Daufuskie Island Club and Resort

National Labor Relations Board - Board Decisions

Apr 16, 2004

341 N.L.R.B. 595 (N.L.R.B. 2004)

DAUFUSKIE ISLAND CLUB AND RESORT 595
Daufuskie Club, Inc. d/b/a Daufuskie Island Club and
Resort, Inc. and Melrose Asset Corp., Bloody
Point Asset Corp., and Melrose Landing Corp.
and Club Financial Corp. and Club Corporation
Inc., and its wholly owned subsidiaries Clubcorp
International, Inc., Clubcorp USA Inc., Club
Corporate, Inc., Clubcorp of America, Inc. and
Clubcorp Resorts, Inc., d/b/a The Pinehurst
Company and/or Pinehurst Company Resorts
and/or Pinehurst, Inc. and Tiburon Capital
Group and Tiburon Hospitality Management,
LLC and their wholly owned subsidiaries and/or
affiliates Daufuskie Island Properties, LLC,
Carolina Shores, LLC, Melrose Utility Com-
pany, Inc., and Rose Mix, Inc. and International
Union of Operating Engineers, Local 465, AFL–
CIO. Case 11–CA–17334
April 16, 2004
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN BATTISTA AND MEMBERS LIEBMAN
AND WALSH
On May 14, 1999, the National Labor Relations Board
issued a Decision and Order in this proceeding1 in which
it ordered Respondent Daufuskie Club, Inc., to make
whole 108 named discriminatees for their losses resulting
from Respondent Daufuskie’s unfair labor practices in
violation of Section 8(a)(1), (3), and (5) of the Act. On
May 2, 2000, the United States Court of Appeals for the
District of Columbia Circuit entered an unpublished
judgment enforcing the Board’s Order.2 On about May
31, 2002, Respondent Daufuskie was sold to Respondent
Tiburon Hospitality Group, et al. (Respondent Tiburon).
A controversy having arisen over the amount of back-
pay due the discriminatees under the Board’s Order, the
Regional Director for Region 11 issued a compliance
specification and notice of hearing on August 12, 2002,
alleging that Respondent Tiburon is a successor of Re-
spondent Daufuskie and that they are jointly and sever-
ally liable for the amounts of backpay owed to the indi-
vidual discriminatees that are set forth in that document.3

1 328 NLRB 415.
2 221 F.3d 196.
3 The compliance specification identifies Respondent Daufuskie as
Daufuskie Club, Inc. d/b/a Daufuskie Island Club and Resort, Inc.;
Melrose Asset Corp., Bloody Point Asset Corp., and Melrose Landing
Corp.; Club Financial Corp.; Club Corporation Inc., and its wholly
owned subsidiaries Clubcorp International, Inc., Clubcorp USA, Inc.,
Club Corporate, Inc., Clubcorp of America, Inc.; and Clubcorp Resorts,
Inc., d/b/a The Pinehurst Company and/or Pinehurst Company Resorts
and/or Pinehurst, Inc.; and Respondent Tiburon as Tiburon Capital
Group and Tiburon Hospitality Management, LLC and their wholly
owned subsidiaries and/or affiliates Daufuskie Island Properties, LLC,
The compliance specification also notified both Respon-
dents that they were required to file a timely answer
complying with the Board’s Rules and Regulations. On
August 30, 2002, Respondent Daufuskie filed an answer.
Respondent Tiburon failed to file an answer to the com-
pliance specification.
By letter dated September 5, 2002, the General Coun-
sel advised Respondent Daufuskie that portions of its
answer were insufficient under Section 102.56(b) of the
Board’s Rules and Regulations in that those portions
failed to plead specifically as to information within Re-
spondent Daufuskie’s knowledge. On the same day, the
General Counsel advised Respondent Tiburon by letter
that it had failed to file an answer.
On September 13, 2002, Respondent Tiburon filed an
answer to the compliance specification and notice of
hearing. Respondent Tiburon generally denied the con-
tested paragraphs. The answer claimed insufficient in-
formation on which to admit or deny the allegations con-
cerning gross backpay and interim earnings. The answer
also denied that Respondent Tiburon was a successor to
Respondent Daufuskie.
Also on September 13, 2002, Respondent Daufuskie
filed a supplemental answer denying, among other
things, that the average hourly earnings formula utilized
in the compliance specification was appropriate. Rather,
it contended that the appropriate backpay formula is
“Formula Two,” referenced in Section 10532.3 of the
Board’s Casehandling Manual, which provides for the
calculation of gross backpay based on the hours and
wages of comparable employees. Respondent Daufuskie,
however, did not supply supporting figures and made no
calculations.
On October 4, 2002, the General Counsel filed with
the Board by Federal Express a Motion for Partial Sum-
mary Judgment.4 The General Counsel asserted in that
motion that inasmuch as Respondent Daufuskie’s sup-

Carolina Shores, LLC, Melrose Utility Company, Inc., and Rose Mix,
Inc.
4 On October 5, 2002, that motion was served on representatives of
the parties by certified mail, and on the parties by regular mail. Inas-
much as the parties were not served in the same manner as was used for
filing with the Board, the Motion for Partial Summary Judgment had
not been properly served in accordance with Sec. 102.114 of the
Board’s Rules and Regulations. On October 8, 2002, the Regional
Director indefinitely postponed the hearing in this manner.
On October 15, 2002, the General Counsel filed a motion that the
Board accepts the Motion for Partial Summary Judgment. The General
Counsel contended that inasmuch as the parties were now properly
served and the hearing had been postponed, the Respondents could
show no prejudice by the Board’s acceptance of the Motion for Partial
Summary Judgment. The General Counsel requested that the Board
accept the Motion for Partial Summary Judgment and afford the Re-
spondents a reasonable opportunity to respond to the motion.
341 NLRB No. 81
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 596
plemental answer did not contain “appropriate supporting
figures,” it was nothing more than a general denial of the
General Counsel’s backpay formula. The General Coun-
sel’s motion further contended that the Respondents’
separate answers to paragraphs 9(a), (b), (c), (d), and (e),
10, 11, 13(a) and (b), 14(a) and (b), 15, 16, 17, and 18 of
the compliance specification failed to meet the require-
ments of Section 102.56(b) and (c) of the Board’s Rules
and Regulations because they constituted general denials
of matters within each of the Respondent’s knowledge.
The General Counsel moved that the Board deem para-
graphs 9(a), (b), (c), (d), and (e), 10, 11, 13(a) and (b),
14(a) and (b), 15, 16, 17, and 18 of the compliance speci-
fication to be admitted as true and grant the General
Counsel’s Motion for Partial Summary Judgment.
On October 9, 2002, the Board issued an order trans-
ferring the proceeding to the Board and a Notice to Show
Cause why the General Counsel’s motion should not be
granted.
On October 23, 2002, Respondent Daufuskie filed an
opposition to the General Counsel’s Motion for Partial
Summary Judgment and Reply to Board’s Notice to
Show Cause, to which it attached its second supplemen-
tal and amended answer. In this opposition, Respondent
Daufuskie maintained that it was prejudiced by the im-
proper service of the General Counsel’s Motion for Par-
tial Summary Judgment because it was deprived of the
opportunity to respond to that motion prior to the Board
issuing its Show Cause Order, resulting in the postpone-
ment of the hearing. Respondent Daufuskie further con-
tended that its second supplemental and amended answer
cured any defects in its first supplemental answer, but
that the first supplemental answer was also sufficient to
avoid summary judgment. Accordingly, it requested that
the Motion for Partial Summary Judgment be denied
pursuant to Section 102.114(c)(1) of the Board’s Rules
and Regulations.
The General Counsel did not file a response to Re-
spondent Daufuskie’s opposition to the Motion for
Summary Judgment or Respondent Daufuskie’s second
supplemental and amended answer.
Ruling on the Motion for Partial Summary Judgment
Sections 102.56(b) and (c) of the Board’s Rules and
Regulations state:

(b) Contents of answer to specification.—The an-
swer shall specifically admit, deny, or explain each
and every allegation of the specification, unless the
respondent is without knowledge, in which case the
respondent shall so state, such statement operating as
a denial. Denials shall fairly meet the substance of
the allegations of the specification at issue. When a
respondent intends to deny only a part of an allega-
tion, the respondent shall specify so much of it as is
true and shall deny only the remainder. As to all
matters within the knowledge of the respondent, in-
cluding but not limited to the various factors enter-
ing into the computation of gross backpay, a general
denial shall not suffice. As to such matters, if the re-
spondent disputes either the accuracy of the figures
in the specification or the premises on which they
are based, the answer shall specifically state the ba-
sis for such disagreement, setting forth in detail the
respondent’s position as to the applicable premises
and furnishing the appropriate supporting figures.
(c) Effect of failure to answer or plead specifi-
cally and in detail to backpay allegations of specifi-
cation.—If the respondent fails to file any answer to
the specification within the time prescribed by this
section, the Board may, either with or without taking
evidence in support of the allegations of the specifi-
cation and without further notice to the respondent,
find the specification to be true and enter such order
as may be appropriate. If the respondent files an an-
swer to the specification but fails to deny any allega-
tion of the specification in the manner required by
paragraph (b) of this section, and the failure to deny
is not adequately explained, such allegation shall be
deemed to be admitted to be true, and may be so
found by the Board without the taking of evidence
supporting such allegation, and the respondent shall
be precluded from introducing evidence supporting
the allegation.

In its first supplemental answer to the compliance
specification, Respondent Daufuskie generally denied the
allegations of the specification, invoked a different back-
pay formula, and asserted that the relevant payroll re-
cords necessary to make the required calculations were
not in its possession. The General Counsel filed his Mo-
tion for Partial Summary Judgment based on the first
supplemental answer to the compliance specification.
It is well established, however, that a respondent in a
compliance proceeding may properly cure defects in its
answer before a hearing by an amended answer or a re-
sponse to a Notice to Show Cause. MFP Fire Protection,
337 NLRB 984, 985 (2002); Mining Specialist, Inc., 330
NLRB 99, 101 fn. 12 (1999). We find that the second
supplemental and amended answer cured any defects in
the first supplemental answer and complies with the re-
quirements of the Board’s Rules and Regulations be-
cause it adequately states the basis for disagreeing with
the compliance specification allegations, sets forth in
detail Respondent Daufuskie’s position as to the applica-
ble formula, and furnishes the appropriate supporting

DAUFUSKIE ISLAND CLUB AND RESORT 597
data. Further, Respondent Daufuskie’s general denial of
interim earnings in its various answers is sufficient to
defeat a Motion for Summary Judgment as to those earn-
ings, as they are generally not within its knowledge.
Dews Construction Corp., 246 NLRB 945, 947 (1979).
Respondent Daufuskie’s second supplemental and
amended answer contends that the average hourly earn-
ings approach used in the compliance specification
grossly overstates the quarterly baseline earnings for the
discriminatees throughout the backpay period. Instead,
Respondent Daufuskie proposes an “actual earnings”
approach for calculating quarterly baseline gross backpay
earnings, utilizing the actual 1996 W-2 earnings record
of the discriminatees. Respondent Daufuskie provides
supporting data for its gross backpay calculations, in-
terim earnings presently known by Respondent
Daufuskie, backpay tolling dates, the predecessor’s wage
rate, the W-2 wages, severance pay, and the specific
formulas upon which the calculations were based for
each discriminatee. The General Counsel has not con-
tested the sufficiency of Respondent Daufuskie’s second
supplemental and amended answer. Accordingly, be-
cause the second supplemental and amended answer is
sufficiently specific under the Board’s Rules and Regula-
tions to join the issues raised by the compliance specifi-
cation, we shall deny the General Counsel’s Motion for
Partial Summary Judgment with respect to Respondent
Daufuskie.5
With respect to Respondent Tiburon, its denial in its
answer that it was a successor to Respondent Daufuskie
raises an issue must be resolved at a hearing. See Marine

5 Inasmuch as we deny the Motion for Partial Summary Judgment,
we find it unnecessary to pass on Respondent Daufuskie’s contention
that it was prejudiced by the improper service of that motion.
Machine Works, 256 NLRB 15, 17 (1981). We need not
decide the question of the adequacy of Respondent Tibu-
ron’s answer to the gross backpay allegations of the
specification. Respondent Daufuskie’s answer ade-
quately raises the gross backpay issue. Respondent Tibu-
ron, if found to be a successor, would be derivatively
liable therefore. Cf. Kolin Plumbing Corp., 337 NLRB
234, 236 (2001); Carib Inn Tennis Club & Casino, 320
NLRB 1113, 1114 fn. 4 (1996), enfd. 114 F.3d 1169 (1st
Cir. 1997).
Accordingly, we shall deny the General Counsel’s Mo-
tion for Partial Summary Judgment, and we shall order a
hearing on the issues raised in the compliance specifica-
tion.
ORDER
IT IS ORDERED that the General Counsel’s Motion for
Partial Summary Judgment is denied.
IT IS FURTHER ORDERED that this proceeding is re-
manded to the Regional Director for Region 11 for the
purpose of issuing a notice of hearing and scheduling a
hearing before an administrative law judge for the pur-
pose of taking evidence concerning the issues raised in
the compliance specification.
IT IS FURTHER ORDERED that the administrative law
judge shall prepare and serve on the parties a supplemen-
tal decision containing findings of fact, conclusions of
law, and recommendations based on all the record evi-
dence. Following service of the administrative law
judge’s decision on the parties, the provisions of Section
102.46 of the Board’s Rules and Regulations shall be
applicable.