Chem Fab Corp.

National Labor Relations Board - Board Decisions

Apr 8, 1985

275 N.L.R.B. 21 (N.L.R.B. 1985)

CHEM FAB CORP
Chem Fab , Corporation and United Steelworkers of
America, AFL-CIO, CLC. Cases 26-CA-8421
and 26-CA-8421-2
8 April 1985
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSO ^NAND MEMBERS
E4=it3
HUNTER AND 1JENNIS
,On 24 October 1984 Administrative Law Judge
Richard J. Linton issued the attached supplemental
decision. The Respo1dent filed exceptions and the
General Counsel filed an answering brief in support
of the judge's decision.
The Board has considered the supplemental deci-
sion and the record in light of the exceptions and
brief and has decided to affirm the judge's rulings,
findings, and conclusions and to adopt the recom-
mended Order. J
ORDER
"The' National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, Chem Fab
Corporation, Hot Springs, Arkansas, its officers,
agents, successors, and assigns,-shall take the action
set forth in the Order.
' Chairman Dotson and Member Hunter note that they did not partici-
pate in the underlying case (257 NLRB 996 (1981); enfd 691 F 2d 1252
(8th Cir 1982))
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
RICHARD J. LINTON, Administrative .Law Judge. This
backpay proceeding was tried before me in Hot Springs,
Arkansas, on July 18-19, 1984, pursuant to the April 9,
1984 backpay specification (BPS) issued by the Regional
Director for Region 26 of the National Labor Relations
Board on behalf of the Board.
On August 26; 1981, the Board issued its Decision and
Order' directing Chem Fab Corporation (Respondent or
Chem Fab) to reinstate John L. Stephens and John C.
Stewart and to-make them whole, with interest, for any
lost earnings' because of their unlawful discharge by Re-
spondent on April 23 and 24, 1980, respectively., On No-
vember 1, 1982, the United States Court of Appeals for
the Eighth Circuit issued its judgment enforcing in full
the Board's Order.2 '
When the parties 'could not -agree on; the amount of
backpay due Stephens and Stewart, the Regional Direc-
i 257 NLRB 996 (1981)
2 691 F 2d 1252 (1982)
21
tor3 issued the BPS alleging the amounts of backpay due
under the Board's order.4 Specifically, the Regional Di-
rector alleges that Respondent must pay Stephens
$34,045, plus interest, and Stewart $21,321, plus interest.
Respondent's general position is that Stephens would
have been laid off in February 1981, and not recalled,
and that he therefore is entitled to no backpay after Feb-
ruary 1981 Chem Fab argues that the gross backpay for-
mula incorrectly includes semiannual merit increases for
both Stephens and Stewart, and avers that they should
be denied backpay for times it contends each incurred a
willful loss of earnings
On the entire record, and from my observation of the
witnesses and their demeanor, and after considering the
briefs filed on behalf of the General Counsel and the Re-
spondent, I make the following
FINDINGS OF FACT
I. APPLICABLE LEGAL PRINCIPLES
The applicable legal principles are well settled by nu-
merous cases. In summary they are as follows: First, in a
backpay proceeding the General Counsel has the burden
of showing the amount of gross backpay due. Second, -
the burden of establishing facts which would reduce the
amount of gross backpay, such as interim earnings or a
willful loss of interim earnings, falls on the Respondent.
Third, if the discriminatees incurred any reasonable and
necessary expenses in earning interim income, it is the
General Counsel's burden to establish the amounts of
those expenses.
Although it is the Respondent's burden to establish the
discriminatees' interim earnings, if any, it is the General
Counsel's voluntary policy to assist in gathering informa-
tion on this topic and including that data in the BPS. 3
NLRB Casehandling• Manual, Burden of Proof, Secs.
10656.6 and 10737.2 (1984).
Respecting the gross backpay formula , it is further
well established that any formula which approximates
what the discriminatees would have earned had they not
been discriminated against is acceptable if it is not unrea-
sonable or arbitrary in the circumstances. Moreover, any
doubts, uncertainties, or ambiguities are resolved against
the Respondent who is the wrongdoer. Laborers Local 38
(Hancock-Northwest, J. V.), 268 NLRB 167 (1983).
Concerning Respondent's burden to demonstrate af-
firmatively that the discriminatees failed to make reason-
able efforts to find interim work, it is well established
that the discriminatees are held only to a reasonable, as-
sertion in this regard and not to a standard of the highest
diligence. Nor is success the measure of the 'sufficiency
of the discriminatees' search for interim employment, for
the law requires only an honest and good-faith effort.
And in determining the reasonableness of this effort, the
discriminatees' skills,' experience,' qualifications, age, and
the labor conditions in the 'area are factors to, be consid-
3 The Regional Director is also referred to herein as the General
Counsel
* The backpay period for each is nearly identical For Stephens it
begins 4-23-80 and ends 2-3-84, and for Stewart it runs from 4-24-80 to
2-3-84
275 NLRB No. 6
22 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ered., Laredo Packing Co., 271 NLRB 553 (1983); Labor-
ers Local 38, supra.
11. THE EVIDENCE
A. The Gross Backpay Formula
The issue on the gross backpay formula is whether the
discriminatees would have received semiannual merit
raises of 25 cents per hour.
Thomas H. Smith Jr. was the Board agent who han-
dled the compliance investigation of this case. At the
time of his testimony, Smith had become Resident Offi-
cer of the Board's Office in Little Rock, Arkansas.5 He
has had extensive experience in calculating backpay in
unfair labor practice cases. Smith visited Respondent's
Hot Springs facility in late March 1983. During his in-
vestigation there, Smith examined company records and
conferred with Respondent's counsel, Robert C. D.
McDonald. . -
Smith testified that he arrived at the 25-cent-an-hour
pay increase- based on his examination of Respondent's
records for employees in classifications similar to those
of Stephens and Stewart plus the pay increase history of,
Stephens and Stewart. He described the 25 cents as a
median figure. Although he found some raises being
granted at intervals of 2 to 3 months, Smith determined.
from .the records that a reasonable period was 6 months
for the pay increases. Moreover, Smith credibly testified
that during this March 1983 visit his information as to
the pay increases was confirmed when Attorney
McDonald told -him that -if Stewart were still employed
he would have been earning between $5 50 and $6-per
hour. This range is consistent with Smith's determination
and the rate and formula set forth in the BPS. Moreover,
Vice President Loren Furnas admitted that across-the-
board pay increases of 25 cents per hour, were granted in
January 1980, 1981, and 1984.6 -
McDonald denies Smith's assertion regarding the pay
range Stewart would have been in had he been on the
payroll in March 1983. According to McDonald, he told
Smith that the range was what other employees at the
Chem Mill were earning. However, as Smith explained
in his testimony, he already had the records for the cur-
rent employees and a report on their pay rates would
have been a redundancy. As Smith's version is the more
logical, and based particularly on Smith's superior de-
meanor, I credit him rather than McDonald.
Accordingly, I find that the General 'Counsel carried
his burden in establishing the gross backpay formula.
B. The Mitigation Issues
1. Layoff and recall as to Stephens •
Respondent contends that Stephens not only would
have been laid off on February •13, 1981, but also that he
5 References to the transcript of testimony are to volume and page
6 In Respondent's 4-25-84 answer to the BPS, it fails to give Stephens
and Stewart credit for any of these plantwide pay raises in setting forth
its version of the correct gross backpay computation for each
would not have been recalled by the close of his back-
pay period.7
The General Counsel concedes in appendix A of the
BPS that Stephens would have been laid off from No-
vember 5, 1982, through January 10, 1983, but contends
that backpay is due for the balance of the backpay
period.
Resident Officer Smith testified that at the beginning
of his March 1983 investigative visit at Respondent's Hot
Springs plant, e''Attorney^McD'o'nald `infoimedl him' that
Stephens and Stewart would have been laid off. Smith
inquired about the basis for that position, and McDonald
explained that layoffs were by job classification seniority.
Smith denies that McDonald qualified this by saying that
seniority was not strictly followed.and that the needs of
the employer controlled. McDonald testified that he told
Smith that seniority was only one of several factors con-
sidered in determining who would be retained in a
layoff. Smith testified that he was certain about McDon-
ald's statement because he knew it would be an issue in
computing the BPS, that he wrote it-down, and - that
such standard is incorporated into the BPS calculations.
Thus, Smith testified that as to Stephens, who had been
second in seniority. in the handformer classification, he
simply ascertained who had succeeded - Stephens in
second position. That person was Otis Hildreth. After re-
viewing the records, Smith determined that Hildreth had
been laid off from November 5, 1982, to January 10,
1983.
In his own testimony, Attorney McDonald 'specifically
referred to the explanation of Respondent's layoff policy
as given at the hearing by Vice President Furnas as what
he, McDonald, told Smith.9
Furnas testified the first item considered on layoffs and
recalls is seniority, with the second item being job quali-
fications. He defined the latter as meaning versatility. He
testified that employees generally are laid off by depart-
ment , and he generally selects the least senior as the first
one to be laid off where versatility is equal . Finally, he
explained that seniority • is defined as plant - seniority
within the department.
Furnas testified that Respondent had to lay off various
employees beginning in February,. 1981 and. continuing
into 1982, and that Stephens would have been selected
for layoff in February 1981 and not later than November
1982. According to Furnas, Stephens would have been
laid off rather than either Otis Hildreth-or Pat White and
that Carl Sheets would have been-recalled before Ste-
phens. The basis for these selections would have been
7 Respondent apparently abandoned its contention that Stewart would
have been laid off, - for it offered no evidence t6 support the affirmative
allegation in its answer -
Chem Fab actually has two plants in Hot Spnngs •One is on - Central
Street, and the second, known as the Chem Mill, is on Nevada Street
Vice President Furnas has his office at the former , although he visits in
both plants daily Presumably the main office and records are at - the Cen-
tral Street, location, and that apparently is where Smith visited in March
1983
9 Thus, McDonald testified , "I clearly told him that layoffs were con=
ducted according to senionty , job performance , and duty performance
and other factors as outlined by Mr Furnas all being equal " - -
CHEM' FAB CORP
that each of these three, according to Furnas, was more
versatile than Stephens.
Hired in May 1978, Stephens had more plant seniority
than either Sheets or White but less than Hildreth (R.
Exh. 3a). However, Stephens had more seniority in the
Hydro department than any of the other three.
Furnas testified that a handformer is classified with the
hydro equipment, and that the term is synonymous with
machine operator. Indeed, Furnas seems to include the
terms-.of hydi-o,ihandformer; imachine, operator, and, fab
processor as interchangeable for job functions within the
same department. The department, it appears, is the fab-
rication department, or division, which is under the di-
rection of Supervisor Ronald E. Smith.
Otis Hildreth credibly testified that Fabrication Super-
visor Ronald Smith told employees at the time of the
November 1982 layoffs that employees were being laid
off by labor grade. In response to a leading question Hil-
dreth testified that this meant they were laid off by job
classification seniority. I find the latter response to be
confusing, as is 'some of the evidence on this point.
Hildreth's testimony is that Supervisor Smith said that
the layoff would be by labor grade. It was Hildreth who
then added, in his testimony, that the highest grade stays.
The diistiiiction make"s` a' difference, for Respondent uti-
lizes a system in which labor grade 1 is the highest paid
and labor grade 7 is the lowest paid (R. Exh. 4). Vice
President Furnas testified that in previous year's Chem
Fab did not utilize labor grades. A machine operator was
classified as such without- a labor grade.' Beginning
around July 1981 to January 1982, however, Chem Fab
assigned labor grades to its job classifications. I find that
Hildreth, confused by the reverse nature of the system,
simply equated the lower paying jobs with the' lower
grade numbers. Thus, I find that Supervisor Smith, as
described by -Hildreth, laid off the higher grades first.
These would be the employee's earning the least money.
The system used by Supervisor Smith does not neces-
sarily coincide with one based, on seniority. Although
most of those in the lower paying grades may have had
less seniority (and experience) than the employees in the
higher paying grades, such is not a required condition of
industrial life. For a variety of reasons, there can be em-
ployees with more seniority, whether plant, department,
or job classification, holding the lower paying jobs than
some of those in positions of higher pay.
'Under Supervisor. Smith's system, the onus of the
layoff fell first on the employees holding lower pay
grades. In effect, that. was a layoff by job classification
within a department. However, the selection criterion
was the grade (pay rate), not seniority.
By contrast, the system described by Vice .President
Furnas, although also departmentwide, utilizes the selec-
tion criterion of job classification by plant seniority.-
Thus, Furnas testified `that if management decided that
the fabrication , department needed to lay off, five ma-
chine operators; the Company would select first those
with the least plant seniority, versatility being equal.1
10 Furnas testified that this system, with its emphasis on versatility, has
been in effect at Chem Fab since the beginning of the Company
23
Of course, that system is different from one in which em-'
ployees are selected based-on the time they have served
in the particular job classification'
The system described by Furnas strikes a balance be-
tween two important considerations, seniority and job
importance. When layoffs are strictly by plant seniority,
the more senior employee, whatever his job classifica-
tion, remains. A company may desperately need welders,
but because a laborer has more plant seniority,' the
welder would have to go. To avoid this problem, and to
balance the dual interests, at least some firms utilize lay-
offs by job classification with selection in accordance
with plant seniority. See, for example, Gulf States Mfg. v.
NLRB, 704 F.2d 1390 (5th Cir. 1983), and Louisiana
Dock Co., JD-(ATL)-101-83, slip op. at fns. 55 and 57
(pending before the Board). By thus giving some defer-
ence to plant seniority, an employer -avoids an equally
bad situation which could result under layoff by job clas-'
sification seniority alone. Thus, a layoff based strictly on
job classification seniority could sacrifice an employee
with 25 years of overall -service who, although a first
class welder, has 2 days' -less service as • a first class
welder than .a retained employee whose plant seniority
totals no more than 4 or 5 years.
Resident Officer Smith testified without contradiction
that Attorney McDonald informed him at the time of
Smith's investigative visit in late March. 1983 that Re-
spondent' had no written layoff policy. Vice.President
Furnas likewise testified-that there was no written policy
for layoffs and recalls. Furnas apparently understood the
question to be directed-to the layoff period in issue, for
moments later he corrected any misimpression on this
topic by identifying an 18-page document (including at-
tachments) of Chem Fab's "Employee' Classification. and
Wage Scale and Introduction to Chem Fab." (R. Exh. 4.)
Furnas testified that,although the document" t was pre-
pared in February 198212 it was not implemented until
November or December 1983. The document, Respond-
ent's Exhibit 4, is not relied on by either party and was
received for the limited purpose of clarifying or shedding'
light on the testimony by virtue of its detailed provisions.
I have relied on it as the source of the information that
the lower labor grades earn the higher., pay rates 13 The
seniority provisions of the document are consistent with
the description given by Furnas of Chem Fab's policy.
Thus, labor grades are. not mentioned as part of the
layoff or recall procedure.
Notwithstanding the testimony of Furnas concerning
Respondent's policy, I credit Hildreth, who testified with
11 The document is written in a fashion resembling a collective-bar-
gaining agreement For example , art I is for "Purpose" (harmony, 'effi-
ciency, and, "equitable adjustments of complaints which may arise be-
tween the Company or any employee) " Art II, "Recognition," provides
that there shall be no discrimination by Chem Fab based on race, creed,
sex, age, or national origin (although nothing is said about union activi-
ties) Art III has four sections for "Management Rights " Art X pertains
to "seniority" and contains detailed provisions
12 The document is dated as "February 24, 1982, Revised January 10,
1984 " '
13 That system is the reverse of the Federal Government's general
schedule in which pay increases as the grade number increases
24 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
a persuasive demeanor, that Supervisor Smith laid off
employees by labor grades.14
Stephens, of course, had been fired before Respondent
assigned labor grades around the last half of 1981. At the
time of his November 5, 1982 layoff, Hildreth was classi-
fied as-a "Fab Processor" grade 5 earning $6 an hour
(G.C. Exh. 3a).1 s
The BPS sets Stephens' hourly pay rate at $6.20 for
the fourth quarter of 1982. That is only slightly more
than Hildreth's $6. _ Presumably that would place Ste-
phens in either the same labor grade as Hildreth, or pos-
sibly labor grade 4, using the pay rate as a.guide.
As earlier discussed, Board Agent Smith testified that
he used job classification/departmental seniority in deter-
mining when and for how long Stephens would have
been laid off. However, as Hildreth had-plant seniority
over Stephens, it appears that Board Agent Smith actual-
ly used strict job classification seniority, for he testified
that Stephens would have been second in seniority in the
same classification held by Hildreth.16
Before concluding the discussion as to -Stephens'
layoff, reference should be made to Respondent's evi-
dence that Stephens would have been laid off earlier ,in
1982 and employees Hildreth, Pat White, and, possibly,
Carl Sheets" retained because Stephens was less versa-
tile than the others. Testifying in support of this conten-
tion were Vice President Furnas, Supervisor Ronald
Smith, and leadperson Danny Larsen. Each of the three
testified with an unsatisfactory demeanor, and I do not
believe any of them on this topic. By contrast, Stephens
persuasively testified that he is good at any work he un-
dertakes after he has done it once or twice. Moreover, it
already has been determined in the underlying case that
Stephens is an "excellent" employee. 257 NLRB 996 at
1007 (1981). - - -
What actually would have happened had Stephens not
been unlawfully terminated is rather uncertain. Respond-
ent, as the wrongdoer, is not permitted- to profit by the
uncertainties it created. As Respondent has not demon-
strated to a certainty the precise period that Stephens
would have been laid off, and as Board Agent Smith's
determination is a rational approximation, I reject Re-
spondent's contentions that the General Counsel erred
respecting the 2-month period the BPS assigned Ste-
phens-to layoff status."
14 Supervisor Smith did not address the subject of the layoff in his
own testimony ' .
15 If the classification and Iob'grade schedule of R Exh-4 had been in
effect, Hildreth, to correspond to a grade 5, would-have been classified as
a sheetmetal machine operator and material processor for a "Fabricator,
Processor & Helper"'is rated at labor grades 6 and 7 (R. Exh 4 at 8)
16 Smith testified that the position title is actually handformer The
person first in seniority in the classification is leadperson Danny Larsen
according to data. Chem Fab furnished Board Agent Smith in March
' .1983 (G C. Exh 10) ,
17 Sheets was not even hired until 5-8-80, a date subsequent to Ste-
phens' termination (R Exh 3a)
18 Hildreth was recalled to the deburr section where he worked about
a month before being returned to his prelayoff position Stephens also
had worked in the deburr section and had experienced no problems
there .
2. Willful loss of earnings-
There is a great deal of evidence in the record con-
cerning the efforts of Stephens and Stewart to find work.
Following their unlawful discharges, they began search-
ing immediately' for work. They applied for work at
many different employers.' 9 As the record reflects, and
the BPS credits, they were successful on occasion but
unsuccessful at other times. I find that each made an
honest good-faith effort in this respect. -
Respondent faults Stephens because in February 1982
he quit a position after working 2 months in the laundry
at Colonial Nursing Home in Hot Springs. His' work
consisted of washing the soiled bed linen of the elderly
and disabled patients. He had to wash the linen by hand.
He quit because he no longer could stand the work. Ste-
phens' action in leaving that work was not unreasonable
in view of the type of work he did at Chem Fab, the pay
difference, and in light of his subsequent efforts to find
work.20
Respondent contends that Stewart should have sought
work at a police department or as a security guard be-
cause he had received such training in the, military (Br.
2). In fact, Stewart did apply for security work, although
he never applied for police work because his military
training was more akin to guard duty Respondent of-
fered no evidence of any such jobs that were-available to
Stewart
In conclusion, I find that Respondent has failed to
carry its burden of establishing that either Stephens or
Stewart incurred a willful loss of earnings.
CONCLUSIONS OF LAW
1. The gross backpay formulas utilized by: the General
Counsel for John L. Stephens and John C. Stewart are
rational and appropriate. -
2. Chem Fab has failed to establish that either John L.
Stephens or John C. Stewart incurred a willful loss of
earnings during their respective backpay periods.
On these findings of fact, conclusions of law, and on
the entire record, I issue the following2l
ORDER
The Respondent, Chem ;Fab, Hot Springs, Arkansas,-
its officers, agents, successors, and assigns, shall make
whole John L. Stephens and John C. Stewart paying to,
each the sum shown below, plus interest as prescribed in
Florida Steel Corp., 231 NLRB 651 (1977), less tax with-
holdings required by law:
John L. Stephens $34,045
John C. Stewart $21,321
19 Stephens sought employment from some 85 or more different em-
ployers He also made numerous visits to the Arkansas unemployment
office Stewart went to at least 39 firms seeking work plus his numerous
visits to the Arkansas unemployment office
20 The day after he left Colonial Nursing Home he found temporary
work parking cars at the horse race track
21 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