McHugh Bowles to stop using D.T.'s non-union carpenters. The director also argues that the union threatened McHugh Bowles with picketing against D.T. if D.T. was used on the Riverwest Project.
In ruling on petitions for preliminary injunction under section 10(1), the court applies a two-stage inquiry. See Operating Engineers Local 150, slip op. at 7. First the court assesses whether the board has the "reasonable cause" for a complaint and to seek an injunction. Id. If the board has reasonable cause, the court is to enter an injunction if it is "just and proper" to do so. Section 10(1) of the NLRA, 29 U.S.C. § 160(1). The Seventh Circuit has held that the correct standard in determining whether an injunction is "just and proper" is to apply the traditional equitable analysis applicable to injunctions generally. Operating Engineers, Local 150, slip op. at 12. Although traditional injunction analysis is quite flexible, it requires a more thorough analysis than equating "just and proper" with the reasonable cause standard. "Injunctive relief still represents an exercise of 'very far-reaching power.' . . . It is an extraordinary tool because it injects the legal system into disputes before a full airing of the facts and a careful consideration of the law, and mistakes can be costly." Id.
In determining whether the board has reasonable cause necessitating a motion for injunction, the court applies a very lenient standard.
The board has reasonable cause if "disputed issues could be resolved by the Board in favor of the regional director's position and the regional director is given the benefit of the doubt." Id. at 13 (citing Squillacote v. Graphic Arts Int'l Union, AFL-CIO (Graphic Arts II), 540 F.2d 853, 860 (7th Cir. 1976); Danielson v. Joint Board of Coat, Suit & Allied Garment Workers' Union, I.L.G.W.U., 494 F.2d 1230, 1245 (2d Cir. 1974)). This benefit of the doubt applies to both issues of fact and theories of law. Id. (citing Squillacote v. International Brotherhood of Teamsters, 561 F.2d 31, 33-34 (7th Cir. 1977) (the regional director's legal theory must be substantial and not frivolous)).
One of the regional director's legal theories is substantial. She argues that the union's picketing of McHugh Bowles, beginning on May 24, 1993, immediately after the union suspended picketing against D.T., amounts to a secondary boycott designed to pressure McHugh Bowles to replace D.T. with a union subcontractor. Since D.T.'s carpentry employees are not considered employees of McHugh Bowles, see NLRB v. Denver Building & Construction Trades Council, 341 U.S. 675, 689, 95 L. Ed. 1284, 71 S. Ct. 943 (1951), and, the director argues, McHugh Bowles has no carpentry employees of its own, the union's strike against Mcxugh Bowles as the new primary is unlawful. See NVE Constructors, Inc. v. NLRB, 934 F.2d 1084, 1090 (9th Cir. 1991) (union may not picket for an 8(f) agreement when employer does not currently employ any employees in the unit sought). The disputed issues of fact relevant to this legal theory are whether or not McHugh Bowles' employees, Pozdol or his replacement, perform carpentry work and whether Schenk should be considered an employee of McHugh Bowles and, if so, whether he too performs carpentry work. These issues could be resolved by the board in favor of the regional director's position and the board has reasonable cause to file a complaint and seek an injunction.
In order to obtain a preliminary injunction, petitioner must, as a threshold, show: (1) that there is no adequate remedy at law, (2) that the charging party will suffer irreparable harm if the injunction is not granted, and (3) some likelihood of succeeding on the merits in the sense that the regional director's chances are better than negligible. National People's Action v. Village of Wilmette, 914 F.2d 1008, 1010-11 (7th Cir. 1990); Lawson Prods., Inc. v. Avnet, Inc., 782 F.2d 1429, 1433 (7th Cir. 1986); Roland Machinery Co. v. Dresser Indus., Inc., 749 F.2d 380, 386-88 (7th Cir. 1984). If the petitioner meets this threshold, the court then applies a "sliding scale" analysis, balancing the harm to the parties and the public from the grant or denial of relief and the likelihood of success on the merits. Village of Wilmette, 914 F.2d at 1011; Roland Machinery, 749 F.2d at 387. The sliding scale analysis is designed to minimize the costs of mistake in ruling on a preliminary injunction. American Hosp. Supply Corp. v. Hospital Prods., Ltd., 780 F.2d 589, 593 (7th Cir. 1986). Therefore, the greater the showing of likelihood of success, the lesser need be the balance of irreparable harm, and vice versa. Roland Machinery, 749 F.2d at 387.
In the Operating Engineers, Local 150 case, the Seventh Circuit rejected the board's argument that a more lenient standard such as the "public interest test" articulated in FTC v. Elders Grain, Inc., 868 F.2d 901, 903 (7th Cir. 1989) and FTC v. World Travel Vacation Brokers, Inc., 861 F.2d 1020, 1028 (7th Cir. 1988) should apply to "just and proper" rather than a "traditional" injunction test. Id. at 12. In distinguishing the public interest test from the traditional test the court noted that the public interest test has "two rather than four prongs" and "unlike the traditional test, the public interest test works on a sliding scale so that the greater the plaintiff's [likely] success on the merits, the lesser harm she must show in relation to the harm defendant will suffer if the preliminary injunction is granted." Id. The court then went on to state that "the public interest test is easier to meet than the traditional test because the petitioner need not demonstrate either irreparable injury or that an injunction would serve the public interest." Id. at 12-13 (emphasis added).
Although the Operating Engineers, Local 150 court distinguished the traditional from the public interest test by noting the absence of a sliding scale, a sliding scale was applied in National Peoples Action, 914 F.2d at 1010-11, where a traditional four-prong test was applied. The use of the term "sliding scale" is used simply to illustrate the type of balancing involved once the threshold elements of irreparable harm, inadequate legal remedy and some likelihood of success are established and the public interest considered. Therefore the distinction between the tests appears to have more to do with the necessary elements than it does with the use of terms like sliding scale or balancing. See Abbott Laboratories v. Mead Johnson & Co., 971 F.2d 6, 11-12 (7th Cir. 1992). The more important distinction the Seventh Circuit drew between the two standards is the lack of basic elements in the public interest standard, which the Seventh Circuit limited to FTC cases. Operating Engineers, Local 150, at 11-12.
The regional director argues that the employer, McHugh Bowles, has no adequate remedy at law because an action against the union to recoup financial losses resulting from illegal activity will not remedy the immediate illegality of the actions. She also argues that unless the union is enjoined, McHugh Bowles will be forced to acquiesce to the union's economic pressure, cease doing business with D.T. and hire a union carpenter. The alternative, according to petitioner, is to keep D.T. but not complete the four town homes scheduled to close in June. Petitioner's brief argues that each town home is worth $ 150,000 and McHugh testified that McHugh Bowles stood to lose $ 600,000 if the town home sales could not be closed on time.
As indicated in the findings of fact, the delays which were causing loss to McHugh Bowles during the strike against D.T. were due to the fact that certain contractors and their employees will not enter a site where picketing is conducted even if a neutral gate has been established. This effect, even if foreseeable, does not make the union responsible for the losses. The union:
has every right to picket the primary employer at the work site, even though this picketing might incidentally, but foreseeably, have a substantial effect on secondary employers. Section 8(b)(4) proscribes only union activity whose "object" or purpose is to coerce secondary employers. And there is an important distinction between intending to enmesh secondary employers in a dispute not their own, and acting with knowledge that secondary employers will inevitably be affected by the union's actions. Even if the union's picketing has substantial (and foreseeable) secondary effects, that conduct does not violate section 8(b)(4) unless the employer satisfies its burden of establishing that the union intended to cause disruption of the secondary employer's business.