F. E. Hazard, Ltd.

National Labor Relations Board - Board Decisions

Feb 26, 1990

297 N.L.R.B. 790 (N.L.R.B. 1990)

790 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
F. E. Hazard, Ltd. and Kenneth W. Moffitt. Case
39-CA-3533
February 26, 1990
SUPPLEMENTAL DECISION AND
ORDER'
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND DEVANEY
On July 14, 1989, Administrative Law Judge
Joel P Biblowitz issued the attached supplemental
decision The Respondent filed exceptions and a
supporting brief, and the General Counsel filed an
answering 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 rulings,
findings,' and conclusions and to adopt the recom-
mended Order
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, F E
Hazard, Ltd, Farmington, Connecticut, its officers,
agents, successors, and assigns, shall pay the
amounts set forth in the Order 2
'In sec I, par 8, of his supplemental decision, the judge Inadvertently
miscited NLRB v Cashman Auto Co, 223 F 2d 832 (1st Or 1955), and
Ad Art, Inc, 280 NLRB 985 (1986)
2 For any additional amounts due the appropriate employee benefit
funds, see Merryweather Optical Co, 240 NLRB 1213 (1979)
Thomas W Mezklejohn, Esq , for the General Counsel
Susan Wright, Esq (Siegel, O'Connor, Schiff Zangari &
Kaznen, P C), for the Respondent
SUPPLEMENTAL DECISION
JOEL P BIBLOWITZ, Administrative Law Judge This
supplemental proceeding was initiated by a compliance
specification and notice of hearing issued by the Region-
al Director for Region 34 on December 7, 1988 Re-
spondent filed a timely answer to the specification and
the matter was heard by me on April 24, 1989, in Hart-
ford, Connecticut
In the underlying case, on July 14, 1988, the Board
issued an order finding that F E Hazard, Ltd (Re-
spondent) violated Section 8(a)(1) and (3) of the Act
when it discharged Kenneth Moffitt on March 4, 1987,
and it ordered Respondent to make Moffitt whole for
any loss he suffered as a result of Respondent's unfair
labor practices
The specification lists the backpay period as beginning
on March 4, 1987 (the date of his termination), and
ending January 19, 1988, the date Moffitt received a
valid offer of reinstatement The weekly gross backpay is
alleged to be S902, and this much is admitted by Re-
spondent The total gross backpay for the periods is al-
leged to be $41,491 less interim earnings of $1698, and
$1969 1 paid by Respondent to Moffitt pursuant to a deci-
sion of a joint employer-union committee reviewing
Moffitt's discharge, for a net total of $37,824 due to Mof-
fitt The specification also alleges that Respondent is re-
quired to pay certain amounts to the International Broth-
erhood of Electrical Workers, Local 42 Insurance Fund,
Pension Fund, Benefit Fund, OSHA, and Training Fund,
Industry Fund, and Cope on behalf of Moffitt, in the
amounts of $2897, $5370, $1185, $486, $394, and $86 Re-
spondent admits that it is obligated to make payments to
these funds on behalf of Moffitt, but denies the time
period and, therefore, the amounts
I FACTS AND ANALYSIS
For many years prior to his employment with Re-
spondent as a mechanic repairing and maintaining its
large fleet of vehicles, Moffitt performed repair work on
vehicles at his home under the name Ken's Repairs Ob-
viously, during the period of his employment with Re-
spondent (he averaged about 50 hours a week) this work
was curtailed The core of the problem in this supple-
mental proceeding is that when Moffitt was unable to
find work after his discharge on March 4, 1987, 2 he re-
activated and expanded his repair and maintenance oper-
ation, when he was suhsequently offered referrals to per-
manent positions with the same conditions of employ-
ment he enjoyed with Respondent he, admittedly, re-
fused these referrals because of commitments and obliga-
tions he had incurred in his business, even though the
business was not nearly as profitable as the referral em-
ployment would have heen (about $40,000 a year)
The referral hall records of International Brotherhood
of Electrical Workers, Local 42 (the Union) establish
that on March 5, the day after his discharge, he signed
the Union's out-of-work book, thereby being eligible for
referral 3 He also filed a grievance with the Union pro-
testing his discharge, this was eventually disposed of by
findings of joint labor-management committees that Mof-
fitt was wrongly discharged and that Respondent was
obligated to pay him $2448 This amount was paid to
Moffitt on July 2 After signing the Union's out-of-work
book, he filed for unemployment compensation 4 Moffitt
also began looking for employment with local businesses
and farmers However, none of them had jobs available
During the 3 to 4 weeks subsequent to his termination,
he frequently called the Union, asking if any work was
'The gross amount paid by Respondent was $2448, less the deductions
for all the union funds referred to, Infra, the net amount for wages was
$1969
2 Unless indicated otherwise, all dates referred to herein relate to the
year 1987
3 The Union's assistant business manager, William Risley, testified that
the Union has about 800 members and 300 referrals'a year However,
only about six of these members are mechanics (Moffitt's classification)
and referrals in this classification are rare (one or two a year)
* He stopped collecting unemployment compensation after about 3
weeks because he devoted all his time to his business beginning at about
that time
297 NLRB No 130
F E HAZARD, LTD 791
available, none was At this point, he was "getting des-
perate" with a number of mortgages to pay off, as well
as a son in college and, in lieu of getting a job, "I went
out looking for work to -brmg to my shop" The floor of
his shop was paved-in June 1986, but he did practically
all the construction himself It was therefore going rather
slowly, so that the permanent lights were not installed
until about April Moffitt visited the local businessmen
and farmers again, telling them that he was opening his
shop for work—"any work that they wanted to send me
the more work they sent me, the less expensive the
labor rate would be send me some work, and they
did" A number of these local farms and businesses began
sending him work to do, some still do business with him
There are a number of aspects to Moffitt's business
the most obvious is the maintenance and repair of vehi-
cles, everything from automobiles to backhoes and bull-
dozers He also repairs equipment and sells it on consign-
ment, keeping a certain amount for his services Addi-
tionally, he rents certain heavy equipment that he has
purchased and repaired
Moffitt was, admittedly, offered job referrals by the
Union subsequent to his discharge, however, there are
some credibility issues regarding the nature of these re-
ferrals and when he got them Risley testified that on
May 11 he called Moffitt with a referral for a job with
the Worrad Company He testified that this would have
been the same type of job Moffitt had with Respondent,
fulltime and permanent 5 As to how much notice he
gave Moffitt, Risley testified "I don't know when
5/11/87 was, 6 but usually we have them start the follow-
ing Monday" He testified that Moffitt's response to this
referral was "He refused the job for reasons being that
he had a lot of work at his company that he had to get
done, commitments" Risley testified that on July 30, he
again offered Moffitt a permanent full-time position with
the Worrad Company, which he again refused because
"he had his commitments at work, and he couldn't
take it at this time" David Gordon received this referral,
he began working on August 27 and was still employed
by Worrad at the time of the hearing Risley testified
that on October 6, he offered Moffitt a third permanent
full-time position as mechanic with the Worrad Compa-
ny, which he again refused because he had commitments
with his business On October 7, David Morway, who
was not a member of the Union, began working for
Worrad as a mechanic and was still employed there at
the time of the hearing
Moffitt's testimony regarding referrals from the Union
is not as clear as that of Risley, he testified that the first
referral he received from Risley (he could not place a
time) was for a job not with Worrad The job was to last
2 weeks and be on the other side of the State of Con-
necticut, and he would have to begin the next day, he
refused this position He testified, as well, that he be-
lieves that Risley did offer him referrals to the Worrad
Company on three occasions, the first was at or about
5 The union hiring hall records show that Peter Rich began working at
the job on May 14 and remained there until he quit on November 4,
1988 -
5 May 11, 1987, was a Monday
the time of the labor-management committee meeting
discussed supra, in about May Moffitt testified "He
wanted me to go to work the next day, and I just
couldn't do that" In about July, and at a subsequent
time as well, Risley again offered him a job at the
Worrad Company as a mechanic at the contractual
wages Moffitt testified that he reason he did not take
any of these referrals to Worrad 7 was that he had a lot
of work in his shop and that he had made commitments
to people to complete that work If he accepted the re-
ferral, he could not have completed the work he had in
the shop in a timely fashion "I had made commitments
to other people I'm not going to say that I didn't
want to go back to work because I probably would
be making more money, but I've got an investment
and I made a commitment to other people at that time
"
In addition to alleging that Moffitt forfeited his back-
pay due to a willful loss of earnings by refusing Risley's
job referrals, counsel for Respondent also alleges that the
specification is incorrect in two areas regarding its calcu-
lation of the 1987 net profit of Ken's Repairs, counsel
claims that the specification should not have allowed the
business deduction for depreciation and should have de-
ducted from the backpay due Moffitt cash payments to
Moffitt's wife and son for services they rendered to the
business
Once a discriminatory discharge is found by the
Board, this represents riresumptive proof that some back-
pay is owed, NLRB v Mastro Plastics Corp, 354 F 2d
170, 175-176 (2d Cir 1965), cert denied 384 U S 972
(1966), and General Counsel's burden in the backpay
proceeding is "to show the gross backpay due each
claimant" J H Rutter-Rex Mfg Co v NLRB, 473 F 2d
223, 230 (5th Cir 1973) The burden then falls upon Re-
spondent to establish affirmative defenses mitigating its
liability NLRB v Brown & Root, 311 F 2d 447, 454 (8th
Or 1963) Respondent's principal defense herein is that
its backpay obligation should be tolled when Moffitt re-
fused the first job referral to the Worrad Company on
about May 11 Respondent's reasoning is that if Moffitt
had accepted the May 11 job offer he would have earned
almost $40,000 a year, even without overtime, or about
$26,000 from May 11 through the end of 1987 instead of
the approximately $1000 Ken's Repairs earned during
1987 Respondent asserts, "It's fine if he wants to go in
business for himself but why should we have to subsidize
this business if he could earn substantially more else-
where?" At first glance, this argument has much appeal,
further examination, however, casts a gloss over it Ini-
tially, it must be noted that it was Respondent's unfair
labor practices which initiated this supplemental pro-
ceeding and that any doubt or uncertainty regarding
Moffitt's interim earnings are resolved against Respond-
ent Lloyd's Ornamental & Steel Fabricators, 211 NLRB
217 (1974) The evidence here establishes that, almost im-
mediately after being fired by Respondent, Moffitt regis-
tered at the union hall and with the state unemployment
7 He testified that an additional reason for refusing the referrals to
Worrad was because Mr Worrad had voted against him at the labor-
management committee meetings referred to, supra
792 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
office In addition, over the following 3 or 4 weeks he
actively sought employment with numerous local busi-
nesses and farmers 8 When this search for work proved
fruitless, he decided that the only way that he could
meet his expenses was by devoting full time to his repair
business, which he did About 4 to 6 weeks later, he re-
ceived the first referral from Risley, by this time, he had
received orders for work from some of the local busi-
nessmen and farmers who had refused his offer of full-
time employment, and he had made commitments to
complete this work on a timely basis I find that it was
not unreasonable for Moffitt to refuse the May 11 and
subsequent referrals It was only 5 or 6 weeks after he
had decided to pursue his repair business on a full-time
basis and he had received repair orders from new cus-
tomers If he had accepted full-time employment at that
time, he could never have completed the work for these
new customers in a timely manner This would have
been an inauspicious, and possibly fatal beginning for his
business
The principal case in this area in Heinrich Motors, 166
NLRB 783 (1967), enfd 403 F 2d 145 (2d Cir 1968) In
that case, the discnmmatee, after his unlawful discharge,
returned to the full-time business he engaged in prior to
his terminated employment—selling used cars and repair-
ing automobiles Like the instant matter, he was not very
successful financially in the business venture and his
former employer attempted to prove that reentering this
business demonstrated a withdrawal from the labor
market and a waiver of the right to backpay for the
period The Board stated "That self-employment is an
adequate and proper way for the injured employee to at-
tempt to mitigate loss of wages hardly requires citation
and a claimant in that category need not seek other
employment" The Board also stated "The failure of
Ora to operate his used car business at a profit, or to in-
crease its revenues after his discharge, furnishes no sup-
port for a finding that he did not devote his full-time to
the business" The Board then cites NLRB v Cashman
Auto Go, 232 F 2d 832, 836 (1st Cir 1955), which said
"But the principle of mitigation of damages does not re-
quire success, it only requires an honest good faith
effort" In Heinrich the Board stated "We reaffirm our
rule that self-employment is not the equivalent of a will-
ful loss of earnings, but is to be treated as other interim
employment" Most importantly to the instant matter,
the Board stated "A person is not required to look for
other employment while employed, even though that
employment may be at a rate of pay less than that from
which he was discharged" See also Ad Art, Inc , 280
NLRB 985 (1986) Moffitt entered the repair business
fulltime only after an unsuccessful 3- to 4-week search
for other full-time employment The evidence establishes
that beginning in about April he spent all his time in an
honest, good-faith effort to make Ken's Repairs into a
profitable operation The fact that the company only had
8 My observation of Moffitt at this and the prior hearing convince me
that he is a forthright and credible witness, and I so find This finding is
supported by the fact that he stopped collecting unemployment Insurance
when he began devoting full time to Ken s Repairs, about a month after
his discharge
a profit of about $1000 the first year does not prove any-
thing other than that he was not successful in his first
year of self-employment I therefore find that Moffitt did
not incur a willful loss of earnings by maintaining his
self-employment while refusing the Union's more lucra-
tive job referrals
Remaining for consideration are Respondent's defenses
that the specification is incorrect in that $5549 for depre-
ciation deduction should not have been permitted in
computing the net profit of Ken's Repairs in 1987 and
that the salary paid to his wife should have been consid-
ered Charles Halloran is the certified public accountant
who prepared the 1987 tax return of Ken's Repairs, he
testified that depreciation is a true and actual expense
and is an expense allowed by the Internal Revenue Serv-
ice In preparing the return for Ken's Repairs he fol-
lowed the rules specified by the Internal Revenue Serv-
ice The Board also allows proper depreciation deduc-
tions in determining backpay due a discnminatee Kansas
Refined Helium Co, 252 NLRB 1156 (1980) Finally, Re-
spondent alleges that the $7340 that Ken's Repairs paid
to Moffitt's wife should be deducted from the amount
due Moffitt testified that his wife assisted him in the
shop from 5 to 9 hours a day and that is why she was
paid this sum for 1987 Regardless, Halloran testified that
this sum was not deducted from the income of the com-
pany in determining the net income of Ken's Repairs be-
cause if he did deduct this amount from the income of
the business, he would have to list it as income for Mrs
Moffitt As Mr and Mrs Moffitt filed a joint return, to-
gether with Ken's Repairs, it would have been a "wash,"
so the amount was not deducted This amount therefore
had no effect on the net income of Ken's Repairs, Re-
spondent's argument is therefore rejected
Accordingly, I shall award Moffitt backpay as set
forth in the compliance specification in the amount of
$37,824 and to the funds as set forth below, plus interest
On these findings of facts and conclusions Of law and
on the entire record, I issue the following recommend-
ed9
ORDER
The Respondent, F E Hazard, Ltd, its officers,
agents, successors, and assigns, shall pay to Kenneth
Moffitt and the funds specified below the amounts _set
forth, plus interest computed in accordance with Florida
Steel Corp, 231 NLRB 651 (1977), and New Horizons for
the Retarded, 283 NLRB 1173 (1987)
Kenneth Moffitt $37,824
Insurance Fund 2,897
Pension Fund 5,370
Benefit Fund 1,185
OSHA and Education Fund 486
Industry Fund 394
Cope 86
9 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