[00:00:00] Speaker 03:
Emma, go on to the next and final case on the calendar today.

[00:00:02] Speaker 03:
It is labeled two different ways.

[00:00:08] Speaker 03:
Depending on which calendar you're looking at, it's either Kaufman or Owens versus Satellite Healthcare.

[00:00:50] Speaker 03:
Whenever you're ready, counsel, we're all set.

[00:00:56] Speaker 04:
May it please the court?

[00:00:57] Speaker 04:
Good morning.

[00:00:58] Speaker 04:
My name is Erin Sweeney.

[00:00:59] Speaker 04:
I represent Respondent Appellant Satellite Healthcare.

[00:01:02] Speaker 04:
I'd like to reserve three minutes for rebuttal.

[00:01:08] Speaker 04:
So this is the kind of labor case that needs a roadmap at times, or it could be easy to get lost.

[00:01:15] Speaker 04:
Satellite's appeal here is fairly limited.

[00:01:20] Speaker 04:
It's focused more on some glaring deficiencies that are very fundamental to the district court's order of this preliminary injunction.

[00:01:28] Speaker 04:
And my goal today would be able to provide the court with a shortcut on that path through the briefing and the evidence to quickly get to the point to see how the order is deficient and should be reversed.

[00:01:44] Speaker 04:
Last fall, the regional director of Region 20 in San Francisco petitioned the district court

[00:01:48] Speaker 04:
for a preliminary injunction restraining and asking for affirmative relief based on approximately 10 charges and two complaints that the region had issued, one in 2023 that covered about nine unfair labor practice charges, a variety of different allegations and as well as a second complaint that was issued.

[00:02:12] Speaker 01:
So where did the district court err here?

[00:02:15] Speaker 04:
The district court erred in its application of the second element, the winter test.

[00:02:20] Speaker 04:
So the four factors that the court must weigh and look at, whether it can issue a preliminary injunction even in the 10-J proceeding.

[00:02:28] Speaker 04:
If you look at it, it erred in a variety of different ways when applying that second element for irreparable harm.

[00:02:34] Speaker 03:
So right at the outset, I just want to make sure that I'm understanding your argument because I read your briefing to be skipping the first component of the winter factors, which we've consistently said is the most important.

[00:02:44] Speaker 03:
And that is likelihood of success on the merits.

[00:02:46] Speaker 03:
But I just want to make sure I'm not overstepping.

[00:02:48] Speaker 03:
Is that right?

[00:02:50] Speaker 03:
Yes.

[00:02:51] Speaker ?:
OK.

[00:02:51] Speaker 04:
But the courts have also said that even though the first element might be met, that does not automatically entitle the regional director to an injunction.

[00:03:00] Speaker 04:
The second element must also be met.

[00:03:03] Speaker 03:
I appreciate that.

[00:03:05] Speaker 03:
We've consistently said it's the most important.

[00:03:06] Speaker 03:
You're not challenging it.

[00:03:09] Speaker 03:
You were going on to the second factor in response to Judge Bress's question.

[00:03:12] Speaker 03:
So I just wanted to make sure I'm not missing anything.

[00:03:14] Speaker 03:
Go right ahead, please.

[00:03:15] Speaker 04:
Sure.

[00:03:15] Speaker 04:
So that second factor for irreparable harm has to be established if the unfair labor practice, the likely unfair labor practice that is shown in the first element, along with a present or impending or an imminent effect of that unfair labor practice is not cured by later relief.

[00:03:31] Speaker 04:
So there's a couple of issues when you look at the court's order and decision here.

[00:03:35] Speaker 04:
The first being that if you look at what the court

[00:03:40] Speaker 04:
in the first factor says are the allegations that there's a likelihood on the merits.

[00:03:45] Speaker 04:
And I'm just going to do some rough math to kind of cut it down here.

[00:03:48] Speaker 04:
There's about seven, I think, what I counted about seven allegations that the court says that they find that there's a likelihood on the merits.

[00:03:56] Speaker 04:
When you get to the second element of the court's order and it's analyzing irreparable harm, the court only points to, I believe, three and makes no attempt to analyze

[00:04:10] Speaker 04:
Let me make sure my mouth is correct there.

[00:04:11] Speaker 04:
Yes, three.

[00:04:13] Speaker 04:
An 8A5 allegation about 2023 merit increases at four centers, an 8A3 allegation about 2023 and 2024 merit increases, and then a termination of an employee at a Vallejo Center.

[00:04:27] Speaker 03:
That analysis- What she's citing is, I think I would pack those a little bit differently, but if we can back up, are you, is your problem that you think that she didn't show that the harm flows from,

[00:04:40] Speaker 03:
each of the issues that she found that the regional director would likely succeed upon?

[00:04:47] Speaker 03:
In other words, why would three be inadequate?

[00:04:50] Speaker 03:
She's supposed to be looking to make sure that the bargaining process is not harmed, preserving the status quo.

[00:04:56] Speaker 03:
I'm not sure why one wouldn't be enough.

[00:04:58] Speaker 03:
Am I missing something?

[00:04:59] Speaker 04:
Well, I think, yes, with the scope of the order, if the order is enjoining or an affirmative relief about bargaining over the change in unilateral policies about attendance and those kind of matters, and there's been absolutely no analysis whatsoever about whether there's any kind of present or imminent harm that could be the effect of that actual

[00:05:25] Speaker 04:
or likely ULP that can't mature by later release.

[00:05:28] Speaker 03:
But scope is a different question.

[00:05:29] Speaker 03:
Scope is a different question.

[00:05:31] Speaker 03:
You were just responding to Judge Bress about the harm and why you think that there wasn't a sufficient showing of harm under the winter factors.

[00:05:40] Speaker 03:
Correct.

[00:05:40] Speaker 04:
So it's a kind of two-factor analysis, I think, that under this second element, not only was there not an analysis of the

[00:05:52] Speaker 04:
Allegations and charges that eventually were incorporated into the order and that was restrained but then also the analysis that was done was not sufficient based upon the evidence and the record and the conclusions that were drawn even for those that were actually considered and contemplated and I can get to that as well, so

[00:06:17] Speaker 01:
I guess I'm struggling a little bit with where you think the error is because is the error in the factual findings about the lack of union support following some of these actions or is it the error in not connecting the lack of union support to the violations?

[00:06:34] Speaker 04:
Both.

[00:06:35] Speaker 04:
So I think that the evidence itself that the court points to

[00:06:41] Speaker 04:
Or at least the conclusions that the court draws about the evidence are not supported by the actual evidence.

[00:06:46] Speaker 04:
And then I also think that that evidence itself does not meet the standard of being present, eminent, or injurious effect in the future, or in the current sense, and also that can't be cured by later release.

[00:07:04] Speaker 01:
So the district court found that the

[00:07:07] Speaker 01:
There was a decline in employee morale.

[00:07:09] Speaker 01:
There was a decrease in union participation.

[00:07:11] Speaker 01:
There's evidence that employees are electing to leave unionized clinics to go to non-unionized clinics, that the union is struggling to organize new clinics.

[00:07:20] Speaker 01:
So were those findings erroneous?

[00:07:23] Speaker 04:
We believe so.

[00:07:24] Speaker 04:
So the, for example, if you, the actual evidence that was presented about morale and decrease in, or let me see.

[00:07:34] Speaker 04:
My example would be unions struggling to organize new clinics.

[00:07:39] Speaker 04:
The actual evidence that the court pointed to to make that conclusion is the declaration of one employee at one center out of all these 11.

[00:07:47] Speaker 04:
And it was a statement about a

[00:07:53] Speaker 04:
conversation he had with a co-worker in 2023, and this is also an employee who was deposed and their entire deposition transcript is on the record.

[00:08:02] Speaker 00:
If I can interrupt, I may agree with you that they may not be the strongest evidence, but we review this for abusive discretion?

[00:08:10] Speaker 04:
I think what the problem is, is that looking at all of the evidence altogether, there isn't this

[00:08:21] Speaker 04:
evidence of this imminent effect that is happening at the time that the injunction is put into place.

[00:08:29] Speaker 03:
But Judge Lee is right about the standard of review.

[00:08:32] Speaker 03:
And unless you can tell us otherwise, we look at the winter factors and impositions of these kinds of injunctions a lot.

[00:08:39] Speaker 03:
And what she had here is that the four clinics that had chosen to unionize in December of 2022, the Vallejo Clinic in April of 2023 by a vote of 22 to 2,

[00:08:50] Speaker 03:
three more in June.

[00:08:52] Speaker 03:
And then by September, there's one union that voted to unionize by one vote.

[00:08:59] Speaker 03:
By February of 2024, there was a clinic that turned down the opportunity.

[00:09:05] Speaker 03:
And then, of course, throughout this timeline, there was dwindling support, as indicated in some of the testimony.

[00:09:12] Speaker 03:
People failing to show up and attend union events and whatnot.

[00:09:15] Speaker 03:
And the goal of this type of injunction, of course, is just to maintain the status quo.

[00:09:20] Speaker 03:
And what she's got is, and I think it's uncontested, that after this clinic voted to unionize, or the four voted to unionize, there was delay until from December all the way to September, about nine months before there was bargaining started.

[00:09:37] Speaker 03:
And in that time, there were unilateral changes by the employer, including

[00:09:41] Speaker 03:
withholding merit increases only from the clinics that had voted to unionize, but paying them to the clinics that had not.

[00:09:50] Speaker 03:
This seems like a very powerful record to me.

[00:09:52] Speaker 04:
Well, there's also evidence on the record that was dismissed that in that exact same time period that the union also organized, I think, six or seven other locations and won elections.

[00:10:04] Speaker 03:
Well, I think I just walked through that.

[00:10:06] Speaker 03:
And when you say dismissed, do you think she failed to consider the evidence?

[00:10:10] Speaker 03:
Yes.

[00:10:11] Speaker 03:
Why?

[00:10:12] Speaker 03:
You found it out, Wade, but it doesn't take a lot to imagine that the bargaining process is going to be harmed if the employer stops paying annual raise increases that have been established, an established course of conduct, only to the folks who voted to unionize.

[00:10:34] Speaker 04:
I think what the conclusions were made were that, or let me,

[00:10:40] Speaker 04:
back up, that when you put the evidence that the region actually brought about that time period and the merit increases, it does not demonstrate, there was no connection or demonstration of this ongoing harm even as to today and a year later that the board cannot remedy.

[00:11:02] Speaker 04:
And that is the other element that was not considered, which is whether this was some kind of, if there is an impact that the board could not remedy.

[00:11:30] Speaker 04:
The other aspect of the challenge to the consideration of irreparable harm is the fail to also consider the significant delay and the evidence that was brought about that.

[00:11:45] Speaker 04:
And this court has said that the significant delay or delay in the process can be evidence to counteract whether there is an impending or, you know,

[00:11:58] Speaker 04:
present impending irreparable harm, and that evidence as well was presented and was not considered.

[00:12:06] Speaker 03:
I just want to be clear.

[00:12:07] Speaker 03:
When you say it wasn't considered, I fully appreciate that it didn't carry the day, but are there indications in the record that the judge refused to consider this evidence?

[00:12:17] Speaker 03:
It's quite different when you do what we do for a living if a judge refuses to consider evidence.

[00:12:22] Speaker 03:
I want to be sure that I understand your argument here.

[00:12:26] Speaker 04:
Sure, and I would have to double check, but my recollection was that it was not something that was considered.

[00:12:34] Speaker 01:
Even so, what material delay are we really talking about here?

[00:12:37] Speaker 04:
We're talking about the delay, for example, with Mendoza and the termination.

[00:12:42] Speaker 04:
The region issued the complaint initially on all the Vallejo charges in November 2024.

[00:12:50] Speaker 04:
The region then decided to, and that was set for hearing in March.

[00:12:55] Speaker 04:
and that included as well the allegations about termination.

[00:13:01] Speaker 04:
The region then chose to wait and amend that complaint several months later to add I think about eight or nine other allegations that were unrelated to the Vallejo complaint and push out the hearing until later in the summer.

[00:13:18] Speaker 04:
The 10J was then brought in October almost a year later.

[00:13:23] Speaker 04:
So at this point, almost a year and a half after this termination happened.

[00:13:27] Speaker 04:
We think that's evidence that shows that there was, at least in this circumstance, not the adequate irreparable harm that a 10J should be based upon from that delay itself.

[00:13:43] Speaker 04:
This is not the delay, I'm sorry.

[00:13:44] Speaker 04:
This is not the delay which I know that the courts have seen, which is incorporated, which is of course there's an administrative delay as the processes go on.

[00:13:55] Speaker 04:
But this was a delay after the issuance of the complaint and 10-J is triggered once upon the issuance of the complaint.

[00:14:04] Speaker 03:
We're taking you into your rebuttal time.

[00:14:05] Speaker 03:
Would you like to reserve?

[00:14:07] Speaker 03:
Yes.

[00:14:07] Speaker 03:
You bet.

[00:14:08] Speaker 03:
We'll hear from opposing counsel, please.

[00:14:30] Speaker 03:
Go right ahead.

[00:14:31] Speaker 02:
May it please the court.

[00:14:33] Speaker 02:
Good morning.

[00:14:33] Speaker 02:
My name is Lori Duggan, and I represent the National Labor Relations Board.

[00:14:37] Speaker 02:
Your Honors, this case is about hard-earned pay raises withheld from employees working at dialysis clinics across the state of California simply because they unionized.

[00:14:51] Speaker 02:
The company, as we just heard, concedes that it withheld these raises from employees for non-financial and non-merit reasons.

[00:14:59] Speaker 02:
So in other words, it's not that the company couldn't afford to pay employees its raises.

[00:15:04] Speaker 02:
And it's not that the employees did not deserve or were not eligible for the raises.

[00:15:10] Speaker 02:
It's simply because the employees at those clinics voted to go union.

[00:15:15] Speaker 02:
And Judge Christin, as Your Honor pointed out, at the same time that the company withheld these raises from employees, they also gave them to non-represented employees at other clinics.

[00:15:27] Speaker 02:
In addition to that fact,

[00:15:28] Speaker 02:
employees at at least four clinics were denied their hard earned raises two years in a row in 2023 and 2024.

[00:15:40] Speaker 02:
Opposing counsel seems to concede that the clear showing of likelihood of success on the merits was met, but appears to dispute that there were record findings of harm.

[00:15:52] Speaker 02:
As your honors pointed out, the district court at pages 16 to 18 of its order,

[00:15:57] Speaker 02:
carefully and in a detailed manner Went through the record findings of harm that were in this case abundant.

[00:16:05] Speaker 02:
There's nothing unusual about this case there was Ample as the district court said abundant record evidence of harm That harm flowed primarily from the withholding of wage increases But also from the discharge of active union supporter nurse Cathy Mendoza at the Vallejo clinic

[00:16:25] Speaker 01:
Does there need to be record evidence that specifically connects the harms the district court identified to the specific unlawful actions?

[00:16:34] Speaker 01:
Like does there need to be record evidence saying the reason that the Vallejo Clinic is struggling is because Ms.

[00:16:39] Speaker 01:
Mendoza was terminated?

[00:16:43] Speaker 01:
Or is it enough to kind of have unlawful violations, have evidence of some things that have happened that are harmful to the union and union employees and then to draw the connection

[00:16:56] Speaker 01:
between the two as a legal matter?

[00:16:58] Speaker 02:
Sure.

[00:16:59] Speaker 02:
Your Honor, in this circuit, it is enough.

[00:17:04] Speaker 02:
The former is enough.

[00:17:05] Speaker 02:
In this circuit, there is precedent, controlling precedent, that merely requires a party to find that there is harm flowing from the nature of the unfair labor practices at issue.

[00:17:17] Speaker 02:
But in this case, although the district court did

[00:17:20] Speaker 02:
briefly connect the nature the severe nature of the unfair labor practice violations in this case to Inferences of harm the district court did not rely on inferences here the district court again in a detailed and careful manner Laid out the record evidence of harm that exists in this case your honors in volume 10 of the excerpts excerpts of record that is the

[00:17:50] Speaker 02:
place in the record that contains affidavits from several both bargaining committee members and employees who work at these clinics and also from union organizers who helped to organize the clinics.

[00:18:05] Speaker 02:
And that affidavit testimony shows that over the course of the organizing campaign, after Nurse Mendoza was terminated, there was a first round of employee support having been chilled.

[00:18:20] Speaker 02:
and employees fearing retaliation as a result of seeing their coworker get fired.

[00:18:27] Speaker 02:
Nurse Mendoza was fired after the first round of raises were withheld at the first four clinics to unionize.

[00:18:37] Speaker 02:
So that was April of 2023.

[00:18:40] Speaker 02:
Mendoza was terminated in June of 2023.

[00:18:43] Speaker 02:
Again, there was another round of withholding of raises in 2024.

[00:18:48] Speaker 02:
And there is, again, abundant record evidence of harm flowing from the withholding of raises in 2024.

[00:18:57] Speaker 02:
In that way.

[00:18:59] Speaker 00:
Sorry, for the firing of Nurse Mendoza, can we impute that to other sites?

[00:19:06] Speaker 00:
I mean, would they even be aware of her being fired?

[00:19:09] Speaker 00:
You know, potential loss of morale in other sites?

[00:19:14] Speaker 02:
Yes, Your Honor, it would be reasonable to impute that harm to other clinics.

[00:19:19] Speaker 02:
There is record evidence showing that employees working at one clinic helped to organize employees working at other clinics.

[00:19:27] Speaker 02:
So there is evidence on the record that employees at different clinics at times talked to each other and might have heard that Mendoza was fired.

[00:19:34] Speaker 01:
What are the most probative declarations on the connection between the harms and the unlawful actions?

[00:19:43] Speaker 02:
Your honors, one of the strongest showings of harm was the diminution of unit employees at the Morgan Hill location and at the San Francisco location.

[00:19:53] Speaker 02:
So at Morgan Hill, the unit dropped from seven to five employees.

[00:19:57] Speaker 02:
It lost two of its employees.

[00:19:58] Speaker 02:
In San Francisco, the unit dropped from 17 to 10 employees.

[00:20:02] Speaker 02:
It lost seven.

[00:20:03] Speaker 01:
Due to the wage increase issue?

[00:20:05] Speaker 02:
Yes, your honor.

[00:20:07] Speaker 02:
There is record testimony that employees

[00:20:10] Speaker 02:
were frustrated that their wages were withheld.

[00:20:13] Speaker 02:
Around that time, employees also started to learn that employees at the first four clinics had their raises withheld.

[00:20:21] Speaker 01:
Wage increases.

[00:20:23] Speaker 02:
Wage increases, yes.

[00:20:24] Speaker 02:
Yes, your honor.

[00:20:25] Speaker 02:
Wage increases withheld.

[00:20:26] Speaker 02:
And they began expressing frustration at how long the bargaining was taking.

[00:20:31] Speaker 02:
Albert Lee is an organizing committee member who testified, we didn't know how long we would have to wait for bargaining.

[00:20:37] Speaker 02:
We thought bargaining would not take this long.

[00:20:40] Speaker 02:
employees were assured by the union that they would get their raises through the bargaining process.

[00:20:46] Speaker 02:
But when they didn't get them for the second year in a row, it predictably caused an erosion of union support across the clinics.

[00:20:56] Speaker 03:
Are the negotiations ongoing?

[00:21:00] Speaker 03:
Or have they achieved a collective bargaining agreement?

[00:21:03] Speaker 02:
The negotiations are ongoing.

[00:21:04] Speaker 02:
The parties have not achieved a first contract.

[00:21:07] Speaker 02:
And your honors, this is an extremely important time in collective bargaining for parties who have recently been certified.

[00:21:15] Speaker 02:
The first contract is not only a critical period because employees are more susceptible to management misconduct, as has been recognized by many circuit courts, but also because the first contract forms the foundation for the negotiations moving forward.

[00:21:33] Speaker 02:
That's the basis upon which the union has to work to bargain over terms and conditions of employment into the future.

[00:21:47] Speaker 02:
Further questions?

[00:21:49] Speaker 03:
I don't think we have further questions, Council.

[00:21:51] Speaker 02:
Your Honors, because the district, again, this is not an unusual case, because the district court acted well within its permissible range of discretion, we respectfully request

[00:22:02] Speaker 02:
that this court affirmed the district court's injunction.

[00:22:05] Speaker 02:
Thank you.

[00:22:05] Speaker 03:
Thank you for your argument.

[00:22:08] Speaker 03:
Council, you reserve some time.

[00:22:18] Speaker 04:
I'd like to just clarify a few of the things that the statements were made.

[00:22:23] Speaker 04:
Sure.

[00:22:24] Speaker 04:
I don't believe there is evidence that the

[00:22:28] Speaker 04:
the alleged drop in the unit, I believe it was San Francisco, Morgan Hill, was due to wage increases.

[00:22:34] Speaker 04:
The evidence in that situation was a declaration from an organizer who merely stated that but did not make any kind of correlation between the wage increases.

[00:22:45] Speaker 00:
For that evidence, yeah, I understand your points.

[00:22:46] Speaker 00:
Correlation, not causation, but did satellite offer countervailing evidence, I don't know, an exit interview saying I'm leaving because I found a better job, I'm moving,

[00:22:58] Speaker 04:
I don't believe we were afforded the opportunity.

[00:23:01] Speaker 04:
So the burden as well was on the regional director to prove that part of the element of the case and the evidence that was provided made these certain statements, but there were no actual kind of connections between that and the merit wage increases.

[00:23:24] Speaker 04:
Three or four witnesses that we did depose and whose testimony is on the record also did not make those kind of correlations as well.

[00:23:35] Speaker 04:
I think also the precedent that I know from this district about the harm flowing in the nature of the ULPs, most of those cases all involve a refusal to bargain altogether or withdrawal of recognition from the union.

[00:23:52] Speaker 04:
Those cases involve where the company or the employer has essentially cut off the union relationship altogether, and that is where the courts have awarded the preliminary injunction saying that there would be no way to remedy this, there would be no way to pay employees back if they weren't able to bargain or have access to this union representation during the administrative process, and that is just not the same situation here.

[00:24:19] Speaker 03:
As your honor mentioned.

[00:24:20] Speaker 03:
I'm not sure it isn't, counsel.

[00:24:22] Speaker 03:
There was a finding that there had been a failure to bargain in good faith.

[00:24:25] Speaker 03:
There was a, and there was a nine-month delay in trying to get even to the first negotiation session.

[00:24:31] Speaker 03:
There's a delay in providing the requested information that ultimately seemed to be, the evidence showed it was readily available.

[00:24:38] Speaker 03:
And then there's the withholding of the merit wage increases for 2023 and 2024.

[00:24:44] Speaker 04:
But the union did not, was not removed from its position and the parties and the

[00:24:49] Speaker 04:
continue to engage in bargaining.

[00:24:51] Speaker 03:
Well, but they weren't.

[00:24:52] Speaker 03:
I mean, that's the problem.

[00:24:53] Speaker 03:
There was no negotiations at all for the first nine months, or even the provision of the requested information.

[00:24:59] Speaker 03:
But again, that is not an effect that is occurring today that the preliminary injunction is going to affect, and that's not something that... No, it just seems... And I'll just... In case you think I'm missing something, the purpose of this type of injunction is to make sure that the bargaining process is not damaged in the meantime, so that we can go forward

[00:25:18] Speaker 03:
And ultimately, it's to maintain the status quo.

[00:25:22] Speaker 03:
So what seems to me what the trial court had was a record that the status quo was not being maintained, that it was being harmed.

[00:25:31] Speaker 03:
What are we missing?

[00:25:31] Speaker 04:
Correct.

[00:25:32] Speaker 04:
But under that reasoning, by the time this came to the district court, that the delay in the information or the delay in starting bargaining was a year past.

[00:25:42] Speaker 04:
So the impact of that... Water under the bridge?

[00:25:46] Speaker 04:
Is that your...

[00:25:48] Speaker 04:
Well, the point of the injunction going forward is to... Maintain the status quo so the bargaining can go forward.

[00:25:55] Speaker 04:
Maintain the bargaining.

[00:25:56] Speaker 04:
The bargaining has happened and as I think the court even noted that there was no evidence that after the bargaining started that the parties had not continued to regularly engage in good faith bargaining.

[00:26:09] Speaker 03:
I think we understand.

[00:26:09] Speaker 03:
I've now taken you way over your time.

[00:26:11] Speaker 03:
Thank you for your patience with our questions, both of you, for your oral argument.

[00:26:14] Speaker 03:
We'll take that matter under advisement and we'll stand in recess for the day.