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International Brotherhood of Teamsters, Local Union No. 639 v. Airgas, Inc.

United States District Court, D. Maryland

June 5, 2017

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL UNION No. 639 Plaintiff,
v.
AIRGAS, INC., Defendant.

          MEMORANDUM OPINION

          THEODORE D. CHUANG UNITED STATES DISTRICT JUDGE.

         On March 3, 2017, this Court granted a Motion for a Preliminary Injunction filed by Plaintiff International Brotherhood of Teamsters, Local Union No. 639 (the "Union") and thus enjoined Defendant Airgas, Inc. ("Airgas") from relocating its High Pressure Resisting and Liquid Can Repair ("HPRLCR") function unit or its Small Medical Oxygen ("SMO") function unit from its Hyattsville, Maryland facility and from making any staffing reductions or alterations related to those functions. See Order, ECF No. 18. On March 14, 2017, Airgas appealed this Court's Order to the United States Court of Appeals for the Fourth Circuit. That same day, Airgas filed with this Court a Motion for Stay of Preliminary Injunction pending the appeal. That Motion is now ripe for disposition. Having reviewed the briefs, the Court finds no hearing necessary. See D. Md. Local R. 105.6 (2016). For the reasons set forth below, the Motion is DENIED.

         DISCUSSION

         The findings of fact on which the Court based its preliminary injunction are set forth in its prior Memorandum Opinion. See Teamsters v. Airgas, __F.Supp.3d__, No. TDC-17- 0577, 2017 WL 1239259 at *l-4 (D. Md. Mar. 3, 2017). Additional facts and procedural history are provided below as necessary.

         I. Legal Standard

         Pursuant to Federal Rule of Civil Procedure 62, a court "may suspend, modify, restore, or grant an injunction" while an appeal of that injunction is pending. Fed.R.Civ.P. 62(c). A party seeking to stay an injunction pending appeal must show (1) a likelihood of prevailing on the merits of the appeal, (2) irreparable injury if the stay is denied, (3) that the other parties will not be substantially harmed by the stay, and (4) that the public interest will be served by the stay. Long v. Robinson, 432 F.2d 977, 979 (4th Cir. 1970).

         II. Likelihood of Success on the Merits of the Appeal

         On appeal, the district court's grant of a preliminary injunction will be reviewed for an abuse of discretion, with legal conclusions reviewed de novo and factual findings reviewed for clear error. Pashby v. Delia, 709 F.3d 307, 319 (4th Cir. 2013); Dewhurst v. Century Aluminum Co., 649 F.3d 287, 290 (4th Cir. 2011). Airgas asserts that it is likely to succeed on the merits of its appeal because this Court made two errors of law: (1) it misapplied the standard for an injunction pending arbitration under the Norris-LaGuardia Act, 29 U.S.C. § 101 (2012), and (2) it failed to hold the Union to its obligation to satisfy all four of the factors required for the issuance of preliminary injunction under Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7 (2008). The Court discusses each alleged error in turn.

         A. Standard for an Injunction Pending Arbitration

         In Boys Markets, Inc. v. Retail Clerk's Union, Local 770, 398 U.S. 235 (1970), the United States Supreme Court held that the Norris-LaGuardia Act's prohibition on issuing injunctions in labor disputes did not divest a federal court of jurisdiction to enjoin a strike where the union and employer were bound by a collective bargaining agreement that provided for binding arbitration of the dispute giving rise to the planned strike. Id. at 253. Lower courts have since interpreted Boys Markets to allow federal courts to issue injunctions to maintain the status quo where the parties' dispute is subject to a binding arbitration clause in the collective bargaining agreement, even absent a threatened strike. See, e.g., Lever Bros. Co. v. Int'l Chemical Workers Union, Local 217, 554 F.2d 115 (4th Cir. 1976); Aluminum Workers Int'l Union, AFL-CIO, Local Union No. 215 v. Consolidated Aluminum Corp., 696 F.2d 437, 441 (6th Cir. 1982). Such "Boys Markets''' injunctions are designed to preserve the integrity of arbitration and thus should issue only if they are "necessary to protect the arbitral process itself." Columbia Local Am. Postal Workers Union v. Bolger, 621 F.2d 615, 617 (4th Cir. 1980). Accordingly, the test for issuance of such an injunction "is whether the conduct proposed must be enjoined because the available arbitral process could not possibly restore the status quo ante in an acceptable form were that conduct to be found violative of contract rights." Id. at 618.

         Airgas asserts that this Court erred as a matter of law by construing the Boys Markets exception too broadly. Airgas casts the Boys Markets exception as applying only where later compliance with an arbitration order would be "impossible.'" Mot. Stay at 9 (emphasis in original). This position misstates the applicable standard. The United States Court of Appeals for the Fourth Circuit has held that a Boys Markets injunction is appropriate where an arbitration award could not "return the parties substantially to the status quo ante, " Lever Bros., 554 F.2d at 123, or "could not possibly restore the status quo ante in an acceptable form, " Bolger, 621 F.2d at 618. Therefore, the test for a Boys Markets injunction is not whether any form of compliance with an arbitrator's order is possible, as Airgas suggests, but whether acceptable compliance is possible, that is, compliance in a form that would not render the arbitrator's decision "a hollow formality." Lever Bros., 554 F.2d at 123. It is this standard, based on a concern for the integrity of the arbitral process, that is controlling in the Fourth Circuit, and that the Court employed in issuing the injunction. See Airgas, 2017 WL 1239259 at *4 (concluding that Airgas's proposed transfer of operations "would likely cause irreparable harm to the arbitral process because that transfer would amount to a 'fait accompli' that would render arbitration 'a hollow formality.'") (citing Lever Bros., 554 F.2d at 122-23).

         Airgas's real objection to this Court's determination appears to stem from the Court's factual conclusions. Airgas argues that an injunction is warranted only when, for example, there is an "irretrievable loss of workers' primary employment, " such as through the "sale or liquidation of an entire division of a company which cannot be unwound. Mot. Stay at 7. The Court, however, made findings of fact that the proposed action would result in the permanent loss of 13 Union positions, and that "the combination here of the physical relocation of entire operational functions and the permanent loss of positions, some of which have already been replaced" were changes to Airgas's operations that could not be unwound. Airgas, 2017 WL 1239259 at *6. The Court particularly noted that because Airgas planned to transform parts of the Hyattsville facility-those that house the operations to be transferred-into a storage area for hazardous chemicals needed to bring Airgas into compliance with federal regulations, "for all intents and purposes, " Airgas's plan would "amount[] to a shuttering of the factory doors for th[e HPRLCR and SMO] units." Id. Notably, Airgas now reiterates, in an Affidavit from its Vice-President of Operations submitted with this Motion, that Airgas will repurpose parts of the Hyattsville location into a hazardous chemical storage facility. Thus, the Court appropriately concluded, under the prevailing legal standard, that an arbitrator's award could not "return the parties to the status quo ante." Airgas, 2017 WL 1239259 at *6.

         B. The Winter Factors

         Airgas further asserts that it is likely to succeed on appeal because this Court failed to require the Teamsters to satisfy each of the four Winter factors: (1) likelihood of success on the merits; (3) likely irreparable harm; (3) the ...


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