PECK v. HORIZONS YOUTH SERVICES, LLC (E.D.Cal. 7-7-2009)

LAWRENCE KARLTON, Senior District Judge

Petitioner, the Acting Regional Director of Region Twenty of the National Labor Relations Board ("Petitioner"), petitions this court for temporary injunctive relief pursuant to section 10(j) of the National Labor Relations Act, 29 U.S.C. § 160(j) (2006). This court resolves the petition on the papers and oral argument. For the reasons stated below, this petition is granted.

I. BACKGROUND

The National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq., governs certain employees' rights to organize and collectively bargain with employers. When employees or their representatives contend that an employer has violated the NLRA, this charge is investigated and prosecuted in an administrative process before the National Labor Relations Board ("NLRB"). In this case, petitioner is prosecuting a charge that respondent Horizons Youth Services is a "successor employer" obliged to recognize prior collective bargaining units, and that respondent has violated this obligation.

Section 10(j) of the NLRA provides that during the pendency of such a prosecution, the appropriate regional director of the NLRB may petition in a district court for temporary injunctive relief. 28 U.S.C. § 160(j). Such a petition is presently before the court.

Petitioner filed a motion to try the section 10(j) injunction petition on the basis of the administrative hearing record and affidavits/declarations regarding irreparable harm. Pet'r. Mot. to Try Section 10(j) Inj. Pet. on Basis of Administrative Hr'g R., filed June. 8, 2009. HYS did not file an opposition to this motion. Further, in its opposition to the motion for injunctive relief, HYS itself relies upon the administrative hearing record. The court interprets this as a non-opposition to Petitioner's motion. Norelli v. Fremont-Rideout Health Group, 2009 U.S. Dist. LEXIS 29253, 1-2 (E.D. Cal. 2009). Accordingly, Petitioner's motion to try the matter on the record of the hearings is GRANTED.

A. Factual Background

The facts in this case center on the Sacramento Job Corps. Center, hereinafter the Center. The Center is funded by the United States Department of Labor, and "provide[s] disadvantaged youth enrolled at ages 16-24 with a comprehensive range of career development services leading to employment and long-term attachment to the workforce." Pet'r's Pet. For Inj., Ex. H at 4.

Prior to July 1, 2008, the Dept. of Labor contracted the operation of the Center to Career Systems Development Corporation ("Career Systems"), a private company. Beginning in 1998, Career Systems recognized the Sacramento Corps. Federation of Teachers, AFT Local 4986 ("Union") as the exclusive collecting bargaining representative of its employees in two bargaining units. The first of these was made up entirely of "residential advisor" employees (the "RA Unit"). The second is referred to as the "instructors unit," and included various types of instructors, counselors and career transitions specialists. The two units were covered by separate collective-bargaining agreements with Career Systems, with the most recent agreement for each unit having a term of June 22, 2006 to June 22, 2009.

On or about May 7, 2008, the DOL declined to renew the contract with Career Systems, instead awarding the contract to operate the Center to Horizons Youth Services ("HYS") for a two year term, beginning on July 1, 2008. The contract was nearly identical to the contract that Career Systems had with the DOL. Both HYS and Career Systems were to "provide material, services, and all necessary personnel to operate a Job Corps. center." Pet'r's Pet. For Inj., Ex. H at 4. HYS has assumed full operation of the Center without any break in service to trainees. Hr'g Tr. 10, 65.

Immediately after securing the contract, HYS entered into a subcontract with Insights Training Group ("Insights") to provide certain staff for the Center, to be effective from July 1, 2008 through December 31, 2008. J. Ex. 4 at Article 4. Pursuant to this subcontract, Insights provided staff in the counseling, career preparation and career transition programs. When Career Systems had operated the Center, employees in these positions were included in the Instructors bargaining unit. Hr'g Tr. at 34. This subcontract terminated as expected, and since January 1, 2009, HYS has been the sole employer of these employees and all other employees previously included in the RA and Instructor units. General Counsel Ex. 13.

On July, 9, 2008, the Union sent a letter to the HYS center director demanding that HYS recognize the Union's status as the exclusive bargaining agent for all instructors and RA's at the Center. Id. No separate demand was made of Insights. Petitioner states that this is because the Union was unaware of the subcontract with Insights until January 2009, by which time that subcontract had terminated. Hr'g Tr. 39. However, after Insights ceased employing staff at the Center, the Union renewed its demand to HYS for recognition and bargaining by a letter dated April 24, 2009. General Counsel Ex. 13., Hr'g Tr. 39-40. HYS refused the July 2008 demand, General Counsel Ex. 5, and has not responded to the January 2009 demand, Hr'g Tr. 42.

B. Procedural and Regulatory Background

In September of 2008, the Union filed a charge with the NLRB alleging that HYS's refusal to recognize the Union was an unfair labor practice in violation of the NLRA. This initiated the NLRA's adjudication process leading to the present petition for temporary relief.

1. The NLRA Adjudication Process

Claims of NLRA violations are both investigated and adjudicated by the NLRB, with different persons within the NLRB playing different roles. The first step in the process is for the private party to file a charge alleging an unfair labor practice with a regional or resident office of the NLRB. 29 U.S.C. § 160(b), 29 C.F.R. § 101.2. After an investigation, the NLRB Regional Director — the petitioner in this case — determines whether a complaint should issue against the charged party. 29 U.S.C. § 160(b), 29 C.F.R. § 101.8. At this stage of the proceedings, the Regional Director and office serve as a neutral party.

If the Regional Director determines that a complaint should issue, an attorney from the NLRB's General Counsel's office prosecutes the case. 29 U.S.C. §§ 153(d), 160(b); 29 C.F.R. § 101.10(a); see also, Resp't's Ex 1-4 (complaints filed by the General Counsel in this case). This attorney presents the case in an adversarial hearing before an administrative law judge ("ALJ"). See 29 C.F.R. §§ 101.10-101.11. The charged party — in this case, HYS — represents itself. 29 U.S.C. § 160(b). The proceedings before the ALJ generally follow traditional judicial processes, although it is typical for the ALJ to request final briefing after oral argument has concluded. 29 U.S.C. § 160(b). Because of this practice, some cases refer to matters as being "fully litigated" when these hearings are completed even though the final round of briefing has not yet been completed. See, e.g., Norelli, 2009 U.S. Dist. LEXIS 29253, 1-2.

The Regional Director may choose to deviate with this ordinary process. 29 C.F.R. § 101.4. No such departure from ordinary procedures occurred in this case.

The ALJ issues a proposed "findings and determination" for review by the five member board that is the NLRB. 29 U.S.C. §§ 153(a), 160(c). The General Counsel, the charged party, and the charging party may object to this recommendation before the Board issues a final decision. If an appeal of the Board's determination is sought, this appeal is heard directly by the Federal Courts of Appeals. 29 U.S.C. § 160(f).

In this case, the Regional Director determined that a complaint should issue, and the General Counsel filed a compliant on September 30, 2008. See Resp't's Ex 1. This complaint was dismissed, but after an appeal, an amended complaint was issued on April 10, 2009. See Resp't's Ex 2, 3, 4. The details of the proceedings prior to the amended complaint are not relevant for purposes of the instant petition. The amended complaint alleges that HYS violated sections 8(a)(1) and (8)(a)(5) of the NLRA. Section 8(a)(1) prohibits employers from "interfer[ing] with, restrain[ing], or coerc[ing] employees in the exercise of the rights guaranteed in section 7," including "the right to self organization [and] . . . to bargain collectively through representatives of their own choosing." 29 U.S.C. §§ 157, 158(a)(1). Section 8(a)(5) provides that it is "an unfair labor practice for an employer . . . to refuse to bargain collectively with the representatives of his employees[.]" 29 U.S.C. § 158(a)(5). Hearings on this complaint were heard before the ALJ on May 6, 2009, and final briefs were due on June 9th, 2009. The ALJ has not yet issued a proposed decision.

2. Interim Relief under The NLRA

Section 10(j) of the NLRA allows the NLRB to seek interim injunctive relief once a complaint has been filed. This section provides that:

the Board shall have power, upon issuance of a complaint as provided in subsection (b) charging that any person has engaged in or is engaging in an unfair labor practice, to petition any district court . . . 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.

NLRA § 10(j), 29 U.S.C. § 160(j). Under the NLRB's procedures, the initial decision as to whether to seek interim relief is made by the Regional Director. If a regional director determines that Section 10(j) relief should be sought, a recommendation will be given to the General Counsel's Injunction Litigation Branch. National Labor Relations NLRB Case Handling Manual, Part I, Unfair Labor Practice Proceedings 10310.3(a). If General Counsel agrees, the recommendation will be given to the Board for consideration. Id. Thus, when a petition for interim relief is filed, the Regional Director, the General Counsel, and the Board have all concurred in the determination that the request is warranted.

Injunctive relief issued as a result of a Section 10(j) petition expires when the Boards final decision is rendered. Id. at 10314. At that time, if the Board deems that injunctive relief is still necessary, the Board must ask the appropriate court of appeals for injunctive relief pursuant to Section 10(e) of the Act, 29 U.S.C. § 160(e).

II. STANDARD

When a petition for relief under Section 10(j) of the National Labor Relations Act is filed, the court should grant temporary relief "as it deems just and proper." NLRA § 10(j), 29 U.S.C. § 160(j). Like other forms of interim relief, an injunction issued under this section serves to preserve the status quo ante litem pending final action by the Board. Scott v. Stephen Dunn Assocs., 241 F.3d 652, 660 (9th Cir. 2001).

To determine whether an injunction is "just and proper," "district courts should consider traditional equitable principles, bearing in mind that the underlying purposes of § 10(j) are to protect the integrity of the collective bargaining process and to preserve the NLRB's remedial power while the Board resolves an unfair labor practice charge." Miller v. Cal. Pac. Med. Cent., 19 F.3d 449, 452 (9th Cir. 1994). The Supreme Court recently explained under these equitable criteria, a party seeking interim relief must show that "[1] he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest." Winter v. Natural Res. Def. Council, Inc., ___ U.S. ___, 129 S. Ct. 365, 374 (2008).

On the merits factor, on a Section 10(j) petition, the Board receives considerable deference. "In assessing whether the Board has met its burden [under these factors], it is necessary to factor in the district court's lack of jurisdiction over unfair labor practices," and the fact that "the Board's [final] determination on the merits will be given considerable deference" by the court of appeals. Miller, 19 F.3d at 460 (citing NLRB v. City Disposal Sys., Inc., 465 U.S. 822, 829 (1984)). Because of the deference accorded to the Board's interpretation of the NLRA, the "Board can make a threshold showing of [the] likelihood of success by producing some evidence to support the unfair labor practice charge, together with an arguable legal theory." Id.; but see Overstreet v. United Bhd. of Carpenters Joiners of Am., Local 1506, 409 F.3d 1199, 1208 (9th Cir. 2005) (where the merits implicated First Amendment issues to which the Board's determination would not receive deference on appeal, no deference owed on a Section 10(j) petition). Since the Board is primarily "responsible for declaring federal labor policy . . . `even on an issue of law, the district court should be hospitable to the views of the General Counsel, however novel.'" Miller, 19 F.3d at 460 (quotingDanielson v. Joint Bd. of Coat, Suit Allied Garment Workers' Union, 494 F.2d 1230, 1245 (2d Cir. 1974)). The Ninth Circuit has candidly acknowledged that because the Board both determines whether to file a petition and determines the final outcome of the case, "[o]ne might presume from the Board's decision to file a § 10(j) petition that if the facts are found to be as projected in the petition, the Board will decide the case consistently with the petition." Overstreet, 409 F.3d at 1208 n. 12.

As to the remaining factors, Miller held that if the Board "is likely to prevail on the merits," i.e., more than "a fair chance of succeeding," the court "presume[s] irreparable injury." 19 F.3d at 460. It appears that this presumption remains at least partially valid after the Supreme Court's decision in Winter.Winter rejected the prior Ninth Circuit practice of issuing preliminary injunctions on a showing of only the possibility of irreparable injury when the likelihood of success on the merits was great. Winter's holding that a preliminary injunction should issue only when irreparable injury was likely does not alter preceding authority which held that, in the NLRA context, such injury would often be likely if not certain to occur, and is likely to be irreparable. Fall River Dyeing Finishing Corp. v. NLRB, 482 U.S. 27, 49-50 (1987),Brown ex. rel. NLRB v. Pac. Tel. Tel. Co., 218 F.2d 542, 544 (9th Cir. 1954). Thus, this court engages in a fact-specific inquiry, but continues to adhere to prior cases which held that certain facts sufficed to demonstrate a likelihood of irreparable injury. The Ninth Circuit's admonition to "take into account the probability that declining to issue the injunction will permit the unfair labor practice to reach fruition and thereby render meaningless the Board's remedial authority" remains unquestionably valid. Miller, 16 F.3d at 460.

III. ANALYSIS

As an initial matter, this court expresses some surprise at the fact that this case is here at all. Congress, in enacting the NLRA, established a scheme wherein jurisdiction over unfair labor practice claims rests primarily in the NLRB itself. Pursuant to this scheme, this matter is proceeding before an administrative law judge. All hearings and briefings in that proceeding have apparently been completed; all that remains is for the administrative law judge to issue a proposed order, and for the Board to rule upon this proposal. The fact that petitioner has come to this court to seek "temporary" relief is therefore at the very least surprising.

This court must assume that the intention behind section 10(j) of the NLRA was to provide for relief akin to a preliminary injunction, to be sought in the early stages of a case. While nothing appears to categorically limit section 10(j)'s application to such a scenario, it astounds this court to think that even where the specialist administrative law judge has already heard the matter, petitioner presents its case to this court afresh in order to more rapidly secure temporary relief.

Petitioner seeks to justify its course of action by indicating that there is likely to be a significant delay before the ALJ files a proposed decision with the Board, and before the Board issues a final order. Neither party in this proceeding has provided a satisfactory answer as to how long this delay might be in this case, or as to what length of delay is typical. Nonetheless, the court accepts the representation of petitioner, speaking on behalf of the Board, regarding the Board's own proceedings. Although this court must wonder whether the NRLB's resources spent in litigation of this matter in the district courts would have been better spent in hastening the NLRB's own processing of claims, this possibility is not a ground for denial of the present petition.

A. Success on the Merits

The complaint alleges that HYS is obliged to recognize and bargain with the Union because HYS is a "successor employer" to Career Systems. HYS agrees that if it is a "successor employer" within the meaning of the NLRA then it faces these obligations. However, HYS contends that it is not a successor.

When an employer replaces a previous employer, and a bargaining unit of employees had previously been recognized, the new employer must continue to recognize the bargaining unit if (1) there are appropriately defined bargaining units both before and after the succession, (2) there is continuity of operations with respect to the new unit, and (3) there is continuity of the work force. NLRB v. Burns Int'l Sec. Servs., 406 U.S. 272, 280-81 (1972), N. Mont. Health Care Ctr. v. NLRB, 178 F.3d 1089, 1095-96 (9th Cir. 1999); see also Fall River Dyeing Finishing Corp. v. NLRB, 482 U.S. 27, 41 (1987), NLRB v. Advanced Stretchforming Int'l, Inc., 233 F.3d 1176, 1180 (9th Cir. 2000). This is because "[w]here a union has been recognized or certified as the representative of the employees of the predecessor, and the successor hires a majority of his workers from those employees, a presumption arises that the successor's employees also support the union." Premium Foods, Inc. v. NLRB, 709 F.2d 623, 627 (9th Cir. 1983). If these factors are met, the new employer is a "successor." Although a successor employer must recognize and bargain with the representative, the successor employer is not obligated to honor a prior collective bargaining agreement. See Burns, 406 U.S. at 283 (1972) ("While the Board does have power . . . to require employers and employees to negotiate, it is without power to compel a company or a union to agree to any substantive contractual provision of a collective-bargaining agreement.").

In this case, there is no dispute regarding the continuity of operations, and this requirement is clearly satisfied. As between Career Systems and HYS, each entered a nearly identical contract with the DOL, and each provides essentially identical services to the trainers at the Center. J. Ex. 1 at 4-6, General Counsel Ex. 7 at 4-6. See Fall River, 402 U.S. at 43. Continuity is similarly present between Career Systems and the subcontractor Insights, and, for employees covered by the subcontract, between Insights and HYS.

As to continuity of the workforce, this continuity is present when "a majority of the successor's employees were represented by the union." Premium, 709 F.2d at 627 n. 5 (9th Cir. 1983) (citingBurns, 406 U.S. at 278). Successorship applies only to units that are appropriate for bargaining, and is determined unit-by-unit. Thus, in cases with multiple bargaining units, as in this case, a separate Burns analysis must be conducted for each unit, and a new employer may be a successor with respect to one unit but not to another, even if all units are represented by the same union.See, e.g., NLRB v. Hudson River Aggregates, 639 F.2d 865, 869-71 (2d Cir. 1981); Royal Midtown Chrysler Plymouth, Inc., 296 N.L.R.B. 1039 (1989). Here, the parties dispute how the new units should be defined. The court begins by considering the two units recognized under the former employer.

1. Residential Advisor Unit

One of the two previously recognized units was the Residential Advisor Unit. The last negotiation between Career Systems and the Union defined the RA collective bargaining unit to consist of employees with the job titles Resident Advisor I and Resident Advisor II. General Counsel Ex. 2. Petitioner contends that this unit remains viable, defining the present unit to include employees hired by HYS on July 1, 2008 with the job titles Resident Advisor Sub; Resident Advisor I, Night; Resident Advisor II, 2^nd Prime; and Resident Advisor II, Prime. Based on pay stubs specifying job titles, petitioner contends that on July 1, 2008, thirty HYS employees fell within this unit, excluding six part-time RAs not part of the bargaining unit. Gen. Counsel Ex. 11; see also General Counsel Ex. 12. Of these thirty employees, petitioner contends that twenty-six were previously employed by Career Systems and represented by the RA bargaining unit. This calculation is also based on job titles gleaned from pay stubs. General Counsel Ex. 9, 10. Thus, petitioner contends that the newly defined bargaining unit is appropriate and that a majority of the unit's employees were formerly represented, such that there is continuity with respect to the workforce in this unit.

HYS first argues that the job titles used by HYS do not alone demonstrate that the proposed HYS RA bargaining unit is appropriate. "It is well settled that the existence of significant bargaining history weighs heavily in favor of a finding that a historical unit is appropriate, and that the party challenging the historical unit bears the burden of showing that the unit is no longer appropriate." In re Canal Carting, Inc., 339 N.L.R.B. 969, 970 (2003); see also 3750 Orange Place L.P. v. NLRB, 333 F.3d 646, 662 (6th Cir. 2003), Trident Seafoods v. NLRB, 101 F.3d 111, 118 (D.C. Cir. 1996). Thus, the ten year bargaining history between Career Systems and the RA Unit employees, along with the collective-bargaining agreement between the Career Systems and the RA Unit, weigh heavily in favor of respecting the historical bargaining unit. HYS has not shown that the former unit was inappropriate, and petitioner may therefore use job titles to determine which employees were formerly represented by the RA Unit.

Nor has HYS shown that the proposed definition of the new RA Unit is inappropriate. Here, the new and former job titles are closely similar or identical, and the work performed by the employer is the same. Thus, petitioner is likely to succeed in demonstrating that a new bargaining unit may be appropriately defined by the above job titles.

Petitioner's argument regarding continuity of workforce is therefore also likely to succeed. HYS argues that because job titles cannot be used to determine who is and who is not within the unit, it is impossible to know how many employees are in the current unit (for purposes of measuring majority, the denominator of the fraction) or which of these employees were in the prior unit and therefore previously represented (the numerator of the fraction). HYS has not provided any authority for this argument. This argument is premised on the assumption that the use of job titles is inappropriate, and as stated above, petitioner is likely to succeed on this point. These job titles indicate that a strong majority of the employees in the new RA Unit were formerly represented, such that HYS is likely to bear a successor's obligations with regard to these employees.

2. The Instructor Unit

The other unit recognized by Career Systems was the Instructor Unit. This unit was also historically defined by employees' job titles, to include "instructors, counselors, and Career Transition Specialists." General Counsel Ex. 3. Petitioner contends that HYS's equivalent job titles are Academic Instructor, CTST Coordinator, Business Tech Instructor, Food Service Instructor, Retail Sales Instructor, etc. Pet'r's Reply Br. at 7-10.

Here, HYS makes two additional arguments challenging petitioner's ability to show that a new appropriate bargaining unit exists. Most significantly, HYS notes that some, but not all, of the employees holding the equivalent positions were covered by the subcontract with Insights, and thus not employed solely by HYS. If the new bargaining unit was defined by the scope of the historic Instructors Unit, this unit would therefore be a mixed or multiemployer unit, which presents problems under the NLRA. Petitioner presents two arguments seeking to circumvent this problem. In a separate argument, HYS argues that any bargaining unit covering Instructor employees impermissibly mixes professional and non-professional employees. The court concludes that both of HYS's challenges to the appropriateness of the bargaining unit or units are likely to fail, and that continuity of the workforce has been shown.

HYS also repeats its arguments challenging petitioner's reliance on job titles. To the extent that the job title argument raises any issues separate from the multi-employer and professional/nonprofessional arguments, the job title argument fares no better as applied to the Instructor employees than it does as to the RA employees.

a. Mixed and Joint Units

The NLRB's treatment of mixed and joint units is controlled by the Board's decision in H.S. Care L.L.C., d/b/a Oakwood Care Center, 343 N.L.R.B. 659 (2004) ("Oakwood"). In Oakwood, the Board began with the NLRA's definition of appropriate bargaining units. Section 9(b) of the NLRA provides that:

The Board shall decide in each case whether, in order to assure to employees the fullest freedom in exercising the rights guaranteed by this Act, the unit appropriate for the purposes of collective bargaining shall be the employer unit, craft unit, plant unit, or subdivision thereof. . . .

29 U.S.C § 159(b). Based on this language, the Board concluded that the broadest unit contemplated by this provision was an "employer unit" consisting of all employees employed by a single employer. Oakwood, 343 N.L.R.B. at 661. Moreover, in practice, a multiemployer unit can "give[] rise to significant conflicts among the various employers and groups of employees participating in the process." Id. Multiemployer units, consisting of employees of distinct employers, are therefore permissible only when all parties consent to such a unit. Id. at 662 (citing NLRB v. Truck Drivers Local 449, 353 U.S. 87, 96 (1957)). Thus, Congress has not authorized the Board to impose units encompassing the employees of more than one employer. Id. at 663 n. 24.

However, this rule does not apply to units in which two or more employers jointly employ every individual in the unit (as opposed to a unit where one employer employs some employees and another employer employs others). Id. Employers are joint employers when they "`share or codetermine those matters governing essential terms and conditions of employment' for bargaining unit employees." Id. (quoting NLRB v. Greyhound Corp., 368 F.2d 778, 780 (5th Cir. 1966)). These terms include "hiring, firing, discipline, supervision and direction." Solid Waste Servs., 1993 N.L.R.B. LEXIS 472, 20 (1993). For purposes of the NLRA, all employees jointly employed by employers A and B "work for a single employer, i.e., the joint employer entity A/B." Oakwood, 343 N.L.R.B. at 662.

Oakwood concerned a combination of the above. A union sought to represent a single proposed bargaining unit consisting of some employees solely employed by employer A, and of some employees jointly employed by employers A and B. The NLRB concluded because some employees were employed by A, and others by A/B, "the entity that the two groups of employees look to as their employer is not the same." Id. at 662. Thus, this unit was a multiemployer or mixed unit, and could not be approved absent the parties' consent. Id. at 663.

Oakwood may have held that this situation, or something like it, could be permissible without all parties' consent in at least some circumstances. 343 N.L.R.B. at 662 (discussing a "joint enterprise" in the "K-Mart cases"). Petitioner has not argued that any such exception applies here, and the court leaves clarification of this issue to the NLRB.

In this case, from July 1 through December 31, 2008, some employees who would have been included in the historic Career Systems Instructors Unit were employed solely by HYS, whereas others were employed jointly by HYS and Insights. Specifically, on July 1, 2008, employees in the counseling, career transitions and career preparation positions, twenty in total, were hired by Insights pursuant to its subcontract. J. Ex. 4., Hr'g Tr. 78, 111. Although Insights hired these employees, petitioner contends that HYS exercised control sufficient to render them jointly employed by Insights and HYS, and is likely to succeed on the merits of this point. All other employees that would have been included in the historic Instructors Unit, twenty-nine in total, were solely employed by HYS on July 1, 2008. General Counsel Ex. 11, 12.

Although HYS contested joint employer status at oral argument, the court notes that petitioner's contention that these employees were jointly employed is likely to succeed. Here, HYS had the right to remove and replace employees provided by Insights, and all Insights staff were responsible to and under the direction of HYS. In addition HYS management made recommendations to Insights regarding hiring, acted on behalf of Insights, and supervised and directed Insights staff.

Of these, Petitioner contends that all twenty of the former group, and twenty eight out of the twenty nine in the latter group, were previously employed by Career Systems in the Instructors Unit. General Counsel Ex. 9, 10. However, if the new bargaining unit is invalid, whether a majority of these employees were formerly represented is irrelevant.

HYS correctly argues that during the period in which the subcontract was in effect, a bargaining unit consisting of both groups of employees would be prohibited under Oakwood absent the employers' consent. Petitioner concedes this point, but has not argued for recognition of such a unit. Instead, petitioner argues that the two groups of Instructor employees may be divided into separate bargaining units, avoiding the Oakwood problem. Alternatively, petitioner argues that once the subcontract ended, HYS became the successor employer with respect to the former Instructor Unit regardless of whether any valid bargaining unit existed in the interim.

b. Whether The Former Instructor Unit May Be Divided into Two Units

If the former Instructor Unit may be divided into two bargaining units, one for employees employed by the joint entity HYS/Insights and the other for employees employed solely by HYS, then there is not a multiemployer unit, and Oakwood does not apply.

Oakwood did not consider successorship, and thus provides no direct statement as to whether such a division is appropriate. The court first puts successorship aside, and considers whether such a division would be appropriate if made initially. It appears that such a division obeys, rather than evades, the prohibition established by Oakwood. Oakwood did not hold that when an employer employs some employees solely, and other employees jointly, none of those employees are entitled to union representation. Instead, Oakwood held that the text of the NLRA and the practical realities of negotiation prevented such employees from being represented by a single bargaining unit. By rejecting a union's request to create such a unit, Oakwood implied that the two groups of employees should be represented by separate units. Thus, if on July 1, 2008, employees had sought initial recognition of these two separate units, it appears thatOakwood would not present a barrier.

Turning to successorship, it also appears that if either half of the proposed division were considered individually, that unit's employer would be a successor. Courts and the NLRB have found successor relationships appropriate even when there are significant changes in the scope and size of the bargaining unit. Provided that a bargaining unit appropriate under NLRA Section 9(b) may be identified both before and after the change in employers, and that for employees in the latter unit, continuity of operations and workforce are shown, the new employer is a successor. N. Mont. Health Care Ctr., 178 F.3d at 1095-96. Thus, "successorship obligations are imposed even when only a small subset of the bargaining unit moves over to the successor employer." Id. (citing Int'l Union of Petroleum Indus. Workers v. NLRB, 980 F.2d 774, 780 (D.C. Cir. 1992)).

The present situation consists of two subsets of a bargaining unit moving to successor employers. One subset moves to the successor employer that is HYS, and the other subset moves to the joint employer that is HYS and Insights jointly. If these two employers were entirely distinct, then under Northern Mont. Health, there is no doubt successorship obligations would be imposed as to each employer. HYS has not provided any argument as to why, under Oakwood, the fact that the two employers are not entirely distinct should change the analysis.

It may be that in some situations, division of a bargaining unit is inappropriate. For example, such a division may be an attempt to gerrymander bargaining units to ensure a majority of formerly represented employees fall within a unit. Because no such problem is evident here, the court leaves the question of such cases to the NLRB. Absent any evidence of an improper purpose or other reason to prevent this division, Petitioner's argument that such division is proper appears to be consistent with Oakwood and the successorship cases, and this argument is therefore entitled to deference in this preliminary proceeding.Miller, 19 F.3d at 460.

c. Successorship after January 1, 2009

Because this court concludes that petitioner is likely to succeed on the merits of the above argument, the court does not consider Petitioner's alternative argument that, even if there was no valid bargaining unit applicable to Instructor employees from July 1 to December 31 2008, a valid unit existed after January 1, 2009, and that the intervening six months may be ignored in the successorship analysis.

However, even when petitioner's arguments regarding the period from July 1 to December 31 2008 are accepted, the effect of Insights' departure is unclear. Because the NLRB treats a joint employers as a single entity, it may be that Petitioner must show that a valid successor relationship exists between the joint HYS/Insights entity and HYS as a subsequent sole employer of those individuals. See 3750 Orange Place L.P., 333 F.3d at 656 (stating in dicta that "in cases involving multiple changes of ownership, the Board must broaden the inquiry and establish an unbroken chain of successorship across the change of ownership."). If this is so, Petitioner must show continuity of operations and continuity of workforce subsequent to the succession, yet Petitioner has offered no evidence on these points. Instead, Petitioner assumes that the transition from HYS/Insights to HYS solely is not a transition between employers. Although this is not the most obvious reading of the NLRB's precedents, this court is not aware of any case directly addressing this issue, and this court is obliged to be "hospitable" to novel interpretations of the NRLA raised by Petitioner. Miller, 19 F.3d at 460. Accordingly, Petitioner has shown a sufficiently likelihood of success on this issue.

A related question is whether the divided Instructor Unit may be recombined. Petitioner contends that the reason for dividing the unit ended with the subcontract, such that the two units may presently be treated as a single unit coextensive with the historical Instructor Unit. Neither party has provided any authority on this point. Because this court concludes that Petitioner is likely to show that HYS bears successor obligations to each half of this unit, because the parties have not identified any legal barrier to recombining the unit, and because no apparent harm will result, the court defers to Petitioner's argument that recombination is permitted.

d. Professional and Nonprofessional Employees

HYS argues that because Petitioner relies on Job titles to establish the appropriateness of the bargaining units there is no evidence as to whether the units include both professional and nonprofessional employees. Since a unit that includes both professional and nonprofessional employee is not appropriate under Section 9(b) of the NLRA, HYS contends that the unit is not appropriate in this case. HYS has not presented any evidence to demonstrate that the unit does contain a mixture of professional and nonprofessional employees, and thus has not met its burden of establishing that the historical unit is no longer appropriate.Indianapolis Mack Sales Serv. Inc., 288 N.L.R.B. 1123, n. 5 (1988).

B. Irreparable Injury

Petitioner has shown a strong likelihood of success on the merits. Miller held that in this situation, the court should presume irreparable injury. 19 F.3d at 460. As discussed above, pursuant to the Supreme Court's decision in Winter, this court discusses whether irreparable injury is likely, informed by prior cases that have applied this presumption. ___ U.S. at ___, 129 S. Ct. at 374.

Petitioner contends that irreparable injury is likely to be suffered by both employees and the union. As to the employees, they are injured by the loss of the opportunity to collectively bargain over, and potentially secure improvements to, wages, health and safety provisions, and grievance-arbitration procedure. HYS observes that the employees' ability to secure such improvements is uncertain, but courts have held that the opportunity to collectively bargain over these things is itself an injury. See, e.g., Bloedorn v. Francisco Foods, Inc., 276 F.3d 270, 299 (7th Cir. 2001). This loss of opportunity is virtually certain. This injury is also irreparable, because a future order to bargain with the Union is "a forward-looking order [that] cannot fully compensate the employees . . . for the variety of benefits that good-faith collective bargaining with the Union might otherwise have secured for them in the present." Id. (reversing denial of temporary relief for this reason).

As to the Union, the Union's Field Representative Ron Jackson^fn6 declares that employees have refrained from communicating with the Union. Jackson Decl. at 2. The Ninth Circuit has held that the risk that union members would "drift[] away" absent a temporary injunction constituted a risk of irreparable harm.Brown ex. rel. NLRB v. Pac. Tel. Tel. Co., 218 F.2d 542, 544 (9th Cir. 1954). When "the new employer refuse[s] to bargain with the chosen representative of the[] [predecessor's] employees" this "`disrupts the employees' morale, deters their organizational activities, and discourages their membership in unions.'" Fall River, 482 U.S. at 49-50 (quoting Franks Bros. Co. v. NLRB, 321 U.S. 702, 704 (1944)). HYS contends that whatever harm the Union may suffer has already been realized, in that the Union currently enjoys no open support. Nonetheless, Fall River and Brown recognize that the longer a union is prevented from operating, the more difficult the union' task becomes.

C. Balance of Hardships

The hardships suffered by the employees and union are the same as the injuries described in the preceding section. These hardships must be balanced against hardships that HYS would suffer if an injunction is issued.

An injunction obliging HYS to recognize and negotiate with the Union will require HYS to pay the cost of negotiations, including the opportunity cost in the loss of managers' time. These direct monetary costs fall on both parties and alone do not defeat the request for interim relief. Scott, 241 F.3d at 669. The Ninth Circuit has also rejected the argument that the loss of managers' time tilts the balance of hardships toward the employer. Id. "This blanket assertion would lead logically to the conclusion that an interim bargaining order is never appropriate." Id.

An additional possible harm to HYS is the risk that, because HYS must bargain in good faith, HYS will reach an agreement in such bargaining, only for the Board to later conclude that bargaining was not required. However, this harm is easily avoided. HYS may in good faith seek to have any agreement entered pursuant negotiations ordered by a temporary injunction include a provision voiding such agreement in the event that the Board finds for HYS. See, e.g., Asseo v. Pan Am. Grain Co., 805 F.2d 23, 28 (1st Cir. 1986); Kaynard v. Palby Lingerie, Inc., 625 F.2d 1047, 1054 (2d Cir. 1980).

Therefore, the Court finds that the balance of hardships weighs in the favor of Petitioner.

D. Public Interest

"In § 10(j) cases, the public interest is to ensure that an unfair labor practice will not succeed because the Board takes too long to investigate and adjudicate the charge. Thus, courts must consider the extent to which this interest is implicated under the circumstances of the particular case."Miller, 19 F.3d at 460. In this case, neither party has identified unusual factors particularly implicating the public interest. Therefore, under Miller, to the extent that this factor is relevant, it favors petitioner.

IV. CONCLUSION

There is a high likelihood that Petitioner will prevail on the merits before the NLRB. There is a likelihood that irreparable injury will occur to the integrity of the collective bargaining process and the Board's remedial authority if a temporary injunction is not granted in this case. The balancing of the hardships and the public interest both favor the issuing of an injunction. Accordingly it is just and proper for the Court to grant the requested relief in respect to the RA Unit and the Instructors Unit.

Now, therefore, upon the entire record, it is hereby ORDERED, ADJUDGED AND DECREED that, pending the final disposition of the matters now pending before the National Labor Relations Board, Respondent, its officers, representatives, supervisors, agents, servants, employees, attorneys and all persons acting on its behalf or in participation with it, be, and they hereby are, enjoined and restrained from: (a) refusing to recognize and bargain with the Union as the exclusive collective-bargaining representative of its employees in the following appropriate bargaining units of its employees: 1) all employees who were covered by the terms of the June 22, 2006 — June 22, 2009, "Resident Advisors Unit" collective-bargaining agreement between the Union and Career Systems Development Corporation, herein Career Systems; 2) all employees who were covered by the terms of the June 22, 2006 — June 22, 2009, "Instructors Unit" collective-bargaining agreement between the Union and Career Systems [Exhibit A, paragraphs 2, 7 through 9]; and (b) in any like or related manner interfering with, restraining or coercing employees in the exercise of their rights guaranteed by Section 7 of the Act. It is further ORDERED, ADJUDGED AND DECREED that, pending the final disposition of the matters herein now pending before the National Labor Relations Board, Respondent, its officers, representatives, supervisors, agents, servants, employees, attorneys and all persons acting on its behalf or in participation with it, shall take the following affirmative steps: (a) upon request, recognize, meet and bargain with the Union as the exclusive collective-bargaining representative of its employees in the appropriate bargaining units, described below, with respect to rates of pay, hours of employment, and other terms and conditions, and if an understanding is reached, embody such understanding in a signed agreement. The appropriate bargaining units are: 1) all employees who were covered by the terms of the June 22, 2006 — June 22, 2009, "Resident Advisors Unit" collective-bargaining agreement between the Union and Career Systems; 2) all employees who were covered by the terms of the June 22, 2006 — June 22, 2009, "Instructors Unit" collective-bargaining agreement between the Union and Career Systems [Exhibit A, paragraphs 2, 7 through 9]. (b) post copies of the Court's Decision and Order at Respondent's Sacramento, California facilities in all locations where notices to employees are customarily posted; maintain these postings during the Board's administrative proceeding free from all obstructions and defacement; grant all employees free and unrestricted access to said postings; and grant to agents of the Board reasonable access to Respondent's Sacramento, California facilities to monitor compliance with the posting requirement; and (c) within twenty (20) days of the issuance of the Court's Decision and Order, file with the Court, with a copy submitted to the Regional Director for Region 20 of the Board, a sworn affidavit from a responsible official of Respondent, setting forth with specificity the manner in which Respondent is complying with the terms of the decree, including the locations of the posted documents and proof of mailings. IT IS SO ORDERED.