and establishing a training facility in New Jersey.
Id. ¶ 8. With respect to the parties' bargaining positions,
Brown notes that the "Daily News is asking for many significant
and substantial changes in the contracts, . . . which the
unions saw as a `retrogressive' attempt to win unnecessary
`give-backs'." Id. Brown does not elaborate upon the Unions'
positions or actions.
Based on his observations and investigation, Brown concluded,
in a letter to the Commissioner, "that efforts to effect a
voluntary settlement of the dispute have been unsuccessful."
Letter, dated July 26, 1990, from Hezekiah Brown to Thomas
Hartnett (attached as Exhibit A to Brown Aff.) ("Certification
Letter"). In addition to citing the primary points in dispute,
also outlined above, Brown emphasized the "significant public
interest in the parties' dispute," noting that "the
negotiations may impact upon government efforts to promote
appropriate economic development within the state, as well as
the state's interest in protecting its workers in various
regards." Id. Thus, Brown "recommend[ed] that a board of
inquiry be asked to investigate the parties' ability and
willingness to enter into mediation, in addition to the
economic issues which are the underlying cause of the dispute."
The Commissioner's July 26, 1990 order, attached as Exhibit
B to the Complaint, requires the Board to investigate the
circumstances of the dispute, including the parties' respective
positions on subjects of bargaining. In addition, the order
identifies six areas of inquiry, which include: how management
rights need to be changed to allow the Daily News to continue
profitably without impairing the basic rights of the employees;
what the parties believe are appropriate manning levels; what
changes in health insurance and pension benefits the parties
desire; and whether the denial of management's overall
proposals would lead to the shut down of the Daily News. Among
the Board's powers are the power to subpoena witness,
documents, contracts, papers and other evidence it may deem
relevant to the dispute and the power to administer oaths and
take testimony. The order directs the Board to issue a final
report, which, unless the dispute is settled, shall include
recommendations as to terms of settlement. Although the Board
may hold hearings either in public or in private, the final
report will be made public.
In a letter dated July 30, 1990, defendant Martin F.
Scheinman, Chairman of the Board of Inquiry, informed the Daily
News and representatives of each of the Unions that the first
meeting of the Board would be held on Monday, August 6, 1990,
at 11:00 a.m. Complaint, Exhibit C. The purpose of the meeting
was to establish the procedures and ground rules for
presentations to the Board. Id.
On August 1, 1990, the Daily News brought this action,
seeking to prevent the defendants from convening the Board.
Although the Unions apparently do not oppose the implementation
of a Board of Inquiry, the Daily News is vehemently opposed to
it. The Daily News argues in essence that the Board constitutes
an impermissible interference by a State into the free and
voluntary collective bargaining process between private parties
which is not tolerated by federal labor law principles.
Moreover, the Daily News asserts that its position in the
negotiations and the bargaining process itself will be
irreparably harmed by the Board's inquiry.
At a conference before the Court on August 1, the
Commissioner agreed to postpone the first meeting of the Board
of Inquiry for one week, from August 6, 1990, to August 13,
1990, to enable the Court to receive complete and detailed
memoranda and affidavits on the issues presented in this
action, and to hold a hearing on the matter. We received a
supplemental memorandum of law and affidavits from the Daily
News on Monday, August 6, 1990, and a memorandum of law and
supporting affidavits from the State on Thursday, August 9,
1990.*fn1 On August 10, 1990, we
held a hearing, which consisted solely of oral argument from
both sides. The following discussion embodies our findings of
fact and conclusions of law.
To prevail in its application for a preliminary injunction,
staying governmental action taken in the public interest
pursuant to a statutory or regulatory scheme, the Daily News
must demonstrate (a) irreparable harm and (b) a likelihood of
success on the merits. Plaza Health Laboratories, Inc. v.
Perales, 878 F.2d 577, 580 (2d Cir. 1989).
A. Irreparable Harm
Irreparable harm is an injury for which there is no adequate
remedy at law. Jackson Dairy, Inc. v. H.P. Hood & Sons, Inc.,
596 F.2d 70, 72 (2d Cir. 1979). The Daily News argues that, if
the Board is allowed to go forward, "the context, fabric and
face of the negotiations between the Daily News and the Unions
would be irreversibly changed." Supplemental Memorandum of New
York News, Inc., in Support of Its Application for a Temporary
Restraining Order and Preliminary Injunction ("Supp. Mem.") at
41. The State responds first that the Daily News will not be
harmed by the Board's inquiry, which is "wholly separate and
independent" from the collective bargaining process, Memorandum
of Defendants in Opposition to Plaintiff's Application for a
Temporary Restraining Order and Preliminary Injunction ("Def.
Mem.") at 13, and second that, even if the collective
bargaining process is affected, any harm to the Daily News is
not irreparable "because there is nothing irreversible in the
process." Transcript of Hearing ("Tr.") at 62. We find that the
Daily News will be irreparably harmed if the Board proceeds
with its investigation.
First, as the Daily News asserts, far from being "wholly
separate and independent" from the collective bargaining
process, the investigation will destroy any atmosphere of frank
and open discussions. As Edward W. Gold, Director of Labor
Relations for New York News, Inc., explains, with a Board of
There is no secrecy or confidences that can be
shared. There can be no candid discussions to
explore, whether a mutually agreeable alternative
exists or whether a concession in one area may
elicit a concession by the other side in another.
The Board of Inquiry will formalize the
negotiations. It will transform private voluntary
collective bargaining into a public forum and
Declaration of Edward W. Gold, executed on August 5, 1990
("Gold Decl."), ¶ 16. Compelled to produce documents and
testify under oath, setting forth their bargaining positions,
the parties will be unable to "be fluid and change positions or
make concessions without embarrassment or losing face." Id. ¶
Second, as the Daily News asserts, the negotiations will be
adversely affected by the public nature of the Board's
proceedings. The Daily News could be forced, through the
production of documents or testimony under oath, to divulge
confidential or proprietary information. For example, questions
about the Daily News' "bottom line" on staffing requirements,
benefits, or independent contractors, would call for disclosure
of information which "would cause severe damage to the
competitiveness of the Daily News in its dealings with the
unions, individually and collectively, and possibly with its
business competitors." Gold Decl. ¶ 19.
Incredibly, the State suggests that the Daily News will not
be forced to disclose anything because the Board may choose not
to use its subpoena power. Def. Mem. at 15. Obviously, the
Board could not carry out its duties if it did not obtain
information from the non-cooperating Daily News by subpoena. As
the State concedes, "[i]f the Board is going to be successful
and the Daily News refuses to participate," the Board will have
to use its subpoena power. Tr. at 30. A subpoena issued by the
Board is "regulated by [New York's] civil practice law and
rules," Labor Law § 803, meaning that the Board may move in New
York State Supreme Court to compel the production of document
or giving of testimony sought by the subpoena CPLR § 2308(b).
Refusal to comply may result in a contempt proceeding. Id.
The State also argues that the Daily News will be protected
by the provisions for confidentiality in Board proceedings.
Although the Board is required by statute to keep testimony and
documents confidential if it finds that the information is not
otherwise available to the public, Labor Law § 804, there can
be no guarantee that witnesses appearing before the Board will
keep the proceedings confidential. Furthermore, while the
Commissioner has agreed to make only the final report and
recommendations public, publication of that report alone will
put broad public pressure on the parties to reach the
particular agreement advocated by the Board. As the State
admits, the public pressure "can't be ignored. Obviously that
is the point of the Board of Inquiry." Tr. at 44 (emphasis
added). After the report is issued, and the public presence is
injected into the dispute, the parties will no longer be able
to bargain freely, in a private negotiation, even though the
Board's recommendations are not "binding" on the parties.
Indeed, the State has conceded that "political jawboning is a
perfectly appropriate purpose of the statute." Tr. at 36.
This reality is at the core of the statute, as the
legislative history confirms. The committee report provides:
It is not intended that this board should have any
sanction or penal powers, but rather that the
procedure depend for its effectiveness upon the
fact that the truth about the particular situation
would be brought to public attention and that
public opinion would force the parties to seek a
Report of the New York State Joint Legislative Committee on
Industrial and Labor Conditions, No. 51 at 30 (1941) (emphasis
added). Inevitably, we believe, this kind of public
truth-finding process will lead to assessment of blame. Indeed,
Brown, the Chairman of the SMB, recommended in his letter to
the Commissioner that "a board of inquiry be asked to
investigate the parties ability and willingness to enter into
mediation." Brown Aff., Exhibit A (emphasis added).
Third, and perhaps even more troubling to the Daily News, it
will inevitably be forced "to reveal information concerning its
negotiation goals, strategies, tactics and settlement points."
Gold Decl. ¶ 19. The State characterizes the Board as merely "a
fact-finding body," Def. Mem. at 13, established to assess the
parties' "positions," not their "strategies." Tr. 33. This is a
distinction without meaning, because the positions of the
parties are inseparable from their bargaining strategies. Thus,
in revealing the "facts" that underlie their "positions," the
parties will necessarily reveal their "strategies," just as the
strategies in a poker game are revealed when the players are
required to lay their cards face up on the table. Tr. at 7. As
a result, the game — here, the process of collective
bargaining — is destroyed.
Fourth, the Board's investigation will intrude upon, and
destabilize, in practical terms, the ongoing negotiations
between the parties. Indeed, as the Daily News points out, the
negotiations have already been disrupted by proceedings
involving the Board. According to Gold, when the media first
reported that the State was considering the possible use of a
Board of Inquiry, the President of the Pressman's Union stated
during a negotiation session "that he did not want to schedule
any further meeting until he knew what was going to happen with
the Board of Inquiry." Gold Decl. ¶ 10. Since that time, at the
insistence of the Daily News, talks have continued with the
Printing Pressman's Union, but at a slower pace. Id. Another
union, the Machinists Union, cancelled a negotiating session
scheduled for August 3, 1990, "because of the pending
proceedings before the Board of Inquiry." Id. ¶ 11. Although
the business representative
of that union, Joseph Armao, now states that he "fully intends
to continue to schedule meetings" with the Daily News,
Affidavit of Joseph P. Armao, sworn to on August 8, 1990
("Armao Aff."), ¶ 2, the disruption in the bargaining schedule
between Armao's union and the Daily News has already occurred.
Moreover, as the Board conducts its inquiry, subpoenaing
documents and compelling testimony from witnesses, more
disruptions are bound to occur, altering not only the
bargaining schedules, but also the substance, direction, pace,
efficiency, tenor and overall environment of the negotiations.
Based on the foregoing, we conclude that the Daily News will
be harmed by the Board's inquiry, which will disrupt the
negotiations and impact upon the positions of the parties.
Given the public nature of the Board's proceedings, in
particular its final report and recommendations, we further
conclude that the damage to the free negotiation process caused
by the Board's inquiry would be irreparable.
B. Likelihood of Success on the Merits
The Daily News argues that Sections 800 through 805 of New
York Labor Law, which provide for the establishment by the
State of a board of inquiry, are preempted by the National
Labor Relations Act ("NLRA"). It is beyond cavil that Congress,
in enacting the NLRA, intended to regulate labor relations "to
the full extent of its constitutional power under the Commerce
Clause." Amalgamated Bus Employees v. Wisconsin Employment
Relations Board 340 U.S. 383, 391, 71 S.Ct. 359, 363-64, 95
L.Ed. 364 (1951). Congress "occupied the field" of labor
relations, leaving to the states only the power to regulate
activities of "a merely peripheral concern of the Labor
Management Relations Act" or conduct touching interests "deeply
rooted in local feeling and responsibility," San Diego Building
Trades Council v. Garmon, 359 U.S. 236, 243-44, 79 S.Ct. 773,
778-79, 3 L.Ed.2d 775 (1959), meaning "conduct marked by
violence and imminent threats to the public order." Id. at 247,
79 S.Ct. at 781.
In the context of labor relations, there are two types of
preemption. Under the first preemption doctrine, set forth in
Garmon, state laws or regulations are presumptively prohibited
if they concern conduct that is actually or arguably prohibited
or protected by the NLRA. Id. at 245, 79 S.Ct. at 779-80. Under
the second doctrine, commonly referred to as "Machinists
preemption," state laws or regulations may be preempted, even
though their objects are neither prohibited nor protected under
the NLRA, if they regulate an activity which was intended by
Congress to be unregulated, "left `to be controlled by the free
play of economic forces.'" Lodge 76, Int'l Ass'n of Machinists
and Aerospace Workers v. Wisconsin Employment Relations
Comm'n, 427 U.S. 132, 140, 96 S.Ct. 2548, 2553, 49 L.Ed.2d 396
(1976) (quoting NLRB v. Nash-Finch Co., 404 U.S. 138, 144, 92
S.Ct. 373, 377, 30 L.Ed.2d 328 (1971)).
Under either doctrine, "conflict is the touchstone of
preemption." Garmon, 359 U.S. at 250, 79 S.Ct. at 783 (Harlan,
J., concurring). Thus, the central question is whether New York
law providing for the establishment of a board of inquiry
conflicts with federal labor law. The Daily News contends that
the New York law conflicts with federal labor law because it
will impair and impede the collective bargaining process
between the Daily News and the Unions and will, directly or
indirectly, inevitably force a particular result on the
parties, thereby going to the heart of what Congress, in
enacting the NLRA, intended to protect and leave unregulated.
One of the central concerns of the NLRA is "establishing an
equitable process for determining terms and conditions of
employment. . . ." Metropolitan Life Ins. Co. v. Massachusetts,
471 U.S. 724, 753, 105 S.Ct. 2380, 2396, 85 L.Ed.2d 728 (1985).
The Act is not interested, however, in dictating particular
terms of the bargain that is struck when the parties are
negotiating from relatively equal positions. Id. The NLRA
simply does not permit governmental regulation or promulgation
of the terms and conditions of employment. As the Supreme Court
The object of [the NLRA] was not to allow
governmental regulation of the terms and
conditions of employment, but rather to ensure
that employers and their employees could work
together to establish mutually satisfactory
conditions. The basic theme of the Act was that
through collective bargaining the passions,
arguments, and struggles of prior years would be
channeled into constructive, open discussions
leading, it was hoped, to mutual agreement. But it
was recognized from the beginning that agreement
might in some cases be impossible, and it was
never intended that the Government would in such
cases step in, become a party to the negotiations
and impose its own views of a desirable
H.K. Porter Co., Inc. v. NLRB, 397 U.S. 99, 104-105, 90 S.Ct.
821, 824, 25 L.Ed.2d 146 (1970). This is consistent with the
legislative intent of Congress when the Act was initially
promulgated. At that time, the Senate Committee on Education
and Labor stated:
The committee wishes to dispel any possible false
impression that this bill is designed to compel
the making of agreements or to permit governmental
supervision of their terms. It must be stressed
that the duty to bargain collectively does not
carry with it the duty to reach an agreement,
because the essence of collective bargaining is
that either party shall be free to decide whether
proposals made to it are satisfactory.
S.Rep. No. 573, 74th Cong., 1st Sess., 12 (1935). Thus, the
role of the NLRB or any other authorized agency is to oversee
or referee the collective bargaining process without dictating
the results. The government "`may not, either directly or
indirectly, compel concessions or otherwise sit in judgment
upon the substantive terms of collective bargaining
agreements.'" H.K. Porter, 397 U.S. at 106, 90 S.Ct. at 825
(quoting NLRB v. American National Insurance Co., 343 U.S. 395,
404, 72 S.Ct. 824, 829, 96 L.Ed. 1027 (1952)).
Because of the coercive and pervasive effect the Board will
have on the negotiations between the Daily News and the Unions,
we find, as have other courts, that the establishment of a
board of inquiry under the circumstances such as these is
preempted by the NLRA. See Oil, Chemical & Atomic Workers Int'l
Union v. Arkansas Louisiana Gas Co., 332 F.2d 64 (10th Cir.
1964) (OCAW); General Elec. Co. v. Callahan, 294 F.2d 60 (1st
Cir. 1961); Rochester Telephone Corp. v. Levine, 90 L.R.R.M.
(BNA) 3032 (W.D.N.Y. 1975); Grand Rapids City Coach Lines, Inc.
v. Howlett, 137 F. Supp. 667 (W.D.Mich. 1955). For example, in
OCAW, the district court enjoined the Oklahoma State Board of
Arbitration and Conciliation from investigating an ongoing
labor dispute and making recommendations and findings. The
Tenth Circuit affirmed, finding that the "State activity was
clearly prohibited." OCAW, 332 F.2d at 66.
Similarly, in General Electric, the court enjoined the
Massachusetts Labor Board from investigating labor negotiations
between a company and some of its employees. The Massachusetts
statute explicitly provided that the Board would publish a
report finding which party was "responsible" or "blameworthy,"
294 F.2d at 62, n. 1, and that the Board's recommendation would
be binding for six months. Id. at 63, n. 2. Aside from this
"limited direct coercive power," however, the court emphasized
the indirect coercive effect of its actions upon
the parties to a labor dispute is by no means
insubstantial. Mere participation in State Board
hearings will surely have some tendency to
solidify positions taken at the bargaining table
thereby making it more difficult later to modify
or abandon a stand taken on a bargaining issue in
favor of an amicable settlement.
Id. at 67. The court concluded that the statutory purpose, "to
coerce agreement by invoking official action to mold public
opinion with respect to a labor dispute to the end of bringing
the pressure of public opinion to bear to force a settlement,"
was contrary to the national policy of not coercing agreements.
Id. Accordingly, "[t]he
conflict between state and federal policy is obvious."
The State argues that, although the Board admittedly will
have some effect on the negotiations, as is the statutory
intent, Tr. at 53, this effect is not enough to require
preemption. To the contrary, the State contends, New York law
is consistent with references in the NLRA for state mediation
boards. See, e.g., 29 U.S.C. § 158(d)(3) (both federal and
state mediation services to be notified in case of pending
resort to economic weapons). The State's argument is based
primarily on its characterization of the Board's inquiry as a
benign, conciliatory process intended to facilitate negotiation
rather than to coerce a particular result. As we have
determined, this characterization is inaccurate. The Board is
not a voluntary mediation service like the FMCS. Its powers are
inherently coercive, and were intended to be so, and its report
will inevitably, and is intended to, force the parties to reach
a particular agreement, in accordance with the public pressure
generated by the Board's report and recommendations.
The State also contends that the Board is not preempted under
either the Garmon or Machinists preemption doctrines. The State
suggests that, because the parties are not bound by the Board's
recommendations, the Board does not regulate their collective
bargaining efforts. As we have observed, however, the Board is
not merely a fact-finding body. Its actions will have, and are
intended to have, a real effect on the negotiations. Thus,
rather than being "peripheral" to the concerns of the NLRA, the
Board goes to the heart of the collective bargaining process.
Accordingly, we find that the Daily News is likely to succeed
in its argument that the Board of Inquiry is preempted by the
Based on our findings that the Daily News will suffer
irreparable harm if the Board is allowed to proceed, and that
the Daily News is likely to succeed on the merits of its
argument that the Board of Inquiry is preempted by the NLRA,
the Daily News' application for a preliminary injunction is
granted. Accordingly, it is hereby ordered that the defendants
be and are hereby restrained and enjoined from taking any
further action pursuant to Sections 800-805 of New York Labor
Law for the purpose of inquiring into the causes and
circumstances of the dispute between the plaintiff and the
union, and the Commissioner is hereby directed to dissolve
immediately the Board of Inquiry. The Daily News must post a
$10,000 bond with the Clerk of the Court by 2:00 p.m. on August