Frankl v. HTH Corp.
2011 WL 3250637, 650 F.3d 1334 (2011)
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Rule of Law:
The National Labor Relations Act permits the National Labor Relations Board to delegate to its General Counsel the authority to decide when to file petitions for temporary injunctive relief under § 10(j), without requiring case-by-case approval from the Board members.
Facts:
- In 2002, the International Longshore and Warehouse Union, Local 142 (the 'Union') began organizing employees at the Pacific Beach Hotel ('Hotel').
- After two elections where the Hotel engaged in objectionable conduct, the Union was certified as the employees' representative in 2005.
- During 2006 contract negotiations, the Hotel insisted on proposals that would grant it unilateral control over the bargaining unit, employment conditions, and grievance procedures, effectively nullifying the Union's representative role.
- In January 2007, the Hotel hired a management company, Pacific Beach Hotel Management, LLC ('PBHM'), to operate the hotel and handle union negotiations.
- The secret management agreement between the Hotel and PBHM required the Hotel's approval for any collective bargaining agreement costing over $350,000 or lasting more than a year, giving the Hotel a veto.
- By June 2007, PBHM and the Union were close to reaching an agreement. PBHM requested the Hotel's approval for a final contract proposal and to disclose the veto provision to the Union.
- Four days after PBHM's request, the Hotel terminated its agreement with PBHM.
- Upon resuming direct management on December 1, 2007, the Hotel refused to rehire five union leaders, withdrew recognition from the Union, and unilaterally changed wages and work schedules.
Procedural Posture:
- The Union filed unfair labor practice charges against HTH Corp. (the 'Hotel') with the National Labor Relations Board (NLRB).
- The NLRB's Regional Director for Region 20 investigated and issued an unfair labor practice complaint against the Hotel.
- After a hearing, an NLRB Administrative Law Judge (ALJ) found the Hotel had committed multiple violations of the National Labor Relations Act.
- The Hotel filed exceptions to the ALJ's decision with the full NLRB in Washington, D.C., where the case remained pending.
- The Regional Director, on behalf of the NLRB, petitioned the U.S. District Court for the District of Hawaii for a temporary injunction under § 10(j) of the Act, based on authorization from the NLRB's General Counsel.
- The Hotel moved to dismiss for lack of subject-matter jurisdiction, which the District Court denied before granting the § 10(j) injunction against the Hotel.
- The Hotel (appellant) appealed the District Court's decision to grant the injunction to the U.S. Court of Appeals for the Ninth Circuit, with the Regional Director as appellee.
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Issue:
Does the National Labor Relations Act permit the National Labor Relations Board to delegate its authority to petition for temporary injunctive relief under § 10(j) to its General Counsel, without requiring case-by-case approval from the Board members?
Opinions:
Majority - Berzon, Circuit Judge
Yes, the National Labor Relations Act permits the Board to delegate its § 10(j) petitioning authority to the General Counsel. The court held that while § 10(j) grants the 'power' to petition to 'The Board,' it does not specify how that power must be exercised or prohibit delegation. The court found statutory authorization for this delegation in § 3(d) of the Act, which provides that the General Counsel 'shall have such other duties as the Board may prescribe.' The court rejected the Hotel's argument that § 3(d) only allows the delegation of 'duties,' not 'powers,' finding that the Act uses the terms interchangeably. The court's conclusion was strongly reinforced by the Board's decades-long, unchallenged practice of delegating similar authority to the General Counsel to file petitions for enforcement of Board orders under § 10(e), a provision with nearly identical language. The court also held that the Board's lack of a quorum at the time the petition was filed did not invalidate the General Counsel's authority, as the delegation itself was made when the Board had a proper quorum. Finally, the court affirmed the district court's issuance of the injunction on the merits, finding no abuse of discretion in the determination that the NLRB was likely to succeed on its claims of bad-faith bargaining and discriminatory refusal to rehire union activists.
Analysis:
This decision solidifies the authority of the NLRB's General Counsel to seek vital interim relief in labor disputes, even when the Board itself is unable to act on a case-by-case basis due to vacancies or political gridlock. By aligning with the Fourth, Fifth, and Eighth Circuits, the Ninth Circuit creates national uniformity on this critical issue, ensuring the NLRA's remedies are not paralyzed by internal Board politics. The ruling reinforces the separation of the NLRB's prosecutorial and adjudicatory functions, empowering the General Counsel to act swiftly to preserve the status quo and prevent employers from succeeding in unlawful union-busting campaigns simply due to the slow pace of administrative litigation.
