Big Three Industries, Inc.

National Labor Relations Board - Board Decisions

Jul 30, 1975

219 N.L.R.B. 881 (N.L.R.B. 1975)

BIG THREE INDUSTRIES, INC. 881
Big Three Industries, Inc. and General Truck Drivers,
Warehousemen & Helpers, Local 5, a/w Interna-
tional Brotherhood of Teamsters, Chauffeurs,
Warehousemen & Helpers of America, Ind. Cases
15-CA-4312 and 15-CA-4313
July 30, 1975
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS KENNEDY
AND PENELLO
On March 31, 1975, Administrative Law Judge
David S. Davidson issued the attached Supplemental
Decision in this backpay proceeding. Thereafter, the
General Counsel and Respondent each filed excep-
tions and a brief in support of its exceptions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge only to
the extent consistent herewith.
We agree with the Administrative Law Judge's for-
mula for measuring the hours discriminatee Rushlow
would have worked during the backpay period and
with his determination of Rushlow 's interim earnings
during that period. While we also agree that
Rushlow's hourly pay rate should be adjusted up-
ward comparably with the rate increases given to op-
erators Minvielle and Stillwell, we disagree with the
Administrative Law Judge's conclusion that Rushlow
would have received a wage increase of 59 cents per
hour beginning January 1, 1972.
There is no reliable evidence to justify this latter
finding. The only evidence concerning this matter
was Regional Compliance Officer Norton's testimo-
ny that Rushlow had told him that he had been
promised that he would receive top operator pay in
January 1972, which would have resulted in a 59-
cents-per-hour wage increase. There is no such testi-
mony by Rushlow in the underlying unfair labor
practice proceeding or in the present backpay pro-
ceeding.
In sum the only evidence in support of the alleged
promised wage increase was Norton's testimony of
what Rushlow had told him. Although finding that
the General Counsel has the burden of establishing
gross backpay, the Administrative Law Judge con-
cluded that this hearsay testimony satisfied that bur-
den and shifted to Respondent the responsibility of
going forward and adducing evidence in support of
its mitigating defense. We do not agree. Whatever
the situation where a discriminatee has become un-
available as a witness, the hearsay testimony ad-
duced in this case was not sufficiently probative in
our opinion to meet the General Counsel's burden
and to require Respondent to respond with its miti-
gating defense, especially since Rushlow was a wit-
ness for the General Counsel and could have given
direct testimony concerning any alleged promise
made to him. Inasmuch as we find, contrary to the
Administrative Law Judge, that the General Counsel
has not proved that Respondent had promised Rush-
low a wage raise of 59 cents per hour beginning Jan-
uary 1, 1972, we shall recompute Rushlow's backpay
beginning January 1, 1972, on the basis that he
would have received wage raises at the same time
and in the same amount as operators Minvielle and
Stillwell, but his wage rate would have been 59 cents
per hour lower than that of the two mentioned em-
ployees.
Quarter
Adjusted
Hours
Hourly
Pay Rate
Gross
Backpay
1971,IV 113.5 3.72
1972, I 717.5 3.72
II 711.5 3.72
III 561.5 3.72
IV 194.5 3.72 724
601.5 4.02 2.418
1973 , I 600 . 25 4.02
II 698 4.02
III 589.375 4.02
IV 630 . 19 4.02
1974 I 113.50 4.02 456
453.625 4.27 1.937
II 404.50 4.27 1,727
282 4 . 51 1.272
III 356 4.51
Interim Net
Earnings Backyay
422 422
2,669 1)062 1,607
2,646 1 , 654 993
2,089 1,553 536
3,142 1,524 1,618
2,413 1 , 685 728
2,806 1,736 1,070
2,369 1,754 615
2,533 4,495 0
2,393 900 1,493
2,999 3,030
1,606 1,410 195
$9,277
219 NLRR No. 159
882 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended , the National Labor Re-
lations Board hereby orders that the Respondent, Big
Three Industries , Inc., Baton Rouge , Louisiana, its
officers , agents, successors , and assigns , shall pay to
Fred J . Rushlow as net backpay the amount of
$9,277, which amount shall accrue interest at the rate
of 6 percent per annum , computed in the manner set
forth in Isis Plumbing & Heating Co., 138 NLRB 716
(1962). There shall be deducted therefrom social se-
curity taxes, income tax withholding, and such other
deductions as may be required by the laws of the
United States or of the State of Louisiana.
CHAIRMAN MURPHY, dissenting in part:
I agree with the decision in this case except insofar
as it adopts the Administrative Law Judge 's use of
Rushlow 's record of bank deposits rather than his
income tax return . To allow litigation of the validity
of such a return in proceedings under our Act and to
use other information leads to speculation and un-
certainty.
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
DAVID S. DAVIDSON, Administrative Law Judge : On Feb-
ruary 7 , 1973, the Board issued its Decision and Order I
directing Respondent, inter alia, to make whole Fred J.
Rushlow for loss of earnings as a result of his discharge on
December 14, 1971, which the Board found violated Sec-
tion 8(a)(3) and (1) of the Act. Thereafter the United States
Court of Appeals for the Fifth Circuit enforced the back-
pay provisions of the Board's order.2 A controversy having
arisen over the amount of backpay due under the terms of
the order , on October 21, 1974 , the Regional Director is-
sued a backpay specification and notice of hearing. Fol-
lowing an initial answer and an amended and supplemen-
tal answer, each of which was the subject of a motion to
strike , Respondent filed its third amended and supplemen-
201 NLRB 700.
2 497 F.2d 43 (1974).
7 This issue was raised by amendment to the answer at the hearing.
4 Respondent's third amended and supplemental answer alleged that
Rushlow failed to mitigate damages and that he voluntarily quit interim
employment These allegations raised matters of affirmative defense, and
tal answer which frames the issues to be resolved in this
proceeding.
The issues are:
1. What is the appropriate measure of the hours that the
discriminatee Rushlow would have worked during the
backpay period?
2. What is the hourly rate which Rushlow would have
been paid from December 31, 1971, through August 5,
1974?
3. What were Rushlow's interim earnings? 4
On February 13 and 14, 1975, a hearing was held before
me at Baton Rouge , Louisiana . At the conclusion of the
hearing the parties were given leave to file briefs which
have been received from the General Counsel and Respon-
dent.
Upon the entire record in this case , including my obser-
vation of the witnesses and their demeanor , I make the
following:
FINDINGS AND CONCLUSIONS
1. THE APPROPRIATE MEASURE OF RUSHLOW'S HOURS
In the backpay specification the General Counsel al-
leged that the hours worked by R. L. Caillouet were an
appropriate measure of the hours which Rushlow would
have worked because Caillouet replaced Rushlow as an
operator, the position from which Rushlow was dis-
charged, and remained employed by the Respondent
throughout the backpay period. The evidence shows that
Caillouet replaced Rushlow as an operator immediately af-
ter Rushlow 's discharge, but it also shows that he did not
remain in that position throughout the entire backpay peri-
od which ended on August 5, 1974. Rather, on January 7,
1973, Caillouet transferred from an operator's job to a
maintenance job and remained in that job for the rest of
the backpay period.
There are significant differences between the work and
hours of operators and those of maintenance employees.
Thus, operators work on a rotating shift schedule so that
over a period of a year they work approximately the same
amount of time on each of Respondent 's shifts in its con-
tinuous operations . Although operators perform some
maintenance work during their regular shifts and are at
Respondent had the burden of proving them Respondent presented no
evidence to support them and appears to have abandoned them. They will
not be considered further in this Decision . In his brief counsel for the Gen-
eral Counsel urges reconsideration and reversal of a procedural ruling made
during the hearing , but concedes that reversal would have no impact on the
outcome of this proceeding . As the issue is clearly moot, I find it unneces-
sary to consider it further herein.
BIG THREE INDUSTRIES , INC. 883
times called in when off duty to perform maintenance
work in the event of an interruption to operations caused
by a breakdown, maintenance work is not their primary
responsibility . Maintenance men on the other hand work
full time at maintenance . They work regularly on the day
shift and remain on call when off duty in the event mainte-
nance problems arise on other shifts . They may also occa-
sionally substitute for operators . From the evidence there is
reason to believe that the amount of overtime work per-
formed by maintenance men exceeds that available to op-
erators.
Respondent normally employs four operators at any one
time . Although the four operator positions were manned
continuously throughout the backpay period, there was
turnover in two of the positions while the other two were
manned by Dallas Stillwell and Bernard Minvielle
throughout the entire backpay period.
Respondent contends that the most appropriate measure
of Rushlow's lost hours would be those worked by Stillwell
or Minvielle or the average of the hours worked by both of
them throughout the backpay period. The General Counsel
adheres to the position that Caillouet 's hours are the appro-
priate measure of the hours Rushlow would have worked
throughout the backpay period because even after his
transfer his duties remained similar to those of an operator
and because there is no reason to believe that Rushlow
would not have similarly changed his classification.
Since Caillouet replaced Rushlow and worked in his
place throughout 1972, I see no reason to reject the use of
Caillouet's hours as the measure of the hours that Rushlow
would have worked for that year. To the contrary, the fact
that he worked in Rushlow's place would indicate that his
hours are the best measure of Rushlow 's lost hours for that
period .5 However, as Caillouet transferred to maintenance
very early in 1973, and as the evidence establishes that the
hours worked by maintenance men varied from the hours
worked by operators , I find it inappropriate to use
Caillouet's hours as the measure of the hours that Rushlow
would have worked after January 1, 1973. While it is true
that the Board has consistently found reasonable the track-
ing of a replacement employee for purposes of determining
the hours a discriminatee would have worked, nothing in
the cases cited by the General Counsel supports the con-
clusion that the Board will continue to track the replace-
ment after he moves to a different job with a different work
schedule . To assert that Caillouet continued to perform the
same work after his transfer is to ignore that what was a
minor part of his work became major and what was major
became minor , with significant impact on the hours that he
worked . Moreover, one cannot assume that Rushlow
would have "tracked" Caillouet by transferring to mainte-
nance in place of Caillouet if he had not been discharged.
Before Rushlow can be compared to Caillouet there must
be reason to believe that he would have transferred. Rush-
low did not testify that he would have sought such a trans-
fer, and the disparity between what Caillouet was paid in
S In this connection , the fact that Caillouet was initially classified as a
junior operator after he replaced Rushlow is immaterial as that classifica-
tion appears to be a temporary classification given new operators. and the
duties and hours are the same as those of an operator.
maintenance and what the specification alleges • Rushlow
should have received gives me reason to believe he would
not have transferred absent some possible factor which is
not in evidence. To be sure, Rushlow might have transfer-
red to maintenance , but many things might have hap-
pened, and more must be shown than is present in this
record to justify comparing Rushlow to Caillouet after Jan-
uary 1, 1973.
The evidence does not establish with any certainty who
worked in Rushlow's place and over what periods of time
after Caillouet's transfer. It also fails to afford a basis for
determining the number of hours worked as operators by
the employees other than Stillwell and Minvielle who held
operator's jobs during 1973 and 1974. Thus, after January
1, 1973, it is not possible to track the replacement in
Rushlow's former job nor is it possible to determine the
average performance of all operators over the remainder of
the backpay period. In these circumstances, the hours
worked by Stillwell and Minvielle are the most reliable
guide available . Accordingly, as Respondent 's schedule is
designed to distribute hours equally among the operators
over the course of the year, as the evidence of the hours
worked by Stillwell and Minvielle constitutes the only evi-
dence of hours worked by operators throughout the period
in question, and as the average of their hours will tend to
eliminate any individual deviations, I conclude that the av-
erage hours worked by Minvielle and Stillwell reflect the
best and most appropriate measure of the hours which
Rushlow would have worked from January 1, 1973, for the
balance of the backpay period.
-
Thus, in calculating the hours which Rushlow would
have worked for-purposes of determining the gross back-
pay due to Rushlow , I shall utilize the same hours as those
utilized by the Regional Director in the backpay specifica-
tion for the four quarters of the calendar year 1972,6 but I
shall utilize the average of the hours worked by Minvielle
and Stillwell as disclosed by exhibits in this case for the
remainder of the backpay period.7
IL THE APPROPRIATE RATE OF PAY
Immediately before his discharge Rushlow was being
paid $3.72 an hour: The backpay specification alleges that
Rushlow's hourly rate would have increased as follows: On
December 31, 1971, to $4.31; on October 20, 1972, to
$4.61; on January 11, 1974, to $4.86; on May 17, 1974, to
$5.10. At the time of Rushlow's discharge Minvielle and
Stillwell were being paid $4.31 an hour and had been re-
ceiving that rate for some time .8 With minor variation as to
the effective dates the increases set forth in the specifica-
tion are the same as increases given Minvielle and Stillwell
during the backpay period.
In its third amended and supplemental answer Respon-
6 Respondent does not contest the calculation of Rushlow 's net backpay
for the fourth quarter of 1971, when Rushlow 's backpay began to run.
71 note in this regard that for the third quarter of 1973, the summary of
Stillwell 's hours placed in evidence by Respondent is at variance with the
hours disclosed by Respondent's more detailed recapitulation of biweekly
payroll records placed in evidence by the General Counsel . I have relied on
the latter.
8 The fourth operator at the time of Rushlow 's discharge was also being
paid at that rate.
884 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
dent conceded that the hourly rates alleged in the specifica-
tion were correct . However , at the hearing Respondent
sought to amend its answer to deny that these rates were
correct and to allege that Rushlow 's correct rate of pay
throughout the entire backpay period would have been
$3.72 an hour because Respondent had been ordered to
bargain with the Union, because no contract had ever been
reached, and because Respondent was not sure it could
lawfully have raised Rushlow 's wage rate without a union
to do it. Counsel for the General Counsel objected to the
amendment on the ground that Respondent had not made
the exact computations of the hours and rates to show the
gross backpay which would have been due Rushlow pur-
suant to this contention . Counsel for the General Counsel
stated that he did not object on any other ground. As there
was no dispute as to the formula for the computation of the
backpay and as Respondent had stated specifically its con-
tention as to the hours and the rate of pay to be used in
applying the formula , all that remained was a mechanical
computation , and the objection was overruled.
The evidence offered thereafter as to the appropriate
rate to be paid Rushlow by both sides was scanty . In sup-
port of its contention that Rushlow's rate would have been
the same as that of Minvielle and Stillwell after January 1,
1972, the General Counsel appears to rely entirely on testi-
mony by the Regional Compliance Officer Norton ad-
duced on cross-examination that he based his use of these
rates on Rushlow 's testimony that he was promised in Jan-
uary 1972 he would receive top operators ' pay? Respon-
dent placed in evidence a document showing the wage
rates paid to Caillouet , Minvielle , and Stillwell from the
beginning of their employment through the backpay peri-
od. Apart from confirming that the rates used in the spec-
ification from December 31, 1971, were the same as the
rates paid Minvielle and Stillwell , it also showed that dur-
ing the period Caillouet worked as an operator he was paid
initially at the rate of $3.51 an hour and he was raised to
$4.09 an hour on October 15, 1972, coincident with a raise
to $4.61 for Minvielle and Stillwell.
The only other evidence as to wage scales in the plant is
found in the testimony of Tina Robertson, personnel secre-
tary for Respondent, who testified that as of the time of the
hearing there was a progression schedule at the Baton
Rouge plant under which increases were granted to em-
ployees after fixed intervals of 3, 6, 9, 12, and 18 months of
service , when the top rate was reached . She testified that in
addition general or cost-of-living increases were granted at
intervals which were not fixed . Mrs. Robertson did not
remember how long the progression schedule had been in
effect at the Baton Rouge plant and she had no documen-
tary evidence with her to show pay scales generally at that
plant throughout the backpay period. She testified that the
policy she described had not been in effect for the entire 9
years that she had been personnel secretary for Respon-
9 This testimony was not pursued further by either side , and it is not clear
what "testimony" of Rushlow Norton was referring to . Rushlow had not yet
testified in this backpay proceeding, and I have been unable to locate any
such testimony by Rushlow in the transcript of the underlying unfair labor
practice proceeding . When Rushlow testified after Norton in this proceed-
ing, he was not asked about his "testimony " or the promise.
dent, but that she did not remember when it came into
effect.
The General Counsel contends that when Respondent
amended its answer to deny the wage increases, it asserted
an affirmative defense and assumed the burden of showing
that Rushlow would not have received the increases. The
General Counsel further contends that Respondent failed
to present evidence to support this defense and abandoned
it, or at the very least failed to carry its burden. Respon-
dent contends on the other hand that there is no support in
the record for the wage rates alleged by the General Coun-
sel, that the claim that Rushlow would have received a
59-cent hourly increase shortly after his discharge is unten-
able because it would have been contrary to the guidelines
of the Federal Cost of Living Council and national policy,
and that the alleged promise of an-increase given Rushlow
is both highly improbable and unsupported by any evi-
dence.
There is no question that Respondent has the burden of
proof as to affirmative defenses in backpay proceedings,
such as mitigation of damages and interim earnings. How-
ever, the General Counsel has the burden of proof as to
gross backpay. It is a close question as to whether the issue
raised by Respondent is an affirmative defense or instead a
denial of a portion of the General Counsel's case which
necessitated that General Counsel at least initially go for-
ward. But whether or not Respondent had the duty to go
forward in the absence of any evidence to support the spec-
ification , I find that there was sufficient evidence adduced
to require Respondent to go forward and adduce evidence
to support its defense . Thus, however unclear in its refer-
ence and despite its hearsay nature, Norton testified to a
basis for the computation which supports the allegation of
the specification . If in fact Rushlow was promised a raise
to the top of the rate in January 1972, the use of Stillwell
and Minvielle 's rate thereafter as a basis of comparison
would be supported, for the top of the rate was at least as
much as they were receiving. If Rushlow had testified that
he received this promise, Norton had a reasonable basis for
use of this rate . Any doubt as to where, when , and under
what circumstances Rushlow gave the testimony could
have been developed by further cross-examination of Nor-
ton, and doubt as to the veracity of Rushlow's underlying
statement that he had been promised the increase could
have been developed through cross -examination of Rush-
low, or development of independent testimony to the con-
trary. The contention that the promised increase would
have violated national wage policy is substantially under-
mined by evidence that during the same phase of Federal
wage controls on October 14, 1972, while Caillouet was
working as an operator he received an increase of 58 cents
an hour from $3.51 of 16 percent. Respondent's broad un-
specific reference to national wage policy no more war-
rants the conclusion that it would have violated that policy
to give Rushlow the increase alleged in the specification
than that it violated that policy to give to Caillouet the
admitted increase. Finally, the alleged implausibility of the
promise is not so great that this evidence must be rejected
out of hand, particularly in the light of the evidence that at
some point in the last 9 years a wage progression system
was instituted at the Baton Rouge plant.
BIG THREE INDUSTRIES, INC.
To be sure, the evidence which supports the specification
is not overwhelming and presented less than a formidable
obstacle for Respondent to overcome. However, it necessi-
tated that Respondent go forward with evidence to support
its alternate contention.10 It did not do so.
As set forth, Respondent amended its answer to allege
that Rushlow's rate would have remained $3.72 an hour
throughout the backpay period, and Respondent's counsel
stated orally as the basis for that claim that Respondent
was under a bargaining order and that it was not sure it
could lawfully have raised Rushlow's wage rate. That basis
for Respondent's position is patently unsupportable on the
record before me, for the evidence presented by Respon-
dent shows that hourly rates of the three other employees
offered by Respondent for purposes of comparison to
Rushlow all increased periodically during the backpay pe-
riod. Quite clearly Respondent did not refrain from grat-
ing its employees increases during the backpay period out
of any sense of obligation to bargain with the Union and
would not have refrained from giving Rushlow increases
for that reason if he had not been discharged. Moreover,
apart from the evidence as to the other three employees,
Mrs. Robertson testified that at some point either before or
after Rushlow's discharge Respondent instituted an auto-
matic progression system for employees at the Baton
Rouge plant. It is reasonable to infer that if this had been
a recent event, Mrs. Robertson would not have been un-
able to remember when in her 9 years of employment it
occurred. Accordingly, Respondent's contention that
Rushlow would have remained at $3.72 an hour through-
out the entire backpay period must be rejected.
Indeed, in its brief Respondent has abandoned its con-
tention that Rushlow's rates would have remained un-
changed and now contends that Rushlow's rates should be
adjusted at the same time and by the same amounts as in
the case of the rate changes of Stillwell and Minvielle, so
that Rushlow's rate would increase during the backpay pe-
riod but always remain 59 cents less than that of Stillwell
and Minvielle. This contention was not made at the hear-
ing, is contrary to the amended answer, was not litigate(
and has little more support in the record tha
Respondent's contention that Rushlow's rate would hav
remained fixed throughout the backpay period.
In these circumstances, I find that there is sufficient evi-
dence to support the allegation of the specification with
respect to the proper wage rate to use as a basis of compu-
tation of Rushlow's pay and to sustain it in the absence of
any evidence to support Respondent's alternative conten-
tion. Accordingly, I find that the appropriate rates to be
used in computing Rushlow's backpay are those set forth
in the specification and at the beginning of this section of
the Decision.
IS See Lee Cylinder Division of Golay & Co., Inc., etc., 184 NLRB 241
(1970). There the General Counsel had shown that many but not all employ-
ees had received increases on specific dates , and the question was whether
the backpay claimants would also have received them if employed. The
Board held that the Respondent had the burden of showing that they would
not have received them.
III. RUSHLOW'S INTERIM EARNINGS
885
1972. In the backpay specification , the Regional Direc-
tor conceded certain interim earnings from identified
sources for each of the quarters of calendar year 1972. Re-
spondent has not disputed the accuracy of those figures,
but contends that deposits made by Rushlow in his person-
al savings account in the amounts of $96, $60, and $350
respectively in the first three quarters of the year should be
added to Rushlow 's interim earnings for those quarters.
This contention is based on Rushlow 's testimony that de-
posits made in his savings account came from money that
he earned and money that he borrowed . Assuming that the
deposits in 1972 all came from earnings , there is no evi-
dence to indicate that the deposits came from earnings
other than those disclosed in the specification . According-
ly, I reject Respondent's contention and find Rushlow's net
interim earnings for the four quarters of 1972 were as stat-
ed in the specification."
1973. In the backpay specification the Regional Director
set forth interim earnings as follows:
Quarter I Frank ' s Door & Building Supply Co . $1,685
Quarter II Frank ' s Door & Building Supply Co. 1,102
Jack Reed Const tion 491
Quarter III
ruc
Jack Reed Construction 2,943
,)uarter IV Jack Reed Construction 981
Lynn .Sanders,
-
880
0Self-Employed 9 U
At the hearing counsel for the General Counsel was per-
mitted to amend the specification on the representation
that he had learned that all income other than attributed to
Frank's Door was self-employment income, that the figures
shown in the specification from sources other than Frank's
Door represented gross income, and that they failed to re-
flect business expenses incurred by Rushlow. After amend-
ment the income attributed to sources other than Frank's
Door was:
Quarter II Self Emp. $208
Quarter III Self Emp. 1,245
Quarter IV Self Emp. 1,167
The support offered for the amendment was Rushlow's
1973 tax return and Rushlow's testimony. Respondent con-
tends that no expenses should be deducted from Rushlow's
interim earnings because the tax return and Rushlow's tes-
timony fail to support the claimed expenses. Respondent
further contends that Rushlow's interim earnings for each
quarter consist of the total of his earnings from Frank's
Door plus amounts deposited in his savings account and
amounts deposited in his checking account which he
opened in April 1973.
For the first quarter Respondent would treat aggregate
savings bank deposits of $260 as additions to interim earn-
ings from Frank's Door. Again there is no reason to con-
clude that these deposits were attributable to earnings from
11 The specification deducts expenses for the first quarter of 1972 which
Respondent does not dispute
886 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
a source other than that disclosed by the specification, and
the contention is rejected . I find that Rushlow's interim
earnings for the first quarter of 1973 are as stated in the
specification.
In the second quarter Rushlow worked for Frank's Door
until the end of May . For the remainder of the year he
performed carpentry work for Jack Reed and others for
which he was paid as an independent contractor . Rushlow
explained that he started a checking account at around the
time he started such work so that he could keep a record of
the amounts received from his work as an independent
contractor . He testified that during the second or third
quarter he made one deposit of around $480 which repre-
sented an income tax refund . Otherwise he identified no
source of deposits in either his savings or checking account
for calendar year 1973 other than earnings.
Respondent contends that all deposits made by Rushlow
to his savings and checking accounts in the second , third,
and fourth quarters should be regarded as self -employment
income . However , there is again no reason to view deposits
made by Rushlow before the end of May as attributable to
self-employment income rather than to his employment at
Frank's Door . Moreover , the May 3 deposit in Rushlow's
savings account of $487 would appear to be accounted for
by his testimony as to the tax refund he received at this
time . The remaining deposits for the year to savings and
checking accounts total $634 for Quarter II, $1,754 for
Quarter 111 , 12 and $4,494.54 for Quarter IV , for a grand
total of $6 ,882.54 13 compared to total gross earnings of
$6,195 from sources other than Frank's Door conceded by
the General Counsel.
The General Counsel contends that Rushlow's testimony
and 1973 tax return support the amended specification
with one modification and that Respondent has failed to
establish that the income reported or the deductions taken
therein should be rejected . Rushlow's return was prepared
by a well-known tax return preparation service on the basis
of information supplied by Rushlow's wife when Rushlow
was not present . Unfortunately the tax return betrays suffi-
cient carelessness or worse in its preparation that its proba-
tive value is slight . On p. 2 of the form in a space provided
for listing employers and income received from them the
return properly shows the income received from Frank's
Door and also shows $6,195, all of which is attributable to
Jack Reed . According to Rushlow , that figure should have
been attributed to all sources of self employment. On
Schedule C used for computation of profit or loss from
business or profession gross receipts are shown as $8,195,
or $2,000 more than the amount attributed to Jack Reed
on p. 2 . Rushlow testified that there was no additional in-
come and that the increase was due to an error in copying.
There then appears on Schedule C a series of amounts
12 Respondent in its brief has overstated deposits for the period
7/24-8/22 through an apparent misreading of the top line of Rushlow's
bank statement.
13 Comparison of Rushlow's savings account withdrawals to checking ac-
count deposits reveals some close correspondences as to dates and amounts
which suggest that at least some deposits in his checking account may repre-
sent transfers of funds from savings rather than earnings received by him
from outside sources. However, Rushlow was not asked about such inter-
account transfers.
which are deducted from gross receipts to arrive at a net
profit of $4,620. According to Rushlow, that figure is over-
stated by $2,000 because of the copying error in transpos-
ing gross receipts . Schedule C-1, cost of goods sold and/or
operations , shows purchases of $899 and cost of labor
(other than Rushlow's) of $1,440. Yet Rushlow testified
that he employed no labor and purchased no materials.14
Also deducted was depreciation of $149 , 15 saw repair of
$40, saw blades and small tools $300, rental equipment
$150, utilities on tool shed $250, telephone expense $107,
and truck expense for 2,000 miles at 12 cent per mile, $240.
Rushlow had not receipts for any of these expenses with
him and was unable in his testimony to explain how his
wife and the tax preparer arrived at most of these figures.
With respect to utilities on tool shed , he testified that the
figure was intended to reimburse his father-in-law for the
cot of utilities for a shed where he worked and stored
materials . He then testified that it more accurately should
have been described as rent.
As set forth , the net profit figure shown on line 21 of
Schedule C is $4,620 . On Schedule SE, provided for com-
putation of Social Security Self Employment Tax, line 5(a)
calls for the amount of net profit to be taken from line 21
of Schedule C as the basis for computation . Yet the
amount which appears on line 5(a) of Schedule SE is
$2,339 , which happens to be identical to the amount which
appears on line 8 of Schedule C- 1 where it purportedly
reflects costs of goods sold and/or operations rather than
net profit . Rushlow's self-employment tax was computed
on the basis of this figure.
I have set this analysis forth only to show that any nor-
mal presumption of accuracy and reliability which might
attach to a tax return has been forcefully overcome by
what appears on the face of the return and Rushlow's lack
of knowledge of its basis.
Accordingly , I find the most reliable evidence of
Rushlow's interim earnings from self employment from
June 1 through December 31, 1973, is to be found in his
savings and checking account deposits , for that period
which I find more persuasive than the tax return as ampli-
fied by Rushlow's testimony. I find further that the tax
return in the absence of any independent corroboration
furnishes no reliable evidence of expenses to be offset
against these earnings . 16 I conclude , therefore, that
Rushlow's interim earnings for 1973 were as follows:
Frank's
Door
Self
Emp . Total
Quarter I $ 1,685 0 $1,685
Quarter II 1,102 $634 1,736
Quarter III 0 1,754 1,754
Quarter IV 0 4,495 4,495
14 The General Counsel concedes that the $1 ,440 deduction should be
disallowed.
15 An attached schedule listed a table saw, router , and air compressor as
items on which depreciation was figured.
161 note in this regard that Rushlow 's testimony shows that for his work
for Jack Reed, which appears to represent the bulk of his self-employment
earnings, he was paid by the hour and did not furnish materials . There is no
showing as to how his transportation costs compared to those incurred by
him in reaching his former job with Respondent . It would appear from
Rushlow's testimony that expenses , if any, which might properly be attribut-
ed to his self-employment were minimal.
BIG THREE INDUSTRIES , INC. 887
1974. Until March 1974 Rushlow was self-employed ap-
parently performing small carpentry jobs . In March he
started to work as an independent contractor for D & D
Construction Co. on home construction . He received a
fixed weekly amount for supervising all work on the houses
and also was paid on a square footage basis for framing
work which he could do by himself, with employees, or
contract out. Starting in May Rushlow began to employ
others to perform this work and opened a separate check-
ing account in which he deposited much of his income
from D & D and from which he paid expenses attributable
to this work.
In the specification , following interim earnings are con-
ceded: Quarter I, $900; II, $3030; and III, $1410, for a
total of $5340 . All but $300 of this amount is attributed to
work performed by Rushlow for D & D. At the hearing a
complete schedule of payments made to Rushlow by D &
D, Rushlow's personal bank statements , and Rushlow's
check stubs from an account from which he paid all busi-
ness expenses were made available and placed in evidence.
These show that during the Quarter I, Rushlow had depos-
its of $ 1,075 in his personal checking account before start-
ing to work for D & D and $280 after that date. However,
during that period Rushlow also made a personal loan of
$900, some of which he testified he probably put in the
bank. During that quarter he was paid $748 by D & D.
In Quarter II Rushlow received a total of $13,794 from
D & D, and paid out expenses totaling $9,830. In Quarter
III, up to August 5 Rushlow received $1,480 from D & D,
and paid out $4,373 in expenses . During Quarters II and
III, Rushlow withheld social security and income taxes
from employees ' pay totalling approximately $680 and
$370 for each of the quarters, which were not transmitted
during these quarters.
Respondent on the one hand would add amounts depos-
ited by Rushlow to his personal checking account during
the period he was performing work for D & D to
Rushlow's interim earnings received from D & D, and on
the other contends that because from $4,000 to $5,000 of
the payments he received from D & D were not deposited
in any bank account Rushlow's earnings plainly exceeded
his gross backpay. Respondent fails to state how it would
treat the fact that in Quarter III, Rushlow' s expenses ex-
ceeded his income.
I find no basis for either of Respondent's contentions as
to Rushlow's bank deposits. Both seek to count the same
earnings twice , and the second contention is not even
soundly based in fact.
The evidence summarized above leaves some question as
to the accuracy of the quarterly distribution of Rushlow's
interim earnings in the specification but if anything shows
a smaller total of interim earnings during calendar 1974
than the General Counsel is willing to concede.l" As a re-
distribution of Rushlow's earnings on a quarterly basis
would not result in any diminution of his net backpay, I
have adopted the interim earnings set forth in the specifica-
tion as amended as those which should be deducted from
Rushlow's gross backpay in 1974.
IV. SUMMARY
On the basis of the foregoing findings and conclusions I
have calculated Rushlow's adjusted hours, gross backpay,
interim earnings , and net backpay as follows , utilizing the
same definitions as in the Specification.
Quarter
Adjusted
Hours
Hourly
Rate
1971, IV 113.5 $3.72
1972, I 717.5 4.31
II 711.5 4.31
III 561.5 4.31
IV 18 194.5 4.31
601.5 4.61
1973, 1 600.25 4.61
II 698 4.61
III 589.375 4.61
IV 630.19 4.61
1974, I 113.50 4.61
453.625 4.86
II 404.50 4.86
282 5.10
III 356 5.10
17 In his brief, the General Counsel adheres to the position that the spec-
ification is correct but sets forth an alternative basis of computation which
would show lesser interim earnings as a demonstration that his concession is
more than adequate. That alternative treats all income from D & D as either
from supervisory activities or from subcontracting framing work by Rush-
low to others. However, as Rushlow performed some framing work directly
Gross
Backpay
Interim
Earnings
Net
Backpay
422 422
3092 1062 2030
3067 1654 1413
2420 1553 867
838
2773
3611 1524 2087
2767 1685 1082
3217 1736 1481
2717 1754 963
2905 4495 0
523
2205
2728 900 1828
1966
1438
3404 3030 374
1816 1410 406
12,953
as a subcontractor with his own employees , the premise of that computation
is in error . In fact , it appears that Rushlow's net earnings from D & D were
even less than the results of the alternative calculation.
16 For those quarters in which Rushlow 's pay rate would have changed, I
have divided the hours as of the end of the pay period closest to the change
as was done in preparing the specification.
888 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
RECOMMENDED ORDER 19 amount shall accrue interest at the rate of 6 percent per
annum, computed in the manner set forth in Isis Plumbing
& Heating Co., 138 NLRB 716 (1962). There shall be de-
ducted therefrom social security taxes, income tax with-
holding, and such other deductions as may be required by
the laws of the United States or the State of Louisiana.
Upon the basis of the foregoing findings and conclusions
it is ordered that Respondent Big Three Industries, Inc., its
officers, agents , successors, and assigns, shall pay to Fred
J. Rushlow as net backpay the amount of $12,953, which
19 in the event no exceptions are filed as provided by Sec. 102.46 of the 102.48 of the Rules and Regulations , be adopted by the Board and become
Rules and Regulations of the National Labor Relations Board, the findings, its findings , conclusions, and Order, and all objections thereto shall be
conclusions , and recommended Order herein shall, as provided in Sec. deemed waived for all purposes.