American Pacific Concrete Pipe Co., Inc

National Labor Relations Board - Board Decisions

Feb 21, 1989

292 N.L.R.B. 1261 (N.L.R.B. 1989)

AMERICAN PACIFIC CONCRETE PIPE CO 1261
American Pacific Concrete Pipe Company , Inc and
Donald Roland Case 31-CA-13776
February 21, 1989
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN AND CRACRAFT
On January 31, 1985, Administrative Law Judge
Richard J Boyce issued the attached decision The
General Counsel filed exceptions and a supporting
brief, and the Respondent filed an answering brief
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions only to the extent consistent with this
Decision and Order
The judge dismissed the complaint, which al
leged that the Respondent's state court lawsuit
against Charging Party Donald Roland violated
Section 8(a)(4) and (1) of the Act We reverse
On July 23, 1982, the Board issued a decisions in
Case 31-CA-10098 finding, inter alia, that the Re-
spondent violated Section 8(a)(3) and (1) of the Act
by its April 1980 refusal to recall employee Donald
Roland, and ordering the Respondent to offer
Roland reinstatement and make him whole for his
economic losses The Court of Appeals for the
Ninth Circuit enforced the Board's Order on April
28, 1983 2
On September 23, 1983, the General Counsel
issued a backpay specification alleging, inter alsa,
that Roland was entitled to backpay totaling
$46,6203 plus interest On November 23, 1983, at a
meeting between representatives of the Respondent
and General Truck Drivers, Warehousemen and
Helpers Union Local 467, International Brother-
hood of Teamsters, Chauffeurs, Warehousemen and
Helpers of America (the Charging Party in Case
31-CA-10098), Roland agreed, inter alia, to waive
his make-whole claim against the Respondent in ex-
change for a payment of $20,000 The General
Counsel did not participate in reaching this settle-
ment agreement between Charging Party Roland
and the Respondent
Despite Roland's private agreement, the General
Counsel continued to pursue Roland's backpay
claim 4 On December 13, 1983, the first day of the
backpay hearing, the Respondents counsel, Carlos
Bea, approached Roland prior to the start of the
hearing and told Roland that the Respondent was
going to sue him On December 18 Roland was
served with a civil complaint against him, which
the Respondent had filed in the East District Supe
rior Court of Los Angeles County, California, on
December 12 The civil complaint alleged that
Roland `instructed an attorney for the National
Labor Relations Board to pursue his back-pay
specification" at the backpay hearing and thereby
breached the November 23 agreement, and that
Roland fraudulently induced the Respondent to
pay him $20,000 by knowingly misrepresenting that
"he would fully and finally release' the Respond
ent from any backpay claims The civil complaint,
which is based on state contract law, seeks "com
pensatory damages of $20,000 plus attorney fees,
litigation expenses for the backpay proceeding, and
$100,000 in `exemplary and punitive damages" for
each of the two causes of action
The judge analyzed this situation under the U S
Supreme Court s decision in Bill Johnson's Restau-
rants v NLRB, 461 U S 731 (1983) He found that,"
even though the General Counsel's continued pur
suit of Roland's backpay claim `triggered" the Re
spondent's suit, the ` real motivating element ' for
the suit was the Respondents perception that
Roland breached the settlement agreement The
judge further found it was unnecessary to decide
whether the Respondents suit was preempted by
Federal law, as contended by the General Counsel,
because in his view a finding of preemption would
have no bearing on the issue of motive Having
concluded that there was no retaliatory motive, the
judge then determined that it was unnecessary to
decide whether the Respondent's suit lacked a rea
sonable basis in fact or law
We find that the judge erred in several respects
First, he failed to address the threshold question of
whether the Board's jurisdiction preempts the Re
spondent's suit Second, he erroneously applied Bill
Johnson's Restaurants, supra, to the instant situa-
tion Finally, he erroneously found that a retaliato
ry motive for the Respondent's suit was not estab-
lished by the record evidence
For the reasons below, we conclude that the
Board's jurisdiction to decide backpay claims pre-
empts the Respondent's suit pertaining to the same
subject matter In San Diego Building Trades Coun-
' 262 NLRB 1223
2 Enfd mem 709 F 2d 1514 4 The General Counsel took the position that the $20 000 paid to
3 The General Counsel subsequently amended Roland s backpay claim Roland pursuant to his private settlement with the Respondent did not
to $41 602 bar his backpay claim but was an offset to the claim
292 NLRB No 133
1262 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
cil v Garmon, 359 US 236, 244-245 (1959), the
Court held that
[w]hen an activity is arguably subject to § 7 or
§ 8 of the Act, the States as well as the federal
courts must defer to the exclusive competence
of the National Labor Relations Board if the
danger of state interference with national
policy is to be averted
The Board's regulation of Section 8 prohibited
conduct and Section 7 protected activity is not lim-
ited to the finding of a violation Pursuant to Sec-
tion 10(c) of the Act, the Board has the authority
to determine and to administer appropriate reme-
dies for unfair labor practices and "to take such af-
firmative action including reinstatement of employ-
ees with or without back pay, as will effectuate the
policies of the Act" See NLRB v Meat Cutters
Local 347, 417 US 1, 8 (1974), Kansas Refined
Helium Co v NLRB, 683 F 2d 1296, 1301 (10th
Cir 1982) "Affirmative action" necessarily in
cludes the institution of compliance proceedings to
determine the make-whole remedy for the employ
ee who was the target of the employer's unfair
labor practices Thus, applying the Garmon analy
sis, the Board has exclusive jurisdiction to deter-
mine the impact of the private settlement of Ro
land's backpay claim in the backpay proceedings
The Respondent's suit, in which the legal effect of
Roland's private agreement would be a central
issue, seeks to adjudicate many of the same issues
involved in the backpay controversy 5 Therefore,
the Respondent's suit is preempted by Federal law
See generally Operating Engineers Local 926 v
Jones, 460 U S 669, 682 (1983) (preemption of state
tort suit involving issues that are crucial elements
of violation in unfair labor practice proceedings),
Wisconsin Department of Industry v Gould Inc, 475
U S 282, 285 (1986) (preemption of state law that
operates as supplement to Board remedies for
unfair labor practices)
Having concluded that the Respondents suit is
preempted by Federal law, it is apparent that Bill
Johnson's Restaurants, supra, is inapplicable to the
instant case There the Court at footnote 5 clearly
stated
It should be kept in mind that what is in-
volved here is an employer's lawsuit that the
5 On July 29 1988 the Board ruled that it would honor the private
agreement and dismissed the backpay specification pertairing to Roland
290 NLRB 623 There is no conflict between the Boards decision to
honor the settlement agreement and our finding here that the Respondent
violated Sec 8(a)(4) of the Act by filing the lawsuit in retaliation against
Roland s continued participation in the backpay proceeding The
policy-embodied in Sec 8 (a)(4)-of protecting access to Board process
applies whether the party whose access is the subject of retaliation ulti
mately obtains relief from the Board
federal law would not bar except for its alleg-
edly retaliatory motivation We are not dealing
with a suit that is claimed to be beyond the ju
risdiction of the state courts because of feder-
al-law preemption, or a suit that has an objec
tive that is illegal under federal law Petitioner
concedes that the Board may enjoin these
latter types of suits Nor could it be suc
cessfully argued otherwise, for we have
upheld Board orders enjoining unions from
prosecuting court suits for enforcement of
fines that could not lawfully be imposed under
the Act and this Court has concluded
that, at the Board's request, a District Court
may enjoin enforcement of a state court in
junction "where [the Board's] federal power
pre empts the field " NLRB v Nash-Finch Co,
404 U S 138, 144 (1971)
The implication is tnat the Board, in determining
whether the filing of preempted state court suits is
violative of the Act, may hold that an employer
who sues an employee for a retaliatory motive is
guilty of a violation of the Act
Contrary to the judge, on careful review of the
record, we find that the Respondent had a retalia
tory motive in maintaining its state suit against
Roland The record indicates that the Respondent
would not have filed the suit but for the General
Counsel's continued pursuit of Roland's backpay
claim The Respondent waited until the day before
the backpay hearing to file a lawsuit On the day of
the hearing, just before the backpay hearing corn
menced, the Respondent surprised Roland with the
news that the Respondent was suing him The suit
was directed only at Roland, although Roland was
not the charging party in Case 31-CA-10098 Tne
Union, which was the charging party in Case 31-
CA-10098, was not sued by the Respondent even
though it was the union that had signed the No-
vember 23 agreement Roland, however, was a
chief witness in the backpay hearing By its suit,
the Respondent not only seeks a return of the
$20,000 and the costs of litigation, but also prays
for an additional $100,000 in punitive damages
against Roland for each cause of action Punitive
damages may indicate a retaliatory motive See
Buffalo Newspaper Guild Local 26 (Buffalo Courier),
266 NLRB 813, 819 fn 15 (1983) All these circum
stances thus reveal that the Respondent filed the
lawsuit with an intent to retaliate against Roland
for testifying or participating in the backpay pro-
ceedings
We conclude that the Respondent, by filing the
lawsuit, violated Section 8(a)(4) and (1) of the Act
AMERICAN PACIFIC CONCRETE PIPE CO 1263
CONCLUSION OF LAW
By filing a complaint against Donald Roland in
the East District Superior Court of Los Angeles
County, California, seeking money damages, in
eluding litigation costs and punitive damages, alleg-
ing that Roland was responsible for the decision by
the General Counsel for the National Labor Rela
tions Board to pursue backpay due Roland because
of the Respondent's unfair labor practices against
Roland, the Respondent has violated Section
8(a)(4) and (1) of the Act
THE REMEDY
Having found that the Respondent has engaged
in certain unfair labor practices, we shall order it
to cease and desist therefrom, and take certain of
firmative action designed to effectuate the policies
of the Act
In order to dissipate the effect of the Respond-
ent's unfair labor practices, we shall order the Re
spondent to cease and desist from prosecuting its
complaint against Donald Roland, and we shall re
quire the Respondent to withdraw the complaint
that it filed against Roland In addition, in order to
place Roland in the position he would have been
absent the Respondent's 8(a)(4) and (1) violations,
we shall order the Respondent to make Roland
whole for all legal and other expenses he incurred
in defending the Respondent's lawsuit See Laborers
Northern California Council (Baker Co), 275 NLRB
278 (1985)
ORDER
The National Labor Relations Board orders that
the Respondent, American Pacific Concrete Pipe
Company, Inc, Upland, California, its officers,
agents, successors, and assigns, shall
1 Cease and desist from
(a) Prosecuting its lawsuit styled as American Pa
cific Concrete Pipe Company Inc a California cor-
poration v Donald E Roland, Does 1 through 10,
No EAC45731 (E D Super Ct of Los Angeles
County, Cal ), which the Respondent has filed and
maintained against Roland in order to retaliate
against Roland for testifying and participating in
proceedings before the National Labor Relations
Board
(b) In any like or related manner interfering
with, restraining, or coercing employees in the ex-
ercibe of the rights guaranteed them by Section 7
of the Act
2 Take the following affirmative action neces
sary to effectuate the policies of the Act
(a) Withdraw its lawsuit, named above, and ream
burse Donald Roland for all legal and other ex
penses he has incurred in defending the lawsuit
(b) Post at its facility copies of the attached
notice marked "Appendix "s Copies of the notice,
on forms provided by the Regional Director for
Region 31, after being signed by the Respondent s
authorized representative, shall be posted by the
Respondent immediately upon receipt and main-
tained for 60 consecutive days in conspicuous
places including all places where notices to em-
ployees are customarily posted Reasonable steps
shall be taken by the Respondent to ensure that the
notices are not altered, defaced, or covered by any
other material
(c) Notify the Regional Director in writing
within 20 days from the date of this Order what
steps the Respondent has taken to comply
6 If this Order is enforced by a judgment of a United States court of
appeals the words in the notice reading Posted by Order of the Nation
al Labor Relations Board shall read Posted Pursuant to a Judgment of
the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board
APPENDIX
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found
that we violated the National Labor Relations Act
and has ordered us to post and abide by this notice
Section 7 of the Act gives employees these
rights
To organize
To form, loin, or assist any union
To bargain collectively through representa
tines of their own choice
To act together for other mutual aid or pro
tection
To choose not to engage in any of these
protected concerted activities
WE WILL NOT prosecute a lawsuit, styled as
American Pacific Concrete Pipe Company Inc a
California corporation v Donald E Roland, Does 1
through 10, No EAC45731 (E D Super Ct of
Los Angeles County, Cal ), which we have filed
and maintained against Roland in order to retaliate
against Roland for testifying and participating in
proceedings before the National Labor Relations
Board
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the exer-
cise of the rights guaranteed you by Section 7 of
the Act
1264 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
WE WILL withdraw our lawsuit, named above,
and we will reimburse Donald Roland for all legal
and other expenses he has incurred in the defense
of our lawsuit
AMERICAN PACIFIC CONCRETE PIPE
COMPANY, INC
Raymond J Magana and Gerald V Selvo Esqs, for the
General Counsel
Robert W Richardson Esq (Carlos Bea A Law Corp), of
San Francisco California for the Respondent
DECISION
STATEMENT OF THE CASE
RICHARD J BOYCE Administrative Law Judge This
matter was tried in Los Angeles California December
11 1984 The charge was filed by Donald Roland, on his
own behalf, December 27, 1983 The complaint issued
June 19 1984, and alleges that American Pacific Con
crete Pipe Company Inc (Respondent) violated Section
8(a)(1) and (4) of the National Labor Relations Act (Act)
in December 1983 by institut[ing] a state court lawsuit
against Roland because Roland participated in the
Boards backpay proceedings in Case 31-CA-10098 i
I JURISDICTION
Respondent is a California corporation engaged in the
manufacture of concrete pipe in the community of
Upland It concededly satisfies the Board s jurisdictional
standards and so is an employer engaged in and affect
ing commerce within the meaning Section 2(2), (6), and
(7) of the Act
II THE ALLEGED MISCONDUCT
A Facts
On July 23 1982 in Case 31-CA-10098 the Board
issued a decision in which it concluded among other
things that Respondent had violated Section 8(a)(3) and
(1) of the Act by its April 1980 refusal to recall certain
employees 2 Roland was one of those employees As a
remedy for that violation the Board ordered Respondent
to offer reinstatement to the affected employees and
make them whole for their economic losses 3 The
Board's Order was enforced by the Ninth Circuit Court
of Appeals in April 1983 4
' The pertinent provisions of the Act state Sec 8 (a)-It shall be an
unfair labor practice for an employer -( I) to interfere with restrain or
coerce employees in the exercise of the rights guaranteed in Section 7 [of
the Act] (4) to discharge or otherwise discriminate against an em
ployee because he has filed chares or given testimony under this Act
Sec 7 guarantees employees the right to self organization to form join
or assist labor organizations and to engage in other concerted activi
ties for the purpose of collective bargaining or other mutual aid or pro
section
2 American Pacific Concrete Pipe Co 262 NLRB 1223 1227
3 Id at 1228
4 American Pacific Concrete Pipe Co Y NLRB 709 F 2d 1514
On September 23 1983 the General Counsel issued a
backpay specification in that case alleging that Roland
and three others were entitled to stated sums of backpay
The sum claimed for Roland was $46 620 02 plus inter
est
On November 23 1983-some 3 weeks before the
opening of a hearing on the backpay specification-a
letter of argument, so called was entered into by Re
spondent Roland and the Charging Partys in Case 31-
CA-10098 It provided in relevant part
Since the parties desire to settle the make
whole portion in Case 31-CA-10098
It is therefore agreed that
The parties agree Roland shall be paid Twenty
Thousand Dollars (2000000) as full compensation
for all alleged injuries as the result of [Respond
ent s] actions which gave rise to the Order in
N L R B Case 31-CA-10098 as liquidated damages
for such alleged injuries
It is further agreed that
The make whole portion in Case 31-CA-10098
is settled and withdrawn
And
That Roland and the Union expressly releases
[sic] and discharges [sic] [Respondent] from all
claims and causes of action that Roland and the
Union ever had now have or may have in the
future known or unknown, or that any person
claiming through them may have or claim to have
against [Respondent] created by or arising out of
the occurrence giving rise to N L R B Order in
Case 31-CA-10098
It is Roland[ s] and the Union s intention that this
release be binding on Roland[ s] and the
Union s legal representatives [and] assigns
Also on November 23 in keeping with the letter of
agreement Respondent paid Roland $20 000
On December 12 1983-the day before the start of the
backpay hearing having learned that the General Court
sel intended to press for Roland s entitlement as alleged
in the specification despite the letter of agreement-Re
spondent filed a complaint against Roland in the Superi
or Court of Los Angeles County East District 6 It al
leges two causes of action
(a) That Roland breached the letter of agreement by
instructing the NLRB to continue to seek recovery pur
suant to the specification
(b) That Roland fraudulently induced Respondent to
pay him the $20 000 by knowingly misrepresenting that
he would release it from further claims
The complaint claims, with regard to each alleged
cause of action that Respondent is entitled to compen
satory damages of $20 000, and `exemplary and punt
tive damages of $100,000
5 General Teamsters Sales Drivers Food Processors Warehousemen
and Helpers Local 871 International Brotherhood of Teamsters Chauf
feurs Warehousemen and Helpers of America
"Cause No 45731
AMERICAN PACIFIC CONCRETE PIPE CO
The complaint was served on Roland December 18
The suit is still pending so far as the record shows
There is no evidence and thus no reason to suppose that
the other backpay claimants have been sued in connec
tion with their involvement in the Board s backpay proc
esses
The backpay hearing, as indicated began December
13, and the General Counsel did proceed on Roland s
behalf in disregard of the letter of agreement 7 Roland
testified in that hearing, conceding that he understood
the letter of agreement to be a release of any claims
that [he] might have against [Respondent] arising out of
backpay dispute and that he at no time attempted to
rescind that transaction There is no evidence that he
ever sought to defer the General Counsel from continu
ing to espouse his cause because of the letter of agree
ment
Roland has not returned the $20,000 to Respondent
B Conclusion
In Bill Johnson's Restaurants v NLRB 8 the Supreme
Court addressed the legality under the Act of a state
court lawsuit in which an employer was seeking compen
satory and punitive damages from certain of its employ
ees, together with injunctive relief because of their pick
eting and handbilling activities The Board had conclud
ed that the suit violated Section 8(a)(1) and (4),9 and the
Court of Appeals for the Ninth District agreed 10
The Supreme Court, however remanded the matter
for further consideration 11 So doing, it stated 12
[W]e hold that it is an enjoinable unfair labor prac
tice to prosecute a baseless lawsuit with the intent
of retaliating against an employee for the exercise of
rights protected by 7 of the [Act]
[T]he prosecution of an improperly motivated
suit lacking a reasonable basis constitutes a violation
of the Act
Retaliatory motive and lack of reasonable basis are
both essential prerequisites to the issuance of a
cease and desist order against a state suit
1265
As concerns motive in the present case it is plain that
had Roland not entered into the letter of agreement,
which inarguably was meant to put the matter of his
backpay to rest once and for all Respondent would not
have sued him in response to the General Counsels on
going prosecution of his alleged backpay entitlement
Otherwise, the others for whom backpay is being sought
presumably would have been sued as well So although
the General Counsel s continued pursuit of Roland s
backpay claim in disregard of the letter of agreement
doubtless triggered the state action the real motivating
element-the sine qua non-was Respondents perception
that Roland had breached that agreement And a persua
sive case has not been made extracting from Allbritton
Communications 13 that that perception was
So unreasonable as to warrant the inference that the
suit had an ulterior motivation such as to discourage
employees from filing legitimate claims or to penal
ize them for doing so
Or, to borrow from Retail Clerks Union Local 770
(Hughes Markets),14 Respondents suit was in vindication
of
a colorable contract right and was not the
kind of tactic calculated to restrain employees
in the exercise of rights guaranteed by the Act
It is concluded in short that a showing has not been
made that Respondents state court suit was filed with
the requisite retaliatory motive and thus, without get
ting into the question whether that suit lacks a reasona
ble basis as contemplated by the Supreme Court in Bill
Johnson s Restaurants, that Respondent did not violate
the Act as alleged 15
CONCLUSIONS OF LAW
By bringing suit against Roland in state court on De
cember 12 1983 Respondent did not violate the Act as
alleged
[Recommended Order for dismissal omitted from pub
lication ]
7 The backpay hearing before Administrative Law Judge Clifford H
Anderson finally closed October 10 1984 after 8 days in session Judge
Anderson s decision is yet to issue
13 217 NLRB 201 208 (1984)8 461 U S 731 (1983)
8 Bill Johnson s Restaurants 249 NLRB 155 (1980) 14 218 NLRB 680 683 (1975)
10 Bill Johnson s Restaurants v NLRB 660 F 2d 1335 (9th Cir 1981)
11 461 U S at 748-749
12 461 U S at 744 748-749
"ThatTha Respondents suit perhaps is subject to dismissal by the state
court on presumption grounds has no bearing on the issue of motive Cf
Clyde Taylor Co 127 NLRB 103 110 (1960)