East Wind Enterprises

National Labor Relations Board - Board Decisions

Jan 27, 1984

268 N.L.R.B. 655 (N.L.R.B. 1984)

EAST WIND ENTERPRISES
East Wind Enterprises and Graphic Arts Interna-
tional Union, Local 280. Case 20-CA-14788
27 January 1984
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
ZIMMERMAN AND HUNTER
On 4 August 1983 Administrative Law Judge
Clifford H. Anderson issued the attached supple-
mental decision. The Employer filed exceptions
and a supporting brief on 23 September 1983, and
the General Counsel filed an answering brief on 19
October 1983.
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 supple-
mental Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, East Wind
Enterprises, San Francisco, California, its officers,
agents, successors, and assigns, shall take the action
set forth in the recommended Order.
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
CLIFFORD H. ANDERSON, Administrative Law Judge:
On March 27, 1980, Administrative Law Judge Jerrold
H. Shapiro issued his decision in Case 20-CA-14788.
The Board adopted the judge's recommended Order on
July 17, 1980,1 and the United States Court of Appeals
for the Ninth Circuit enforced that Order on December
4, 1981.2 That Order, inter alia, required the Respondent
to make Leonard Gerard (the backpay claimant or the
claimant):
... whole for any loss of earnings he may have
suffered by reason of the discrimination against him,
by payment of a sum of money equal to that which
he would have earned from the date of his unlawful
termination, less his net earnings, if any, during such
period, to be computed in the manner prescribed in
F. W: Woolworth Co., 90 NLRB 289 (1950). Interest
on the backpay shall be computed as set forth in the
Board's decision in Florida Steel Corp., 231 NLRB
651 (1977). See generally Isis Plumbing Co., 138
NLRB 716 (1962).
' 250 NLRB 685 (1980).
' 664 F.2d 754 (9th Cir. 1981).
268 NLRB No. 89
A dispute having arisen over the amount of backpay
due the claimant under the Order, on May 18, 1982, the
Regional Director for Region 20 of the National Labor
Relations Board issued a backpay specification and
notice of hearing. On January 13, 1983, Associate Chief
Administrative Law Judge William J. Pannier ruled on
preliminary motions and granted a postponement of the
hearing until February 7, 1983. I heard the matter in trial
on February 7, 8, and 22, and March 9 and 10, 1983, in
San Francisco, California. Thereafter, the General Coun-
sel and Respondent filed posthearing briefs.
FINDINGS AND CONCLUSIONS
Based on the record as a whole, including my observa-
tion of the witnesses and their demeanor and the post-
hearing briefs of the Respondent and the General Coun-
sel, I make the following findings and conclusions.
I. ISSUES
The parties were not in dispute regarding the appro-
priate backpay period--essentially a I-year period begin-
ning August 6, 1979, and ending August 14, 1980. The
parties disagreed, however, regarding: (1) the formula
for calculating the gross backpay amount, (2) the back-
pay claimant's mitigation of damages during the period
and, finally, (3) the issue of pension payments. These
issues are treated separately, infra.
II. THE GROSS BACKPAY FORMULA AND AMOUNT
A. The Contentions of the Parties
The General Counsel utilized as a measure of the
claimant's backpay during the backpay period the wages
he earned before his termination. Thus, the General
Counsel advances Gerard's prior earnings in 1979 as a
measure of the earnings he would have obtained after his
discharge had he remained in the Respondent's employ.
The Respondent did not dispute the accuracy of the cal-
culations of the General Counsel in determining the
claimant's earnings in the predischarge period but vigor-
ously opposed any formula which used the pretermina-
tion period as a measure of posttermination earnings.
Rather the Respondent argued that the measure of gross
backpay due should be taken from the work that would
have been assigned Gerard during the backpay period
itself.
The General Counsel's compliance agents testified and
the record otherwise agreed that examination of the
hours and earnings of other employees most comparable
to the backpay claimant, particularly employee Hughs,
showed substantial amounts of employee overtime. Such
wage data produces a gross wage for the claimant which
is unordinarily high when compared to the claimant's
pretermination earnings. Thus, the agents testified that in
the interest of fairness the period before the claimant's
discharge was used to obtain representative wage and
employment figures which figures were then utilized in
calculating the claimant's gross backpay. The Respond-
ent did not dispute this testimony so much as challenge
the relevance of it. The Respondent argues that since
work conditions changed soon after the claimant's dis-
655
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
charge, neither the wages and hours of other employees
during the backpay period nor the wages and hours of
the backpay claimant before the discharge should be
used to determine his gross backpay. Rather, the Re-
spondent argues, the work that was in fact done by the
Respondent's employees during the backpay period
should be examined and those portions that would have
been done by the backpay claimant, had he remained in
the Respondent's employ, should be used to calculate the
total work and earning would have been paid the claim-
ant for the relevant period.
The Respondent argued that the end of the second
shift, the technological changes in machines at the facili-
ty and changing types of work done, all contributed to a
substantial reduction in the quantity of work which
would have been assigned to the backpay claimant had
he remained working during the backpay period. Thus,
in the Respondent's calculations, the backpay claimant
would have worked approximately 70 days during the
backpay year. This total was based on testimony ad-
duced by the Respondent concerning the various print-
ing jobs undertaken during the backpay year and that
portion of each job which the backpay claimant would
have been assigned in the normal course. The Respond-
ent did not deny that other department employees
worked significantly longer hours but rather claimed
those hours were a result of those workers' different
skills and abilities as compared to the claimant.
Counsel for the General Counsel argued with equal
vigor in favor of her predischarge hours worked formu-
la. She also argued strenuously that the formula pro-
posed by the Respondent was both impossible of realistic
calculation and, as applied by the Respondent to the
claimant, produced an inequitable and distorted gross
backpay amount which could not be suppported by a fair
reading of the evidence. The General Counsel initially
noted that the original decision herein held that the end
of the second shift by the Respondent was an illegal act.
Counsel for the General Counsel additionally disputed
the testimony of the Respondent's witnesses regarding
that work the backpay claimant would have been as-
signed during the backpay period. Thus, for example, the
backpay claimant testified that he had worked on job as-
signments using certain types of printing equipment
while the Respondent's witnesses either disagreed with
this testimony or questioned the size or number of such
assignments completed by the claimant. Fundamentally
the General Counsel attacked the Respondent's assertions
as mere post hoc opinions of what work would have
been undertaken by the backpay claimant. The General
Counsel argued such determinations are essentially im-
possible to initially ascertain or to verify and, by their
very nature, involve simplifying assumptions which were
abused by the Respondent in its calculations. 3 The Gen-
s Thus the General Counsel argued the Respondent's witnesses as-
sumed that the backpay claimant did not possess the qualifications or in-
terest in undertaking certain work at the plant and that this lack of quali-
fications or interest would have continued unabated through the backpay
year. The General Counsel asserts it is far more likely that, were the
backpay claimant working fewer hours than his colleagues because he re-
fused to learn certain tasks, as the Respondent asserts, he would soon
have shown greater interest in doing or learning to do whatever was nec-
essary to work more hours.
eral Counsel also argues that the result of the calcula-
tions of the Respondent produces an essentially absurd
result, i.e., that at the time of the claimant's discharge
other employees suddenly increased their hours through-
out the backpay period while the backpay claimant
would have suffered a substantial and lasting reduction in
his hours. Other department employees were admittedly
working overtime while the backpay claimant under the
Respondent's formula would have been reduced to a
fraction of his former hours.
B. Analysis and Conclusion
An administrative law judge considering conflicting
backpay formula arguments must determine the most ac-
curate method of determining backpay amounts. J. S. Al-
berici Construction Co., 249 NLRB 751 (1980); American
Mfg. Co. of Texas, 167 NLRB 520 (1967). Coupled with
this obligation, however, is the fundamental notion that
uncertainties will be assessed against the wrongdoer.
NLRB v. Miami Coca-Cola Bottling Co., 360 F.2d 569
(5th Cir. 1966). Thus, the Board has rejected theoretical
formulas for determining backpay offered by respondents
which, while internally consistent, did not reflect the re-
alities of the events involved. See, e.g., Fruin-Colnon
Corp., 244 NLRB 510 (1979). It follows that I should
carefully consider the proposed formulas and calcula-
tions offered by each party and determine what formula
and what calculations produce the most accurate gross
backpay amount, keeping in mind that uncertainties must
be resolved against the respondent whose illegal conduct
in terminating the backpay claimant produced both the
uncertainties at issue and the injury the instant litigation
is intended to remedy.
The type of backpay formula proposed by the General
Counsel is both conventional and noncontroversial. 4 The
Board's Casehandling Manual, Part Three, Compliance
Proceedings, section 10538 et seq. describes four gross
backpay formulas for use in backpay calculations. Two
are based on the discriminatee's hours of earnings prior
to his or her discharge. Two are based on the earnings of
hours of representative employees or replacement em-
ployees who worked during the backpay period. The un-
contested testimony of the compliance agents herein re-
veals that reliance on employee's hours or earnings
during the backpay period, i.e., the latter two formulas,
would produce a gross backpay sum which would be
larger than that obtained using the discriminatees' own
hours and earnings preceding the discharge. Thus, there
seems to be no dispute that the General Counsel selected
a formula which, from among the four formulas noted, is
most favorable to the Respondent. It is also true that the
General Counsel's projected earning formula has met
with court approval. E.g., Bagel Bakers Council of Great-
er New York, 555 F.2d 304 (2d Cir. 1977); Charley Top-
pino & Sons, Inc., 358 F.2d 94 (5th Cir. 1966). Thus the
General Counsel has clearly taken a traditional position
based on a court approved .formula which is both con-
4 See, e.g., Chef Nathan Sez Eat Here, 201 NLRB 343, 345 (1973),
where the Board labels an actual earnings formula "the most fair, suita-
ble, and equitable formula to employ and should not be departed from in
the absence of special circumstances not present here."
656
EAST WIND ENTERPRISES
ventional, and when considering the four alternative,
most favorable to the Respondent.
The General Counsel's projected earnings formula for
gross backpay substitutes the readily ascertainable hours
and earnings of the claimant before his discharge for the
often difficult to ascertain and essentially abstract notion
of what hours and/or earnings the claimant would have
enjoyed had he remained in the Respondent's employ
during the backpay period. As noted above, it is clear
that the total backpay amount resulting from this calcula-
tion is less than would have resulted had other employ-
ees' hours or earnings during the backpay period been
utilized. The Respondent proposed an entirely different
formula based on a quantification of the work done
during the backpay period which, it argues, would have
been performed by the backpay claimant. The litigation
of the specifics of this formula as applied to the backpay
claimant occupied the bulk of the trial. The General
Counsel, as noted, disputed both the validity of the Re-
spondent's formula and its application herein, i.e., she
disputed the Respondent's claims as to what work would
have been assigned the claimant.
The Respondent's formula, in theory, is a better for-
mula for calculating gross backpay than the General
Counsel's. By definition it measures exactly the work for
which the backpay claimant would have been paid. Such
a formula, however, is more easily stated than quantified
and obviously presents complications in its application to
the claimant's specific situation. The litigation of the spe-
cific application of the formula to the instant case con-
vinces me that the necessarily complicated and opinion
laden assumptions regarding what work would have
been performed by the backpay claimant as opposed to
other employees during the backpay period makes the
Respondent's formula, under either the General Coun-
sel's or the Respondent's view of the facts, less accurate
than the proposed formula of the General Counsel.
The uncertainties or speculations implicit in the asser-
tions of the Respondent which render its proposed appli-
cation of the backpay formula unsatisfactory are numer-
ous. Initially, as noted above, the Respondent assumes
that the claimant would be satisfied with very short
hours and would not volunteer for or accept new assign-
ments on new machines or that the respondent would
not assign the work to him in such circumstances even
when other employees were working overtime. It further
assumes he would not become competent to do such
work. This is an improper assumption.s Second, the for-
mula credits the claimant with specific work without any
inclusion of general overhead time or, and perhaps more
importantly, any showing that a similar analysis would
account for all the time actually worked by other em-
ployees in the department. Thus, the formula has no con-
trol sample to establish its validity. Would the formula
have correctly predicated the earnings of other employ-
ees in the department? Further, testimony by Respond-
ent's witnesses concerning the assignment of particular
5 It was the Respondent's termination which has foreclosed the back-
pay claimant's opportunity to demonstrate fitness for future tasks. The
Board utilizes a presumption of performance improvement. Cf. Flora and
Argus Construction Co., 149 NLRB 583 (1964); Kansas Refined Helium
Co.. 252 NLRB 1156 (1980).
work to the claimant and the conclusion that the claim-
ant would not have done or would not have been as-
signed certain work was clearly opinion evidence and
was contested by the backpay claimant. Lastly, as noted
in the complicated arguments of the parties on brief re-
garding the arithmetic significance of the conflicting
summaries of business records and other work-related
evidence, the quantification of work that would have
been assigned the backpay claimant is simply not suscep-
tible to certain resolution on this record. The necessary
guess work thus involved in applying the Respondent's
formula renders it less accurate than the traditional for-
mula proposed by the General Counsel.
In summary, I find the General Counsel's projected
earning backpay formula conventional both in its form
and in its application herein. Comparing the formula sug-
gested by the Respondent, howsoever arguably superior
in theory, I find on this record it was not susceptible to a
clear or certain application. Thus, I have found that the
General Counsel's formula produces a gross backpay
result which is more accurate than any total reasonably
resulting from the application of the Respondent's formu-
la to the conflicting record testimony herein. According-
ly, I accept both the formula and the calculations of the
General Counsel as to the gross backpay.
III. THE PENSION CONTRIBUTION ISSUE
The General Counsel alleged in paragraphs Ii and 12
of the backpay specification that the Respondent made
weekly pension contributions to a union pension trust
fund on behalf of employees in the lithographic prepara-
tory department, that Gerard would have been employed
in the preparatory department and therefore that Gerard
would have received such contributions. The Respond-
ent denied paragraphs 11 and 12 in its answer as amend-
ed and further alleges that it had made payments only to
certain employees subject to "a specical agreement" with
the Union.
The Board's original Order does not address pension
contributions. The Board has held, however, that pen-
sion contributions are a proper part of a general make-
whole order. Fruin-Colnon Corp., above. Thus, the Gen-
eral Counsel would prevail in this aspect of the case if it
proved its assertions as pled. As noted, the Respondent
denied that the backpay claimant would have received
pension contributions. There was no testimony that other
employees received the contributions during the backpay
year. Rather the General Counsel contends on brief that
the Respondent did not prove the denials contained in its
answer. As to gross earnings however, of which pension
contributions are part, the burden is on the General
Counsel to establish its case. Thus, it is not incumbent
upon the Respondent to sustain its denial of the backpay
specification allegation; rather it is up to the General
Counsel to adduce evidence that its contentions are true.
There was testimony that employee pension contribu-
tions were completely discontinued for all employees
sometime after the backpay claimant was terminated.
The earnings report submitted on a roughly comparable
employee to the backpay claimant indicates that his pen-
sion contributions ended in the third quarter of 1979, i.e.,
657
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
on or before August 31, 1979. No more specific dates are
evident in the record. Without more, I find that the Gen-
eral Counsel's case on this aspect fails for want of proof.
Accordingly, I shall dismiss the pension aspect of the
backpay specification.
IV. INTERIM EARNINGS AND ALLEGED FAILURE TO
MITIGATE DAMAGES
The General Counsel in the backpay specification, as
orally amended at the hearing, alleges certain interim
earnings by the claimant which the Respondent does not
dispute. The Respondent argues, however, that the back-
pay claimant failed to mitigate his damages in several
ways as discussed further infra.
The Board in Aircraft and Helicopter Leasing and Sales,
227 NLRB 644, 646 (1976), approved the following re-
statement of legal principles regarding mitigation:
An employer may mitigate his backpay liability
by showing that a discriminatee "willfully incurred"
loss by "clearly unjustifiable refusal to take desira-
ble new employment." (Phelps Dodge Corp. v.
NLRB, 313 U.S. 177, 199-200 (1941)), but this is an
affirmative defense and the burden is upon the em-
ployer to prove the necessary facts. NLRB v.
Mooney Aircraft, Inc., 366 F.2d 809, 813 (C.A. 5
1966). The employer does not meet that burden by
presenting evidence of lack of employee success in
obtaining interim employment or of low interim
earning; rather, the employer must affirmatively
demonstrate that the the employee "neglected to
make reasonable efforts to find interim work."
NLRB v. Miami Coca-Cola Bottling Co., 360 F.2d
569, 576-576 (C.A. 5 1966). Moreover, although a
discriminatee must make "reasonable efforts to miti-
gate [his] loss of income . . . [he] is held . . . only
to reasonable exertions in this regard, not the high-
est standard of diligence." NLRB v. Arduini Mfg.
Co., 394 F.2d 420, 422-423 (C.A. 1 1968). Success is
not the measure of the sufficiency of the discrimina-
tee's search for interim employment; the law "only
requires an honest good faith effort." NLRB v.
Cashman Auto Co. and Red Cab Co., 233 F.2d 832,
836 (C.A. 1). And in determining the reasonableness
of this effort, the employee's skill and qualifications,
his age, and the labor conditions in the area are fac-
tors to be considered. Mastro Plastics Corp., 136
NLRB 1342, 1359.
firms. Further, he engaged in what was ultimately un-
profitable self-employment.6
The Respondent suggests the backpay claimant should
have sought work outside his printing specialty. Given
that the claimant was in his final year of his working
life-the backpay period ended by his retirement at age
65, I do not find on this record that the backpay claim-
ant's job search was unreasonable or other than diligent.
Considering the testimony of the backpay claimant
which I credit both because of the superior demeanor of
the witness and because of the absence of contradictory
evidence and, on the record as a whole, I find that the
backpay claimant made diligent efforts to find employ-
ment and that the interim earnings admitted by the Gen-
eral Counsel constitute the only proper interim earning
deductions from the gross backpay sums as found above.
I further find the Respondent has failed to meet its
burden of proof to establish additional deductions from
the gross sum.
V. SUMMARY AND CONCLUSIONS
Having found the General Counsel's backpay formula
and calculations correct, save for the pension contribu-
tions paragraphs rejected above, and having found the
interim earnings as pled in the amended backpay specifi-
cation, I find the backpay claimant is entitled to the sums
reflected in the following table:
Gross Interim Net
Year Qtr. Backpay Earnings Backpay
1979
1979
1980
1980
1980
III
IV
I
II
III
2,974.58
6,352.23
6,327.23
6,327.23
3,114.94
-0-
1,679.68
2,221.37
3,766.53
-0-
2,974.58
4,672.55
4,105.86
2,560.70
3,114.94
Total Net Backpay principal: $17,428.63.
On the basis of the foregoing, and pursuant to Section
10(c) of the Act, I issue the following recommended
ORDER7
It is hereby ordered that the Respondent, East Wind
Enterprises, San Francisco, California, its officers,
agents, successors, and assigns, shall forthwith pay to
Leonard Gerard the amount listed after his name, plus
In determining if the backpay claimant made a reasona-
ble search for employment, the entire record must be
considered in the context of the claimant's search over
the entire backpay period. Highview, Inc., 250 NLRB 549
(1980); Saginaw Aggregates, Inc., 198 NLRB 598 (1972);
Nickey Chevrolet Sales, Inc., 195 NLRB 395, 398 (1972).
Uncertainties in the evidence are to be resolved against
the wrongdoer, NLRB v. Miami Coca-Cola Bottling Co.,
above.
The uncontradicted testimony of the backpay claimant
was that he sought work in his trade by registering for
employment with the Union and by calling on printing
6 The Respondent's efforts to suggest that the backpay claimant had
hidden profits or other business revenues were unsuccessful There is no
evidence to suggest that the backpay claimant's business ventures were
other than as testified to by him.
I 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.
s See generally Isis Plumbing Co., 138 NLRB 716 (1962). The specifica-
tion of earnings by calendar quarter as set forth above shall be used for
purposes of interest calculation.
658
EAST WIND ENTERPRISES 659
interest to be computed in the manner set forth in Florida
Steel Corp., 231 NLRB 651 (1977), and Olympic Medical
Corp., 250 NLRB 146 (1980),? less tax withholding re-
quired by Federal and state laws.
Leonard Gerard S17,428.63