Arthur Young & Co.

National Labor Relations Board - Board Decisions

Aug 21, 1991

304 N.L.R.B. 178 (N.L.R.B. 1991)

178
304 NLRB No. 37
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 The Respondent argues that it was precluded from presenting evidence of
alleged willful misconduct which caused Nina Bloom’s discharge by two in-
terim employers. Although the judge did not allow the testimony of Bloom’s
former supervisors, he did allow the Respondent to make an offer of proof.
We have reviewed the Respondent’s offer of proof and agree with the judge
that the evidence, even if credited, would not warrant a finding of willful loss
of employment.
2 The Respondent has excepted to some of the judge’s credibility findings.
The Board’s established policy is not to overrule an administrative law judge’s
credibility resolutions unless the clear preponderance of all the relevant evi-
dence convinces us that they are incorrect. Standard Dry Wall Products, 91
NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully ex-
amined the record and find no basis for reversing the findings.
Additionally, the Respondent contends that the judge was biased and de-
prived the Respondent of a fair hearing. After a careful examination of the
entire record, we are satisfied that this allegation is without merit.
3 Interest shall be computed in the manner prescribed in New Horizons for
the Retarded, 283 NLRB 1173 (1987), and accrued to the date of payment.
Backpay and interest shall be paid minus tax withholdings required by Federal
and state laws.
Ernst and Young, formerly known as Arthur
Young and Company and Nina Bloom. Case 2–
CA–22164
August 21, 1991
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND OVIATT
On February 22, 1991, Administrative Law Judge
Howard Edelman issued the attached supplemental de-
cision. The Respondent filed exceptions and a support-
ing brief and the General Counsel filed an answering
brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the supplemental decision
and the record in light of the exceptions and briefs and
has decided to affirm the judge’s rulings,1 findings,2
and conclusions and to adopt the recommended Order.3
ORDER
The National Labor Relations Board adopts the rec-
ommended Order of the administrative law judge and
orders that the Respondent, Ernst and Young, formerly
known as Arthur Young and Company, New York,
New York, its officers, agents, successors, and assigns,
shall take the action set forth in the Order.
James M. Mells, Esq., for the General Counsel.
Lois Chamberlain, Esq. and Elizabeth Healy, Esq., for the
Respondent.
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
HOWARD EDELMAN, Administrative Law Judge. This case
was tried before me on May 29 through 31, 1990, in New
York, New York.
On September 28, 1988, the National Labor Relations
Board issued a Decision and Order in Case 2–CA–22164, di-
recting Ernst & Young, formerly called Arthur Young &
Company (Respondent), to make Nina Bloom and Lisa
Cohen whole by offering reinstatement and paying backpay
due to Bloom and Cohen. On August 28, 1989, The United
States Court of Appeals for the Fourth Circuit enforced the
Board’s Order.
On December 13, 1989, a controversy having arisen over
the amount of backpay due to the above individuals, under
the Board’s Order as enforced by the court of appeals, issued
the instant backpay specification and notice of hearing.
Respondent, in its amended answer admitted the formula
used in the specification to compute gross backpay and the
net interim earnings set forth in the specification.
Respondent contends that Bloom and Cohen failed to
make a reasonable search for work following their discharge
from Respondent.
The credible and uncontradicted testimony of Bloom and
Cohen establishes the following. Bloom was unlawfully dis-
charged by Respondent on February 27, 1987. Bloom
credibly testified that following her discharge she examined
the employment advertisements in the New York Times on
a weekly basis. Additionally, she utilized the services of sev-
eral employment agencies on an unspecified periodic basis.
Such agencies included Accountemps, Kelly, and Crystalline,
seeking proofreading jobs. Additionally, she utilized the Yel-
low Pages of the Manhattan telephone directory. During her
employ at Respondent, she had earned a yearly salary of
$16,500. During her job search she testified that she was
seeking a salary of $18,000, because she could no longer live
on her former salary. Bloom testified that she spent several
days per week and several hours per day contacting various
companies whose names she obtained from the Times or the
Yellow Pages for suitable employment. Bloom was unable to
recall the names or the employers she contacted, nor did she
keep records of such contacts. However she credibly testified
that the New York State Board of Unemployment Com-
pensation required that she produce evidence of her continu-
ing search for work to be eligible for benefits and that she
had never been denied employment benefits.
As a result of the search, described above, Bloom was able
to obtain employment with another employer, Rosen & Read,
within about 4 months from the date of her discharge from
Respondent, and employment within a similar period with
Seidman & Seidman following her discharge from Rosen,
and once again employment within a similar period with her
present employer, Weiss Dorwid, following her discharge
from Seidman.
Cohen credibly testified that she reviewed advertisements
in the Times and went to various employment agencies, in-
cluding Typographer’s Personnel, F.E.G.S., Asta, Kelly, and
Cosmopolitan, and applied to various companies without suc-
cess. She also made independent application to NBC, ABC,
American Express, Simon & Schuster, and various other
specified companies without success. After about 4 months
of unemployment, during which time she earned about $450
performing some freelance work as a proofreader, she ob-
tained temporary employment through an application with
Temps America, the employment agency she had used to ob-
tain her employment with Respondent. Cohen continued her
temporary employment for about 6 months, until sometime
179ARTHUR YOUNG & CO.
during the first quarter in 1988 when she obtained full-time
employment with Virgin Atlantic Airlines. Cohen is currently
employed by Virgin. Her duties at Virgin are unrelated to
those she performed at Respondent.
During her search for interim work, Cohen did not limit
herself to applications for proofreading jobs. While she was
unemployed, she filed for unemployment benefits and was
required to document her search. Cohen was never denied
unemployment benefits.
Respondent called two expert witnesses to testify as to the
availability of proofreading jobs in the area. Dr. David Stein,
a vocational consultant paid by Respondent for his testimony,
testified that following an analysis of Times advertisements
for which Bloom and Cohen would have been qualified, he
concluded that there were substantial numbers of proofread-
ing jobs available to proofreaders with similar qualifications
as Bloom and Cohen. William Henderson, the director of a
proofreading employment agency, who used to have Re-
spondent as a regular account, testified that he regularly ran
advertisements in the Times as well as other newspapers, and
that the 1987–1988 period was the best period of the decade
for employment of proofreaders, and that if Bloom or Cohen
had applied with his agency during this period, he could
have easily placed them. However, Henderson’s credibility is
highly suspect. He no longer had Respondent for an account,
and I’m sure his testimony was given largely, if not wholly,
in an attempt to regain Respondent as a client. Such conclu-
sion is reinforced by his testimony that he was neither sub-
poenaed by, or paid by Respondent for his testimony, but
rather testified out of the ‘‘goodness of his heart.’’
A discriminatee is required to make a reasonable search
for work in order to mitigate loss of income and the amount
of backpay. Lizdale Knitting Mills, 232 NLRB 592, 599
(1977). The Board and the courts hold however, ‘‘that in
seeking to mitigate loss of income a backpay claimant is held
. . . only to reasonable exertions in this regard not the high-
est standard of diligence. . . . The principle of mitigation of
damages does not require success, it only requires an honest
good faith effort . . . NLRB v. Arduini Mfg. Co., 394 F.2d
420, 422–423 (1st Cir. 1968); NLRB v. Madison Courier,
550 F.2d 1101 (8th Cir. 1977); or that he wilfully incurred
losses of income or was otherwise unavailable for work dur-
ing the backpay period.’’ NLRB v. Pugh & Bass, Inc., 231
F.2d 588 (4th Cir. 1956); NLRB v. Miami Coca-Cola Bot-
tling Co., 360 F.2d 569 (5th Cir. 1966). Moreover, in apply-
ing these standards, all doubts should be resolved in favor
of the claimant rather than the respondent wrongdoer, United
Aircraft Corp., 204 NLRB 1068 (1973).
Neither Bloom’s nor Cohen’s testimony as to their search
for work is contradicted by Respondent. Bloom credibly tes-
tified that her primary reference for job openings was the
Times advertisements and the Yellow pages. She credibly
testified that she spent several days per week and several
hours per day making calls or applications for jobs. Although
Bloom did not document her search, nor could she recall the
names of places to which she made calls or applications such
failure does not diminish her credibility. The Board has re-
peatedly held that it is not unusual or suspicious that backpay
claimants cannot remember the names of employers with
whom they applied. Amsher Associates, 234 NLRB 791 at
fn. 7 (1978); United Aircraft Corp., 204 NLRB 1068 (1973);
Lizdale Knitting Mills, supra; Neely’s Car Clinic, 255 NLRB
1420 (1981). Cohen, on the other hand, did document her
search for work to a greater degree. She testified as to var-
ious employment agencies to which she contacted and var-
ious employers to which she applied for work. Moreover,
both Bloom and Cohen obtained work within a short period
of several months following their discharge from Respondent
and Bloom’s discharge from subsequent interim employers.
The testimony of Respondent’s witnesses Stein and Hen-
derson, even if credited is speculative. Such testimony does
not in any way contradict the testimony of Bloom or Cohen.
Moreover, the Board has held that the existence of employ-
ment advertisements or a favorable job market does not meet
the employer’s burden of proof that the backpay claimant
failed to make a reasonable search. Associated Grocers, 295
NLRB 806 (1989); Groves Truck & Trailer, 294 NLRB 1
(1989). The Board has held that the existence of advertise-
ments for jobs does not establish that such jobs would have
been available or that the claimant would have been selected
had he applied. Airport Service Lines, 231 NLRB 1272
(1977). As set forth above, in applying the applicable back-
pay standards all doubts should be resolved in favor of the
claimant, rather than the employer wrongdoer. United Air-
craft Corp., supra.
Accordingly, I conclude that both Bloom and Cohen made
a reasonable search for work.
Respondent contends that Bloom and Cohen wilfully con-
cealed interim earnings and that based on the rational set
forth in American Navigation Co., 268 NLRB 426 (1983),
backpay should be denied for the quarters such earnings were
wilfully concealed. Of course it must first be determined if
there was such willful concealment.
The compliance officer, Ester Morales, testified that she
calculated the compliance specification based on conversa-
tions and documents submitted to her by Bloom and Cohen.
With respect to Bloom’s earnings from Rosen in 1987, Mo-
rales testified that she calculated such earnings based on a
conversation she had with Bloom in which Bloom told her
she earned $356 per week. Bloom did not supply Morales
with her W-2 forms. Bloom did bring with her for the trial
of this case her W-2 forms. The total of the W-2 forms es-
tablished that Bloom’s interim earnings with Rosen over the
second, third, and fourth quarters was $114.81 more than set
forth in the compliance specification. Neither Bloom nor Mo-
rales was able to account for this discrepancy.
With respect to Bloom’s earnings at Seidman in 1988 and
1989, Morales testified that she calculated such earnings
based on a conversation she had with Bloom. Bloom told
Morales that when she started her employment with
Seidman, she was earning $21,500 per year, and that later in
July 1988 she received a $1000 raise. The W-2 forms sub-
mitted by Bloom established that Bloom’s earnings over the
four quarters in 1988 were $220.04 more than set forth in
the compliance specification. Neither Bloom nor Morales
was able to account for this discrepancy.
With respect to Bloom’s earnings with Seidman during the
first quarter in 1989, Morales based her calculations on
Bloom’s interim earnings based on Bloom’s $22,500 salary.
The W-2 forms for this period established that Bloom earned
$102.67 more than set forth in the compliance specification.
Neither Bloom or Morales was able to explain this discrep-
ancy. Additionally, Respondent’s counsel brought to counsel
for the General Counsel’s attention that on Bloom’s dis-
180 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
charge from Seidman in the first quarter of 1989, Bloom
failed to include $866 severance pay. Morales testified that
Bloom did report such severance pay but that she had inad-
vertently forgotten to include it in the specification.
With respect to Cohen’s interim earnings in March
through June 1987, Cohen testified she performed freelance
work for Official Books. Cohen submitted receipts showing
payment of $450 which was the amount set forth in the com-
pliance specification. During the trial of this case, Cohen tes-
tified that entries totaling $563.99 were entered in a booklet
created at the New York State Unemployment Compensation,
and submitted by her to the compliance officer prior to the
issuance of the specification, and were the accurate figures
representing her interim earnings during this period. This
represented a discrepancy of $113.99. Neither Cohen or Mo-
rales could explain the discrepancy.
Pursuant to a motion by the General Counsel the specifica-
tion was amended to include the accurate figures established
by the records submitted by the claimants at the trial and by
Morales’ testimony that she had inadvertently forgot to in-
clude Bloom’s severance pay.
In American Navigation Co., supra, the Board held that
backpay claimants found to willfully conceal interim earn-
ings from the Board will be denied backpay for all quarters
in which they concealed such employment earnings. See also
Ad Art, Inc., 280 NLRB 985 (1986). The Board has further
held that it is for the administrative law judge to determine,
based on his reasoned evaluation of objective criteria wheth-
er a discrepancy is the result of a willful concealment or due
to an honest error. American Navigation, supra at 428 fn. 7;
Rainbow Tours, 280 NLRB 166 (1986).
An excellent example of a willful concealment under
American Navigation, is Arthur Briggs, Inc., 281 NLRB 789
(1986), in which the Board upheld the administrative law
judge’s finding of a willful concealment. In Arthur Briggs,
the judge found that a backpay claimant wilfully concealed
interim earnings when he denied working at a barber shop
where he was paid off the books. A willful concealment was
established when his testimony during the backpay trial
wherein he denied working at a barber shop during the first
quarters of 1981 was contradicted by his prior testimony dur-
ing the underlying unfair labor practice trial where he testi-
fied that he worked in the barber shop on weekends. This
testimony was further contradicted by the credible testimony
of a private investigator who testified that during the first
two quarters of 1981, he visited the barber shop during the
week on several occasions and while the claimant was cut-
ting his hair, he admitted that he worked Tuesday through
Saturday. The facts of the Briggs case represent an obvious
willful concealment of interim earnings. On the other hand,
the Board has held that a simple underestimation of earnings,
is insufficient to establish a willful concealment. Lundy
Packing Co., 286 NLRB 141, 158 (1987).
Based on the facts of this case, I conclude that the discrep-
ancies in Bloom and Cohen’s interim earnings were not the
result of a willful intention to conceal. In this connection,
with respect to Bloom, she disclosed the severance pay she
received from Seidman to the Board. It was Morales who in-
advertently failed to include it in the specification. With re-
spect to the actual earnings of Bloom, Morales credibly testi-
fied she calculated such figures based on Bloom’s statements
to her as to her yearly earnings, including a raise. Morales
then divided her yearly salary by 52 to establish the weekly
earnings which were then multiplied by the number of weeks
in the quarter. Morales did not have the accurate W-2 forms
to work with. It was Bloom who furnished the W-2 forms
at the trial. Such conduct hardly represents an attempt to
wilfully conceal.
With respect to Cohen, she submitted both the receipts and
the unemployment document to the compliance officer in
order that her earnings could be calculated. It was the Region
through its agents who used the receipts rather than the un-
employment document to calculate the interim earnings. It is
clear that such error which apparently resulted in the discrep-
ancy cannot be attributed to Cohen.
Based on an examination of the facts in this case, it is
clear to me that the discrepancies in Bloom and Cohen’s in-
terim earnings were inadvertent. I find no evidence of a will-
ful concealment, and no merit to Respondent’s contention.
Respondent contends that Bloom’s backpay award should
be reduced because she failed to maintain substantially
equivalent employment. In this connection, Respondent con-
tends that Bloom engaged in willful misconduct which re-
sulted in her discharge from Rosen and Seidman. The Board
held that a discriminatee’s entitlement to backpay may be re-
duced when the employer has shown that the discriminatee
has engaged in a willful loss of earnings during the interim
period, either by an unreasonable quit, or by engaging in
such conduct, resulting in discharge, which amounts to a
willful loss of pay. Associated Grocers, supra; A. A. Supe-
rior Ambulance Service, 292 NLRB 835 (1989); Sylvan
Health Care Center, 270 NLRB 72 (1984).
Bloom was hired by Rosen on or about June 22, 1987.
During her employ she performed various bookkeeping type
jobs that she did not perform while employed with Respond-
ent. Such functions included footing and accounting ledgers.
According to the credible and uncontradicted testimony of
Bloom, she was discharged because of a personality conflict
with her supervisor. It would appear that Rosen had no prob-
lems with Bloom’s work performance, because when her sec-
ond interim employer, Seidman, requested a reference as to
Bloom’s work Rosen gave her a good reference and she was
hired by Seidman. Bloom was employed by Seidman during
all four quarters of 1988 and 1989 until her discharge on
January 23. Bloom performed similar work for Seidman that
she had performed for Rosen. Bloom initially performed her
work well at Seidman because on or about July 1988, she
was given a $1000 raise. Shortly thereafter, her work per-
formance declined, and she received warning that her per-
formance was not satisfactory. Bloom’s performance did not
improve and she was discharged on January 23, 1989, for
‘‘carelessness’’ and failure to ‘‘follow departmental proce-
dures.’’ There is no evidence as to what procedures she
failed to follow, nor is there any evidence that her unsatisfac-
tory performance in either area was willful. There is no evi-
dence that her unsatisfactory performance in both areas was
willful.
The issue presented is whether Bloom’s conduct in either
or both jobs amounted to a willful act by Bloom which re-
sulted in her discharge from Cohen and Seidman. The Board
has repeatedly held that a discharge based on poor work per-
formance does not constitute a willful loss of earnings. Kan-
sas Refined Helium Co., 252 NLRB 1156, 1162 (1980);
A. A. Superior Ambulance Service, supra. The Board has
181ARTHUR YOUNG & CO.
also held that an employee’s discharge resulting over an ar-
gument with a supervisor concerning working conditions
over an argument with a supervisor concerning working con-
ditions does not constitute a willful loss of employment.
Artrim Transportation System, 193 NLRB 179, 183 (1971).
Applying the applicable law to the credible and
uncontradicted facts set forth above, I conclude that Bloom’s
conduct which resulted in her discharges from Cohen and
Seidman did not amount to a willful loss of earnings. I there-
fore conclude there is no merit to Respondent’s contention
in this connection.
Accordingly, I conclude the backpay is as follows:
Conclusions and Recommended Order
Gross Backpay of Nina Bloom
Period/Qtr. Backpay Period Gross Backpay
1977
1st 4 weeks x $310 $1,240
2d 13 weeks x 310 4,030
3d 13 weeks x 310 4,030
4th 13 weeks x 310 4,030
1988 13 weeks x $3261 $4,238
1st 13 weeks x 326 4,238
2d 13 weeks x 326 4,238
3d 13 weeks x 326 4,238
4th 13 weeks x 326 4,238
1989 13 weeks x $3492 $4,537
1st 13 weeks x 349 4,537
2d 13 weeks x 349 4,537
3d 6 weeks x 349 2,094
1 Bloom received a 5% wage increase.
2 Bloom received a 7% wage increase.
Interim Earnings of Nina Bloom
Period/Qtr. Interim Employer Earnings
1987
1st Severance Pay $930
2d Rosen & Read 856
3d ’’ ’’ 4,615
4th ’’ ’’ 3,905
+ 115
1988
1st Seidman & Seidman $1,239
2d ’’ ’’ 5,369
3d ’’ ’’ 5,629
4th ’’ ’’ 5,629
3+ 220
1989
1st Seidman & Seidman 4$2,598
2d Weiss, Dorwid, Fross, Zelnik &
Lehrman, P.C. 962
3d ’’ ’’ 6,253
4th ’’ ’’ 2,886
3 The $115 and $220, amounts should be added to the interim
earnings of Bloom based upon her actual earnings established by her
W-2 forms.
4 The $2598 amount represents severance pay of $866 which was
inadvertently omitted by the compliance officer.
Net Backpay for Nina Bloom
Period/Qtr. Gross Backpay Interim Earn-ings Net Backpay
1987
1st $1,240 $930 $310
2d 4,030 356 3,674
3rd 4,030 4,615 0
4th 4,030 3,905 125
+ 115 - 115
1988
1st $4,238 $1,239 $2,999
2d 4,238 5,369 0
3d 4,238 5,629 0
4th 4,238 + 220 - 220
1989
1st $4,537 $2,598 $1,939
2d 4,537 962 3,575
3d 4,537 6,253 0
4th 2,094 2,886 0
Total Plus
Interest $12,287
Gross Backpay of Lisa Cohen
Period/Qtr. Backpay Period Gross Backpay
1987
1st 4 weeks x $285 $1,140
2d 13 weeks x 285 3,705
3d 13 weeks x 285 3,705
4th 13 weeks x 285 3,705
1988
1st 13 weeks x $3025 $3,926
2d 13 weeks x 302 3,926
3d 13 weeks x 302 3,926
4th 13 weeks x 302 3,926
1989
1st 13 weeks x $3266 $4,238
2d 13 weeks x 326 4,238
3d 13 weeks x 326 4,238
4th 6 weeks x 326 1,956
5 Cohen received a 6% wage increase.
6 Cohen received an 8% wage increase.
Interim Earnings of Lisa Cohen
Period/Qtr. Interim Employer Earnings
1987
1st Severance Pay $570
2d Self Employed 7564
3d Temps America 2,170
4th Temps America 2,170
1988
1st Virgin Airlines $4,160
2d ’’ ’’ 4,160
3d ’’ ’’ 4,160
4th ’’ ’’ 4,160
182 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
8 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules
and Regulations, the findings, conclusions, and recommended Order shall, as
provided in Sec. 102.48 of the Rules, be adopted by the Board and all objec-
tions to them shall be deemed waived for all purposes.
Interim Earnings of Lisa Cohen—Continued
Period/Qtr. Interim Employer Earnings
1989
1st Virgin Airlines $4,745
2d ’’ ’’ 4,745
3d ’’ ’’ 4,745
4th ’’ ’’ 2,190
7 This figure represents Cohen’s interim earnings established by
the New York State Employment Booklet.
Net Backpay for Lisa Cohen
Period/Qtr. Gross Backpay Interim Earn-ings Net Backpay
1987
1st $1,140 $570 $570
2d 3,705 564 3,141
3d 3,705 2,170 1,535
4th 3,705 2,170 1,535
1988
1st $3,926 $4,160 $0
2d 3,926 4,160 0
3d 3,926 4,160 0
4th 3,926 4,160 0
Net Backpay for Lisa Cohen—Continued
Period/Qtr. Gross Backpay Interim Earn-ings Net Backpay
1989
1st $4,238 4,745 0
2d 4,238 4,745 0
3d 4,238 4,745 0
4th 1,956 2,190 0
Total Plus
Interest $6,781
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended8
ORDER
The Respondent, Ernst and Young, formerly known as Ar-
thur Young and Company, New York, New York, its offi-
cers, agents, successors, and assigns, shall
Pay to Nina Bloom $12,287 and to Lisa Cohen $6,781, to-
gether with interest as set forth in Isis Plumbing & Heating
Co., 138 NLRB 716 (1962), and Florida Steel Corp., 231
NLRB 651 (1977).