Demi's Leather Corp.

National Labor Relations Board - Board Decisions

Jan 26, 2001

333 N.L.R.B. 89 (N.L.R.B. 2001)

DEMI’S LEATHER CORP. 89
Demi’s Leather Corp. and Amalgamated Clothing
and Textile Workers Union, AFL–CIO–CLC.
Cases 3–CA–17081, 3–CA–17149, 3–CA–17350,
3–CA–17789
January 26, 2001
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN TRUESDALE AND MEMBERS
LIEBMAN AND WALSH
On August 21, 1996, the National Labor Relations
Board issued a Decision, Order, and Direction in this
proceeding,1 in which it ordered the Respondent, inter
alia, to (1) reinstate and make whole Anthony Valovic III
for any loss of earnings suffered by reason of the Re-
spondent’s unlawful termination of his employment be-
cause of his union activities and (2) restore to their pre-
vious status and make whole Alan McArthur and Greg-
ory Handy for any loss of earnings suffered by reason of
the Respondent’s unlawful permanent layoff of them
because they engaged in union activities or testified in
NLRB proceedings. On January 5, 1999,2 the Respon-
dent entered into a stipulation waiving its right to contest
either the propriety of the Board’s Decision, Order, and
Direction or the findings of fact and conclusions of law
underlying that Order.
A controversy having arisen over the amount of back-
pay due under the Board’s Order, the Regional Director
for Region 3 issued a compliance specification on April
23. On May 28 the Respondent filed an answer to the
compliance specification.
On June 24 the General Counsel filed with the Board a
motion to transfer proceedings to the Board, for partial
summary judgment and to strike certain affirmative de-
fenses. On June 25 the Board issued an order transfer-
ring the proceeding to the Board and a Notice to Show
Cause why the General Counsel’s motion should not be
granted. On July 20 the Respondent filed a response.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
On the entire record, the Board makes the following
Ruling on Motion for Partial Summary Judgment and to
Strike Certain Affirmative Defenses
Section 102.56(b) and (c) of the Board’s Rules and
Regulations states:
(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.

1 321 NLRB 966.
2 All subsequent dates refer to 1999 unless specified otherwise.
(c) Effect of failure to answer or to 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 so
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 evi-
dence supporting such allegation, and the respondent
shall be precluded from introducing any evidence
controverting the allegation.
1. The compliance specification
Relying on the above rule, the General Counsel seeks
partial summary judgment with respect to the following
allegations of the compliance specification:
Paragraph 4 of the compliance specification alleges
that Valovic’s gross backpay should be based on the
earnings of two individuals who replaced Valovic during
the backpay period: Sheldon Jacobson from March 1992
through the third quarter of 1995, and Milton Van Horne
thereafter until the end of the backpay period. Jacobson
and Van Horne were dry floor supervisors.
Paragraph 7 alleges that McArthur’s gross backpay
should be based on the earnings of his replacement.
Paragraph 8(a) alleges that when the employment of his
replacement (Samuel Surnear) ended in June 1998, no
one was hired as a replacement and, consequently, no
backpay is due after the June 1998 date.
Paragraph 10(a) alleges that Handy’s gross backpay
should be based on the earnings of his replacement;
333 NLRB No. 12
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 90
10(b) alleges that the replacement’s gross earnings
should be prorated because Handy worked on a part-time
basis before he was unlawfully laid off, while the re-
placement was a full-time employee.
2. The Respondent’s position
The Respondent denies the allegations in paragraphs 4,
7, 10(a), and 10(b). With respect to paragraph 8(a), the
Respondent admits that Surnear’s employment ended as
alleged, but denies that Surnear or anyone else replaced
McArthur.
In addition, the Respondent asserts the following af-
firmative defenses. With respect to Valovic, the Re-
spondent asserts that his job was eliminated and that nei-
ther Jacobson nor Van Horne replaced him; that it is im-
proper for the General Counsel to use supervisors as the
basis for calculating backpay for a subordinate position;
and that Valovic collected unemployment funds which
should be credited to the Respondent in the backpay
specification.
With respect to McArthur, the Respondent asserts that
it is improper for the General Counsel to compare
McArthur, an inexperienced employee, with a more ex-
perienced individual; and that the backpay specification
should not be calculated on a quarterly basis.
With respect to Handy, the Respondent asserts that his
job was eliminated and he was not replaced; that the per-
son to whom the General Counsel compares Handy does
not perform the same job; and that Handy had income
from other sources for which the Respondent should re-
ceive a credit.
The Respondent’s response to the notice to show cause
reiterates its answer and affirmative defenses.
3. Analysis and conclusions
The Respondent’s answer, affirmative defenses, and
response to the notice to show cause raise two major is-
sues. First, the Respondent contends that Valovic,
McArthur, and Handy are not entitled to backpay be-
cause their jobs were eliminated and no one was hired to
replace them. Second, the Respondent asserts that the
individuals the General Counsel selected for comparison
purposes are inappropriate.
First, we reject the Respondent’s contention that
Valovic, McArthur, and Handy are not entitled to back-
pay because the jobs for which they were hired were
eliminated. It is axiomatic that the “finding of an unfair
labor practice . . . is presumptive proof that some back
pay is owed by the [Respondent].” NLRB v. Mastro
Plastics Corp., 354 F.2d 170, 178 (2d Cir. 1965), cert.
denied 384 U. S. 972 (1966); Roman Iron Works, 292
NLRB 1292 (1989). In the underlying proceeding, the
judge found that the discharge of Valovic and permanent
layoffs of McArthur and Handy were discriminatorily
motivated. The assertion that the discriminatees’ jobs
were eliminated is not sufficient to avoid backpay liabil-
ity.
Furthermore, by asserting that the discriminatees are
not entitled to backpay because their jobs were elimi-
nated, the Respondent is essentially seeking to relitigate
what was, or could have been, litigated in the underlying
proceeding. This the Respondent may not do in a sup-
plementary proceeding to determine the amount of back-
pay. Overseas Motors, 277 NLRB 552, 553–554
(1985).3
The General Counsel’s motion addresses the possibil-
ity that the Respondent is contending the discriminatees’
positions were eliminated at some time subsequent to the
unfair labor practice hearing. Initially, we believe that
the General Counsel’s reading of the Respondent’s posi-
tion is overly generous. We can find no statement in the
Respondent’s answer, affirmative defenses, or response
that even hints that Valovic’s, McArthur’s, or Handy’s
jobs were eliminated at some time other than when they
were discharged or laid off. Indeed, by taking the posi-
tion in its Answer, that no one replaced McArthur, the
Respondent seems to be contending only that
McArthur’s job disappeared when he was laid off.
Assuming, arguendo, the Respondent is making such a
contention, we agree with the General Counsel that the
answer fails to conform to the Board’s rules quoted
above. The Respondent supplies no date for when the
jobs were eliminated. Further, if the jobs were elimi-
nated at some time after the unfair labor practice hearing,
the Respondent is obligated to provide alternative calcu-
lations for the period of time before the jobs were elimi-
nated. Section 102.56(b) states that when a respondent
disputes any matters within its knowledge, its answer
must specifically set forth the grounds for its disagree-
ment and furnish the appropriate supporting figures. See
Baumgardner Co., 298 NLRB 26, 27 (1990). The date
on which jobs were eliminated subsequent to the unfair
labor practice hearing and supporting figures for alterna-
tive calculations are clearly within the Respondent’s
knowledge. The Respondent’s answer falls far short of
the specificity our rules require.
Second, we find insufficient the Respondent’s asser-
tions that the individuals the General Counsel selected
for comparison purposes are inappropriate. We are
guided by the following precedent.

3 In addition, the Respondent’s assertion that Valovic’s job was
eliminated is directly contradicted by the judge’s finding in the underly-
ing case that another employee was performing his job after his termi-
nation. 321 NLRB at 977.
DEMI’S LEATHER CORP. 91
In J. Huizinga Cartage Co., 308 NLRB 106, 107
(1992), the respondent asserted that it did not know the
individual the General Counsel selected for backpay
comparison purposes. In DeMuth Electric, 319 NLRB
942, 943 (1995), the respondent claimed that the General
Counsel’s selection of the employee next in seniority to
the discriminatee was inappropriate for backpay com-
parison purposes because the respondent did not sched-
ule work based on seniority. In both cases, the Board
found the respondents’ answers deficient because the
answers did not set forth in detail the respondents’ posi-
tions as to the applicable premises and did not furnish the
appropriate supporting figures.
In the instant case, the Respondent asserts that it is im-
proper to compare Valovic to supervisors, to compare
McArthur to a more experienced employee, and to com-
pare Handy to an employee who does not perform
Handy’s same job. These reasons for objecting to the
persons named for comparison purposes are similar to
the reasons the respondents asserted in the cases cited
above.
As the Board explained in DeMuth,
respondents are required to do more than simply criti-
cize the bases for the specification . . . Although the
[respondent] expresses disagreement with the General
Counsel’s allegations, it does not set forth in detail the
Respondent’s position as to the applicable premises and
does not furnish the appropriate supporting figures.
In the instant case, the reasons the Respondent advances
for objecting to the General Counsel’s selection of the
named individuals for comparison purposes are nothing
more than expressions of disagreement with the General
Counsel’s allegations. The Respondent has not set forth
in detail its position as to the applicable premises, nor
has it furnished the appropriate supporting figures. Thus,
the Respondent simply criticizes the bases for the speci-
fication. For the reasons set forth above, we shall grant
the General Counsel’s motion for partial summary judg-
ment,4 deem the allegations contained in paragraphs 4, 7,
8(a), 10(a), and 10(b) of the compliance specification to
be true, and strike the Respondent’s affirmative defenses
related to paragraphs 4, 7, 8(a), 10(a), and 10(b) of the
compliance specification.5 Finally, we shall also grant the
General Counsel’s motion to strike the following:

4 It is well settled that a respondent may properly cure defects in its
answer before a hearing either by an amended answer or a response to a
notice to show cause. Ellis Electric, 321 NLRB 1205, 1206 (1996).
Therefore, in considering the sufficiency of the Respondent’s answer
and affirmative defenses, we have also considered its response to the
notice to show cause.
5 At the end of the motion, the General Counsel for the first time re-
fers to par. 9 of the compliance specification in the list of paragraphs he
a. The Respondent’s contention that it should be cred-
ited for unemployment funds Valovic received and for
“income [Handy received] from other sources which
made him financially independent.” Unearned income
and collateral benefits, such as unemployment benefits,
are not interim earnings and are not an offset against
backpay liability. See NLRB Casehandling Manual (Part
Three) Compliance Proceedings Sec. 10542.1; United
Enviro Systems, 314 NLRB 1130, 1131 (1994); Conti-
nental Insurance Co., 289 NLRB 579, 601 (1988).
b. The Respondent’s contention that McArthur’s back-
pay should be limited to the difference between interim
earnings and gross backpay for the entire backpay period,
rather than computed on a quarterly basis. The Board
has long held that the appropriate calculation method is a
quarterly analysis. F.W. Woolworth Co., 90 NLRB 289
(1950).
ORDER
IT IS ORDERED that the General Counsel’s Motion
for Partial Summary Judgment is granted as to para-
graphs 4, 7, 8(a), 10(a), and 10(b) of the compliance
specification.
IT IS FURTHER ORDERED that the General Coun-
sel’s motion to strike the Respondent’s affirmative de-
fenses related to paragraphs 4, 7, 8(a), 10(a), and 10(b) of
the compliance specification is granted.
IT IS FURTHER ORDERED that this proceeding is
remanded to the Regional Director for Region 3 for the
purposes of issuing a notice of hearing and scheduling
the hearing before an administrative law judge, for the
taking of evidence concerning issues properly raised by
the Respondent’s answer to the compliance specification.
IT IS FURTHER ORDERED that the administrative
law judge shall prepare and serve on the parties a second
supplemental decision containing findings of fact, con-
clusions of law, and recommendations based on all the
record evidence. 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.

requests be deemed true. Although the Respondent’s response opposes
the request, the Respondent admitted par. 9 in its answer. The General
Counsel’s and the Respondent’s references to par. 9 appear to be inad-
vertent errors, and we shall disregard them.

DEMI’S LEATHER CORP. 1

333 NLRB No. 12