December 12, Inc.

National Labor Relations Board - Board Decisions

Dec 18, 1986

282 N.L.R.B. 475 (N.L.R.B. 1986)

DECEMBER 12, INC.
December 12, Inc .; December 12,, Inc . of Nevada
and Harold Alexander . Case 31-CA-12661
18 December 1986
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
JOHANSEN AND STEPHENS
On 11 August 1986 Administrative Law Judge
Earldean V. S. Robbins issued the attached supple-
mental decision. The Respondent filed 'exceptions
and a supporting brief, and the General Counsel
filed limited 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 rul-
ings, ' findings, P and conclusions and to adopt the
recommended Supplemental Order as modified.
ORDER
The National Labor Relations Board adopts the
recommended Supplemental Order of the adminis-
trative law judge as modified below and orders
that the Respondent, December 12, Inc.; December
12, Inc. of Nevada, Los Angeles, California, its of-
ficers, agents, successors, and assigns, shall jointly
and severally pay Harold Alexander as specified in
the Order as modified.
Insert the following as the second sentence of
the Order.
"The Respondent will also place Harold Alexan-
der on a preferential hiring list in the event the Re-
spondent hires a percussionist in the future."
1 The Respondent renews its motion, denied at trial by the judge, to
dismiss this case because the Respondent was denied pretrial discovery.
The Board does not allow the taking of depositions to provide discovery
in ordinary circumstances . See Flite Ceief, Inc., 258 NLRB 1124 (1981),
affd. 696 F.2d 1003 (9th Cir. 1982). The Respondent has failed to estab-
lish that it has been prejudiced by any denial of discovery in this pro-
ceeding . In this connection, we note that the Respondent's counsel intro-
duced into evidence a written stipulation of the testimony of union offi-
cer Dick Gabriel who was unavailable for the hearing . Further, concern-
ing records that discriminatee Harold Alexander kept regarding his inter-
im income and search for employment , the General Counsel turned over
these documents to the Respondent's counsel during the hearing , and the
hearing was recessed briefly to permit him to review the records. Al-
though he reiterated that pretrial discovery should have been permitted,
counsel did not request more time to review the documents and did not
request a continuance , but rather chose to proceed with the hearing.
8 The Respondent has excepted to some of the judge 's credibility find-
ings. The Board's established policy is not to- overrule an administrative
law judge's credibility resolutions unless the clear preponderance of all
the relevant evidence 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 examined the record and find no basis for reversing
the findings.
475
Bernard T. Hopkins, Esq., for the General Counsel.
Ivan M. Hoffman, Esq., of- Los Angeles, California, for
the Respondent.
SUPPLEMENTAL DECISION
EARLDEAN V. S. RoBBINS, Administrative Law Judge.
On 30 November 1984, the National Labor Relations
Board (the Board) entered its Decision and Order in this
matter? in which it directed December 12, Inc. (the ,Re-
spondent) to offer to Harold E. Alexander immediate
and full reinstatement to his former job or, if that job no
longer exists , to a substantially equivalent job, without
prejudice to his seniority and other rights and privileges;
and make him-whole for any loss of earnings and other
benefits suffered as a result of his unlawful discharge on
30 September 1982, with interest on lost earnings.
On 30 August 1985, the United States Court of Ap-
peals for the Ninth Circuit (the Court) entered its judg-
ment (the judgment) enforcing the Board's Order. Re-
spondent, having failed and refused to make whole Alex-
ander, and having failed and-refused to reinstate him; and
a controversy having arisen over the reinstatement of Al-
exander and the amount of backpay due under the terms
of the judgment and the Order, the Regional Director
for Region 31 of the Board issued a backpay specifica-
tion and notice of hearing alleging the backpay due
under the Board's Order, as enforced by the court's
judgment, for the period of time from 1 October 1982
through 14 September 1985 (reserving for further deter-
mination Respondent's backpay obligation to the discri-
minatee for all periods after ' 14 September 1985), to
which Respondent filed a timely answer that was there-
after amended. The matter was heard before me in Los
Angeles, California, on 8 April 1986. Posttrial briefs
were filed by the General Counsel and the Respondent.
The principal issues raised by the pleadings are:
1. Whether Alexander's job has been lawfully eliminat-
ed so as to relieve- Respondent of its obligation to rein-
state him.
2. Whether Alexander incurred a willful loss of interim
earnings.
3. Whether Respondent is obligated to make Alexan-
der whole for medical insurance payments made, on his
behalf, by his mother.
4. Whether Respondent is liable for compensation due
Alexander for television and/or videotape performances
by Respondent's band and for reuses of any videotape
performances (residuals) and for AFM-EPW Trust Fund
(pension) contributions.
5. Whether Respondent granted members of the band
a general wage increase effective 24 February 1984.
On the entire record,2 including my observation of the
demeanor of the witnesses, and after due consideration of
the briefs filed by the parties, I make the following
273 NLRB 1 (1984).
2 On 10 July 1986, I reopened the record herein for the limited pur-
pose of receiving a stipulation of the parties as to the exact dates of ter-
mination of all band members, singers , and other road personnel terminat-
ed subsequent to Alexander's discharge. That stipulation and the support-
ing payroll records attached thereto are received into evidence as it.
Exhs. 1(a) through (e), and the record is reclosed.
282 NLRB No. 77
476 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
FINDINGS OF FACT
1. THE REINSTATEMENT ISSUE
Respondent contends that Alexander's job no longer
exists and that no substantially equivalent position exists.
It is undisputed that Alexander worked for Respondent
as a percussionist and that there has been no percussion-
ist in Respondent's band since his discharge . The only
time a percussionist has been used has been during en-
gagements when the house orchestra had a percussionist.
Respondent's principal, Dionne Warwick, Respondent's
bookkeeper, Marie Byars, and Jerome Sklar, a certified
public accountant used by Respondent, testified and doc-
umentary evidence establishes that both before and
during the alleged backpay period, Respondent has expe-
rienced significant financial problems resulting from tax
liabilities owed to the Internal Revenue Service and the
California Franchise Tax Board, which required the in-
stitution of certain economies in order to pay 'the tax li-
ability . To this end , according to Respondent's witnesses,
certain personnel were terminated.
In the underlying unfair labor ` practice proceeding
herein, the judge rejected Respondent's argument that
Alexander's discharge was motivated by these economic
difficulties and found that his discharge was unlawfully
motivated, based on remarks made by Warwick that "the
Union stuff ... had to go," and that Alexander could
find himself on a plane home if he did not "drop" his in-
sistence that musicians in Respondent's employ be paid
union scale; and other indications of Warwick's resent-
ment of Alexander's activities in this regard. Neverthe-
less, Respondent still argues that Warwick made the de-
cision not to replace Alexander on 1 October 1982 for
valid creative and economic reasons; and therefore, be-
cause the job of percussionist is no longer in existence,
Respondent is not obligated to reinstate Alexander nor
liable for any backpay:
f find this argument totally without merit. The, court
enforced the Board's Order adopting the judge's finding
that Alexander was discharged on 30 September 1982 be-
cause of his union activities and not for the economic
and creative reasons asserted by Respondent . In the ab-
sence of persuasive evidence that something occurred
during the ensuing 24 hours to legitimize these alleged
creative'and economic decisions; I find that Respondent
has failed to establish that the position of percussionist
was eliminated on 1 October 1982 for lawful reasons.
However, this does not necessarily preclude a finding
that, at some later time, the position was lawfully elimi-
nated.
Essentially, Warwick testified that her basic band has
always been a rhythm section-piano, keyboard, guitar,
bass, and drums. Her guitarist has accompanied her from
the very ` beginning, 25 years ago. Approximately '19
years ago, her accompaniment was expanded to a four-
piece rhythm section-piano , bass, drums, and guitar. In
the midseventies she added a keyboard instrument and
background `singers . This complement did not change
until 1980,, when she hired Alexander. According to
Warwick, Alexander was hired because she decided her
new show would include an extensive medley of Earth,
Wind, and Fire3 music and from other sources that had a
primitive, percussive sound. A percussionist was neces-
sary to recreate that sound.
Although Respondent is correct that creative deci-
sions-those based on artistic taste-in the music indus-
try are entitled to be accorded the same legitimacy as the
more mundane decisions made in other industries, it is
clear that such decisions are highly subjective. Thus,
once an unlawful motivation for a discharge has been
found, it may be difficult to establish that a decision to
eliminate a job for allegedly creative , artistic reasons is
free from the taint of the original unlawful motivation.
Because any uncertainty that arises from the essential
subjective nature of the decision is a direct result of Re-
spondent's unlawful action, it is proper to resolve the
question in favor of the discriminatee and not the wrong-
doer.
Here, however, there is some evidence that tends to
support Respondent's contention that Alexander's job
would have been eliminated for economic reasons even
in the absence of Respondent's unlawful conduct. Thus,
in addition to certain other reductions in personnel costs,
by 14 November 1983, Respondent had discharged its
'road manager and all three of the background singers,
thereby reducing Warwick's musical accompaniment to a
basic rhythm section.4 There is no evidence, or conten-
tion, that these discharges were made for any reason
other than the economic one asserted by Respondent.
Considering that Respondent had employed background
singers for several years before a percussionist was hired,
I do not find it unreasonable to conclude that, at least by
14 November 1983, the percussionist position would
have been eliminated. Any uncertainty as to exactly
when, prior to 14 November 1983, the position would
have been eliminated is resolved against Respondent. Ac-
cordingly, I find that if Respondent had not discharged
Alexander for unlawful reasons on 30 September 1982, it
subsequently would have laid him off for lawful reasons
on 14 November 1983, at the time Respondent's band
was reduced to a basic rhythm section. I, therefore, find
that backpay is tolled as of that date and that Alexander
is not entitled to immediate reinstatement. However, I
shall recommend that he be placed on a preferential
hiring list in the event Respondent hires a percussionist
in the future.
II. THE MITIGATION OF DAMAGES ISSUE
It is well established that an employer may mitigate his
backpay liability by establishing that a discriminatee
"willfully incurred" loss by a "clearly unjustifiable refus-
al to -take desirable new employment." Phelps Dodge
Corp. P. NLRB, 313 U.S. 177, 199-200 (1941). However,
this is an affirmative defense and the employer has the
burden of proving facts that would mitigate its liability.
NLRB v. Mooney Aircraft, Inc., 366 F.2d 809, 813 (5th
Cir. 1966); NLRB Y. Miami Coca-Cola Bottling Co., 360
F.2d 569, 575 (5th Cir. 1966); NLRB v. Brown & Root,
a A vocal group whose sound is basically primitive and percussive.
4 One background singer was terminated on 17 June and the other two
background singers and the road manager were terminated on 14 Novem-
ber 1983.
DECEMBER 12, INC.
Inc., 311 F.2d 447 (8th Cir. 1963). That- burden is not niet
by evidence of lack of employee 's success in obtaining
interim employment or of low interim earnings . Rather,
the respondent must affirmatively establish that the em-
ployee neglected to make reasonable efforts to find inter-
im work . NLRB v. Miami Coca-Cola Bottling Co., supra
at 575-576 . Further, a discriminatee is held "only to rea-
sonable exertions in this regard , not the highest standard
of diligence." NLRB v. Arduini Mfg. Co., 394 F .2d 420,
422-423 (1st Cir. 1968). Also, a discriminatee 's obligation
to mitigate damages does not require success in a search
for interim employment, it only requires an honest, good-
faith effort. NLRB v. Cashman Auto Co ., 223 F.2d 832,
836 (1st Cir. 1955). The employee 's skills and qualifica-
tions, age, and the labor conditions in the area , are,factors
to be considered in determining the reasonableness of
this effort . Mastro Plastics Corp., 136 NLRB 1342, 1359
(1962).
Respondent offers several reasons in support of its
contention that Alexander did not diligently seek interim
employment: (1) He did not utilize the Union's referral
service nor the Musicians' {Contact Service , a private or-
ganization that obtains work for musicians in Los Ange-
les; (2) the compliance forms completed by Alexander
show he failed to actively make- daily, contact with pro-
spective sources of employment ; (3) his failure to seek
work through employment agencies ; (4) his inability to
explain "satisfactorily" the source of various deposits to
his bank account; and (5) the totality of these reasons in-
dicate that Alexander "planned and schemed to keep
himself idle while ' making the appearance, the pretense,
of looking for work, so that he could make [Respondent]
pay for his leisure." Essentially, Respondent argues that
Alexander failed to exert a minimum, good-faith, diligent
effort to even look for work.
However, the evidence adduced on the record is insuf-
ficient to meet Respondent's burden of proof in this
regard . Thus, although Barry Squires, the union repre-
sentative who handles the Union's referral service, testi-
fied that the service does exist, there is no evidence to
establish, as contended by Respondent, that it is the prin-
cipal, or a principal, source of employment in the indus-
try or that its existence was widely known in the indus-
try. I credit Alexander's testimony that he had no knowl-
edge of the service, and his uncontradicted testimony
that his principal source for obtaining employment in the
past had always been to contact people in the industry,
to make it known that he is available for work, and to
keep himself in the minds of other performers. He also
testified that he went to the state unemployment agencies
many times seeking work and that he did consult want
ads.
Further, although Squires testified that there have
been jobs for percussionists in the last 5-1/2 years, no
testimony was adduced either as to the number of jobs
available nor the length of these jobs. There was also no
evidence adduced to refute Alexander 's testimony that
work is generally procured in the industry through con-
tacts. Respondent produced no evidence to show there
were jobs available that would have been offered to Al-
exander or that he rejected any job offers . Rather, Re-
477
spotldent relied on its cross-examination of Alexander
and the nonspecific testimony of Squires.
This is insufficient to meet Respondent's burden of
proof that Alexander did not diligently seek work during
the backpay period. An employee who has been discri-
minatorily discharged need not instantly seek new em-
ployment. Saginaw Aggregates, 198 NLRB 598 (1972).
Nor will a backpay claimant be found to have incurred a
willful loss in earnings merely because the search for in-
terim employment was not made in each and every quar-
ter of the backpay period. Rather, as the Board stated in
Cornwell Co., 171 NLRB 342, 343 (1968), "The entire
backpay period must be scrutinized to determine whether
throughout that period there was, in.,the light of all sur-
rounding circumstances, a reasonably continuing search
such as to foreclose a fording of willful loss." ,See also,
Firestone Synthetic Fibers Co., 207 NLRB 810, 812 (1973);
Southern Household Products Co., 203 NLRB 881 (1973).
Employees are not' automatically disqualified from back-
pay because of their, poor recordkeeping, uncertainty as
to memory, or even exaggeration . ' Patrick Izzi Trucking
Co., 162 NLRB 242, 245 (1966). Further a good-faith
search for employment does not necessitate that the em-
ployee spend all of every day searching for employment.
Laidlaw Corp., 207 NLRB 591, 603 (1973), enfd. 507 F.2d
1381(7th Cir. 1974), cert. denied 422 U.S. 1042 (1972).
American Medical Insurance Co., 235 NLRB 1417, 1419-
1422 (1978).
Similarly, Respondent's cross-examination of Alexan-
der as to the source of his bank deposits is insufficient to
establish, as claimed by Respondent, that Alexander had
unreported interim earnings. Alexander testified that he
withdrew approximately $38,000 from a'n investment ac-
count, borrowed money from various lines of credit, and
from his mother. -Respondent's contention is based on
mere speculation, and there is no evidence in the record
to establish Alexander had unreported interim' earnings.
Based on the foregoing, I ford that Respondent has
failed to establish that Alexander did not make a diligent
search for employment during the backpay period or
that he had unreported interim earnings. Alexander testi-
fied that certain expenses claimed by him related to tele-
phone conversations with respect to this proceeding. The
General Counsel concedes, and I ford, that these ex-
penses are not properly claimable.5
III. MEDICAL INSURANCE PREMIUMS
The parties stipulated that the medical insurance pay-
ments shown on Appendix C of the backpay specifica-
tion were made on behalf of the discriminatee by his
mother, but Respondent reserved - the right to argue
whether Respondent had any liability in this regard
absent evidence that the discriminates had reimbursed his
mother or is obligated to do so. However, Respondent
did not pursue this argument in its brief. Even assuming
that the insurance premium payments were a gift from
Alexander's mother, 'they constituted a collateral benefit
5 It appears that, prior to 1984, ' these were local calls for which no
amounts were claimed. Therefore , disallowance of such telephone ex-
penses does not affect the amount of expenses incurred during the back-
pay period.
478 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that is not deductible as an offset against Alexander's
claim for loss benefits. Medlin Industries, 261 NLRB
1329, 1337 (1982).
IV. SUPPLEMENTAL INCOME, AFM-EPW TRUST FUND
(PENSION ) CONTRIBUTIONS, AND THE ALLEGED
WAGE INCREASE
Respondents deny that they are liable for payments for
any television and/or videotape performances or reuses
or residuals thereof or for any AFM-EPW trust fund
contributions in that Respondent has not signed any
agreement with the American Federation of Musicians
that require it to pay such sums . The backpay specifica-
tion alleges, and the judge found in the underlying -unfair
labor practice case , that the musicians enter into standard
AF of M "personal 'service" contracts with the radio and
television producers, rather than Respondent, with re-
spect to their wages and fringe benefits . Indeed, the
judge found it was Alexander 's insistence that the musi-
cians be paid wages and ' fringe benefits in accordance
with AF of M scale that was a motivating factor in his
discharge. Because the television and/or videotape per-
formances and the reuse and residual payments related
thereto were an incident of Alexander's employ, and the
trust fund contributions were a benefit related to'his em-
ployment, Respondent is obligated to pay such amounts.
It is immaterial that Respondent is not party to a con-
tract with AF of M. NLRB v .'Carpenters Local 1913, 531
F.2d 424 (9th Cir. 1976).
I do not reach the issue of the alleged 1984 wage in-
crease because I have found above that the backpay
period ended on 14 November 1983.
Conclusions
Based on the foregoing and the entire record, it is
found:
a. Alexander's backpay period commenced 30 Septem-
ber 1982 and ended 14 November 1983, the date that the
road manager and the last of Respondent's background
singers were laid off.
b. During his backpay period, Alexander had interim
earnings as set forth in the backpay specification.
c. Alexander is entitled to backpay in the amounts set
forth below for that portion of the backpay period up to,
and including, the third quarter of 1983, plus an amount,
to be determined, for the fourth quarter of 1983.6
6 Because the record does not contain information sufficient to deter-
mine what portion of the gross backpay expenses and interim earnings in
the fourth quarter of 1983 was incurred prior to and including 14 No-
vember 1983, the amount of backpay due Alexander for that quarter is
left for determination by the Regional Director. Backpay is computed as
alleged in the backpay specification with modifications for the fourth
quarter of 1983, to be determined by the Regional Director to reflect my
finding that the backpay period ended on 14 November 1983. Backpay
computations through the third quarter of 1983 are set forth in the appen-
dices.
DECEMBER 12, INC.
Yr./Qtr Qtr. Net Qtr. Pension
Medical
InsuranceBackpay Payment Premium
1982/4 .................. $7,409.01 $205.98 $217.87
1983/1 .................. 8,257.30 116.60 341.58
1983/2 .................. 10,462.99 77.73 ' 290.34
1983/3 .................. 5,495.65 61.53 290.34
On the foregoing findings of fact, and the entire
record, and pursuant to Section 10(c) of the Act, I issue
the following recommended'
T 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
479
ORDER
The Respondent, December 12, Inc.; December 12,
Inc. of Nevada," Los Angeles, California, their officers,
agents, successors, and assigns , shall jointly and severally
make Harold Alexander whole by payment to him of the
amounts set forth above and in the Appendices, and the
amount, to be determined by the Regional Director, for
the fourth quarter of 1983, plus interest accrued to the
date of payment pursuant to Florida Steel Corp., 231
NLRB 651 (1977).
Board and all objections to them shall be deemed waived for all pur-
poses.
S In the answer to the backpay specification , as amended at the supple-
mental hearing herein, Respondent and December 12, Inc . of Nevada
admit that they constitute a single -integrated business enterprise and are a
single employer within the meaning of the Act.
480 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX A
1 2 3 4 5 6 7 8 9
Calendar
Days or Weeks
Calendar
Quarter
Calendar
Quarter Calendar
Calendar
Quarter CalendarQuarter Total Net
Quarter
Per Calendar
Quarter
Rate of Pay Gross Interim QuarterExpenses
Net
I n Net BackpayBackpay Earnings Earnin gs Backpay
11 Days ............... $200.00/Day
4th Qtr ................ 3 Weeks .............. 900.00/Week
(1) 5 Days(TV).. 416.43/Day $7,474.78 $249.20 $183.43 $65.77 $7,409.01
1982 ..................... (2) 1 312.32/Reuse
Reuse(TV).
(3) 1 Day(TV).... 180.31/Day
19 Days ............... 200.00/Day
1st Qtr ................. 1 Day .................. 300.00/Day
3 Weeks .............. 900.00/Week...... 8,257.30 0 0 0 8,257.30 0
1983 ..................... (4) 2 312.32/Reuse
Reuse(TV).
(5) 2 Days(TV).. 416.43/Day
2d Qtr ................. 50 Days............... 200.00/Day
(6) 1 Day(TV) 10,971.68 ............. 707.50 198.81 508.69 10,462.99
and
555.25/Day
1983 ..................... (7) 1 Day(TV).... 416.43/Day
3d Qtr ................. 16 Days............... 200.00/Day
2 Weeks .............. 900.00/Week 5,683.68 326.00 137.97 188.03 5,495.65
1983 ..................... (8) 1 Day(TV).... 683.68/Day
4th Qtr.
1 1 1 1 1 1 1
1983 ......................... .........................
1 To be determined by the Regional Director.
DECEMBER 12, INC.
APPENDIX B
481
1 2 3 4 5 6 7
Television and Videotape Days Rate of
Gross
Earnings Pension CalendarQuarter Total NetCalendar Quarter and Reuses Per Calendar
Pay for TV, Rate Pension PensionQuarter Videotape, (Percent) Payment Paymentand Reuses
4th Qtr ........................................... 5 Days......, ..................................... $416.43
1 Day ............................................. 180.31 $2,574.78 8 $205.98
11982 ................................................ 1 Reuse ......................................... 312.32
]1st Qtr............................................ 2 Days................................ ............ 416.43
1,457. 50 8 116.60
11983 ................................................ 2Reuse .......................................... 312.32
2d Qtr........ ..................................... 1-Day............................................. 555.25
1 Day ............................................. 416.43 917.68 8 77.73
1983
3d Qtr.
1 Day ............................................. 683.68 683 .68 9 61.53
983 ...................................................
4th Qtr.
1 .... 1,186.88 1 9 1
1 To be determined by the Regional Director.
APPENDIX C.-MEDICAL INSURANCE PREMIUMS APPENDIX C.-MEDICAL INSURANCE PREMIUMS-
Continued
1
Calendar Qtr.
1982:
3d Qtr ................................ .....
1983:
1st, Qtr .............................. .....
2d Qtr. ..........................................
2
Calendar
Qtr. Payment
$217.87
341.58
290.34
3
Total
Payment
1
1
Calendar Qtr.
3d Qtr.... ......................................
4th Qtr.........................................
2
Calendar
Qtr. Payment
290.34
1
1 To be determined by the Regional Director.
3
Total
Payment