Lineback v. Irving Ready-Mix, Inc.

In the

United States Court of Appeals

For the Seventh Circuit

No. 11-1371

R IK L INEBACK, Regional Director

of the Twenty-Fifth Region of

the National Labor Relations

Board, for and on behalf of the

N ATIONAL L ABOR R ELATIONS B OARD ,

Petitioner-Appellee,

v.

IRVING R EADY-M IX, INC.,

Respondent-Appellant.

Appeal from the United States District Court

for the Northern District of Indiana, Fort Wayne Division.

No. 1:10-cv-00346-JD-RBC—Jon E. DeGuilio, Judge.

A RGUED JUNE 9, 2011—D ECIDED A UGUST 5, 2011

Before M ANION, W OOD , and H AMILTON, Circuit Judges.

H AMILTON, Circuit Judge. The district court issued an

injunction under section 10(j) of the National Labor

Relations Act, 29 U.S.C. § 160(j), ordering respondent

Irving Ready-Mix, Inc. to stop certain unfair labor

2 No. 11-1371

practices pending a final administrative decision by the

National Labor Relations Board. Irving Ready-Mix has

appealed, but we find no error or abuse of discretion

by the district judge. We affirm.

I. Factual and Procedural Background

Respondent Irving Ready-Mix, Inc. sells, delivers, and

installs ready-mix concrete from its five plants in

northern Indiana. For many years, the ready-mix concrete

truck drivers employed by Irving Ready-Mix have been

represented by the Chauffeurs, Teamsters & Helpers,

Local Union No. 414, a local of the International Brother-

hood of Teamsters. A collective bargaining agreement

was in effect from June 1, 2005 through May 31, 2010.

As the agreement’s expiration date neared, the union

and management met to negotiate a new agreement. The

employer insisted that a new agreement would have to

allow it to reduce its total labor costs (wages plus benefits)

from approximately $43.00 per hour to about $31.00 per

hour. The union refused, management stuck to its

position, and the old agreement expired on May 31, 2010

without a replacement. The drivers went on strike on

June 1st.

The employer then took the actions at the center of this

lawsuit. It announced that it no longer recognized the

union as the drivers’ collective bargaining representa-

tive. Instead, it contacted the drivers directly, offering

to employ them individually on new terms consistent

with management’s last offer. A few drivers resigned from

No. 11-1371 3

the union and returned to work, including one member

of the union’s bargaining committee. The strike ended

on July 19, 2010, and more drivers returned to work at

the lower wage rates and on terms less favorable than

those of the old collective bargaining agreement.

The union filed charges of unfair labor practices with

the National Labor Relations Board. The charges relevant

to this appeal all stem from the employer’s refusal to

recognize the union after the old collective bargaining

agreement expired, despite the absence of evidence that

the union had lost support of a majority of the drivers.

An administrative law judge heard evidence from the

parties on September 29 and 30, 2010. The next week, on

October 5, 2010, NLRB regional Director Rik Lineback

filed this petition in the district court seeking a sec-

tion 10(j) injunction pending a final decision by the Board.

Before the district court ruled on the injunction re-

quest, the ALJ issued a decision finding that all but one

of the unfair labor practice charges had merit. First, the

ALJ determined that the employer was subject to the

unfair labor practices restrictions of the National Labor

Relations Act (NLRA) as a result of the type of collective

bargaining agreement it held with the union. Second, the

ALJ concluded that the employer violated two of those

restrictive provisions. We elaborate briefly on the ALJ’s

conclusions.

In the first step of his analysis, the ALJ found that the

employer’s collective bargaining agreement with its

employees was made pursuant to section 9(a) of the

NLRA, 29 U.S.C. § 159(a). Under this section, a union

4 No. 11-1371

chosen for purposes of collective bargaining by the major-

ity of employees in a unit is considered the exclusive

representative for negotiating conditions of employment.

Other provisions of the Act prohibit practices that

interfere with this section 9(a) relationship. The relevant

provision here is section 8(a), which prohibits unfair

practices by the employer. See NLRA § 8(a)-(b), (d);

29 U.S.C. § 158(a)-(b), (d).

To avoid this result, the employer argued that its rela-

tionship with the union was governed not by section 9(a)

but by section 8(f), under which it would have been

excepted from the restrictions of section 8(a). Section 8(f)

of the NLRA allows an employer “engaged primarily in

the building and construction industry” to enter into a

collective bargaining agreement with a union before the

union has established majority status.1 See 29 U.S.C.

§ 158(f). As a result of this special situation, section 8(f)

1

Section 8(f) was enacted to accommodate the special needs

of the building and construction industry. See H.R. Rep. No. 741,

at 19-20 (1959). In Operating Engineers Pension Trust v. Beck

Engineering & Surveying Co., 746 F.2d 557, 563 (9th Cir. 1984), the

Ninth Circuit explained that, in adopting section 8(f),

Congress recognized that the representation procedures

prescribed in Section 9 of the Act were largely unsuited to

the peculiar circumstances of the construction industry,

where employers ordinarily hire on a project-by-project

basis . . . [and] where an employer who might employ no

one unless he is working on a project, must nevertheless

know his anticipated labor costs before making a bid and

must have access to a readily available pool of skilled

craftsmen.

No. 11-1371 5

agreements are not subject to the full set of unfair labor

practices restrictions like traditional section 9(a) agree-

ments. Under section 8(f), the employer’s unilateral

termination of recognition after expiration of the collec-

tive bargaining agreement would have been permitted.

The ALJ rejected the employer’s argument, relying on

Board precedents that ready-mix concrete employers

are not “engaged primarily in the building and construc-

tion industry” within the meaning of section 8(f).

The ALJ also noted that the employer’s agreement

with the union exhibited “no evidence” that it was a

section 8(f) agreement. The employer and the union

had entered into at least four consecutive five-year con-

tracts. Those contracts allowed new employees thirty

days to join the union, rather than the seven days permit-

ted in contracts under section 8(f). Further, the drivers’

employment with the employer was stable and long-

term, not the sporadic and site-specific work that charac-

terizes many construction jobs for which section 8(f) was

designed. Concluding that section 9(a) controlled the

parties’ relationship, the ALJ then found that the em-

ployer violated subsections 8(a)(1) and 8(a)(5) by com-

municating directly with the drivers during the strike

and unilaterally changing the terms of the drivers’ em-

ployment.

A few weeks later, on January 28, 2011, the district

court granted the Director’s motion for a preliminary

injunction pending a final decision by the Board. The

court ordered the employer to recognize the union as

the drivers’ exclusive collective bargaining representa-

6 No. 11-1371

tive; to restore wages, benefits, and working conditions

to what they had been under the old collective bargaining

agreement; and, to stop dealing directly with individual

employees regarding wages and other terms of employ-

ment. The employer then filed this appeal.

II. Analysis

We discuss first the applicable law governing the

injunction and then turn to the specific factual and legal

issues concerning the employer’s attempt to take ad-

vantage of section 8(f) to withdraw recognition from

the union.

A. Section 10(j) of the National Labor Relations Act

Under section 10(j), a district court may order injunctive

relief pending the Board’s final disposition of an unfair

labor practice claim if such relief would be “just and

proper.” 29 U.S.C. § 160(j); Lineback v. Spurlino Materials,

LLC, 546 F.3d 491, 499 (7th Cir. 2008). We review the

district court’s decision to grant interim relief under

this section for an abuse of discretion and reverse only

if its decision depends on “faulty legal premises, clearly

erroneous factual findings, or improper application of

the criteria governing preliminary injunctive relief.”

Spurlino Materials, 546 F.3d at 500, quoting NLRB v. Electro-

Voice, Inc., 83 F.3d 1559, 1566 (7th Cir. 1996).

An injunction granted under section 10(j) is an “extra-

ordinary remedy” and should be granted only in those

No. 11-1371 7

situations in which effective enforcement of the Act is

threatened by delay in the Board’s dispute resolution

process. See Bloedorn v. Francisco Foods, Inc., 276 F.3d 270,

297 (7th Cir. 2001). The district court must consider “the

lack of an adequate remedy at law, the balance of

potential harms posed by the denial or grant of interim

relief, the public interest, and the petitioner’s likelihood

of success on the merits of its complaint.” Spurlino Mate-

rials, 546 F.3d at 500, quoting Francisco Foods, 276 F.3d

at 286. This final requirement does not ask the district

court to pass on the merits of the underlying case;

rather, the court evaluates only on a preliminary basis

the Director’s probability of success before the Board.

See Francisco Foods, 276 F.3d at 287; Electro-Voice, 83 F.3d

at 1567. In this case, the district court did not issue its

decision until after the ALJ issued a decision, but a

district court need not wait for such a preliminary deci-

sion. See, e.g., Lineback v. Printpack, Inc., 979 F. Supp. 831,

858 (S.D. Ind. 1997) (issuing section 10(j) injunction before

ALJ ruled). The goal is to protect the integrity of

the collective bargaining process and to preserve the

Board’s power to provide effective remedies for viola-

tions despite the “notoriously glacial” pace of Board

proceedings. See Kinney v. Pioneer Press, 881 F.2d 485, 491

(7th Cir. 1989) (vacating denial of section 10(j) injunction),

quoting Boire v. International Brotherhood of Teamsters,

Chauffeurs, Warehousemen & Helpers of America, 479 F.2d

778, 788 (5th Cir. 1973).

Here, the district court determined that the Director

presented sufficient evidence for each of the four

elements such that a section 10(j) injunction was war-

ranted. Finding the employer’s practices to be “enor-

8 No. 11-1371

mously destructive” to the union’s organizational efforts,

the court had no trouble concluding that the union had

established irreparable harm. This conclusion was clearly

correct. We have previously found circumstances such

as these — a decline in the union’s membership, loss of

employee benefits, and ongoing erosion of the employer-

union relationship — to be sufficient to establish irrep-

arable harm. See Spurlino Materials, 546 F.3d at 500-01

(affirming section 10(j) injunction on similar facts and

noting the probable inadequacy of the Board’s eventual

remedy); see also Francisco Foods, 276 F.3d at 297 (reversing

denial of section 10(j) injunction); Barker v. A.D. Conner

Inc., ___ F. Supp. 2d ___, ___, 2011 WL 2683164, at *16

(N.D. Ill. July 11, 2011) (granting section 10(j) injunc-

tion). The employer here does not even challenge the

district court’s finding of irreparable harm. Nor does

the employer dispute the district court’s determinations

as to the balance of harms or the public interest. The

issue for our review is the district court’s assessment of

the Director’s likelihood of success on the merits — an

assessment we review for clear error. See Electro-Voice,

83 F.3d at 1570. Giving deference to the findings of the

district court and some measure of deference to the view

of the ALJ, we consider whether the Director has

“some chance” of succeeding before the Board. Spurlino

Materials, 546 F.3d at 502.

B. Classifying the Ready-Mix Concrete Business

The nature of the employer’s obligations following

the expiration of the collective bargaining agreement

No. 11-1371 9

depends on whether the agreement was constituted

according to NLRA section 9(a) or section 8(f). If Irving

Ready-Mix as a ready-mix concrete company qualifies

under section 8(f) as “an employer engaged primarily in

the building and construction industry,” then it is

not subject to some of the NLRA’s unfair labor practice

restrictions in section 8(a) and was entitled to withdraw

recognition from the union. See Engineered Steel Concepts,

Inc., 352 N.L.R.B. 589, 600 (2008), citing John Deklewa &

Sons, 282 N.L.R.B. 1375 (1987), enforced sub nom. Inter-

national Ass’n of Bridge, Structural & Ornamental Iron

Workers, Local 3 v. NLRB, 843 F.2d 770 (3d Cir. 1988). If the

employer does not qualify under section 8(f), then the

union was entitled to a rebuttable presumption that a

majority of drivers still supported it as the exclusive

collective bargaining representative pursuant to section

9(a) even after the old agreement expired. Engineered

Steel Concepts, 352 N.L.R.B. at 600; St. John Trucking,

303 N.L.R.B. 723, 729 (1991). The employer has made

no attempt to rebut that presumption. Thus, if the em-

ployer is not covered by the section 8(f) exception, its

withdrawal of recognition violated section 8(a). We

turn now to this principal issue.

Ready-mix concrete, involving the delivery of fresh

wet concrete manufactured at a plant to a work site in

a transit mixer truck, is not a recent innovation.2 This

2

See F. Biasioli, “Ready Mix Concrete: An Old-New Material

for the 21st Century” in Creating with Concrete, eds. Ravindra K.

(continued...)

10 No. 11-1371

court and the Board have had occasion to address the

activities of ready-mix concrete companies in several

cases. The Board has previously decided this very ques-

tion under section 8(f) and concluded that a ready-

mix concrete company is not an “employer engaged

primarily in the building and construction industry.”

Irving Ready-Mix does not contend that it presents a

novel claim here. Rather, it suggests that the Board prece-

dents on which the ALJ and the district court based

their decisions were wrongly decided.

The ALJ and district court relied on J.P. Sturrus Corp.,

288 N.L.R.B. 668 (1988), in which the Board agreed with

an ALJ’s finding that ready-mix concrete delivery was

not considered “construction” for purposes of section 8(f).

There, the ALJ looked to prior Board precedent stating

that ready-mix concrete delivery did not fall within the

meaning of “construction” under NLRA section 8(e) and

extended that line of reasoning to the “building and

construction industry” under section 8(f).3 The Board

added that although the “drivers occasionally, and at

2

(...continued)

Dhir, Peter C. Hewlett, and M. Roderick Jones (Thomas Telford

Publishing 1999), 170 (discussing the scientific development

of ready-mix concrete in the early 1900s).

3

Section 8(e) provides another exception to the NLRA’s unfair

labor practices provisions for agreements between labor

organizations and an employer “in the construction industry”

relating to the “contracting or subcontracting of work to be

done at the site of construction.” 29 U.S.C. § 158(e); see also

Inland Concrete Enterprises, Inc., 225 N.L.R.B. 209 (1976);

Island Dock Lumber, Inc., 145 N.L.R.B. 484 (1963).

No. 11-1371 11

their own discretion, assist the contractor at the construc-

tion site with screeting and spreading of concrete, after

they have poured it,” such incidental tasks did not

bring the company within the building and construction

industry as required by section 8(f). 288 N.L.R.B. at 668.

Since J.P. Sturrus, the Board has repeatedly held that

ready-mix concrete delivery companies and similar

businesses that deliver construction materials to job

sites are not engaged in construction for purposes of

section 8(f). See Engineered Steel Concepts, 352 N.L.R.B. at

602 (noting entire line of J.P. Sturrus cases and concluding

that employers engaged in the transportation and

delivery of scrap steel were not engaged primarily in the

building and construction industry and, as a result, could

not enter into a section 8(f) relationship); Mastronardi

Mason Materials Co., 336 N.L.R.B. 1296, 1306-07 (2001)

(relying on J.P. Sturrus for classifying agreement between

ready-mix concrete employer and union); Techno Con-

struction Corp., 333 N.L.R.B. 75, 81-83 (2001) (discussing

the J.P. Sturrus holding and using it as guidance to

refine the range of work comprised by the “building

and construction industry”); St. John Trucking, 303

N.L.R.B. at 730 (acknowledging teaching of J.P. Sturrus

and holding that an employer engaged in the transporta-

tion and delivery of stones, sand, and commodities at

job sites was not engaged in the building and construc-

tion industry for purposes of section 8(f)).

Like other construction material manufacturers and

suppliers, ready-mix concrete falls in a grey area between

construction labor, such as carpentry for framing homes,

12 No. 11-1371

and manufacture of building materials, such as bricks

or nails. But section 8(f) requires that a line be drawn

somewhere and drawing that line is more the Board’s job

than it is ours. As a general matter, we defer to the

Board’s judgment with respect to such specialized issues

of labor law. See Local 15, IBEW v. NLRB, 429 F.3d 651, 655-

56 (7th Cir. 2005). Here, we follow the Board’s con-

sistent and reasonable judgment that ready-mix con-

crete suppliers, like other companies whose primary

role is to deliver construction materials to a job site, do

not fall within the building and construction industry

for purposes of section 8(f).

The employer here nevertheless insists that J.P. Sturrus

was wrongly decided and that we should treat it as an

aberration. To support this contention, the employer

relies on the Board’s earlier decision in Carpet, Linoleum

and Soft Tile Local Union No. 1247 (Indio Paint & Rug Cen-

ter), 156 N.L.R.B. 951 (1966). In Indio Paint, the Board

held that the employer, a flooring installer, was pri-

marily engaged in the building and construction in-

dustry within the meaning of section 8(f), as a special

trade contractor. The Board noted that the legislative

history of section 8(f) provided little guidance on what

precise definition Congress intended the “building and

construction industry” to encompass. 156 N.L.R.B. at

957. The Board adopted the “traditional meaning” of the

terms as used in common parlance as well as in

technical industrial parlance. Id.

Through its detailed analysis, the Indio Paint decision

gave ALJs guidance regarding the scope of the term

No. 11-1371 13

“building and construction industry.” That industry

includes employers engaged in “the provision of labor

whereby materials and constituent parts may be com-

bined on the building site,” but not those carrying out

the manufacture and assembly of products installed by

others at the construction site. Id. at 959. In this case,

the employer’s principal argument is that, under the

methodology of Indio Paint, ready-mix concrete com-

panies are “building and construction” companies. The

employer contends that the Board’s decision in J.P.

Sturrus, which did not cite Indio Paint, was flawed

because it broke from the Indio Paint precedent without

explanation or justification.

In our view, the employer’s argument is undermined

by the Board’s favorable treatment of J.P. Sturrus in cases

involving ready-mix concrete companies over the past

twenty years. If later cases had adopted contradictory

positions or questioned the discrepancy, the employer’s

argument might carry more weight. But its argument

that J.P. Sturrus failed to properly apply section 8(f) runs

head-on into the several cases consistently upholding

and applying that decision.

Contrary to the employer’s contention, this pattern of

Board precedent is not like the deviation we described

in Milwaukee and Southeast Wisconsin District Council of

Carpenters v. Rowley-Schlimgen, Inc., 2 F.3d 765 (7th Cir.

1993). There, we found that the Board’s decision in

Chicago District Council of Carpenters (Polk Brothers, Inc.),

275 N.L.R.B. 294 (1985) was a departure from the

Board’s otherwise consistent treatment of section 8(e) in

preceding and subsequent cases. 2 F.3d at 768. As a

14 No. 11-1371

result, we attributed little precedential value to Polk

Brothers, noting that when the Board “fails to distinguish

contradictory decisions rendered in similar cases, it

forfeits ‘the deference we would otherwise show to its

very considerable expertise in strictly labor matters.’ ”

Id., quoting Shaw’s Supermarkets, Inc. v. NLRB, 884 F.2d

34, 37 (1st Cir. 1989).

There was no such aberration here. The solid line of

cases reiterating J.P. Sturrus’ holding supports the

district court’s conclusion that the Director is likely to

succeed on the merits.

We conclude that the district court did not err.

We A FFIRM its order.

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