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SEIU Healthcare 1199NW v. Community Psychiatric Clinic

United States District Court, W.D. Washington, Seattle

August 12, 2019

SEIU HEALTHCARE 1199NW, a labor organization, Plaintiff,
v.
COMMUNITY PSYCHIATRIC CLINIC, Defendant.

          ORDER DENYING MOTION FOR A TEMPORARY RESTRAINING ORDER

          MARSHA J. PECHMAN, UNITED STATES DISTRICT JUDGE

         THIS MATTER comes before the Court on Plaintiff's Motion for a Temporary Restraining Order and Order to Show Cause why a Preliminary Injunction Should Not Issue. (Dkt. No. 2.) Having reviewed Plaintiff's Motion, the Response (Dkt. No. 8), and all related papers, the Court DENIES the Motion.

         Background

         Plaintiff, SEIU Healthcare 1199NW (the “Union”), which represents over 200 current employees of Defendant, Community Psychiatric Clinic (“CPC”), seeks to enjoin Defendant from merging with Sound, another mental healthcare provider. (Dkt. No. 3, Declaration of Jason Beauchene (“Beauchene Decl.”), ¶¶ 4, 6.) Plaintiff contends the sale to Sound violates the Parties' collective bargaining agreement (“CBA”), which controls the wages, hours, and other terms and conditions of employment at CPC. (Id. ¶ 5, Ex. A.) Without an injunction, Sound will assume Defendant's assets and liabilities at the end of this month. (Id. ¶ 6; Dkt. No. 10, Declaration of Bruce Smith (“Smith Decl.”), ¶ 5, Ex. 1.)

         From January 2018 through March 11, 2019 the Parties were in negotiations regarding the current iteration of their CBA. (Id. ¶ 13.) On March 11, the Parties achieved a recommended settlement agreement, with the new contract including a provision for addressing employee issues in the event of a merger or sale of CPC. (Id. ¶ 14.) The Union signed the CBA on April 25, 2019, but Defendant contends the Union did not deliver a copy of the agreement that was signed by the Union until July 10, 2019. (Beauchene Decl., Ex. A at 27; Smith Decl. ¶ 15.) The CBA was “effective [on the] date of signing.” (Beauchene Decl., Ex. A at 26.)

         On March 20, 2019, Defendant entered into a letter of intent with Sound, beginning the process of negotiating a potential sale. (Beauchene Decl. ¶ 6; Smith Decl. ¶ 5, Ex. 1.) During the negotiations that followed, Defendant claims that it described the CBA to Sound and requested that Sound continue employment for former CPC employees on the same or similar terms as those employees had with CPC. (Smith Decl. ¶¶ 6-7.) On April 15, 2019, CPC and Sound signed an Asset Transfer Agreement. (Id. ¶ 8.) According to Defendant, due to regulatory, funding, and staffing challenges, without the sale to Sound, it will be “almost impossible” for CPC to remain open after August 31. (Smith Decl. ¶¶ 31-35.)

         Two days after signing the agreement with Sound, Defendant's Chief Executive Officer, Douglas Crandall, emailed all CPC employees and texted a Union representative to announce that CPC and Sound would merge. (Beauchene Decl. ¶ 7; Dkt. No. 9, Declaration of Matthew W. Lynch (“Lynch Decl.”), ¶ 3, Ex. 1.) CPC employees began receiving letters in mid-June that their employment with CPC would end on August 31, 2019. (Beauchene Decl. ¶ 15.) Approximately 15 current CPC employees were not offered employment with Sound; these employees are not the least senior in their program, pay grade, or specialty. (Beauchene Decl. at ¶ 16; see Dkt. No. 14.) Several of these employees have submitted declarations describing their concerns about finding future employment and their ability to obtain medical care when their employment ends. (See Dkt. No. 3, Ex. K, Declaration of Belinda Allender (“Allender Decl.”), ¶¶ 4-7; Ex. L, Declaration of Chris Dyson (“Dyson Decl.”), ¶¶ 2, 4; Ex. M, Declaration of Kirsten Staszak (“Staszak Decl.”), ¶¶ 2-5; Ex. O, Declaration of Dendrie Lynn Plodzrein (“Plodzrein Decl.”), ¶¶ 2-4, 6.)

         For those CPC employees who have received offers from Sound, the terms and conditions of their employment will change. (Beauchene Decl. ¶ 17.) For example, they will no longer have a clause that permits Sound to terminate them only for “just cause, ” and will have a new high-deductible health insurance plan where the current CPC plan is low-deductible. (Id.) For at least one employee, the new health insurance plan means she will be unable to afford her current medications. (Id., Ex. N, Declaration of Abigail Minor (“Minor Decl.”), ¶¶ 3-6.) These employees will also forfeit any accrued sick leave over 120 hours, may lose accrued vacation hours, and will be required to undergo background checks. (Beauchene Decl. ¶¶ 18-20.)

         On April 30, 2019, the Union requested information about the partnership between CPC and Sound. (Beauchene Decl. at ¶ 9, Ex. C.) In response, Defendant provided the Letter of Intent, the Asset Transfer Agreement, and a flash drive with copies of service delivery contracts and other documents but did not provide information regarding the terms and conditions of employment for those CPC employees who received offers with Sound. (Id.; Smith Decl. ¶¶ 18-19, Ex. 7.) In accordance with the CBA's four-step grievance procedure, Plaintiff filed a grievance on June 5, 2019, complaining that the successorship provision of the CBA had been violated and the notice period was insufficient; the parties held a grievance meeting on June 20, 2019. (Beauchene Decl. ¶ 12, Ex. D; Smith Decl. ¶ 19.) Although not provided for in the CBA, Plaintiff requested that the Parties enter expedited arbitration. (Id.; Ex. A.) On August 1, having received no response, Plaintiff again requested expedited arbitration and an agreement that Defendant delay the asset transfer until completion of arbitration. (Id.) The Parties have now reached Step Three of the grievance process, the final step before arbitration. (Id. at ¶ 29; see Dkt. No. 14.)

         Discussion

         I. Legal Standard

         The Norris-LaGuardia Act, 29 U.S.C. §§ 101, et seq., generally limits a district court's power to issue injunctions in disputes between a union and an employer. In Boys Markets, Inc. v. Retail Clerks Union, Local 770, the Supreme Court recognized an exception to the Act's anti-injunction provisions and allowed equitable relief to prevent a union from going on strike over a dispute that was subject to a binding arbitration process. 398 U.S. 235, 253 (1970) (injunctive relief can support the central purpose of the Norris-LaGuardia Act when it “merely enforces the obligation that the union freely undertook under a specifically enforceable agreement to submit disputes to arbitration”); see also Buffalo Forge Co. v. United Steelworkers of America, 428 U.S. 397, 407, (1976) (“The driving force behind Boys Markets was to implement the strong congressional preference for the private dispute settlement mechanisms agreed upon by the parties.”).

         Courts have also found injunctive relief to be appropriate in so-called “reverse Boys Markets” instances where “an employer makes changes in areas which are subject to the grievance-arbitration procedure, and the union seeks to enjoin the employer from making the changes until the grievance is resolved through arbitration.” Newspaper & Periodical Drivers' & Helpers' Union, Local 921 v. San Francisco Newspaper Agency, 89 F.3d 629, 632 (9th Cir. 1996).

         Under the reverse Boys Markets exception, courts have found ...


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