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

United States Court of Appeals, Fourth Circuit

March 13, 2018

INTERNATIONAL BROTHERHOOD OF TEAMSTERS, LOCAL UNION NO. 639, Plaintiff - Appellee,
v.
AIRGAS, INCORPORATED, Defendant-Appellant.

          Argued: December 6, 2017

         Appeal from the United States District Court for the District of Maryland, at Greenbelt. Theodore D. Chuang, District Judge. (8:17-cv-00577-TDC)

         ARGUED:

          Judd E. Stone, II, MORGAN LEWIS & BOCKIUS, LLP, Washington, D.C., for Appellant.

          Mark James Murphy, MOONEY, GREEN, SAINDON, MURPHY & WELCH, P.C., Washington, D.C., for Appellee.

         ON BRIEF:

          Allyson N. Ho, MORGAN, LEWIS & BOCKIUS, LLP, Dallas, Texas, for Appellant.

          Matthew D. Watts, MOONEY, GREEN, SAINDON, MURPHY & WELCH, P.C., Washington, D.C., for Appellee.

          Before GREGORY, Chief Judge, and WILKINSON and HARRIS, Circuit Judges.

          Dismissed by published opinion. Judge Harris wrote the majority opinion, in which Chief Judge Gregory joined. Judge Wilkinson wrote a dissenting opinion.

          PAMELA HARRIS, Circuit Judge:

         Airgas, Inc., a national company that produces gases for industrial and medical uses, operates a facility in Hyattsville, Maryland, where its approximately 65 employees are represented by an International Brotherhood of Teamsters union. When Airgas announced plans to relocate some of its Hyattsville operations to nonunionized facilities, the Union objected, arguing that the move was barred by the parties' collective bargaining agreement, and initiated the mandatory arbitration provided for by the agreement. And at the Union's urging, the district court entered a preliminary injunction prohibiting the contemplated transfer pending arbitration, to ensure that the status quo ante could be restored were the Union to prevail on the merits of the contract dispute.

         Airgas appealed, asking that we vacate the injunction and allow it to proceed with its planned relocation during the arbitration. While Airgas's appeal was pending, however, the arbitrator issued a final decision in favor of the Union, the arbitration concluded, and the preliminary injunction expired by its own terms. Because Airgas no longer has a legally cognizable interest in the validity of the preliminary injunction, we follow our recent practice, see International Union, UMWA v. CONSOL Energy, Inc., No. 17-1378 (4th Cir. Nov. 27, 2017), ECF No. 42, and dismiss this appeal as moot.

         I.

         In February 2017, Airgas notified the Union that represents its Hyattsville, Maryland employees that it intended to "completely shut down" and move two of its Hyattsville operations to two nonunionized locations, one in Maryland and one in Pennsylvania, by the next month. J.A. 71. The vacated Hyattsville space would be converted into specialized storage facilities for nitrous oxide and various chemicals, as required to bring Airgas's practices into compliance with Food and Drug Administration and Department of Homeland Security regulations regarding chemical storage. The parties agree that the transfer would mean the loss of an estimated 13 Union positions at the Hyattsville facility, reducing the bargaining unit's size by about twenty percent.

         The Union objected on the ground that the proposed relocation would violate Article 10 of the parties' collective bargaining agreement ("CBA"), which provides that Airgas "shall not subcontract, transfer, lease[, ] assign[] or convey[] in whole or in part, directly or indirectly, any work or service . . . presently performed or hereafter assigned to the collective bargaining unit." J.A. 29. Airgas disagreed, pointing to Article 9, which reserves to Airgas the right to manage its business as it sees fit "except as specifically limited" by the CBA, and in particular, to "[s]ell, lease, transfer, move, change location, discontinue, [and] relocate all or part of the business or operations." J.A. 26-28. Airgas also informed the Union that it had started the process of hiring nonunion employees to perform the transferred work operations at one of its new locations.

         As the parties agree, their dispute is subject to mandatory arbitration under the CBA. When Airgas declined to expedite arbitration, the Union moved in the district court for a preliminary injunction barring the proposed relocation pending arbitration. Federal courts generally are without jurisdiction to issue injunctions in labor disputes, see 29 U.S.C. § 101, but the Union invoked the exception recognized in Boys Markets, Inc. v. Retail Clerk's Union, Local 770, 398 U.S. 235 (1970) and Lever Brothers Co. v. International Chemical Workers Union, Local 217, 554 F.2d 115 (4th Cir. 1976), which allows for injunctions during arbitration if an arbitrator otherwise would be unable to restore the status quo ante after deciding the merits of a labor dispute. According to the Union, this was precisely such a case: Once Airgas moved several large pieces of equipment from the Hyattsville facility to new locations, converted the vacated Hyattsville space into designated chemical storage, and replaced 13 terminated Union members with nonunion employees - five of whom, it turned out, already had been hired - it would be too late for an arbitrator to unwind the transfer if the Union prevailed on the merits. Airgas disagreed, insisting that it could and would undo the transfer promptly and with ease were the arbitrator to rule against it.

         After holding a hearing, the district court agreed with the Union and issued a preliminary injunction barring the proposed transfer pending arbitration. See International Brotherhood of Teamsters, Local Union No. 639 v. Airgas, Inc., 239 F.Supp.3d 906 (D. Md. 2017). The court recognized the "jurisdictional limitations deriving from the Norris-LaGuardia Act" that generally leave federal courts without jurisdiction to enter injunctions in labor disputes. Id. at 912. But under Boys Markets and settled circuit precedent, the court explained, "special considerations" will permit a preliminary injunction pending arbitration: When the parties' dispute is subject to mandatory arbitration under a collective bargaining agreement, a court retains jurisdiction to enter a preliminary injunction barring proposed employer conduct where "necessary to protect the arbitral process itself, " by ensuring that the arbitrator will be able to "restore the status quo ante in an acceptable form were that conduct found to be violative of contract rights." Id. at 912-13 (quoting Columbia Local, American Postal Workers Union v. Bolger, 621 F.2d 615, 617-18 (4th Cir. 1980)).

         Because Airgas conceded that the parties' dispute was subject to arbitration under the CBA, the district court turned to the factual question of whether Airgas's planned relocation could, "as a practical matter, be fully unwound" were the arbitrator to rule against it. Id. at 913. The court noted that our circuit has upheld Boys Markets status quo injunctions in cases that involve the planned relocation of company operations rather than more easily rectified changes in work shifts or schedules. Id. at 913-14 (citing Bolger, 621 F.2d at 616-18; Drivers, Chauffeurs, Warehousemen & Helpers Teamsters Local Union No. 71 v. Akers Motor Lines, Inc., 582 F.2d 1336, 1338-39, 1341 (4th Cir. 1978); Lever Bros., 554 F.2d at 122). In this case, too, the district court determined, the evidence and testimony established that "it is not realistic to conclude that Airgas could simply undo" the contemplated move in the event of an unfavorable ruling by the arbitrator. Id. at 914. That was so, the district court found, because of a combination of circumstances: The move would require the physical relocation of large pieces of equipment from Hyattsville to the alternate sites; it would be accompanied by the repurposing of the Hyattsville space as designated chemical storage, as required by federal regulations; and Airgas already had started to replace Hyattsville workers with newly hired nonunion employees. Id. at 914-15. All told, Airgas's transfer of operations, if allowed to commence, almost certainly would become so "strongly rooted" during the year or so devoted to arbitration that it would be infeasible for an arbitrator to return the parties to the status quo ante. Id. at 915.

          Having satisfied itself of jurisdiction to enter a preliminary injunction under Boys Markets, the district court went on to consider the traditional preliminary injunction factors. See Boys Markets, 398 U.S. at 254 (instructing courts to consider whether issuance of injunction would be "warranted under ordinary principles of equity"). As to likelihood of success on the merits, the court explained, because the merits of the contract dispute are reserved to the arbitrator, the relevant inquiry is limited to whether the parties' dispute is subject to arbitration - a point conceded by Airgas. Airgas, Inc., 239 F.Supp.3d at 916 (citing Akers, 582 F.2d at 1342). The ...


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