Carmel Furniture Corp.

National Labor Relations Board - Board Decisions

Dec 17, 1985

277 N.L.R.B. 1105 (N.L.R.B. 1985)

CARMEL FURNITURE CORP. 1105
Carmel Furniture Corp. and Local 1010, United In-
dustrial Workers of the United Industrial
Workers of the United Furniture Workers of
America, AFL-CIO. Case 21-CA-22510(E)
17 December 1985
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND BABSON
On 30 January 1985 Administrative Law Judge
Earldean V.S. Robbins issued the attached supple-
mental decision. The Applicant filed exceptions
and a supporting brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the supplemental deci-
sion and the record in light of the exceptions and
briefs and has decided to affirm the judge's rulings,
findings,' and conclusions and to adopt the recom-
mended Order.
ORDER
The recommended Order of the administrative
law judge is adopted and the application of the Ap-
plicant, Carmel Furniture Corp., Los Angeles,
California, for attorney's fees and expenses under
the Equal Access to Justice Act is denied.
1 We find that the General Counsel was "substantially justified" under
the Equal Access to Justice Act, as amended, in issuing and prosecuting
the unfair labor practice complaint in this proceeding We believe that
Congress , in amending the Act, did not alter, but merely clarified, the
definition of "substantially justified," which means more than " mere rea-
sonableness " H R Rep 99-120 at 9.
SUPPLEMENTAL DECISION
(Equal Access to Justice Act)
EARLDEAN V. S. ROBBINS, Administrative Law Judge.
On June 29, 1984, I issued my decision in the above-enti-
tled proceeding finding that the General Counsel had not
made out a prima facie case as to any allegation of the
complaint and dismissing the complaint in its entirety.
No exceptions were filed and on August 7, 1984, the
Board adopted my decision dismissing the complaint in
its entirety.
On September 4, 1984 Respondent filed with the
Board an application for award of attorney fees and re-
lated costs pursuant to the Equal Access to Justice Act
(EAJA)1 and Section 102.143 et seq. of the Board's
Rules and Regulations. On September 7, 1984, pursuant
to Section 102.148(b) of the Board's Rules, the Board or-
dered that the matter be referred to me for appropriate
action. On September 12 the General Counsel filed a
motion to dismiss application for an award of fees and
expenses under the Equal Access to Justice Act which
sets forth both substantive and procedural grounds for
dismissal. The General Counsel contends (1) that the ap-
plication is fatally deficient on its face in that it does not
include a detailed statement of Respondent's net worth
as of October 26, 1983, the date the complaint issued, but
rather includes a statement of net worth as of February
29, 1984; and (2) that the General Counsel's position in
the underlying litigation was substantially justified. The
General Counsel also urges that even if its positions
above are rejected, the application should be dismissed as
to the claimed expenses which are clearly attributable to
the investigatory phase of the case. On September 24 Re-
spondent filed its response to the General Counsel's
motion in which it urges that Section 102.143 of the
Board's Rules does not require the statement of net
worth to be as of the date of the issuance of the com-
plaint, but, nevertheless, included in its response a state-
ment of net worth as of October 31, 1983. Respondent
also responded to the General Counsel's other argu-
ments.
EAJA provides that an award shall be made to an eli-
gible, prevailing party unless the position of the agency
was "substantially justified" and "special circumstances"
do not render an award unjust.2 The Act does not define
"substantially justified," however the legislative history
characterizes it thusly.
The test of whether or not a Government action
is substantially justified is essentially one of reason-
ableness. Where the Government can show that its
case had a reasonable basis both in law and fact, no
award will be made. In this regard, the strong de-
terrents to contesting Government action require
that the burden of proof rest with the Government.
This allocation of the burden, in fact, reflects a gen-
eral tendency to place the burden of proof on the
party who has readier access to and knowledge of
the facts in question. The committee believes that it
is far easier for the Government, which has control
of the evidence, to prove the reasonableness of its
action than it is for a private party to marshal the
facts to prove that the Government was unreason-
able.
The standard, however, should not be read to
raise a presumption that the Government position
was not substantially justified, simply because it lost
the case. Nor, in fact, does the standard require the
Government to establish that its decision to litigate
was based on a substantial probability of prevailing.
H.R. Rep. No. 1418, 96th Cong., 2d Sess. 10 (1980)
reprinted in 5 U.S. Code Cong. & Ad. News 4984,
4989. See Enerhaul, Inc., 263 NLRB No. 121 (1982),
slip op. at 2. See also S. Rep. No. 253, 96th Cong.,
2d Sess. 6-7 (1980).
1 Pub. L. 96-481, 94 Stat. 2325, 5 U.S C § 504 (1980). 2 5 U.s C. § 504(a)(1), 5 U S C § 504(b)(1)(B).
277 NLRB No. 119
1106 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The meaning of "substantially justified" was further
clarified in Iowa Parcel Service, 266 NLRB 392 (1983),
wherein the Board adopted the following language of
the administrative law judge at 392-393:
The burden of establishing substantial justification is
on the Government and the test of whether or not
governmental action is substantially justified is one
of reasonableness. The Government, to defeat an
award, must establish that its position had a reason-
able basis in fact and law. However, the fact that
the Government lost its case does not give rise to
any presumption that its position was unreasonable
and the "substantially justified" standard does not
"require the Government to establish that its deci-
sion to litigate was based on a substantial probabili-
ty of prevailing."5 Moreover, as the Board has re-
cently pointed out, the Government's position
might still be deemed reasonable in fact and law
notwithstanding that the General Counsel failed to
establish a prima facie case.6
5 S. Rept. No 96-253, 96 Cong., 1st sess 6-7, 14-15 (1979);
H R Rept No 96-1418, 96th Cong, 2d sess 10-11 (1980), Spencer
v NLRB, 111 LRRM 2065, 2066 (D C. Cir. 1982)
6 See Enerhaul, Inc., 261 NLRB 890 (1982)
In the underlying unfair labor practice case the Gener-
al Counsel alleged that Respondent violated Section
8(a)(3) and (1) of the National Labor Relations Act by
discharging four employees because they engaged in
union activities. In support of this allegation the General
Counsel adduced evidence from the alleged discrimina-
tees that the supervisor who made the discharges made
statements which, if credited, would tend to establish an-
tiunion animus on his part and that he had discharged
them because of their union activities. However I cred-
ited Respondent 's witnesses, including the organization
coordinator for the Union's parent organization who was
also the trustee of the Union, that Respondent invited the
Union to organize its plant and that the supervisor was
told this was what Respondent wanted and was instruct-
ed that, in order to facilitate the Union 's organizational
campaign, he was to hire the union organizer who would
later apply for employment at Respondent's plant. In
view of this credibility finding I concluded that it was
improbable that the supervisor would have made the
statements attributed to him or discharged the alleged
discriminatees because of their union activities. Accord-
ingly, I did not credit the General Counsel's witnesses
with regard to these statements, and in view of my credi-
bility resolutions, I found that the General Counsel had
not made out a prima facie case.
In its response to the General Counsel's motion to dis-
miss, Respondent argues that no substantial justification
exists to prosecute the underlying case herein . In support
thereof, Respondent argues that (1) the Region did not
consider it was justified enough to file exceptions with
the Board and that lack of justification was also indicat-
ed when the Regional Director canceled the original
trial date with only two working day's notice; (2) both
Respondent and the union leadership requested that the
charges be dismissed; (3) the Region was advised by both
Respondent and the Union that Respondent invited the
Union to organize its employees, making such discharges
for Union reasons inherently improbable, and (4) the
only credibility conflict was between union representa-
tives and if the matter had been investigated properly it
would easily have been ascertained that the business
agent filing the unfair labor practice charges herein did
so without sufficient knowledge and thus, Respondent
argues, there were no issues of credibility requiring a
trial.
I reject this argument . If I had discredited Respond-
ent's witnesses that the supervisor knew Respondent
wanted its employees to be represented by the Union and
had invited the Union to embark on the organizational
campaign , and had credited the employee witnesses as to
the statements allegedly made by the supervisor, the
question of unlawful motivation would have been a close
one despite Respondent's invitation to the Union. Thus
this matter presented credibility issues appropriate for
resolution after a hearing before an administrative law
judge. Accordingly, I find that the General Counsel had
a reasonable basis both in law and fact, and therefore had
substantial justification , for issuing the complaint in this
matter and for prosecuting it through the hearing stage.
In view of this finding, I do not reach the other conten-
tions set forth in the General Counsel's motion.
On the foregoing finding and conclusions, the record
in the underlying unfair labor practice case, and the
pleadings herein, and pursuant to Section 102.153 of the
Board's Rules and Regulations, I issue the following rec-
ommended3
ORDER
IT IS ORDERED that the application of the Applicant,
Carmel Furniture Corporation, Los Angeles, California,
for an award under the Equal Access to Justice Act be
dismissed.
3 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 objections to them shall be deemed waived for all pur-
poses
1