Fibreboard Paper Products Corp.

National Labor Relations Board - Board Decisions

Dec 15, 1969

180 N.L.R.B. 142 (N.L.R.B. 1969)

142 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Fibreboard Paper Products Corporation and East
Bay Union of Machinists , Local 1304, United
Steelworkers of America, AFL-CIO; and United
Steelworkers of America, AFL-CIO. Case
20-CA- 1682
December 15, 1969
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN MCCULLOCH AND MEMBERS
FANNING AND ZAGORIA
On May 23, 1968, Trial Examiner Henry S.
Sahm issued his Trial Examiner ' s Backpay Decision,
attached hereto , finding that specific amounts of
backpay be awarded to certain employees of the
Respondent.' Thereafter , the Respondent, the
Charging Parties, and the General Counsel filed
exceptions to the Trial Examiner's Backpay
Decision with briefs in support thereof; the
Respondent filed a brief in answer to the exceptions
of the General Counsel and the Union; the General
Counsel filed a brief in answer to Respondent's
exceptions, and the Union filed a reply brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a
three-member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed . The rulings are
hereby affirmed. The Board has considered the
entire record in this case, including the Trial
Examiner's Backpay Decision , the exceptions, the
briefs, and the answering briefs, and hereby adopts
the findings, conclusions, and recommendations of
the Trial Examiner only to the extent that they are
consistent herewith.
(1) The Charging Party (hereinafter referred to as
Local 1304 or the Union) excepts to the wage
formula found applicable by the Trial Examiner for
computing the terminated employees' gross backpay
during the backpay period , September 14, 1962 to
'On March 27 , 1961, the Board issued a Decision and Order , 130 NLRB
1558, finding that Respondent had not committed unfair labor practices
within the meaning of 8(a)(l ), (3), and (5) of the Act and sustaining the
Trial Examiner's dismissal of the complaint . The Charging Parties ' petition
for reconsideration was granted by the Board and on September 13, 1962,
the Board issued a Supplemental Decision and Order , 138 NLRB 550, in
which it found that "Respondent violated Sec . 8(a)(5) by unilaterally
subcontracting its maintenance work without bargaining with the Charging
Unions over its decision to do so ." The Supplemental Decision and Order
did not modify the original decision with respect to the dismissal of the
charges under Sec. 8(a)(1) and (3) of the Act.
On July 3 , 1963 (322 F .2d 411) the Court of Appeals for the District of
Columbia Circuit granted the Board 's petition for enforcement. The
Supreme Court , on December 14, 1964 , affirmed the judgment of the
Court of Appeals , holding that Respondent was obligated to bargain and
that the Board 's order was within its power to fashion remedies (379 U S.
203).
January 18, 1965.2 We find merit in the Union's
exceptions.
The Local 1304 maintenance machinists were
terminated on August 1, 1959; the
collective-bargaining agreement between Respondent
and Local 1304 had expired at midnight July 31,
1959. According to the provisions of that
collective- bargaining agreement the machinists' wage
rates were determined by the so-called Pabco Wage
Formula (hereinafter "Pabco formula") which
established the unit employees rate at ":one dollar
per day (or 12.5 cents per hour) less than the
prevailing Building and Construction Crafts Scale"
(construction millwrights).' The "Pabco formula,"
first embodied in the collective-bargaining
agreement effective August 1, 1951, was
incorporated in each succeeding agreement through
July 31, 1959. The ILWU millwrights employed by
Respondent received the same wage rates as the
terminated machinists from July 1946 to July 31,
1959; the ILWU millwrights' wage rates were not
independently established, but were determined by
Local 1304's collective-bargaining agreement in
automatic fashion.' After the Union machinists were
terminated, the ILWU millwrights, of which there
were apparently only 2, continued to work and, in
fact, replaced the machinists in the felt mill;
however, they received no wage increase until 1961,
when it was agreed that they would receive the
increases set forth in the collective-bargaining
agreement between the Respondent and the ILWU
production employees.' Upon the machinists'
termination the Respondent contracted out the
maintenance work to an independent contractor,
which employed millwrights and paid them the
building trades or construction millwright wage
rates.'
'rhe Board ' s Supplemental Decision (138 NLRB 550) limited backpay
to earnings which might have been received from and after the date of the
Supplemental Decision , September 13, 1962, rather than from the date of
the employees' termination , August 1 , 1959. The period August 1 , 1959, to
September 14, 1962, is referred to as the hiatus period.
'The terms "building trades millwrights", "building and construction
crafts" and "construction millwrights" are used interchangeably herein
At the time of termination the machinists were receiving $3.525 per hour
under the "Pabco formula." The hourly rates payable under the "Pabco
formula" during the backpay period would have been. September 14, 1962,
to July 31, 1963 - $4.275; August 1, 1963, to January 18, 1965 - $4.505.
'According to Burke, the ILWU business agent , the ILWU millwrights
"waited until [Local) 1304 . . settled their negotiations and then
adjustments were automatically passed on to our group under our contract
[1]t was just a matter of processing through payrolls, it was
automatic."
'The Respondent had collective-bargaining agreements with the ILWU
production workers; these agreements did not include the ILWU
millwrights until 1961.
During the backpay period the ILWU millwrights received the following
hourly rates : September 1962 to May 31 , 1963 - $3.695; June 1, 1963, to
May 31 , 1964 - $3.795; June 1 , 1964, to May 31, 1965 - $3.895.
Beginning June 1 , 1965, they received $3.985 per hour.
'These hourly rates were:
Effective June 16 , 1959 - $3 76
Effective June 16 , 1960 - $3.945
Effective June 16 , 1961 - $4.18
Effective June 16 , 1962 - $440
180 NLRB No. 33
FIBREBOARD PAPER PRODUCTS CORP. 143
The Trial Examiner rejected the "Pabco formula"
and found that the wage rates received by the
ILWU millwrights should be utilized in computing
the gross backpay of the terminated machinists. In
excepting, the Union contends that the "Pabco
formula" is the most reasonable and objective
criterion for computing the machinists' backpay,
since it had appeared in every contract between the
parties from 1951 to 1959 and is reasonably close to
the wage rates received by the employees of the
independent contractor, who replaced the terminated
machinists. Moreover, it contends that Respondent
has failed to show with reasonable certainty that if
it had not been for Respondent's unlawful act,
different wage rates would have been negotiated for
the 1962 to 1965 backpay period.
The Board's function in this proceeding is to
determine the amount of backpay that will, as
nearly as possible, make the unlawfully terminated
employees whole. This is not always an easy task.
For as the Eighth Circuit pointed in N.L R.B. v.
Brown & Root, Inc.:'
Obviously, in many cases it is difficult for the
Board to determine precisely the amount of
backpay which should be awarded to an
employee. In such circumstances the Board may
use as close approximations as possible, and may
adopt the formula reasonably designed to produce
such approximations ....
In our opinion, the circumstances herein permit
only reasonable approximation. We also emphasize
that any uncertainty must be resolved against the
wrongdoer whose conduct made certainty
impossible.'
The Trial Examiner correctly found the following
principle of law applicable to this case: "Loss of
earnings of backpay claimants should be measured
by the earnings of their replacements or comparable
employees" (emphasis supplied). In finding that the
rates of the ILWU millwrights are the best measure
of what the terminated machinists would have
received, the Trial Examiner emphasized that the
ILWU millwrights performed work requiring skills
comparable to the terminated machinists. He did
not consider, however, the wage rates of the
independent contractor's employees who actually
replaced the terminated machinists on 19 of the 21
jobs he found available during the backpay period.
Presumably the failure to consider the replacements'
wage rates resulted from the fact that he erred with
Effective June 16, 1963 - $4 63
Effective June 16, 1965 - $4 925
It should be noted that these rates (building trades or construction
millwrights ) are the same rates upon which the "Pabco formula" was
based Thus, if the machinists had not been terminated and the "Pabco
formula" had remained in their contract with Respondent, the machinists
actually would have been receiving 12.5 cents per hour less than the
independent contractor's employees who replaced them received
'311 F 2d 447, 452 (C A 8)
'See Ozark Hardwood Co, 119 NLRB 1130, enfd. 282 F 2d I (C A 1);
NLRB v Miami Coca-Cola Co. 260 F 2d 569 (C A 5)
respect to the hourly rates received by the
independent contractor's employees since he found
that their hourly rate was $4 in January 1965, or
about the same rate as the ILWU millwrights. In
fact, the independent contractor's millwrights were
receiving $4.63 in January, 1965.9 Having
erroneously found that the wage rate of the
replacements of the backpay claimants was $4, the
Trial Examiner concluded that it would be contrary
to precedent to utilize the "Pabco formula," which
would have provided substantially higher wage rates,
because gross backpay "should be measured by the
earnings of [the backpay claimants'] replacements or
comparable employees." However, since the
independent contractor's employees who replaced
the terminated machinists on 19 of the 21 jobs
found available by the Trial Examiner, in fact,
received higher rates than the "Pabco formula"
would have provided, utilization of the "Pabco
formula" presents no conflict with precedent.
In finding the ILWU millwright rates the best
measure to determine gross backpay, the Trial
Examiner also emphasized that the ILWU
millwrights had received the same rates as the
terminated machinists for 13 years.t0 But he
overlooked the fact that historically the ILWU
millwrights' wage rates had followed the terminated
machinists' rates in an automatic fashion. After
August 1, 1959, the ILWU millwrights, of which
there were apparently only 2, for one reason or
another (be it neglect of their bargaining agent, the
fear that they also might be terminated, the
realization, as suggested by the Trial Examiner, that
their rates were excessive, or just confusion) neither
bargained for nor received a wage increase until
1961. From this fact the Trial Examiner concluded
that "it is not too unreasonable to assume that they
(the ILWU millwrights) recognized the soundness of
Fibreboard's claim that the terminated machinists'
wage rates under the Pabco formula . . . were too
'The Respondent contends that the Trial Examiner did not err with
respect to the rates of the independent contractor , but that the Trial
Examiner ' s reference to a $4 rate was, in fact, a reference to the
comparative wage cost to Respondent of employing the independent
contractor Although the Trial Examiner 's rather ambiguous footnote (no.
23) appears to lend some support to the Respondent 's contention, in our
opinion , it is not sufficient to overcome the fact that the Trial Examiner
found that in January 1965 , " the independent contractor ' s employees
received $4 00 " Therefore, we can only assume the Trial Examiner was in
error with respect to this finding.
"The Trial Examiner attempts to bolster his support for the ILWU
millwrights ' rates by arguing that the rates paid by other employers with
whom the Union had contracts should be considered He points out that
the contract of Foremost Food and Chemical provides the highest rates
and that the Foremost rate is approximately the same as the ILWU
millwrights received during the backpay period The simple answer to the
Trial Examiner 's argument, however , is that prior to 1959, Respondent had
voluntarily negotiated contracts with the Union which contained rates
significantly higher than those paid by Foremost or the other employers
with whom the Union had contracts Thus, in January 1958, the Foremost
rate was $2.93 and the Fibreboard rate was $3 375, in January 1959, the
Foremost rate was $3 04, and the Fibreboard rate was $3 525 Therefore,
unlike the Trial Examiner , we see no reason to attach any significance to
wage rates included in contracts negotiated by the Union with any other
employer
144 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
high." To the contrary , it seems just as reasonable,
if not more reasonable , to assume that the ILWU
millwrights realized that if they requested higher
wage rates they might follow in the footsteps of the
terminated machinists . In our opinion , if we accept
the ILWU millwrights' rates as the backpay period
wage rates, we are placed in the rather anomalous
position of finding that the backpay claimants' rates
should be determined by a control group (the ILWU
millwrights ) whose wage rate had previously
followed their own, and who, for almost a 3-year
period, might not have requested or received a wage
increase precisely because of the Respondent's
unlawful termination of the backpay claimants.
But the factor deemed most significant by the
Trial Examiner in rejecting the "Pabco formula" is
that if the "Pabco formula" were adopted, the
backpay claimants would receive higher wage rates
during the backpay period than the rate the Union
eventually agreed to upon their return to work. The
Trial Examiner was of the opinion that such a result
would be not only specious but strange.
The terminated machinists returned to work in
March 1965 , at $3.74 per hour "pending
negotiations ." In July 1965, Local 1304 and the
Respondent executed a collective - bargaining
agreement which provided a $4.00 wage rate. While
we agree that a subsequently negotiated wage rate is
one factor to be considered in determining a wage
rate applicable to the backpay period, we do not
agree that it is the controlling factor . Moreover, it
appears necessary to consider the Union's
bargaining position in 1965. The negotiations
matched a Union weakened by 6 years off the job,
without a majority of the former employees back in
the plant , against a Respondent determined to
preserve the savings it had achieved through its
unlawful contracting-out. In addition, the
Respondent made it clear that it considered that its
only obligation was to talk ." In this situation the
Union had been warned by its counsel to avoid an
impasse at all cost. In the circumstances of this
case, we do not believe that the wage rates that
resulted from the 1965 bargaining should be
considered a controlling factor in the determination
of the backpay wage rates.
But, the Respondent contends the Union had the
same bargaining weaknesses in 1959 as it did in
1965. Stressing , as did the Trial Examiner , that its
decision to subcontract the maintenance work was
economically motivated and justified, the
Respondent assumes as a forgone conclusion that
"Thus, R C. Thurmann , Respondent 's director of industrial relations
candidly admitted
The very firs t meeting that I held with 1304 I reviewed with them
where we were and that if we had only known back in '59 that we were
supposed to do some talking before our minds were made up, why we
would have gone through that motion and I said now we are going
through that motion now and as you understand fully that we are only
obliged to discuss this matter with you and then if we find that we
cannot work it out to our satisfaction , we are at liberty to continue on
with our contracting
had bargaining occurred in 1959, the "Pabco
formula" would have been eliminated or the
maintenance work subcontracted, and contends that
the Trial Examiner's finding merely constitutes an
attempt to apply the wage rates which in all
probability would have resulted from bargaining in
1959.
In its answering brief the Respondent states:
But to assume as does the Union that bargaining
in 1959 would have resulted in abandonment by
Fibreboard of its plans to contract out the work,
and in renewal in that and subsequent years of the
old contract and its wage formula is to ignore the
fact that this is exactly what Fibreboard refused
to do and that it made its refusal stick.
The simple answer to this assertion is that
Respondent did not negotiate reduced wage rates in
1959 and that it made its refusal "stick" because it
refused to bargain over its decision to subcontract,
and that this refusal was precisely the gravamen of
its unfair labor practice as found by the Board, the
D.C. Circuit Court of Appeals, and the Supreme
Court.
For as the Supreme Court said:
The Company was concerned with the high cost
of its maintenance operation. It was induced to
contract out the work by assurances from the
independent contractor that economies could be
derived by reducing the work force, decreasing
fringe benefits, and eliminating overtime
payments. These have long been regarded as
matters particularly suitable for resolution within
the collective bargaining framework . . . . Yet it
contended that when an employer can effect cost
savings in these respects by contracting the work
out, there is no need to attempt similar economies
through negotiations with existing employees or to
provide them with an opportunity to negotiate a
mutually acceptable alternative. The short answer
is that, although it is not possible to say whether
a satisfactory solution could be reached, national
labor policy is founded on the congressional
determination that the chances are good enough
to warrant subjecting such issues to the process of
collective negotiations.
In the words of the Supreme Court, "it is not
possible to say whether a satisfactory solution could
[have been] reached ..." Indeed, as the Respondent
contends, the Union might not have been able to
persuade the Respondent not to contract-out or
retain the "Pabco formula". On the other hand, it is
by no means clear that the parties could not have
reached an agreement in 1959 which would not have
eliminated the "Pabco formula". The fact that the
Respondent did not give the Union an opportunity
to attempt to reach such an agreement was found
violative of the Act. Thus, any uncertainty with
respect to what wage rates the backpay claimants
would have received except for termination was
created by the Respondent, which bears the risk of
that uncertainty.
FIBREBOARD PAPER PRODUCTS CORP. 145
In the circumstances of this case we are of the
opinion that the "Pabco formula" provides the most
reasonable, acceptable, and [objective approximation
of what the backpay claimants would have received.
Accordingly, we find that the gross backpay of the
terminated machinists for the backpay period
beginning September 14, 1962, ending January 18,
1965, be computed on the basis of the "Pabco Wage
Formula."' I
(2) The Trial Examiner found that in addition to
the 10 jobs that were available in the powerhouse
(over which there is no dispute)," there were 21
available jobs for the maintenance machinists during
the backpay period. The General Counsel and the
Union except," contending there were 31 jobs
available; the Respondent excepts, contending there
were only 16 jobs available.
The essence of the General Counsel's and Union's
contention is that the burden of alleging and proving
job diminution during the backpay period is on the
Respondent and that Respondent has not carried
this burden. We are of the opinion that the evidence
offered by the Respondent to show diminution of
available jobs supports the Trial Examiner's finding
that there were 21 available jobs at the beginning of
the backpay period.
In finding that there were 14 maintenance jobs
available at the Emeryville plant, excluding the 2
jobs in the paint shop and felt mill, the Trial
Examiner relied on Union Exhibit 21 (which the
Union through a miscalculation had introduced to
show there were 24 jobs available), a record of man
hours worked by the independent contractor's
millwrights during 13 of the 28 months comprising
the backpay period. By utilizing the average number
of hours worked by a machinist in 1958, the
Respondent ( Resp . Exh. 18 ) demonstrated that
approximately 13 1/2 jobs (rounded off to 14 by the
Trial Examiner) were available at the Emeryville
main shop. The General Counsel and the Union
contend that these exhibits should be rejected
because they cover only 13 of the 28 month backpay
period and are limited only to the Emeryville
operation . They point out that no claim was made
that the records for both operations (Emeryville and
"these hourly rates are:
September 14, 1962 to July 31, 1963 - $4.275
August I, 1963 to January 18, 1965 - $4.505
"The Trial Examiner found that on February 1,' 1964, automatic
controls were installed in the powerhouse, eliminating the need for 5
firemen However, the parties stipulated that the automatic controls were
installed on January 15, 1964, and not February 1. The Trial Examiner's
finding is hereby corrected to accord with that stipulation. None of the
discussion concerning availability of jobs that follows includes the 10
powerhouse jobs.
"The General Counsel and the Union arrived at the conclusion that 31
jobs would have been available by taking the number of machinists
employed on July 31, 1959, and reducing this number by the stipulated
manpower reductions which occurred between that date and the
commencement of the backpay period. There is a complex dispute as to
the number of machinists that constituted the Respondent's work force on
July 31, 1959. In view of our determination herein, we find it unnecessary
to resolve that issue.
Martinez) were unavailable; and that Respondent's
failure to produce the records for the full backpay
period from its independent contractor justified an
inference that such records would not support the
Respondent's position. Since we find some merit in
this contention, we have utilized this evidence only
for the limited purpose of providing a means by
which to check the accuracy of the testimony of
Respondent' s witnesses.'s
Reisenberg, a plant engineer and former
maintenance engineer for the insulation department,
testified that the independent contractor regularly
assigned 5 millwrights from the main shop to
insulations during the backpay period. Maffey, who
until July 1967, was plant engineer in control of the
main shop, testified that excluding the 5 millwrights
assigned to insulations , the independent contractor
utilized from 6 to 9 millwrights in the main shop.
Resolving the uncertainty against the Respondent
we find the independent contractor utilized 9
millwrights in addition to the 5 millwrights assigned
to insulations or a total of 14 millwrights at
Emeryville." Sandin , plant engineer at the Martinez
Roofing Plant, testified that 5 of the independent
contractor's millwrights were regularly assigned to
the roofing department at Martinez . Thus, we
concur with the Trial Examiner's finding that the
number of millwrights required by the independent
contractor was 19.
The Trial Examiner erred in finding that ILWU
millwrights replaced the machinists in both the felt
mill and paint shop, since Maffey testified that the
work performed by the machinists after August 1,
1959, in the paint shop was performed by the ILWU
production workers, not the ILWU millwrights.
This error is of no consequence , however, as Maffey
also testified that the work done by the ILWU
millwrights in the felt mill was the equivalent of 1 to
2 jobs ("it would be one and a half"). In addition,
Maffey testified the ILWU production workers did
the work formerly done by the terminated
machinists in the paint shop; this work would
properly belong to the machinists . Therefore, we
agree with the Trial Examiner' s finding that there
were 2 jobs available in the paint shop and felt mill
combined.
In response , however, Respondent contends that
the ILWU millwrights worked out of the main shop
"The General Counsel contends that testimony of Respondent's
witnesses with respect to the number of employees used by the independent
contractor, was not only vague and shifting , but was also secondary in
nature (i.e., no representative of the subcontractors was called to testify
from first-hand knowledge or from original business records ) We agree
that it would have been better for the Respondent to have called a
representative of the independent contractor for such testimony . We also
agree that the witnesses ' testimony was at times vague and uncertain;
however, the fact remains that the testimony was uncontrad,cted on the
record . We therefore do accept this testimony, but the weight we give it is
affected by its nature . (See New England Tank Industries , 147 NLRB
596.)
"It should be noted that this number of jobs, 14, is the same as the
number found by the Trial Examiner for the main shop at Emeryville.
Thus, to this extent, Union Exh. 21 and Resp. Exh 18 , upon which the
Trial Examiner relied , confirm the testimony of Respondent's witnesses.
146 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and if 2 separate jobs are found for the paint shop
and felt mill, this results in counting the work twice,
since it has already been counted in the 14 jobs
found available at the Emeryville main shop. This
contention, in our opinion, is not supported by the
record. In the first place, Maffey did not testify that
the number of jobs available in the main shop
included the 2 ILWU millwrights. Moreover, the
Respondent's contention is not supported by Union
Exhibit 21 and Respondent Exhibit 18, on which the
Trial Examiner relied to show that 14 jobs were
available in the Emeryville main shop." For those
exhibits were based on a tabulation of the total
hours worked by the independent contractor's
millwrights, and it is unlikely that the hours of the
ILWU millwrights employed by the Respondent
would be included in such tabulation.
In conclusion , we adopt the Trial Examiner's
finding that there were 2 jobs available in the felt
mill and paint shop and that the total number of
jobs available for the terminated machinists during
the backpay period was 21.
After finding that 21 machinist jobs were
available at the beginning of the backpay period
(and that no additional machinists jobs were
eliminated during the backpay period), the Trial
Examiner assigned 21 names in order of seniority to
these jobs. In so doing , however, he neglected to
consider whether each of the machinists assigned to
the 21 available jobs was eligible to work or could
have worked throughout the entire backpay period.
Therefore, in our final determination of backpay
eligibility, we have awarded backpay to the next
eligible backpay claimant according to seniority in
each instance where a backpay claimant was
ineligible to work or for some other reason could
not work during the backpay period."
(3) We agree with the Trial Examiner's finding
that the terminated machinists are not entitled to
"current service benefits" also referred to as pension
credits for the hiatus period (August 1, 1959, to
September 13, 1962) since such credits are based on
wages received , and to find otherwise would be
tantamount to awarding backpay for the hiatus
period in contravention of the Board's order.
(4) The Trial Examiner held that the severance or
termination payments made to the terminated
employees on July 31, 1959, should be deducted
from gross backpay. His grounds for this were
twofold: 1. Since the termination of the employment
"The Respondent contends that at least globs should be deducted from
these 14 jobs because the work involved rigging and welding not formerly
done by the machinists . For the reasons set forth by the Trial Examiner,
we reject this contention.
"This determination is in accordance with the stipulation of the parties
that "in computing backpay of terminated employees , it is deemed that
they would have been called for available work in order of their seniority
within thew classification ." The Respondent also agrees , since it states
in its brief that "the number of machinists thus entitled to reinstatement
and backpay is somewhat more than 16 (the number of jobs it contended
were available ) as a result of retirements and disabilities which would have
occurred during the backpay period."
relationship in contemplation of which the payments
were made did not occur (the Board having ordered
reinstatement), not to permit the deduction of these
payments would penalize the Respondent as it
would, in effect, have to pay twice; 2. The
terminations were nullified by the reinstatement
order which resulted in a failure of consideration for
the payments.
The Union and the General Counsel except,
contending that the severance allowance is not a
permissible deduction from backpay in that it was
paid during and for the first month or two of the
hiatus period when no backpay accrued and
therefore under the Board's quarterly method of
determining the amount of backpay owing, there is
nothing from which it can be deducted.19 We find
merit in the exceptions.
The termination payments were made on July 31,
1959, along with 2 weeks pay in lieu of notice. The
payments, which were based on past service, varied
from a low of $282 to a high of $776.20 The
collective-bargaining agreement between Local 1304
and the Respondent made no provision for a
severance allowance. Thus, it appears that for
reasons best known to it, the Respondent voluntarily
chose to give these allowances to the terminated
machinists."
We find the Trial Examiner's holding that ". . .
since the terminations were nullified by the
reinstatement order, this resulted in a failure of
consideration" without merit. As noted above, the
collective-bargaining agreement had no provision for
severance payments. It is also clear that there was
no bilateral contractual relationship established by
which the employees voluntarily terminated
employment in return for severance payments.
As stated by the Trial Examiner, the purpose
behind a backpay order is to make an employee
"whole"; it is not to enrich him by ordering the
Respondent to pay twice. The rationale for
deducting severance payments from backpay in the
normal case is that they are in lieu of, or similar to,
wages and allowing the employee to have backpay
plus the severance allowance would make him more
than "whole." In the instant case , however, the
employees cannot be made more than "whole"
"Under the Board ' s quarterly method of determining backpay owing,
interim earnings received in one quarter are not deducted from backpay
accrued in another quarter (see F W Woolworth Company. 90 NLRB
289).
"If viewed as wages, the payments would cover no more than a month
or two of wages during the hiatus period.
"In rejecting the General Counsel ' s contention that the severance
payments were not discussed with the Union, the Trial Examiner stated
(fn. 62 of his Decision).
The original decision states that these severance payments were
negotiated with the Union although not called for under the terms of the
collective bargaining agreement.
However , the Trial Examiner , in the original proceeding , did not find that
severance payments were negotiated, but only that the facts did not
support the allegation that the Respondent violated Sec . 8(a)(5) by refusing
to bargain with respect to the severance allowance (130 NLRB 1558,
1573).
FIBREBOARD PAPER PRODUCTS CORP.
because, unlike the normal case , backpay did not
accrue from the date of termination. Moreover, it
appears clear that the Board has considered
severance payments to be in the nature of
"earnings" or wages, since it has allowed severance
payments as a deduction from gross backpay when
backpay has accrued in the period in which the
payment was made. t2
Accordingly, under the Board's quarterly method
of determining backpay owing, we will not consider
the severance payments made on July 31, 1959, as
deductions against backpay, since no backpay
accrued in that quarter from which to deduct the
payment.
(5) We agree with the Trial Examiner's finding
that interest be paid on the net backpay from
September 14, 1962.
(6) We find, in agreement with the Trial
Examiner, that the disputed compulsory retirement
dates of the seven machinists occurred on the
following dates:27
Gronberg February 1, 1962
Capps June 1, 1962
J. P. Johnson August 1, 1962
Holmes September 1, 19622'
Crispino October I, 1962
Hamidy December 1, 1962
Bennett December 1, 1962
(7) The Trial Examiner found that Fred C.
Johnson is not entitled to backpay because he did
not engage in a diligent and continuous effort to
find gainful employment and thereby incurred a
willful loss of earnings . The Union and the General
Counsel except to this finding. We find merit in
their exceptions.
The Trial Examiner correctly stated the applicable
"The Respondent , however, contends that unlike the 2-week pay in lieu
of notice , the severance payment was not a wage payment for some
particular future period ; indeed it was not a wage payment at all but was a
payment based on past services rendered, made in contemplation and
consideration of termination of the employment relationship. We note that
the Respondent 's explanation of the severance allowance is not wholly
consistent with the definition of "severance pay" (Commerce Clearing
House , "Dictionary of Law Terms, Second Edition - 1953") upon which
the Trial Examiner relied and to which the Respondent took no exception.
According to that definition of severance pay, our finding is consistent with
the underlying purpose of severance pay . For that definition makes it clear
that, "[t]he idea behind dismissal wages is to aid the worker while he is
seeking employment elsewhere or adjusting himself to a new job ." Thus,
according to that definition , and contrary to the Respondent 's contention,
a severance payment , not only is considered to be for some particular
future period , but is granted for the purpose of tiding the employee over
during the period immediately following termination.
"In so finding , we do not rely on the Trial Examiner 's finding that the
document submitted by the Respondent to the Board compliance officer in
1965 or the compilation entitled "Retirement Plan Status ..." submitted to
the Union by the Respondent during the 1965 bargaining sessions, which
shows the compulsory retirement dates of these men to be January 1, 1963,
was a coincidental error and not confirmation of the fact that the
Respondent agreed that the retirement dates of these men were January 1,
1963. Nor do we adopt his comments with respect to the parole evidence
rule. Instead , we rely on the fact that the Trial Examiner did not credit the
Union witnesses who testified that an oral agreement postponing the
compulsory retirement date of these men to January 1, 1963, was made.
"As a consequence of this finding , Gronberg , Capps , J. P. Johnson, and
Holmes, whose compulsory retirement dates fell before the commencement
of the backpay period , are ineligible for backpay.
147
law as follows: Willful loss of earnings is an
affirmative defense, and that burden of proof is on
the Respondent.25 Once the General Counsel has
shown the gross amount of backpay due, the burden
is on the employer to establish facts to negative or
mitigate liability to a given employee.2' And finally,
"any uncertainty is resolved against the wrongdoer
whose conduct made certainty impossible."27
In attempting to meet its burden of proof, the
Respondent limited itself to calling Johnson as a
witness. The Respondent introduced no other
evidence to show that Johnson's efforts to find work
were unreasonable or that other suitable jobs were
available in the area for a person of Johnson's age
and experience.23
Johnson's uncontradicted testimony may be
summarized as follows:
After his termination on July 31, 1959 (he had
been employed by Respondent for approximately 22
years) he immediately sought other employment; he
registered at the union hall and State Employment
Office and reported twice a week at the union hall
and once a week at the State office. He also applied
at every place where he thought he might be able to
handle the work.21 He contacted two or three
employers a day, answered "help wanted" ads and
filled application blanks for various firms. He soon
found that his age (57 years at the time of his
discharge) in addition to the fact that he was not a
journeyman machinist was a severe handicap in his
search for work."
In November 1959, he obtained work as a
machinist with a trailer company where he worked
until February 1960, after which he resumed his
search for work and kept up his registration with
the Union and the State Employment Office. By
May 1900, having had only 3 months work in the
previous 9 months, and feeling that he had
exhausted the possibilities of finding work in the
Bay Area, he sold his home in Oakland and moved
to the town of South Lake Tahoe, California, where
he had purchased a lot 3 years earlier, and
eventually intended to retire. Since moving to Lake
Tahoe, which has no industrial plants, he has tried
his hand in an unsuccessful contracting business
(building and selling homes), worked in a motel, and
at a boat shop repairing motor boats for $2 per
hour. Respondent reinstated him to his former job
about March 18, 1965 (reinstatement was originally
scheduled for January 1965), but Johnson quit 2
"N.L R B v. Mooney Aircraft, Inc., 366 F.2d 809 (C.A. 5).
"N.L R B v. Brown & Root . Inc.. 311 F.2d 447 (C.A. 8).
"N:L.R.B. v. Miami Coca-Cola Co, 360 F.2d 569 (C.A. 5).
"See N.L. R B. v. Brown & Root . Inc., 311 F 2d 447 (C.A. 8).
"Among the places he specifically recalls applying to were American
Machine and Foundry , American Can Company, Continental Can
Company, Mother's Cake and Cookies Co, a press punch company, and a
trailer company.
"In early 1960, in a telephone interview with a press punch company,
whose name he didn't recall , he felt he was about to be hired until the
interviewer learned he was 58 years old At American Machine and
Foundry he was told that he had passed written and oral tests "with flying
colors" but was never called to work
148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
weeks later (April 2, 1965) and returned to Lake
Tahoe.
It was also brought out that Johnson received,
both after his termination and while he was
employed at Fibreboard, about $4,000 in investment
income annually; and that he became eligible for
Social Security benefits and pension benefits from
Respondent in September 1967. Johnson worked
during seven of the eleven quarters of his backpay
period.
The Trial Examiner rejected Johnson's testimony,
characterizing it as unspecific and a maze of
confusion. Yet Johnson's testimony stands
uncontradicted and unrefuted. Moreover, except to
the limited extent that these characterizations may
be based on the Trial Examiner's evaluation of
Johnson's demeanor, we are of the opinion that they
are unwarranted upon a careful reading of the
record. For such a reading reveals that Johnson's
testimony is rather clear and consistent, when it is
considered that Johnson was testifying to events that
had occurred as long as 8 years before he testified.
Thus, we do not find it unusual that Johnson could
not recall the dates upon which he sought specific
jobs.
The Trial Examiner characterized Johnson's
contacts with the State Employment Office and his
Union as a sham, insincere and "an automatic going
through the motions in order to be eligible for
unemployment compensation." In our opinion there
is no basis whatsoever for inferring lack of
motivation in seeking work from the fact that an
employee made weekly visits to the State
Employment Office or his union hall or from the
fact that he received unemployment compensation.
Nor do we believe that the Trial Examiner was
justified in drawing adverse inferences and
presumptions concerning Johnson's motivation from
the following:
1. That Johnson testified that he eventually
intended to retire to Lake Tahoe. For the fact
remains that Johnson did not retire; he moved to
Lake Tahoe only after his attempt to find work in
the Bay Area appeared futile. Moreover, at Lake
Tahoe he continued to work at whatever he could
find.
2. That as a result of his "happy situation"
($4,000 annually as investment income along with
the prospect of Social Security benefits and a
pension from Respondent) he was not obliged to
seek work and therefore removed himself from the
labor market. In our opinion the fact that Johnson
had about $4,000 per annum investment income is
irrelevant and is not grounds for imputing lack of
motivation and diligence in seeking work to him,
particularly in view of the fact that he also received
the investment income while he was employed by
Respondent. In addition, he was not eligible to
receive the Social Security benefits or retirement
benefits from Respondent until approximately 7
years after he moved to Lake Tahoe.
3. That Johnson quit his job with Respondent 2
weeks after he was reinstated in March 1965.
Needless to say, it was clearly within Johnson's
right to accept or reject Respondent's reinstatement
offer for any reason or no reason and to remain on
the job as long as he chose."
We are of the opinion that Johnson made
satisfactory and reasonable efforts to obtain work
through his registration at the union hall, the State
Employment Office, and his own independent
actions. He had searched diligently for work in the
Bay Area for some 9 months after his termination
with little success; while there, he had also
discovered that his age and lack of journeyman's
skills hindered his effort to find work.32 He was
under no obligation to continue such a
presumptively futile search indefinitely. That he then
moved from an industrial area to a rural area is not
evidence of withdrawal from the labor market."
Moreover, Johnson accepted less desirable work at
lower pay and had interim earnings in 7 of the 11
quarters in which he was entitled to backpay. The
fact that Johnson was unemployed or received low
interim earnings during part of the backpay period
does not give rise to a presumption that he failed to
seek work or that he willfully incurred loss of
earnings ." In these circumstances, that Johnson
moved to another area and accepted lesser jobs at
lower pay does not preclude his entitlement to
backpay.35 In our opinion, the Trial Examiner's
"The Trial Examiner also found that Johnson accepted reinstatement
"only because the Union importuned him to do so in connection with this
matter of backpay ." In our opinion , this finding is not justified because
Johnson also testified that he had to leave on the 1st day of April for
another engagement He further testified that reinstatement was offered in
the first part of January 1965, and that he thought he would thus have an
opportunity to get 2 or 3 months work from Respondent
"See N L R B. v Pugh & Barr , Inc, 231 F 2d 558 (C A 4), which holds
that in determining the reasonableness of an effort to find employment, the
employee 's age and the labor conditions in the area must be considered.
"Charles T. Reynolds Box Co 155 NLRB 384. See also N.L.R.B v.
Reynolds Box Co, 399 F .2d 668 , where the Sixth Circuit , in rejecting a
contention that many employees had removed themselves from the labor
market by moving from an industrial to various rural areas stated, " . it
is the duty of the Respondent to carry the burden of proof
[G]eneralizations that employees do not want to work after their unlawful
discharge , and return to their home area to avoid working are not
sufficient to establish respondents ' case. . '
"Miami Coca Cola Bottling Co., 151 NLRB 1701.
"Efco Mfg. Co, I l1 NLRB 1032, Salant & Salant . 92 NLRB 343. See
also Robert Haws Company, 161 NLRB 299, enfd. in pertinent part 403
F.2d 979 (C A 6). In that case the Trial Examiner, whose finding was
adopted by the Board and the court, stated
A discrimmatorily discharged employee is required to exercise
reasonable efforts to mitigate his loss of earnings by seeking other
suitable employment . However , there is no requirement that his search
for employment must be limited to the geographical area where he had
been working when he was discriminatorily discharged and there is no
evidence in the record which suggests that Reynolds exercised
unreasonably bad judgment in leaving Detroit to look for work
elsewhere . Furthermore, immediately following his discharge , Reynolds
did look for employment in Detroit and after he left that city he did not
restrict his search for employment to West Virginia but also went to the
State of Ohio and ultimately returned to Detroit . In these circumstances,
contrary to Respondent , I find that the various moves Reynolds made in
the course of his search for employment do not constitute any willful
loss of earnings.
FIBREBOARD PAPER PRODUCTS CORP. 149
reliance on Johnson's "few jobs" and sporadic
employment is also misplaced. Success in finding
employment is not equated with a good faith effort
in seeking employment. 36
In conclusion, we are of the opinion that Johnson
made an honest, good faith effort to obtain work
throughout the hiatus and backpay periods.
Accordingly, we find that Johnson is entitled to
backpay.
(8) The Trial Examiner found that terminated
machinists David Arca and Lincoln Beck forfeited
their right to reinstatement and backpay because of
their picket line misconduct in August 1959. The
Trial Examiner further found that the picket line
activity engaged in by Carl Olson in August 1959,
did not warrant denying him reinstatement and
backpay.
The Respondent excepts to the Trial Examiner's
finding that Olson's conduct did not warrant
forfeiture of his backpay and reinstatement rights.
The General Counsel and the Union except to the
finding that Arca and Beck be denied reinstatement
and backpay, contending that the Trial Examiner
should not have reached the issue whether Arca,
Beck, and Olson were subject to forfeiture of
backpay and reinstatement, because the
Respondent's defense of picket line misconduct with
respect to these employees was not timely raised
("barred by laches"). In the alternative, they
contend that the conduct of Arca and Beck does not
warrant forfeiture of backpay and reinstatement
rights; they agree with the Trial Examiner's finding
with respect to Olson.
We find it unnecessary to decide whether the
alleged picket line misconduct of Arca, Beck, and
Olson would, in other circumstances, have
warranted forfeiture of their backpay and
reinstatement rights, as we agree with the contention
of the General Counsel and the Union that
Respondent's defense with respect to picket line
misconduct was not timely raised.31
The alleged misconduct of Arca, Beck, and Olson
involved picket- line incidents that occurred in
August 1959, more than a month prior to the
original unfair labor practice hearing. The
Respondent does not contend that it had no
knowledge of the alleged misconduct; in fact, it had
litigated the matter of alleged misconduct in the
Alameda County Superior Court from August 24 to
"Mastro Plastics Corporation, Inc , 136 NLRB 1342, enfd 354 F 2d 170
(C A 2), cert denied 384 U S 972 See particularly Heinrich Motors,
Inc , 153 NLRB 1575, enfd 403 F 2d 145, with respect to the effect of an
employee' s attempt at self-employment
"At the backpay hearing, the General Counsel objected to the receipt of
any evidence (oral or documentary ) concerning the alleged picket line
misconduct of Area, Beck and Olson, these objections were overruled The
contention that the Respondent 's defense to the reinstatement and backpay
rights of these backpay claimants could not be raised at this stage of the
proceedings was renewed by the General Counsel in his brief to the Trial
Examiner Nevertheless , the Trial Examiner did not mention the
contention in his Decision
Member Zagoria would adopt the Trial Examiner' s findings as to Area
and Beck
September 11, 1959, which was before the Board's
unfair labor practice hearing , held on September 21
and 22, 1959.
It should be noted that the General Counsel's
complaint of September 2, 1959, alleged the
discharge of the Respondent's maintenance
employees, represented by the Union, as violative of
Section 8(a)(3) as well as Section 8(a)(5) of the Act.38
The Trial Examiner on November 27, 1959,
recommended that the complaint be dismissed in its
entirety 39 On March 27, 1961, the Board sustained
the Trial Examiner's findings (130 NLRB 1558) and
dismissed the complaint. After the Union's May 11,
1961, petition for reconsideration was granted by the
Board, the Respondent, on July 11, 1962, filed a
petition to reopen the record for the introduction of
testimony relating to the reduction of its
maintenance department work force; that petition
made no reference to picket-line misconduct of
terminated employees
The Respondent's petition to reopen the record
was denied (138 NLRB 550, fn. 2) on the grounds
that the matter was one "more properly treated at
the compliance stage of the proceedings." The
Respondent contends that had it moved that the
record be reopened to present evidence that certain
employees had disqualified themselves from
reinstatement and backpay the Board's answer
would have been the same. The Respondent would
thus equate the diminution of jobs, wage rates, and
failure to exercise due diligence in seeking other
work during the backpay period with the issue of
disqualification for misconduct or "cause." We do
not agree with the Respondent's contention, for the
former issues are properly matters for compliance in
that they go to the issue of the amount of
Respondent's liability or damages, whereas the
latter issue goes to the remedy itself (the right to
reinstatement ).40
Moreover, the Respondent fails to consider that
unlike the defense of disqualification for misconduct,
the question of diminution of jobs cannot be
considered with any finality until an offer to
"In view of this fact, the Respondent 's contention that this case should
be contrasted to cases arising under Sec 8(aXi) and (3) appears to be
without substance
"The Alameda County Superior Court issued its findings of fact and
conclusions of law on October 7, 1959 (the decision and judgment were not
rendered by the Court until December 2, 1959), which was before the
parties had filed briefs with the Trial Examiner in the unfair labor practice
proceeding . However, the Respondent did not raise the issue of picket-line
misconduct in its brief to the Trial Examiner , request that the Court's
findings be made part of the record , or request that the record be reopened
to receive evidence in this matter
"For example , if the defense of diminution of jobs is raised, the right to
reinstatement and backpay of the employee involved is not in question,
rather, the issue is whether the Respondent is able to comply ( i e , whether
the employee ' s former or a substantially equivalent position is available) If
an employee ' s position is at first unavailable but later becomes available,
the employee remains entitled to it On the other hand , when an employee
is denied reinstatement and backpay for "cause" (misconduct ) he has no
right to reinstatement or backpay whether his former position is available
or not In this connection see John F Cuneo Co . 152 NLRB 929, where
the Trial Examiner found that an employee had been unlawfully discharged
150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
reinstate has been made and accepted , and the
backpay period is thereby established. The issue of
disqualification for misconduct, however, can be
determined with finality in the original proceeding
(providing the facts were then known) and is not
dependent on the establishment of the backpay
period , or the changing nature of Respondent's
business . Thus, the issue of employee misconduct
("cause" ) which warrants forfeiture of backpay and
reinstatement goes to the remedy and not to the
issue of compliance with the remedy.
We must also consider the effect, if any, of the
Court' s decree enforcing the Board ' s order."
Although we have found no case directly in point,
an examination of the cases indicates that the courts
look with disfavor on belated attempts to assert
misconduct defenses to the reinstatement remedy as
opposed to defenses which go to the amount of the
Respondent's backpay liability which the courts
consider to be questions within the Board 's special
competence. 42
In N.L.R.B. v. Mastro Plastics Corporation, 261
F.2d 147 (C.A. 2), the employer, which had been
ordered to reinstate a number of unlawfully
discharged employees, refused to reinstate one of
them because she had been convicted of disorderly
conduct on the picket-line, both the conduct and the
conviction having occurred before the unfair labor
practice hearing . The Second Circuit held (at 148):
Although the discharge and reinstatement of
these employees were the `central ' issues in
dispute , Mastro never asserted the improper
conduct of Yolanda Flamio or her disorderly
conduct convictions as a ground for not
reinstating her. No valid reason has been offered
by respondents to excuse their failure to raise the
conviction issue before the Trial Examiner. Their
failure to assert the conviction before the Board
would itself have precluded them from asserting it
here in 1954, 29 U.S.C.A. [Section] 160 (e), and
necessarily prevents such assertion now.
Mastro was adjudged guilty of contempt and
required to offer reinstatement to the employee to
purge itself."
but refused to receive the Respondent 's evidence attempting to prove that
reinstatement should be denied because the employee had disqualified
himself for reinstatement . The Board affirmed the finding that the
discharge was unlawful , but remanded the proceeding to the Trial
Examiner for determination of the employee 's suitability for reinstatement
because the determination of that issue at the unfair labor practice hearing
was material to the appropriateness of the usual remedy of reinstatement
and backpay . See also /. Posner , Inc, 133 NLRB 1567, fn I
The Board 's Supplemental Decision and Order was upheld by both the
Court of Appeals for the D.C. Circuit (322 F. 2d 411) and the Supreme
Court (379 U.S. 203). The Supreme Court held that the Board ' s Order was
within its power to fashion remedies , "... when the loss of employment
stems directly from an unfair labor practice as in the case at hand." The
Board 's order is clear and unequivocal as to reinstatement.
The ...Board orders that ... Fibreboard ... offer to those employees
[represented by the Union] immediate and full reinstatement to their
former or substantially equivalent positions....
"See N L.R.B. v. Kohler Co 351 F.2d 798 , 801 (C.A.D.C.). See also
Wallace Corp v. N.L R.B 159 F.2d 952 (C.A. 4), N L. R B. v. Bird
Machine Co., 174 F.2d 404 (C.A. 1).
Likewise, the Fifth Circuit declined to remand a
case to the Board to consider evidence of alleged
union misconduct during a strike (which conduct
had been raised as a defense to the unfair labor
practice), on the issue of reinstatement of strikers,
because there had been, .. . .. no proper offer of
specific and relevant proof on the reinstatement
issue," at the unfair labor practice hearing to show
the strikers were engaged in such misconduct. The
Board's order was enforced."
It therefore appears that the Court decree
enforcing the Board's order that the terminated
machinists be offered reinstatement precludes our
consideration of the misconduct defense at this stage
of the proceeding.
The Respondent could have raised the alleged
misconduct at the hearing held on September 21 and
22, 1959, just a month after the alleged occurrence.
Respondent could have petitioned the Board to
reopen the record to receive the evidence at any
time up to the presentation of the case to the Court
of Appeals, as provided in Section 10(c) of the Act.
Likewise, at any time before the Court of Appeals
decision on July 3, 1963, Respondent could have
applied for a remand to the Board to hear this
evidence, pursuant to Section 10(c) of the Act. In
our opinion, the misconduct defense based on facts
of which the Respondent had knowledge in August
1959, has been raised too late to be now considered
by the Board as a ground for barring reinstatement
and cannot be asserted as a bar in this backpay
proceeding, the purpose of which is to determine the
amounts of backpay due Arca, Beck, Olson" and
the other terminated machinists.
Justice Frankfurter, in N.L.R.B. v. Donnelly
"The Respondent would distinguish Mastro Plastics since the contempt
convictions, in the instant case, were not handed down until more than 2
months after the close of the unfair labor practice hearing . In our opinion
this alleged distinction is without merit , for as the court pointed out,
"Mastro never asserted the improper conduct ... or her disorderly conduct
conviction as a ground for not reinstating her." (Emphasis supplied.) The
court's language indicates that the defense would not have been barred if
either the improper conduct or the conviction had been asserted in the
original proceeding . Moreover , it should be noted that both the Board and
the courts have indicated that a contempt conviction for violation of a
state court injunction is not controlling or diapositive on the question of
whether employees should be reinstated . (see N L. R.B v Cambria Clay
Products Co, 215 F .2d 48 , (C.A. 6); J H. Rutter-Rex Mfg Co.. Inc, 158
NLRB 1414, 1419 , fn. 8).
"N.L.R.B v. Lambert , d/b/a Sue-Ann Mfg Co., 211 F.2d 91 (C.A. 5)
The Respondent, however, citing Elmira Machine and Specialty Works,
Inc, 148 NLRB 1695, contends that if the Board finds the misconduct
defense barred, its finding will be contrary to its own precedent.
In our opinion, Elmira is distinguishable from the instant case on at
least 2 grounds : First , there is no indication that the impropriety of
considering misconduct of reinstated employees in the backpay proceeding
was asserted , neither the General Counsel nor the union filed exceptions to
the Trial Examiner 's Supplemental Decision . Therefore, the Board did not
pass on the issue.
Secondly , in Elmira there was not an intervening court decree enforcing
the Board 's reinstatement order as in the instant case.
"Olson was not offered reinstatement by Respondent . The Trial
Examiner computed Olson 's backpay to June 30 , 1967, apparently the date
upon which the Trial Examiner thought Olson 's job was eliminated
However , the parties stipulated that Olson's job was eliminated on October
21, 1967, and not June 30. Accordingly, we have computed Olson's
backpay to the date his job was eliminated , October 21, 1967.
FIBREBOARD PAPER PRODUCTS CORP.
Garment Co., 330 U.S. 219, succinctly stated the
principle involved:
Due process does not afford a party the right to
treat as a dress rehearsal a hearing on the issues
for which the hearing was adequate. And the
Wagner Act does not require that ground be
„covered a second time, or piecemeal.
Accordingly, we find that backpay claimants Arca66
and Beck are entitled to reinstatement. 07
(9) Certain terminated machinists" elected to take
early retirement benefits (also referred to as pension
benefits) on August 1, 1959. These employees
received monthly retirement benefits during the
hiatus period as well as the backpay period. The
Trial Examiner found that the early retirement
benefits paid during the hiatus period as well as
during the backpay period be deducted from gross
backpay.
The General Counsel and the Union except to the
Trial Examiner's finding, contending that although
early retirement benefits paid during the backpay
period may constitute a valid deduction against
backpay owed, the same is not true with respect to
the early retirement benefits paid during the hiatus
period. We find merit in this contention.
It was uncontested that these employees would
not have elected to take early retirement benefits
except for their unlawful termination. We also note
that under the terms of the retirement plan, the
early retirement benefits were not paid by the
Respondent but by the Retirement Fund itself.
Moreover, an undertermined part of the early
retirement benefits paid represents the employees'
own contributions to the Retirement Fund made
over a period of years. Thus, it appears that having
met the requirements for early retirement benefits,
the employees were entitled to these benefits as a
matter of right.
The purpose of the backpay remedy is to make
unlawfully terminated employees whole. Interim
"The General Counsel contends , and we agree, that the backpay period
for Area and Beck still continues and will continue until such time as the
Respondent extends to them an adequate offer of reinstatement
The Trial Examiner erroneously found that there was no dispute as to
the average base-period quarterly earnings of the machinists since there is
such a dispute with respect to the average quarterly earnings of David
Area. Area was on leave of absence to attend to union business for 8 8
weeks during the base period (August 4, 1958, to July 31, 1959) The
General Counsel, as he did with all other employees who did not work a
full year during the base period, projected Area's average quarterly
earnings during a full year. He arrived at average quarterly earnings of
$2,045 19 for Area The Respondent , although it conceded the correctness
of such projections made as to other employees , objects to such a
projection in the case of Area We find the method employed by the
General Counsel to be a reasonable means for determining average
base-period quarterly earnings , and that it is Just as reasonable for Area as
it is for the other employees We have , therefore , calculated Area's
backpay on the basis of $2,045 19 average base -period quarterly earnings.
"Contrary to the General Counsel 's contention , we find that the hourly
wage rates set forth in the collective bargaining agreement between the
Respondent and the Union , effective July 15, 1965, retroactive to March
22, 1965, and not the "Pabco formula" should be applied in computing the
backpay of Area, Beck and Olson after March 22, 1965
"Bennett , Capps, Crispino, Fuller, Gronberg , Hamidy, Hughes, ET
Johnson, J P Johnson , Lowell, Nash, and Smith.
151
"earnings" (if the retirement benefits are considered
earnings - if not, they are clearly not deductible)
from whatever sources are deducted from backpay
because otherwise unlawfully terminated employees
would be made more than whole or receive a
windfall. Since backpay did not accrue during the
hiatus period, under the Board's quarterly method
of determining backpay owing," early retirement
benefits received in that period should not be
deducted from backpay which accrued after the
hiatus period. Accordingly, we have not allowed the
early retirement benefits paid during the hiatus
period as a deduction against backpay.
(10) Finally, we turn to a discussion of our
understanding of the Respondent's retirement plan
and how it will be applied with respect to the
backpay claimants. The Plan operates as follows:
The employees' contributions (by payroll
deductions) to the Plan are determined by the
amount of their earnings. In addition, the
Respondent contributes those amounts which are
actuarily determined to be necessary so that when
added to the employees' contributions, they will
assure an adequate fund from which to pay
retirement and death benefits called for in the Plan.
Upon retirement an employee receives a monthly
income drawn from the past and current service
benefits (provided by the employer's and employees'
contributions) which have accrued to his account. A
member of the Plan whose employment is
terminated and who has completed 20 years of
service and attained age 55 can elect to continue as
a participant in the Plan and receive a retirement
income either immediately or after age 65.
Alternatively, a terminated employee who does not
meet the foregoing requisites receives a refund, with
interest, of his deposits.
The Trial Examiner found and we agree that
although the terminated employees are not entitled
to current service benefits during the hiatus period,
they are entitled to be treated as having been in
service for that period. Thus, the hiatus period
would not be considered a break in service and the
rights of the backpay claimants would be enhanced
under the provisions of the Plan which make length
of service a factor to be considered. Among these
are length of service prerequisite to participation in
the Plan (sec. 6(b)), guaranteed minimum retirement
income (sec. 13(a)), amount of death benefit (sec.
14), and vesting (sec. 15).
The Union and the General Counsel contend that
if Respondent is not liable for contributions to the
Plan during the hiatus period as found by the Trial
Examiner (a finding we adopt), the Respondent
should be liable for contributions during the
backpay period, and should at each employee's
option pay these contributions either to the
retirement fund or directly to the employee. We do
"Under the Board 's quarterly method of determining backpay owing,
interim earnings received in one quarter are not deducted from backpay
accrued in another quarter . (see F W. Woolworth Co, 90 NLRB 289).
152 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
not agree, because affording the employees such an
option would be contrary to the express provisions
of the Plan which provides that prior to retirement
an employee's interest in the fund is vested only to
the extent of his own deposits.
What is required by the Board's order is that the
terminated employees be treated as having been
employed during the backpay period during which
time both the employees and the Respondent would
have made contributions to the Plan. If they would
have retired during this period or become eligible
for early retirement (20 years service and age 55)
during this period, they are entitled to elect to
receive retirement income or their deposits.
At the time of their termination each of the
machinists who did not elect or was ineligible for
early retirement or terminated vested status (by
which retirement benefits are deferred to age 65)
was refunded his Retirement Plan deposits. In order
to participate now in the Plan, assuming eligibility
(length of service and age) it would be necessary for
a terminated employee to pay back to Respondent
the deposits refunded in 1959 along with deposits
(employee contributions) owing on the amount he
would have received as wages from Respondent
during the backpay period. The Trial Examiner felt
that these deductions should not be made from
backpay unless the men were first given the option
of continuing in the Plan and for this reason he did
not deduct the deposits refunded in 1959 or the
employees' deposits due on backpay. We agree.
The Respondent contends that only the employees
who accepted reinstatementSO are eligible to make
this election. We do not agree. For, we are of the
opinion that any employee awarded backpay who
meets the length of service requirement (assuming
he also meets the age requirement) by virtue of the
hiatus and backpay period, whether he accepted
reinstatement or not, should be offered the
opportunity to continue in the Plan, and we so find.
Certain employees took early retirement benefits
upon termination in 1959;5i none of them accepted
reinstatement. The Respondent agrees that the
monthly retirement benefits of those terminated
machinists who elected to take early retirement
benefits and are entitled to backpay should be
recalculated based on the amount of employee and
employer contributions which would have accrued
during the backpay period.62 We have found that the
early retirement benefits received by these
employees should be deducted for the period that
they were entitled to backpay. In addition, the
Respondent should be credited with the amounts
"These are Cruze, Bradford, Lippert, Homen , Longnecker, Price,
Ramer, Rexhl , Swisher , Weismiller, and Novacek . Of these, Homen and
Swisher were not awarded backpay because their jobs were eliminated
"These men were Bennett , Capps, Cnspino, Fuller, Gronberg, Hamxdy,
Hughes, E.T Johnson , J.P Johnson , Lowell, Nash, and Smith . Of these
Nash , Crispino, Hamidy, Bennett, Lowell, Hughes, and E T Johnson were
eligible to receive backpay
"In addition , Cruze and F C. Johnson , who deferred their pension
benefits to age 65, are entitled to have their monthly pension recalculated
upon payment of employees' pension contributions due on backpay.
these employees would have contributed to the Plan
during the backpay period. Therefore, the amounts
for early retirement and pension deposits for these
employees have been deducted. These are set forth
in the Appendix to this decision.13
Finally, we agree with the Respondent's
contention that no provision need be made with
respect to its responsibility to make contributions to
the Plan for wages accruing during the backpay
period to those employees who elect to continue in
the Plan, or those employees who are entitled to
have their pension benefits recalculated. For as the
Respondent points out "these [contributions] will
follow automatically from the Company's
responsibility to keep the fund actuarially sound."
We therefore assume that these contributions will be
provided under the express provisions of the plan.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Fibreboard Paper Products Corporation, its officers,
agents , successors, and assigns , shall make the
employees involved in this proceeding whole by
payment to them in the following amounts:
Name Back Pay Due
Machinists
1. Nash, Lloyd J. (see Appendix) $1,272.71
2. Jackson, Warren C. 8,217.48
3 Beck, Lincoln E. (see Appendix) 27,850.39
4. Wittorff, Detlif C. 5,529.70
5. Crispino, Manuel (see Appendix) 318 57
6. Hamidy, Robert (see Appendix) 1,722.49
7. Cruze, Joseph S. 10,752.27
8. Johnson, Fred Clarence 19,293.91
9. Schlotterbeck, Eugene 9,782.66
10. Bennett, Florin F. (see Appendix) 62.96
11. Schoenfeld, Milton H. (see Appendix) 5,546.32
12. Arca, David (see Appendix) 6,704.69
13. Goranson, George W. 4,830.68
14. Jensen, Raymond D. 16,792.36
15. Longnecker, Joe E. 8,906.63
16. Bradford, Harry C. 8,062.19
17. Fusare, Alex J. 8,661.34
"The Appendix also includes the computations utilized in determining
the amount of backpay to be awarded to individual employees in each
instance where our computations differ from those set forth in Appendix
B-2 of the General Counsel' s Backpay Specification. Among the reasons
which made it necessary to modify some of the General Counsel's
computations are. the correction of mathematical errors; the General
Counsel computed backpay through December 31, 1962, for all of the 7
employees whose compulsory retirement dates were disputed , the General
Counsel computed the backpay of Arca, Beck , and Olson by means of the
"Pabco formula" wage rates after March 22, 1965, instead of the rates set
forth in the July 15, 1965, collective- bargaining agreement between
Respondent and the Union which was retroactive to March 22, 1965,
certain employees were not eligible for backpay during the entire backpay
period but only from dates that jobs became available due to the disability
or retirement of other backpay claimants , and in one instance (Griffin) the
General Counsel' s computations provide backpay through January 31,
1964, though it was agreed his job would have been eliminated on January
15, 1964.
FIBREBOARD PAPER PRODUCTS CORP. 153
18. Price, Joe
19. Cunningham, Harry L
20. Ramer, Louis C
21. Reihl, William W
22. O'Leary, Vincent Johns'
23 Fontcs, Clifford L.ss
24 Lippert, Donald W."
25. Vanderbeck, Joseph P s' (see Appendix)
26. Weismiller, Jr, Gerald38 (see Appendix)
Power House Employees
27 Lowell, Fredric Lincoln (see Appendix)
28. Hughes, Robert Edgar (see Appendix)
29. Haueter, Herbert F
30 Johnson, Elmer T (see Appendix)
31. Novacek, George R
32 Olson, Carl W (see Appendix)
33. Giffin, John L (see Appendix)
34 Mann, Eugene G.
35. Van Zoen, Jacque J
36. Wall, James R
With respect to those employees whose
still accruing , s' as found herein , payment
the amount found to be due and accruing
22,230 90
12,093 51
21,688.93
6,671.27
7,986 24
3,086.78
8,895 02
6,691 99
3,575 64
$5,851 83
18,082 36
11,044.87
18,305 72
7,326 95
12,615 70
3,209 82
7,819.12
3,892 18
5.555.77
$330,931 95
backpay is
to them of
constitutes
satisfaction of Respondent's obligation only up to
the date set forth in the Appendix, which is the end
of the period covered by the backpay specification.
54The opening for O'Leary was created by the fact that Crispino was
disabled from prior to the commencement of the backpay period until his
compulsory retirement date (10/1/62)
"The opening for Fontes was created by the fact that Bennett was
disabled from prior to the commencement of the backpay period until his
compulsory retirement date (12/1/62)
"The opening for Lippert was created by the fact that Cruze was
disabled from prior to the commencement of the backpay period until
Hamidy ' s retirement date (12 /l/62) Thus, Lippert would have replaced
Cruze from "9/14/62 to 12/1/62" and Hamidy thereafter
"The opening for Vanderback was created by Ciuze' s continued
disability from "12/1/62" (Hamidy 's retirement date ) until "4/1/63,"
Wittorffs retirement date Thus, Vanderbeck would have replaced
Lippert (who replaced Cruze from -9/14/62 to 12/ 1 /62" and then
Hamidy, whose retirement date was 12 / 1/62) for the disabled Cruze from
"12/1/62 to 4/ 1/63" and then Wittorff whose retirement date was
"4/l/63" for the remainder of the backpay period
"The first opening for Weismiller was created by Craze's continued
disability from "4/1/63" (the date Vanderbeck would have become eligible
for the retiring Wittorff'sjob) to 4/15/63 when Cruze would have returned
to work The second opening was created when Nash reached his
compulsory retirement date on 3/1/64
"David Arca and Lincoln Beck
APPENDIX
Machinists
NASH, Lloyd J
Compulsory retirement date March 1, 1964
Year & Gross
Quarter Backpay
1962-3
1962-4
1963-1
1963-2
1963-3
1963-4
1964-1
TOTALS
BECK, Lincoln E.
443 54
2,334.43
2,334.43
2,334 43
2,418 10
2,459 95
1,63996
$13,964.84
Year & Gross
Quarter Back Pay
1962-3
1962-4
1963-I
1963-2
469 75
2,472 37
2,472 37
2,472.37
Net Interim Net
Earnings Back Pa
314 97
1,91075
1,889 15
1,970.35
2,120.01
1,873 55
1,331 17
$11,40995
128 57
423.68
445 28
364.08
298 09
586 40
308.79
y
$2,554.89
Medical
Expenses
6.43
34.80
38.10
38.10
38 10
38 10
26 60
$220 23
Total Net Quarterly Backpay 2,554 89
Medical Expense 220.23
Net Back Pay 2,775 12
Early Retirement Benefits' 1,092 17
1,682.95
Pension Deposits' 410 24
Total Backpay $1,272 71
Net Interim Net Medical
Earnings Back Pay Expenses
218.33
1,310.92
474.82
474.82
251 42
1,161 45
1,997 55
1,997.55
2.10
12.60
14 25
14.25
'Less early retirement benefits received during backpay period
'Less employees pension deposits on backpay This backpay claimant is
entitled to have his monthly pension benefit recalculated
154 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1963-3 2,560.97 474.82 2,086.15 14.25
1963-4 2,605.30 474.82 2,130.48 14.25
1964-1 2,605.30 284.69 2,320.61 14.25
1964-2 2,605.30 284.69 2,320.61 14,25
1964-3 2,605.30 284.69 2,320.61 14.25
1964-4 2,605.30 284.69 2,320.61 14.25
1965-1 2,572.94 1,188.16 1,384.78 14.25
1965-2 2,313.77 1,188.17 1,125.60 14.25
1965-3 2,313.77 1,188.16 1,125.61 14.25
1965-4 2,313.77 1,188.17 1,125.60 14.25
1966-1 2,313.77 1,656.46 657.31 14.25
1966-2 2,313.77 1,656.46 657.31 14.25
1966-3 2,367.49 1,656.46 711.03 14.25
1966-4 2,376.96 1,656.47 720.49 14.25
1967-1 2,376.96 1,794.75 582.21 14.25
1967-2 2,376.96 1,794.75 582.21 14.25
TOTALS $47,114.49 $19,535.30 $27,579.19 $271.20
Total Net Quarterly Back Pay $27,579 1
Medical Expense 271 2
Total Backpay as of 6 /30/67 $27,850.3
NOTE : Backpay period not yet ended , as Beck has not yet received offer of reinstatement.
'Backpay from 3/22/65 computed on basis of rates included in
collective-bargaining agreement between Respondent and the Union
effective July 15, 1965, retroactive to March 22, 1965.
CRISPINO , Manuel
Disabled until compulsory retirement date on October 1,1962.
Year & Gross * -Net Interim Net Medical
Quarter Back Pay Earnings Back Pay Expenses
1962-3 I 376.20 0.00 376.20 3.95TOTALS $376.20 0.00 $376.20 $3.95
Total Net Quarterly Back Pay
Medical Expense
Net Back Pay
Early Retirement Benefits'
Pension Deposits'
Total Back Pay
'Straight-tune pay at $4.275 per hour under Respondent 's salary plan
during period of disability.
376.20
3.95
380.15
54.06
326.09
7.52
$318.57
FiA MIDY, Robert
Year & Gross
Quarter Back Pay
Net Interim Net Medical
Earnings Back Pay Expenses
1962-3 424.99 0.00 424.99 6.75
1962-4 1,490.20 0.00 I 1,490.20 40.50TOTALS $1,915.191 $0.00 $1,915.19 $47.25
Total Net Quarterly Back Pay
Medical Expense
Net Back Pay
Early Retirement Benefits'
Pension Deposits'
Total Back Pay
1,915.19
47.25
1,962.44
201.65
1,760.79
38.30
$1,722.49
' Less early retirement benefits received during backpay period.
'Less employees pension deposits on backpay . This backpay claimant is
entitled to have his monthly pension benefit recalculated
FIBREBOARD PAPER PRODUCTS CORP. 155
BENNETT, Florin F.
Disabled until compulsory retirement date December 1, 1962.
Year & Gross Net Interim Net Medical
Quarter Back Pay Earnings Back Pay Expenses
1962-3
1962-4
239.40
0.00
0.00
0.00
239.40
0.00
5.27
17.70
TOTALS $239 40 $0.00 $239.40 $22.97
otal Net Quarterly Back Pay $239.40
Medical Expense 22 97
Net Back Pay 2o2 37
Early Retirement Benefits' 194.62
6775
Pension Deposits= 4.79
otal Back Pay $62.96
'Represents seven work days from September 13 to September 22, 1962
at S4 275 per hour
SCHOENFELD, Milton H.
Year & Gross Net Interim Net Medical
Quarter Back Pa y Earnings Back Pay Expenses
1962-3 432.08 298.97 133.11 4.92
1962-4 2,274.11 1,794.75 479.36 26.62
1963-1 2,274.11 1,794.75 479.36 27.62
1963-2 2,274.11 1,794.75 479.36 29.87
1963-3 2,355.62 1,794.75 560.87 29.12
1963-4 2,396.38 1,794.75 601.63 29.12
1964-1 2,396.38 1,794.75 601.63 27.62
1964-2 2,396 38 1,794.75 601.63 30.87
1964-3 2,396.38 1,794.75 601.63 26.62
1964-4 2,396.38 1,794.75 601.63 26 62
1965-I 463.82 322.03 141.79 5.32
TOTALS $22,055.75 $16,773.75 $5,282.00 $264.32
Total Net Quarterly Back Pay
Medical Expense
Total Back Pay
ARCA, David
Year & Gross Net Interim Net Medical
Quarter Back Pay Earnings Back Pay Expenses
1962-3 471.28 291.49 179.79 0.00
1962-4 2,480.41 1,981.04 499.37 0.00
1963-1 2,480.41 2,951.41 0.00 0.00
1963-2 2,480.41 2,069.61 410.80 0.00
1963-3 2,569.32 2,069.61 499.71 0.00
1963-4 2,613.77 3,263.58 0.00 0.00
19641 2,613.77 2,099.41 514.36 0 00
1964-2 2,613 77 2,154.88 458.89 0.00
1964-3 2,613.77 2,127.94 485.83 0.00
1964-4 2,613.77 2,387.77 226.00 0.00
*1965-1 2,581.30 2,025.78',' 555 52 0.00
'Backpay beginning March 22, 1965, computed on basis of rates
included in collective - bargaining agreement between Respondent and the
Union effective July, 15, 1965, retroactive to March 22, 1965
$5,282.00
264.32
$5,546.32
'Less early retirement benefits received during backpay period
'Less employees pension deposits on backpay This backpay claimant is
entitled to have his monthly pension benefit recalculated
156 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
1965-2 2,321.29 2,453.66 0.00 0.00
1965-3 2,321.29 2,243.25 74.08 0.00
1965-4 2,321.29 2,742.85 0.00 0.00
1966-1 2,321.29 2,700.00 0.00 0.00
1966-2 2,321.29 2,925.00 0.00 0.00
1966-3 2,375.18 2,925.00 0.00 0.00
1966-4 2,384.69 398.00 1,986.69 0.00
1967-1 2,384.69 1,575.00 809.69 0.00
1967-2 2,384.69 2,730.00 0.00 0.00
TOTALS $47,267.68 $44,115.28 $6,704.69 $ 0.00
Total Net Quarterly Back Pay $6,704.69
Medical Expense 0.00
NOTE: Backpay period not yet ended, as
Total Back Pay as of 6/30/67
Area has not yet received offer of reinstatement.
$6,704.69
VANDERBECK, Joseph P.
Year & Gross Net Interim Net Medical
QU arter Back Pay Earnings Back Pay Expenses
*1962-4 918.56 597.31 321.25 0.00
1963-1 2,701.66 2,078.88 622.78 0.00
1963-2 2,701.66 1,756.80 944.86 0.00
1963-3 2,798.48 2,274.80 523.68 0.00
1963-4 2,846.92 2,018.20 828.72 0.00
1964-1 2,846.92 2,150.40 696.52 0.00
1964-2 2,846.92 1,855.20 991.72 0.00
1964-3 2,846.92 2,234.40 612.52 0.00
1964-4 2,846.92 1,915.20 931.72 0.00
1965-1 551.02 332.80 218.22 0.00
TOTALS1 $23,905.98 1 $17,213.99 1 $6,696.99 0.00
Total Net Quarterly Back Pay 6,691.99
Medical Expense
Total Back Pay $6,691.99
'The opening for Vanderbeck was created by Cruze's continued disability
from 12/ 1/62 (Hamidy's retirement date ), until 4/1/63, Wittorfrs
retirement date.
WEISMILLER, JR., Gerald
(Reinstated)
Year & Gross Net Interim Net Medical
Quarter Back Pay Earnings Back Pay Expenses
1963-2 * 461.71 294.43 167.28 1.50
19641** 973.08 775.73 197.35 3.19
1964-2 2,861.99 1,944.75 917.24 9.39
1964-3 2,861.99 1,997.92 864.07 9.39
1964-4 2,861.99 1,697.02 1,164.97 9.39
1965-1 553.94 323.95 229.99 1.88
TOTALS 1 1 $10,574.70 $7,033.80 $3,540.90 $34.74
Total Net Quarterly Back Pay 3,540.90
Medical Expense 34.74
Total Back Pay $3,575.64I
'The first opening for Weismiller was created by Cruze's
continued disability from 4/1/63 (the date Vanderbeck would have become
eligible for the retiring Wittorfrs slot) to 4/15/63 and was terminated by
Cruze' s return to work.
"The second opening was created when Nash reached his compulsory
retirement date on 3/1/64
FIBREBOARD PAPER PRODUCTS CORP. 157
Power House Employees
LOWELL, Fredric Lincoln
Year & Gross Net Interim Net Medical
Quarter _ Back Pay Earnings Back Pay Expenses
1962-3 540.90 298.97 241.93 0.00
1962-4 2,846.83 2,012.99 833.84 0.00
1963-1 2,846.83 2,434.05 412.78 0.00
1963-2 2,846.83 1,962.35 884.48 0.00
1963-3 2,948.86 2,082.06 866.80 0.00
1963-4 2,999.90 2,002.93 996.97 0.00
1964-1 2,999.90 2,076.03 923.87 0.00
1964-2 2,999,90 1,989.39 1010.51 177.60
1964-3 2,999.90 2,079.39 920.51 0.00
1964-4 2,999.90 2,022.75 977.15 0.00
1965-1 580.63 422.76 157.87 0.00
TOTALS $27,610.38 $19,383.67 $8,226.71 $177.60
Total Net Quarterly Back Pay $8,226.71
Medical Expense 177.60
Net Back Pay 8,40431
Early Retirement Benefits ' 1,639.68
6,764.63
Pension Deposits ' 912.80
Total Back Pay $5,851.83
HUGHES, Robert Edgar
Compulsory retirement date 10/1/64
Year & Gross Net Interim Net Medical
Quarter Back Pay Earnings Back Pay Expenses
1962-3 543.66 131.67 411.99 5.07
1962-4 2,861.35 693.18 2,168.17 27.45
1963-1 2,861.35 650.57 2,210.78 27.45
1963-2 2,861.35 650.57 2,210.78 27.45
1963-3 2,963.90 650.57 2,313.33 27.45
1963-4 3,015.20 650.57 2,364.63 27.45
1964-1 3,015.20 334.51 2,680.69 27.45
1964-2 3,015.20 334.51 2,680.69 224.95
1964-3 3,015.20 334.51 2,680.69 27.45
TOTALS $24,152.41 $4,430.66 $19,721.75 $422.17
Total Net Quarterly Back Pay 19,721.75
Medical Expense 422.17
Net Back Pay 20,143.92
Early Retirement Benefits' 1,275.47
18,868.45
Pension Deposits' 786.09
otal Back Pay $18,082.36
' Less early retirement benefits received during backpay period.
'Less employees pension deposits on backpay . This backpay claimant is
entitled to have his moody pension benefit recalculated.
158 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
JOHNSON, Elmer T.
Year & Gross Net Interim Net
Quarter Back Pay Earnings Back Pa
1962-3
1962-4
1963-1
1963-2
1963-3
1963-4
1964-I
1964-2
1964-3
1964-4
1965-1
TOTALS
509 55
2,681 83
2,681.83
2,681.83
2,777.94
2,826 03
2,826 03
2,826 03
2,826 03
2,826.03
546.98
$26,010.11
166 85
878.31
752.99
752.99
752 99
752 99
476 42
476.42
476 42
476.42
95 29
$6,058 09
342.70
1,803.52
1,928.84
1,928.84
2,024.95
2,073 04
2, 349 61
2,349.61
2,349.61
2,349.61
451.69
$19,952.02
Medical
Expenses
7.69
39.10
39.10
39.10
39 10
'39 10
39.10
39.10
39.10
39.10
7.82
$367.41
Total Net Quarterly Back Pay $19,952 02
Medical Expense 367 41
OLSON, Carl W.
Q
Year &
uarter
1962-3
1962-4
1963-1
1963-2
1963-3
1963-4
*1964-1
1964-4
* *1965-1
1965-2
1965-3
1965-4
1966-1
1966-2
1966-3
1966-4
1967-1
1967-2
1967-3
1967-4
TOTALS
Net Back Pay
Early Retirement Benefits'
Pension Deposits'
Total Back Pay
Gross Net Interim Net
Back Pay Earnings Back Pa
523.93
2,757 51
2,757.51
2,757.51
2,856.34
2,905 77
484.39
2,905.77
2,869 68
2,580.62
2,580.62
2,580 62
2,580.62
2,580.62
2,640.54
2,651.10
2,651.10
2,651.10
2,716.81
627 53
$47,659.69
280.66
1,540.18
1,57432
1,853.77
1,844.29
1,565.20
271.09
1,859.38
2,397.29
2,397.29
2,397.29
2,397 29
2,000.92
2,000.92
2,000.92
2,00092
2,078.57
2,078.57
2,078.57
426.55
$35,043.99
243.27
1,217 33
1,183 19
903 74
1,012.05
1,34057
213 20
1,046.39
472.39
183.33
183.33
183.33
579.70
579.70
639.62
650.18
572.53
572 53
638.24
200 98
y
$12,615.70
20,319.43
1,164 24
19,155.19
849 47
$18,305 72
Medical
Expenses
0.00
0 00
0 00
0.00
0.00
0.00
0.00
0 00
0.00
0 00
0.00
0.00
0.00
0 00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
Total Net Quarterly Back Pay 12,615.70
Medical Expense
Total Backpay as of 6/30/67 $12,615 70
NOTE: Backpay period ended October 21, 1967, upon elimination of his job Not yet offered reinstatement
'Job eliminated January 15, 1964 , due to installation of automatic
controls in power house . An opening was created for Olson on 10/1/64,
the compulsory retirement date of Hughes
' 'Backpay from 3/22/65 computed on basis of rates included in
collective-bargaining agreement between Respondent and the Union
effective July 15, 1965. retroactive to March 22. 1965
' Less early retirement benefits received during backpay period.
'Less employees pension deposits on backpay This backpay claimant is
entitled to have his monthly pension benefit recalculated
FIBREBOARD PAPER PRODUCTS CORP. 159
GIFFIN, John L.
Year & Gross Net Interim Net Medical
Quarter Back Pay Earnings Back Pay Expenses
1962-3 476.38 544.66 0.00 0.00
1962-4 2,507.26 1,478.45 1,028.81 0.00
1963-1 2,507.26 1,602.72 904.54 0.00
1963-2 2,507.26 1,710.28 796.98 0.00
1963-3 2,597.12 2,117.63 479.49 0.00
1963-4 2,642.07 3,232.65 0.00 0.00
*1964-1 435.41 512.64 0.00 0.00
TOTALS $13,672.76 $11,199.03 $3,209.82 0.00
Total Net Quarterly Back Pay
Medical Expense
Total Back Pay
3,209.82
$3,209.8200
'Job eliminated January 15, 1965, due to installation of automatic
controls in power house.
TRIAL EXAMINER'S BACKPAY DECISION'
History of Proceedings
HENRY S. SAHM, Trial Examiner: The Company and
the Union have had a history of collective bargaining
dating from 1937.' The last of these contracts expired on
July 31, 1959. Between 1954 and 1956 the Respondent
Company had under consideration the feasibility of
contracting out its maintenance work as a measure of
effecting plant economies. The study was renewed in June
1959. As a result of the renewed study, Respondent let out!
its maintenance work to an independent contractor and
terminated 53 of its maintenance employees. The Union
then initiated proceedings and the Board found the
Company to have committed an unfair labor practice
within the meaning of Section 8(a)(5) of the National
Labor Relations Act, herein called the Act,' and ordered
the Company to reinstitute the maintenance operation
performed by the employees represented by the Union and
to reinstate the employees to their former or substantially
equivalent positions with backpay computed from the date
of the Board's supplemental decision to the date of the
Company's offer of reinstatement to the terminated
employees.' On appeal, the Court of Appeals for the
District of Columbia granted the Board's petition for
enforcement, 322 F.2d 411. The decision was affirmed by
the Supreme Court, 379 U.S. 203, on December 14, 1964.
A controversy then arose over the amount of backpay
due the terminated employees. The General Counsel
claimed $378,545; the Respondent Company, $118,136.
'The transcript of the hearing is hereby corrected in accordance with the
parties ' joint motion dated February 19, 1968.
'The Company is referred to interchangeably herein as Respondent and
Fibreboard and the Union also as Local 1304.
'The Board in its original decision ( 130 NLRB 1558) dismissed the
complaint but upon reconsideration it found the Respondent had violated
the Act and ordered reinstatement and backpay for the terminated
employees (138 NLRB 550).
'138 NLRB 550. The Board limited backpay to earnings which might
have been received from and after the Board's final order in its
supplemental decision and not from the date the Company terminated the
employment nor from the date of the original decision.
Thereafter, the Regional Director for the Twentieth
Region on August 17, 1967, issued backpay specifications
for the purpose of determining the amount of backpay, if
any, due to these terminated employees. Respondent
thereupon filed an answer which was subsequently
amended on October 13, 1967. Hearings were held after
prehearing proceedings before Trial Examiner Henry S.
Salim in San Francisco, California, on various dates
between October 16 and December 15, 1967. Briefs were
filed by the parties on February 19, 1968, and reply briefs
10 days later.
The Salient Issues
1. Although there is agreement among the parties as to
the base period quarterly earnings for the year preceding
August 1, 1959, and also for interim earnings, medical
expenses and other deductible expenses, there is
disagreement as to the wage formula that should be
applied in computing the terminated employees' gross
backpay during the backpay period which commences on
September 14, 1962, and ends on January 18, 1965. The
contract under which the parties operated prior to the
time the employees were terminated had a wage formula
which provided that wage scales shall be established at 12
1/2 cents per hour less than the building trades
millwrights' rate. The Employer, Fibreboard, takes the
position that since this contract expired on July 31, 1959,
when the employees were terminated, the validity of this
formula expired with it. Therefore, its argument continues,
one must look to or have recourse to other indicia in
determining what the appropriate wage rate should be
during the backpay period. This wage rate, contends
Respondent, should be the hourly wage rates paid its
ILWU millwrights who from 1946 to 1959 received the
same rate and did comparable work as the terminated
machinists.
The Union's position is that the contract did not
terminate but continued in effect, automatically renewed
each year for a 1-year term from August 1, 1959, until the
parties negotiated a new contract in July 1965. Therefore,
argues the Union, the above-described formula embodied
in the contract is the most appropriate measure of the
wage scale available and, accordingly, should be applied.
160 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The General Counsel argues that whether or not the
contract terminated is immaterial because the best
objective formula to be applied in computing the
employees' gross backpay is the formula in the contract
which was used since 1951 to establish the employees'
wage scale.
2. Also, in dispute is the number of jobs which were
available during the backpay period when the terminated
employees were replaced by an independent contractor.
3. Whether the Company is obligated to the discharges
for certain specified pension benefits for the period from
August 1, 1959 (the date of the employees' termination),
to September 14, 1962 (the date the Board's supplemental
decision issued), for which period of time no backpay was
ordered by the Board.
4. Whether severance payments made at the time the
employees were terminated should be deducted from
backpay due.
5. What the appropriate compulsory retirement dates
are with respect to seven terminated employees.
6. Whether interest on backpay should accrue even
though the Board's supplemental decision contained no
order that interest be paid.
7. Whether three dischargees forfeited their rights to
reinstatement and backpay because of alleged picket line
violence.
COMPUTATION OF GROSS BACKPAY
The General Counsel and Union's Contentions
Counsel for the General Counsel and the Upton
contend gross backpay should be computed on the basis of
the terminated employees' basic wage rate to the wage
rate of the construction millwrights in the Bay Area of
Northern California. This "objective" criterion, they state,
was originally embodied in the Union and Respondent
Company's collective-bargaining agreement effective
August I, 1951,° and had been incorporated in each
succeeding agreement through July 31, 1959. Section I of
these collective-bargaining agreements established the
wage scale formula of the unit employees ' "at one dollar
per day less than the prevailing Building and Construction
Crafts' scale" [construction millwrights] and further
provided that the said wage scale "shall be. applied
automatically August 1 of each year."' The said
agreements also established a workday of 8 hours.
Accordingly, the $1 per day amounted to a differential of
12 1/2 cents per hour.'
The construction crafts' [millwrights] hourly scale for
work of the type performed by the unit maintenance
machinists employees , the dischargees herein, as set forth
in applicable contracts during the backpay period of
September 14, 1962, to January 18, 1965, was as follows:
June 16, 1962 - $4.40; June 16, 1963 - $4.63, and June
16, 1965 - $4.925.' Accordingly, contends the General
'Union's Exh. 4
'Classifications encompassed within the unit of maintenance employees
were : maintenance machinists , firemen , engineers, helpers, and working
foreman ; See Appendix "A" of Union's Exh 4.
'The terms "building trades millwrights , building and construction
crafts," and "construction millwrights" are used interchangeably in the
transcript and in this decision.
'Also known as the "Pabco formula " See sec. I of Union 's Exh 4.
'The wage rates of'the construction crafts, also referred to as building
trades millwrights , that were in effect from 1959 to the beginning of the
backpay period were : June 16 , 1959 - $3.76 an hour; June 16, 1960 -
$3.94 1/2, and June 16 , 1961 - $4 18
Counsel and the Union, the basic hourly wage rate of the
terminated employees which should be applied in
computing their gross backpay is 12 1/2 cents per hour
less than the construction crafts' scale or: August 1, 1962
- $4.275; August 1, 1963 $4 505, and August 1, 1965
$4.80.
The General Counsel claims that the quarterly gross
backpay for each terminated employee should be
determined by multiplying each one's average quarterly
earnings by a factor obtained by dividing the applicable
backpay period wage rate by the basic wage rate of $3.525
of the parties' collective-bargaining agreement in effect at
the time of the unfair labor practices. Thus, under the
General Counsel's formula the factors applicable to
various portions of the backpay period, reflecting changes
in the wage scale, are as follows:
September 14, 1962, to July 31, 1963 - 4 275/3.525 or
1.212;11 and for
the period from August 1, 1963, to July 31, 1965 -
4.505/3.525 or 1.278;
and from August 1, 1965, to July 31, 1967 -
4.80/3.525 or 1.361."
In refuting the Company's contention that the contract
between the parties terminated on July 31, 1959, (supra),
and with it, the validity of this above-described wage
formula, the Union argues that the contract did not
terminate but continued, automatically renewed each year
until a new contract was negotiated in July 1965.
The contract which was in effect on July 31, 1959, the
date when the employees were terminated, provides at
page 1, a renewal clause which reads as follows:
This Agreement shall continue in full force and effect
to and including July 31, 1959, and shall be considered
renewed from year to year thereafter between the
respective parties unless either party hereto shall give
written notice to the other of its desire to change,
modify, or cancel the same at least sixty (60) days prior
to expiration.
Within fifteen (15) days after notice of reopening is
given, the opening party shall submit a complete and
full list of all proposed modifications. All other sections
shall remain in full force and effect. Negotiations shall
commence no later than forty-five (45) days prior to the
anniversary date of the Agreement unless otherwise
mutually changed.
On May 26, 1959, the Union sent Respondent
Fibreboard a letter notifying it as follows:, I
Pursuant to the provisions of The Labor
Management Relations Act, 1947, you are hereby
notified that the Union desires to modify as of August
1, 1959, the collective-bargaining agreement contract
dated July 31, 1958, now in effect between the
Company and the Union.
The Union offers to meet with the Company at such
early time and suitable place as may be mutually
"The gross backpay for each employee for the fraction of a quarter from
September 14 to 30, 1962, was computed by the General Counsel by
multiplying 0.19, representing the fraction of a quarter involved, by his
average quarterly earnings and then multiplying the product thereof by the
appropriate factor for that period, namely , 1.212.
"The gross backpay of each terminated employee for the period January
I to January 18, 1965 (end of backpay period), was computed by the
General Counsel by multiplying 0.20, representing the fraction of the
quarter involved, by his average quarterly earnings and then multiplying
the product thereof by the appropriate factor for that period, namely,
1.278.
i'Resp . Exh. 2.
FIBREBOARD PAPER PRODUCTS CORP. 161
convenient, for the purpose of negotiating a new
contract.
On June 15, 1959, the Union sent a letter to the
Company specifying various proposals which it desired to
discuss." These proposals included wage scales, seniority,
hours of work and overtime, holidays, night differentials,
vacations, welfare plan, adjustment of complaints and the
payment of 5 cents per hour to provide for supplementary
unemployment benefits for employees laid off in a
reduction in force.
The Union contends that in interpreting the above
notice vis-a-vis the renewal clause of the contract, supra, a
distinction must be drawn between a notice to terminate
and a notice to modify. This letter, argues Union's
counsel, is a notice to modify not terminate and,
therefore, no notice to terminate was sent by the Union
within the meaning of said contract's above-quoted
renewal provision. Accordingly, concludes the Union, the
contract was renewed for another year, namely, to July
31, 1960, subject to negotiations on those sections of the
contract opened for modification, thus establishing that
the wage formula in the contract continued in effect from
August 1, 1959, to January 18, 1965, the end of the
backpay period or until a new contract was executed by
the parties in July 1965.
Respondent's Contentions
Respondent states that the General Counsel and the
Union's computation of gross backpay on the basis of the
wage formula in the contract which terminated on July 31,
1959, results in a wage scale throughout the backpay
period higher than the $4 rate to which the parties agreed
when they executed a collective-bargaining agreement in
July 1965. The Respondent asks rhetorically if it is
reasonable to credit these terminated employees
throughout the backpay period with wage rates higher
than what the reinstated employees ultimately received
when they returned to work pursuant to the Supreme
Court's decision. Moreover, argues Respondent, the
record clearly shows that the work done by the ILWU
millwrights and the terminated machinists was comparable
in skill as evidenced by the historical identity of their
hourly wage rates from 1946 to 1959, and the fact that
they were both being paid the same wage rate when the
machinists were terminated. Therefore, contends
Respondent, the formula which should be applied in
computing what the dischargees would have received
during the backpay period is the hourly wage rate which
was paid by Respondent to its ILWU millwrights from
September 14, 1962, to January 18, 1965.
Conclusions
Contract Termination
In determining whether the collective-bargaining
agreement executed on September 24, 1958, expired on
July 31, 1959, as Respondent contends, or automatically
renewed itself each year until a new contract was
negotiated in July 1965, as the Union claims, it should be
borne in mind that not only did the Board in its original
Decision and Order state that the contract "expired July
31, 1959,"" but also there is no reference to the matter of
contract termination in the Board's Supplemental
"Resp . Exh. 3(a) and (b).
"130 NLRB 1558, 1559.
Decision and Order." Moreover, the Board stated in its
original decision that "automatic renewal of the existing
contract with the Steelworkers had been forestalled by the
Union's letter of May 26,. requesting substantial
modifications in the existing contract."16 The Trial
Examiner in his decision also stated "the contract
terminated . . . on July 31, not only by its own terms but
also by reason of the Steelworkers' May 26 notice.""
Furthermore, when the Union's letter of May 26, 1959,
notifying the Company of its "desire to modify" the
contract is considered in the context of a specific provision
in said contract that it "shall continue in 'full force and
effect from year to year unless either party shall give
written notice of its desire to change, modify, or cancel
the same at least sixty days prior to expiration,"" it would
appear the Union's contention that the contract was not
terminated passes the outermost bounds of reason. It
simply will not bear the construction which Union's
counsel propounds. Furthermore, the Union's reason for
claiming the contract did not expire is without merit
because the language of the renewal clause is
unambiguous and clear in its meaning. It plainly and
explicitly states that if no agreement is reached upon the
Union's proposed modifications before the contract
expiration date, the collective-bargaining agreement will
terminate. Accordingly, in evaluating the foregoing
circumstances, it is found that the parties'
collective-bargaining agreement terminated at midnight on
July 31, 1959.
Backpay Wage Rate
There is agreement among the parties with respect to
the average quarterly earnings of each terminated
employee during the base period , August 4 , 1958, through
July 31, 1959, as well as their interim earnings , medical
and other expenses incurred in connection with interim
employment . It was stipulated that , beginning with 1946
and ending on July 31, 1959, wage rates of millwrights,
members of the International Longshoremen's and
Warehousemen ' s Union , hereinafter referred to as ILWU
millwrights (who are not to be confused with the ILWU
production workers), employed in Respondent's
Emeryville plant , received the same wage rates as the
terminated maintenance machinists whose backpay is in
issue. Subsequent to the machinists ' termination, the
ILWU millwrights continued to work throughout the
backpay period and some of them replaced the terminated
machinists in the felt mill and paint shop. It is
uncontroverted that the wage rate paid by Fibreboard to
its ILWU millwrights during the backpay period was
identical with the hourly rate paid maintenance machinists
under the Union ' s contract with Foremost Food and
Chemical Company and that this was the highest wage
rate paid maintenance machinists in the Bay Area" under
any contracts that the Union herein had with other
companies which employed maintenance machinists doing
work and requiring skills comparable to that of the
maintenance machinists at Fibreboard . See Respondent's
Exhibits 7 and 9. In July 1959, Respondent's ILWU
millwrights received $3.52 1/2 per hour, the same as the
"138 NLRB 550
"See supra
"130 NLRB at 1573.
"Resp Exh . I at p. I
"The "Bay Area" encompasses the following nine counties: San
Francisco , San Mateo, Contra Costa, Alameda, Marm, Sonoma, Solano,
Napa, and Santa Clara. U.S. Census Bureau.
162 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
terminated maintenance machinists. In September 1962,
the beginning of the backpay period, the ILWU
millwrights wage rate was $3.695 per hour; June 1, 1963
- $3.795 per hour; June 1, 1964 - $3.895 which hourly
rate remained in effect until June 1, 1965, when it was
increased to $3.985.
It is also stipulated that when the terminated
maintenance machinists were reinstated on March 22,
1965, they received $3.74 per hour upon their return to
work as compared with the $3.895 which Respondent's
ILWU millwrights were receiving at that time.
Subsequently, on July 7, 1965, the Respondent and Union
negotiated a contract in which they agreed upon a wage
rate of $4 per hour for the reinstated maintenance
machinists, effective July 15, retroactive to March 22,
1965. And on June 1, 1965, the Respondent's ILWU
millwrights' hourly wage rate was increased to $3.985.
It will be recalled that the Union and General Counsel
contend that the wage rates the terminated maintenance
machinists should be credited with during the backpay
period should be determined by the "Pabco wage
formula" embodied in the contract which expired on July
31, 1959.26 The Respondent Fibreboard claims, however,
the best measure of what the reinstated employees would
have received during the backpay period is the rate
Respondent paid its ILWU millwrights who did work
comparable in skills and whose wage rate for 13 years had
been the same as the terminated maintenance machinists.
If the General Counsel and Union's formula were to be
adopted, the dischargees would receive an hourly wage of
$4.505 for the last 6 months of the backpay period as
contrasted with both the $3.74 rate at which they returned
to work in March 1965, and the $4 per hour agreed upon
subsequently by the parties under their
collective-bargaining agreement effective July 15, 1965.
Moreover, the wage rates which would have been payable
under the 1959 expired contract, had it remained in effect,
would have been excessive as compared with the wage
rates paid by other employers in the Northern California
Bay Area who had contracts with the Charging Union
involving their maintenance machinists. The highest wage
rates paid maintenance machinists during the backpay
period under any of said contracts were those paid by the
Foremost Food and Chemical Company. (See Resp. Exh.
9.) It is uncontroverted that during the first portion of the
backpay period, beginning in August 1962, Foremost's
maintenance machinists were receiving $3.57 per hour as
contrasted with the $4.275 which would have been payable
under the "Pabco" formula in the Fibreboard contract for
the period August 1959 to August 1960." This $3.57
foremost figure for August 1962, as compared with the
$4.27 1/2 Pabco rate as of August 1959, reveals that the
"Pabco" formula is both unreasonable and unrealistic.
Corroborative of this predicate is the Board's finding in its
decision that Fibreboard's concededly valid economic
reason for subcontracting its maintenance work to an
independent contractor in 1959 was due to its maintenance
costs being too excessive."
If the Union's theory were to be given credence that the
contractual wage formula in the 1959 agreement remained
operative thereafter, it would have resulted in an
automatic wage increase to $3.53 1/2 an hour for the unit
employees beginning in August 1959, whereas more than 5
years later in January 1965, and in an economy of rising
"The Pabco wage formula provides a wage rate of 12 1/2 cents an hour
less than the construction millwrights ' wage scale See supra
"See p . 160 and fn. 9.
"Fibreboard Paper Products Corporation , 130 NLRB 1558.
prices, the independent contractor's employees received
$4, and the reinstated dischargees upon their reinstatement
in March 1965, received $3.74 which was raised four
months later to $4, and Respondent's ILWU millwrights
received a wage rate of only $3.895."
Moreover, if the the General Counsel and Union's
backpay formula were to be adopted, the employees would
receive during the last quarter of 1962, a wage rate of
$4.27 1/2 as contrasted with the $4 eventually agreed
upon in July 1965. Continuing this comparison, the
contractual or "Pabco" formula would have resulted in
wage rates of $4.50 1/2 per hour for the backpay period
from August 1, 1963, to August 1, 1964, and $4.80 as of
January 18, 1965, the end of the backpay period, or 50
cents and 80 cents per hour more than the $4 wage rate
discharged employees subsequently received under the
contract which was executed in July 1965 after their
reinstatement ." It would not only be specious, but indeed
strange , to adopt the Union and General Counsel's
formula under which the terminated employees would
receive during the 1962-65 backpay period a wage rate
higher than the $4 hourly rate established in the contract
executed by their Union with the Respondent in July
1965."
Furthermore, to adopt the Pabco formula would be
contrary to precedent, as the Board has repeatedly held
that the fairest measure of computing backpay, in
situations such as this, is to adopt a wage scale paid other
employees in the same plant who do similar work
requiring comparable skills. Loss of earnings of backpay
claimants should be measured by the earnings of their
replacements or comparable employees.S6 Probative of the
fact that the work of the terminated machinists and
ILWU millwrights was similar and required comparable
skills is their identical wage scale prior to July 31, 1959,
and the testimony of Maffey, Project Engineer at
Fibreboard's Emeryville plant, that the dischargees who
worked in the paint shop and felt mill were replaced by
Respondent's ILWU millwrights.
Finally, it should be borne in mind that when it was
agreed by the Respondent and Union in July 1965, that
the reinstated employees should receive a wage rate of $4,
the ILWU millwrights employed by Respondent were
receiving approximately the same wage rate, namely $3.98
"The record is not entirely clear as to the exact wage rate the
independent contractor who took over the duties of the terminated unit
employees was paid by Respondent in January 1965, but it appears to have
been approximately $4 per hour It should be noted in this regard that the
independent contractor paid his employees tune-and-a -half for overtime
whereas Respondent had paid the terminated employees double time.
When the parties executed a contract in July 1965, it provided double time
for overtime . The $4 rate paid the independent contractor is equivalent to
what the independent contractor was receiving as of January 1965, which
figure , in addition to a basic hourly rate , includes also overtime rates and
fringe benefits. It was also stipulated that the employees of the independent
contractor for the period from 1959 to 1965 that were doing millwrights'
work were paid the rates of millwrights under the contract between the
building trades union and the Associated General Contractors in the Bay
Area. See pp. 843 and 935 of the record.
"Union 's Exh . 23 shows the relationship between the wage rates in the
Fibreboard contract , Foremost contract and BLS Occupational Wage
Survey for the San Francisco-Oakland area for January 1958 and 1959. In
January 1958 , the Foremost rate was $2.93 and Fibreboard's $3.375;
January 1959 , Foremost $3.04 and Fibreboard $3.525. See pp 161-162,
supra, with respect to the wage rates received by Respondent's ILWU
millwrights during the backpay period. See also Resp . Exh. 8(c)
"Under the "Pabco formula "; the wage rate would have been $5.40 as of
August 1, 1967.
"Alaska Chapter of the Associated General Contractors . 119 NLRB
663, 667; East Texas Steel Castings Company, Inc.. 116 NLRB 1336,
1337-39, 1353; Pugh and Barr. Inc., 102 NLRB 562, 564-565
FIBREBOARD PAPER PRODUCTS CORP. 163
1/2 an hour Also corroborative of the soundness of this
$4 rate is the cogent fact that it was higher than the cost
of living increases which had accrued during the backpay
period Accordingly, it is found that the formula to be
applied in computing the terminated maintenance
machinists' gross backpay is the wage rate paid by
Respondent to its ILWU millwrights from September 14,
1962, to January 18, 1965.
The record is clear that the ILWU millwrights
employed by Respondent not only performed work
involving skills comparable to those of the terminated
maintenance machinists, but also they were paid the same
wage rates as the machinists from 1946 to July 31, 1959
Thus, on July 31, 1959, they, like the maintenance
machinists, were receiving a wage rate of $3 525 per hour
Subsequent to the machinists termination, the ILWU
millwrights not only continued to work throughout the
backpay period but in a few instances replaced the
terminated maintenance machinists in the felt mill and
paint shop. From the fact that the ILWU millwrights
received no wage increases in 1959 or 1960, it is not too
unreasonable to assume that the ILWU recognized the
soundness of Fibreboard's claim that the terminated
machinists' wage rates under the "Pabco formula," which
also determined the ILWU millwrights' wage rates, were
"too high."=' This is evidenced by the Company's action
in terminating the machinists and subcontracting the
maintenance work to an independent contractor at a wage
rate less than the machinists had been receiving.
Thereafter, beginning in 1962, the ILWU millwrights
received the same wage increases as the ILWU production
employees.r" The ILWU millwrights were paid during the
backpay period the following wage rates: July 1, 1962 -
$3.695 per hour; June I, 1963 - $3 795 per hour, June 1,
1964, to June 1, 1965 - $3 895 per hour." For these and
other reasons delineated below and based on Board
precedent, it is found, that the wage rate during the
backpay period paid to the ILWU millwrights in the
performance of work comparable in skills to that which
had been performed by the terminated machinists and
whose wage rates for 13 years had been the same as the
machinists is a reliable and logical yardstick and the best
measure of what the maintenance machinists would have
received during the backpay period "
indicative of the lack of realism in the position of the
General Counsel and the Union that the dischargees
should receive under the "Pabco formula" $4 505 per hour
in January 1965, is the cogent fact that in July 1965,
Local 1304 entered into collective-bargaining agreements
with Fibreboard, Foremost Food and Chemicals Company
and Encinal Terminals which provided a $4 per hour wage
rate for the maintenance machinists employed by all these
three companies. Also corroborative of the soundness of
this $4 rate is the fact that it was higher than the cost of
living increases which accrued during the backpay period
and more than the highest wage rate received by
"it strains one 's credulity to believe the testimony of William Burke,
Business Agent for the ILWU, that the reason the ILWU millwrights in
Respondent 's plant received no wage increase in both 1959 and 1960 was
because he forgot all about them
"However, at no time was the ILWU millwrights hourly wage rate the
same as the ILWU production workers.
"These wage rates were the highest payable to maintenance machinists
under any contract which Local 1304 had with other Bay Area employers
See Resp Exhs 7 and 9.
"Maffey, a company official's testimony to this effect , stands
uncontradicted which is confirmed by the ILWU millwrights ' wage history
after the machinists were terminated and also by Ferber, a union official,
who on cross-examination testified that the bargaining unit employees did
work "very similar" to Local 1304 maintenance machinists who were
employed at other Bay Area plants with which the Union had contracts
maintenance machinists during the backpay period who
were working for other employers under contract with
Local 1304. On the other hand, the terminated employees
would receive under the Union's formula upon their
reinstatement a wage rate higher than that in their
contract executed in July 1965 with Respondent
On the basis of the facts detailed above, and applicable
precedent, it is found that in computing what the
dischargees would have received during the backpay
period beginning on September 14, 1962, and ending
January 18, 1965, is the wage rates paid the Respondent's
ILWU millwrights" The Board has repeatedly held that
the loss of earnings of backpay claimants should be
measured by the earnings of their replacements or other
comparable employees of the Respondent during the
period involved."
Number of Jobs Available During Backpay Period
Question Involved
The sole question involved is the number of jobs
available during the backpay period which is September
14, 1962, to January 18, 1965. Of the 53 employees
terminated on July 31, 1959, it is agreed by the parties
that there is no issue as to the 10 powerhouse employees.
The remaining 43 terminated employees were classified as
39 maintenance machinists and 4 helpers. It was stipulated
that on October 1, 1960, Fibreboard closed its Emeryville
floor covering plant, and on July 1, 1961, it discontinued
its Emeryville linoleum plant. On March 1, 1962, it
moved its Emeryville roofing plant to its newly
constructed Martinez plant and on February 1, 1964,
automatic controls were installed in the powerhouse
boilers thereby eliminating the need for firemen and on
October 21, 1967, the powerhouse was abandoned."
Parties' Contentions
The Union claims that the normal complement as of
July 31, 1959, the termination date, was 37 machinists and
four helpers. However, the Company disputes this,
alleging there were only 35 machinists and four helpers in
the unit on July,31, 1959. The Respondent claims that of
the force of 43 machinists and helpers on the seniority
roster as of July 31, 1959, four were in excess of the
normal complement Their disagreement revolves around
four machinists who as of July 31, 1959, were either on
sick leave, leave of absence, or temporarily transferred to
another job in the plant These four machinists were
Holmes and Jobe who were ill; Arca on leave of absence,
and Vanderbeck who had been temporarily transferred to
"In September 1962, the ILWU millwrights were receiving $3.695, June
1963 - $3 795, June 1964 - $3 895, June 1965 - $3 98 1/2, June 1966
- $4 075, and June 1967 - $4 275 It should also be noted that from July
31, 1959, until June 1961, there was no increase in the ILWU millwrights'
wage rates which would appear to indicate that the ILWU tacitly
recognized that Local 1304's maintenance machinists ' wage rate as of July
31, 1959, was excessive This is further evidenced by the Company
subcontracting the maintenance work to an independent contractor m
August 1959 at a wage rate less than what the terminated machinists
would have received under the Pabco formula See page 935 of the
transcript and Union's Exh 19
"International Association of Heat and Frost Insulators, et al , 261 F 2d
347, 350 (C A 1)
"A detailed mathematical analysis of the Union 's and Respondent's
respective positions will be found in Union's Exhs 26 and 27 and
Respondent 's Schedule 2, Appendix to its amended answer
164 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the powerhouse. The Company claims that Swisher and
Yoch, who were hired on July 20, 1959, replaced two of
these four men and that the remaining two were not
replaced at all. Thus, the Company claims there were four
less jobs than men who were working as of July 31, 1959,
thus eliminating Jobe, Holmes, Arca, and Vanderbeck.34
The Union, on the other hand, argues that when
Vanderbeck and Arca would have returned to their
machinists' jobs, no one in the unit would have been laid
off as the number of jobs available was 37 and not 35 as
the Company claims. It was stipulated also that as of July
31, 1959: E. F. Schlotterbeck had been assigned to the
roofing plant; J. Gronberg had been working as a foreman
in the felt mill, and the storekeeper's job had been
eliminated sometime prior to September 14, 1962.36
The Union also argues that the reduction of machinists
a.,d helpers as of August 1, 1959, was not the elimination
of work or jobs but the assignment by the Company of
these jobs to other classifications. The jobs, the Union
states, continued to exist and the work would have been
done by the terminated machinists, particularly those felt
mill and paint shop jobs that were assigned by
Respondent to the ILWU millwrights and ILWU
production personnel after the unit employees discharges.
With respect to the closing of the floor covering and
linoleum plants on October 1, 1960, and July 1, 1961,
respectively, Local Union 1304's counsel agrees with
Respondent's counsel that 11 machinists' jobs and a
helper in the linoleum plant were eliminated. Union's
counsel agrees also that when the central warehouse was
demolished in December 1961, the storekeeper helper's job
was eliminated. He denies, however, that the roofing
helper was eliminated because when the transfer was made
from the Emeryville plant to the Martinez plant on March
1, 1962, the oiling and greasing work still continued at the
Martinez plant. Union's counsel alleges that prior to the
machinists' and helpers' terminations that the roofing
helper's job was performed by a combination of machinist
and helper but Respondent's answer to this is that during
the backpay period no helpers were employed by the
independent contractor; all work was done by journeymen.
Although the Union acknowledges that there was some
elimination.of work in the main machine shop as a result
of changes in the floor covering, linoleum, and roofing
departments; nevertheless, the reduction in jobs so affected
was only five and not seven as the Company claims. The
Company contends, however, that two jobs were
eliminated when the independent contractor took over,
namely, one job in the felt mill and one in the paint shop
as no employee was any longer regularly assigned to the
paint shop but this work was performed by a man
assigned to the main shop. The Union disagrees,
contending the work was not eliminated but assigned by
the Company to other personnel outside the unit, pointing
out that when those machinists who had been assigned to
the felt mill and paint shop were terminated, the felt mill
work was taken over by the ILWU millwrights and the
"It was stipulated that employees Swisher and Yoch who were hired on
July 20, 1959, were not told by Respondent when they were employed that
their jobs were temporary or that they would be employed only until other
employees returned to work . The Union concedes Swisher and Yoch were
replacing Holmes and Jobe who were ill
"See Union' s Exh 26 which shows the distribution of the terminated
employees as of July 31, 1959 Respondent 's counsel , however, disagrees
that employees Crispino and Reihl were assigned to the felt mill (although
Appendix A of the specification alleges that they were assigned to the main
shop ) He also claims Gronberg was in the felt mill and not roofing as
alleged in Appendix A of the specification and that Schlotterbeck was in
roofing and not the main shop as alleged in the specification
paint shop job by an ILWU production employee. The
Company also claims a helper's job was eliminated in the
move of the roofing plant to Martinez whereas the Union
asserts the job continued to exist but that the Company
assigned it to a machinist.
The Union also introduced into evidence its Exhibit 21,
a compilation and tabulation showing the number of hours
worked by the independent contractor's millwrights in the
Emeryville plant from December 24, 1963, to January 22,
1965, which work was done formerly by the terminated
unit machinists and helpers.36 Appendix II of the Union's
brief contends that 29 machinists' jobs and two helpers'
jobs are the number of jobs available at the beginning of
the backpay period. In the Union's pretrial statement and
at the hearing, it took the position that there were 22
machinists' jobs and two helpers' jobs available.
It is Respondent counsel's interpretation of Union's
Exhibit 21 that there were 11 of the contractor's
millwrights doing machinists' work at Emeryville and
either two or three men doing the work of pipefitters,
welders and riggers, all of which duties the millwrights
employed by the independent contractor performed at
Emeryville. To this figure of 11, states Respondent's
counsel, must be added five millwrights of the independent
contractor who performed maintenance work at Martinez
when it went into production about March 1962, or 16
millwrights in all who, in addition, also did pipefitting,
welding and rigging. Accordingly, concludes Respondent,
there are available 16 bargaining unit jobs for the
reinstated machinists at Emeryville and Martinez.
To substantiate this figure of 16 available machinists'
jobs, Respondent states that in 1960-61 the Emeryville
floor covering department was closed out which eliminated
the jobs of 11 machinists and one helper. In March 1962,
the roofing plant, except for the felt mill and mastipave
machine, was moved to Martinez. On July 31, 1959, six
machinists and one helper were employed in roofing,
including one assigned to the felt mill. With the advent of
the maintenance contractor, the felt mill and helpers' jobs
were eliminated, thus leaving jobs for five machinists, one
of whom serviced the mastipave machine when it was in
operation so that when roofing moved to Martinez, a man
still was needed at Emeryville to service the mastipave
machine. Thus, claims Respondent, only four machinists'
jobs were moved out of Emeryville. At Martinez an
additional machinist was required (or a total of five)
because of higher production there and because the
machinists' work there included the oiling and also certain
work which prior to July 31, 1959, had been performed at
Emeryville by other crafts. Thus, when in March 1962, the
roofing plant was moved to Martinez, the move resulted
in a gain for one job for a machinist.
In July 1959, continues Respondent's recital, the work
in the paint shop had declined to the point where it no
longer was sufficient to keep a man busy, and with the
advent of the independent contractor, the machinist's job
in the paint plant was eliminated. Shortly thereafter, the
storekeeper's job was eliminated and also the helper in the
truck shop. With the elimination of the linoleum and felt
base plants and the removal of the roofing plant, alleges
Respondent, the demands upon the main shop at
Emeryville were reduced to the point where there was
need for only 5 men instead of 12.
Moreover, Respondent argues, even if the Union
counsel's argument that the contractor employed more
men than the number of jobs available is true, the number
of men employed by the contractor is not an accurate
"This exhibit should be read in conjunction with Resp Exh 18.
FIBREBOARD PAPER PRODUCTS CORP. 165
measure of machinists' jobs available because the
independent contractor's men did all of the work which
formerly had been done by crafts other than the
machinists, including the following who were terminated:
10 electricians, 9 pipefitters and 5 riggers and welders.
Accordingly, Respondent Company concludes, during the
backpay period, there were 16 jobs for maintenance
machinists, including working foremen and mechanics, at
the Emeryville and Martinez plants and no jobs for
helpers.
It is the General Counsel's position, however, that the
yardstick which should be used in determining the
available number of jobs is to start with the 53 men
involved and deduct from that number the stipulated
reductions but he fails to state in his brief a definite
figure." However, during the course of the hearing he
claimed that it should be found there were 14 jobs
available at Emeryville which includes two millwrights
who performed pipefitting, welding and rigging. At
Martinez, he states, there were 8 men from March 1,
1962, to November 30, 1963; 7 men from December 1,
1963, to June 30, 1964, and from July 1, 1964, to January
18, 1965, 6 men, including l man who did pipefitting,
welding and rigging or a total of 20 machinists as of the
end of the backpay period: 14 at Emeryville and 6 at
Martinez.
Conclusions
The following facts are either stipulated or
uncontradicted. There were 53 men on the maintenance
unit seniority roster on July 31, 1959: 39 machinists, 4
helpers, and 10 engineers and firemen in the powerhouse.
On October 1, 1960, the Company discontinued its
Emeryville floor covering plant. On July 1, 1961, its
Emeryville linoleum plant closed. About December 1,
1961, the central warehouse was demolished. On March 1,
1962, the roofing plant was moved from Emeryville to
Martinez when Respondent opened a new plant there. On
February 1, 1964, automatic controls were installed in the
powerhouse eliminating the need for five firemen. When
the powerhouse was discontinued on October 21, 1967, the
five remaining engineers' jobs were abolished. It would
appear, therefore, that the closing of the floor covering
department resulted in the loss of 12 jobs; the
demolishment of the central warehouse eliminated another
job, and the move to Martinez resulted in a gain of one
job. Accordingly, and since there were 43 machinists and
helpers in the unit, the number of jobs remaining,
exclusive of the powerhouse, was 31 as of September 14,
1962, the beginning of the backpay period.
However, with the demise on July 31, 1959, of the
maintenance machinists-and helpers unit and with the
advent of the independent contractor shortly thereafter,
working conditions changed drastically due to shutdowns
and various technological transformations. Work which
previously had been performed by pipefitters, welders and
riggers was done by the millwrights employed by the
independent contractor. No helpers were used by the
contractor. Work in the felt mill and paint shop, which
had been performed prior to July 31, 1959, by Local
1304's maintenance employees, was performed after that
date by ILWU millwrights and ILWU production
employees, respectively. Noteworthy is the fact that
rigging, pipefitting and welding duties which were not a
part of Local 1304's unit work prior to July 31, 1959,
have been performed by its members since their
reinstatement in March 1965, at both the Emeryville and
Martinez plants.
Based upon an analysis of the hours worked from
December 24, 1963, to January 22, 1965, by the
millwrights employed at Emeryville by the independent
contractor, it is found that approximately 14 men were
employed at Emeryville during the backpay period." The
number of maintenance men required by the independent
contractor to service the Martinez plant was five." Two
jobs, one in the paint department and another in the felt
mill, performed by ILWU men during the backpay
period, still exist. Respondent' s assigning these jobs to the
main shop has no pertinency insofar as determining the
number of jobs available. The reassignment of these jobs
did not result in their elimination as there is still a need
for them in the paint shop and felt mill. Accordingly,
these two jobs which were performed by Local 1304's
members prior to their termination should be reassigned
to them. In sum , the number of maintenance machinists'
jobs available are 21: 14 at Emeryville and 5 at Martinez
and 2 in the paint department and felt mill.-
Pension and Retirement Benefits For Hiatus Period
The issue concerns the Company's obligation, if any, to
the 53 dischargees for the period from August 1, 1959, to
September 14, 1962, referred to herein as the hiatus
period, for which the Board ordered no backpay. This
arises because the Board in its supplemental decision
ordered that backpay should begin on September 14,
1962, rather than July 31, 1959, the date the employees
were terminated.
The General Counsel contends that each of the
terminated employees is entitled to current service benefits
for the period from August 1, 1959, to the end of the
backpay period and not merely for the backpay period
itself which begins on September 14, 1962, and ends
January 18, 1965 Each terminated employee, he argues, is
entitled to full participation in Respondent's Retirement
Plan from August 1, 1959, to January 18, 1965." It is his
theory that retirement credits for the hiatus period are
more in the nature of continuous service benefits, like
seniority rights, rather than backpay as such and that the
Board's award suggests there is a period of continuous
service as to all employee rights and benefits except
backpay per se. His basis for this contention is that the
Company's Retirement Plan itself provides that
"continuous employment" shall not be broken by layoffs
up to 12 months, leave of absence or military service.
Moreover, asserts the General Counsel, except in the case
of employees who have already retired and would be
entitled to an adjustment to their pension income,
retirement credit for the hiatus period and the backpay
period would not call for any present payment to
employees.
The award of the Board which requires that the
" It would appear that this figure would be 31 jobs.
"See Resp . Exh. 18 and Union's Exh. 21; p. 37, in. 134
"When the Martinez plant was opened in March 1962, there was an
unusual amount of capital construction , reconstruction and alterations
incident to getting this new plant into operation. Consequently, the
independent contractor employed eight millwrights the first year of the
backpay period which number continued to decrease progressively until
January 1965 , when the number of men required to maintain the plant
numbered five.
"The reorganized and reconstituted unit of reinstated employees
presently provides for no helpers . The basis for this finding is the cogent
fact that no helpers , only maintenance machinists , are mentioned in the
parties' collective-bargaining agreement executed in July 1965
"See Resp. Exh 6.
166 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
employees are to be offered reinstatement "without
prejudice to their seniority, or other rights and privileges"
is interpreted by the Union to mean that the 1959-62
hiatus period is a period of continuous employment for
computation of all other benefits, even if no backpay is
due. Therefore, counsel for the Union contends, that when
the employee's retirement benefits are computed, a
retrospective reference must be made to what he actually
earned during his active employment. Accordingly, he
argues, the Board's requirement that a dischargee should
not be deprived of his other privileges of employment
must be interpreted so as to allow a dischargee pension
credits for the 1959-62 hiatus period even though no
backpay is awarded for that period on the theory that it
should be accorded cognizance by requiring the 1959-62
hiatus period to be considered one of continuous service.
Consequently, he contends, it should be determined what
the employee would have earned during this hiatus period
(even though he is entitled to no backpay during this
hiatus) by allowing him pension credits for that time.
Thus, the Union's position is that the terminated
employees are entitled to "prospective future retirement
benefits" whether or not they were employed by the
Respondent or made any deposits into the pension fund
during the 1959-62 hiatus period 'r
Union's counsel takes this theory one step further
arguing that although early retirement benefits are a
legitimate deduction to the extent that the dischargees are
entitled to backpay, nevertheless, "early retirement
benefits for the hiatus period are not a legitimate
deduction because [they] did not receive any backpay in
this period." In resolving this issue, states the Union, the
question that arises is the responsibility of the Company
for pension benefits to be paid after retirement which are
computed on the basis of what an employee "would have
earned" in this 1959-62 hiatus period if he had been
employed. What is involved, the Union emphasizes, is the
computation of "future benefits" rather than the
computation and award of backpay.
Furthermore, the Union argues that the Company has
tacitly accepted the principle of retirement benefits for the
hiatus period, i.e., that service during 1959-62 should be
counted as it does this in determining employee eligibility
for increased vacations where these employees have been
reinstated to their former or. substantially equivalent jobs.
This, claims the Union, is a cost item to the Company but
it is not payable until the increased vacation is actually
taken. The same rationale, the Union argues, should apply
to pension benefits so that retirement benefits would be
determined as though 1959-62 was a period of
employment. Accordingly, the Union claims, the only
meaningful way to consider this a period of continuous
employment is to credit the employees with "current
service benefits," as that term is used in Section 12 of the
Retirement Plan for the earnings he would have received
if he had been employed in the hiatus period from August
1, 1959, to September 14, 1962 " In short, Union
counsel's argument is reduced to the proposition that
when an employee retires, his pension should be computed
so as to accord the employee continuous service during
"See Union ' s Exh . 28 which details the Union's contention as to what
the monthly pensions should have been for those individuals who retired in
the period from August 1, 1959, to January 18, 1965, if they had been
given continuous credit for both the hiatus and backpay periods.
"Sec 12 (a) of Resp . Exh 6 provides "The current-service benefits [shall
be computed according to a detailed formula] " Sec 12(b) provides that
"the current-service compensation , upon which current -service benefits
shall be based , shall be the compensation received during each calendar
year or portion thereof , of participation in the Plan "
this hiatus period at a rate of pay that he would have
earned during that period of time
It is also the contention of the Union that pension
credits under the Company's Retirement Plan (Sec 26,
Respondent's Exh. 6) which would have accumulated to
the account of claimants had they been in employment
during the hiatus period, are akin to "other rights and
privileges" protected with reinstatement rather than wages
which would be part of backpay. The supplemental
decision listed reinstatement "without prejudice to their
seniority rights and privileges" separately from the
requirement to make the said employees "whole" with
backpay from the date of the decision to the offer of
reinstatement This, Union's counsel contends, means that
while backpay is not due for the hiatus period, this
1959-62 period is a period of continuous employment for
"seniority rights and other privileges."
The issue that arises is the responsibility of Fibreboard
for "present service benefits", [sec. 12(a) of the Plan]
which are translated into income only after retirement,
accumulated by the employee during the hiatus period
based on what he would have earned in this period It is
argued that such accumulated credits which would result
in benefits only at some future time are not backpay, but
rather a component of rights and privileges of
employment, like seniority, which must not be prejudiced
in reinstatement. Reinstatement "without prejudice to .. .
other rights and privileges" includes the pension credits an
employee would have received had he been in service
continuously from the time of his termination to the offer
of reinstatement, claims the Union. These pension credits
can only result in payment, if at all, at a future retirement
date. Accordingly, the Union's argument concludes, these
credits are not backpay, but rather the right to future pay,
and are not subject to the tolling of backpay in the hiatus
period.
Respondent counsel's analysis of the Union's argument
is that if this theory were to be given credence, then irr
determining pension benefits which would become payable
on normal retirement, the terminated employees would be
treated as if they had made pension contributions
throughout the 1959-62 hiatus period If this theory were
accepted, he argues, Fibreboard would not be credited
with early retirement benefits paid during the hiatus, the
dischargees would be credited with earnings during a
period for which they were denied backpay; they would be
credited with pension plan deposits which they never
made; and, therefore, entitled to be treated during the
hiatus period as having been actively employed and
earning wages and at the same time as being retired and
entitled to pension benefits. "Aside from, the irrational
nature of the Union's contention," the Respondent argues,
"it ignores the fact that Fibreboard as well as the
employees contribute to the pension plan." This theory, if
accepted, states Company's counsel, would require it to
pay, in addition to its own contributions for the hiatus
period, the contributions of the discharged employees
This is untenable, it is urged, as pension contributions
paid by an employee are part of an employee's pay. Thus,
concludes Respondent, the Union seeks backpay for the
hiatus period contrary to the Board's order which limits
backpay to the period from September 14, 1962, the date
of its supplemental decision, to January 18, 1965, the
stipulated termination date of the backpay period.
Conclusions
The terminated employees should not be entitled to any
monetary award for the hiatus period but they are entitled
FIBREBOARD PAPER PRODUCTS CORP.
to certain credits, explicated below, for this period of time
as if they actually had been in continuous service. Thus,
they should be accorded those rights which are given them
under Secs. 6(b), 13(a), 14, and 15 of the Retirement Plan
which provisions make length of service a factor to be
considered in determining their eligibility to participate
under the Retirement Plan; namely, their minimum and
maximum benefits, death benefits, and the vesting period
for retirement benefits.
The General Counsel's argument that each terminated
employee should be accorded the option of electing to
receive current-service benefits for the hiatus period, along
with the obligation of paying the required pension deposits
or having said deposits treated as a deduction against the
backpay due him or waiving current-service benefits, along
with the acceptance of net backpay due him, without
deductions for pension deposits, is without merit and
without precedent.
If the General Counsel's theory cannot be accepted, the
Union's contention that the terminated employees should
be given credit for deposits which they did not pay into
the Plan during the hiatus period is an a fortiori situation.
These arguments, regardless of how they are characterized
are, nonetheless , if given credence , tantamount to finding
that the dischargees are entitled to backpay for the hiatus
period. Not only would this violate the Board's backpay
order to exclude the period from August 1, 1959, to
September 14, 1962, but no precedent for such an
unorthodox concept has been cited by Counsel nor is the
Trial Examiner aware of any Board decision so holding.
It would appear that both the General Counsel and
Union's counsel fail to distinguish the substantive
incidences which flow from a break in service in
computing pension credits as contrasted with crediting an
employee with earnings during the hiatus period when he
was not working. This is particularly so, when it is
considered that the major portion of the funds for this
plan is contributed by the Company based upon the
covered payroll of each employee plus a past service
contribution. However, no credit is received, insofar as the
dollar amount of the pension is concerned, during a break
in the employee's service except for vesting early
retirement. Accordingly, the General Counsel and Union's
contentions are found to be without merit and, therefore,
must be disallowed.
Compulsory retirement date for those dischargees
over 60 years of age on January 1, 1958
The parties disagree as to the automatic or compulsory
retirement dates of seven employees." Under the
Retirement Plan of the Company, individuals normally
retire when they reach the compulsory retirement age of
65. It was stipulated by the parties that employment
terminates at the compulsory retirement date and thus
ends backpay eligibility. The General Counsel and the
Union contend that January 1, 1963, is the appropriate
date for each of the seven men. Each of these seven men
had reached age 60 on January 1 , 1958, their "unit
eligibility date"" but had not yet attained the compulsory
retirement age of 65.
"Gronberg , Holmes , J. P. Johnson , Capps, Crispino, Hamidy, and
Bennett.
"See Resp . Exh. 6 , Sec. 7(dXl), p. 16, "Retirement Plan" and Exh. B of
Respondent's amended answer , which provides that the unit eligibility date
for East Bay Union of Machinists , Local 1304 , United Steelworkers of
America , AFL-CIO, the Union herein , shall be January 1 , 1958. See also
Sec. 17(e), p. 33 of the Plan.
167
Section 17(b) of the Retirement Plan provides as
follows:
For participants who have attained age sixty (60) but
have not yet attained the age of sixty five (65) at
[January 1, 19581," the normal retirement date shall be
the first day of any calendar month elected by the
participant following the attainment of age sixty five
(65), but not later than the first day of the calendar
month next following the attainment of the fifth
birthday subsequent to [January 1, 19581."
Respondent states that under the wording of Section
17(b) of the Retirement Plan, supra, the compulsory
retirement dates of these men fell prior to the
commencement of the backpay period. Moreover, claims
Respondent, the compulsory retirement dates and their
method 6f computation is so clearly explained in the Plan
itself that the General Counsel and Union should not be
permitted to change it by parol evidence which they seek
to do as detailed below.
The General Counsel and Union allege that the Union
and Respondent had entered into an oral agreement in
1957, amending Sections 6(d), 17(b), and (e) of the
Retirement Plan so that those members of the unit who
joined the plan and who were over age 60 as of January 1,
1958, but not yet 65, would not be required to retire until
five years after that date, or January 1, 1963. These oral
representations by the Company, claims the Union and
General Counsel, were part of the basis for the Union
accepting the Retirement Plan. Accordingly, they urge,
these seven men should not be forced to retire earlier than
they had been informed by Respondent that they would
have to retire. This, alleges the Union, was the mutually
understood interpretation of the language of Section 17(b)
and (e) of the Retirement Plan. This interpretation, states
the Union, was reiterated by the Company in early 1965,
in the negotiations which eventuated in an agreement
between the Union and Company, effective July 15, 1965.
The Union claims that its Exhibit 16 is a written list of
retirement dates of all the unit employees supplied to the
Union by the Company during the 1965 negotiations
which confirms and validates not only this purported oral
agreement but the exhibit itself shows that the retirement
dates of these men to be January 1, 1963. Additional
corroboration of this oral agreement, claims the General
Counsel and the Union, is evidenced by a letter dated
March 24, 1965, with an attached Schedule "A" (Union's
Exh. 17), which the Company's counsel wrote to the
Board's Regional Office and reveals the Company agreed
that those members of the plan over 60 years of age on
January 1, 1958 (the unit eligibility date), had 5 years
from the time they joined the Retirement Plan or until
January 1, 1963, before they would be required to retire.
Thus, claims the General Counsel and Union, there was
an oral agreement by the Company that these men, whose
ages were between 60 and 65, as of January 1, 1958, and
who needed 5 years to qualify for the Retirement Plan,
would be permitted to work for 5 years from January 1,
1958, the date they joined the Plan, or until January 1,
1963, in order to qualify for a pension.
The General Counsel also argued at the hearing that
sec. 17, p. 32 of the Retirement Plan provides for
"deferred retirement" in certain instances. "The
retirement plan," he states, "does not make any attempt
to cover all of the possible instances where deferred
retirement would be appropriate" which accounts for the
genesis of this purported oral agreement. To substantiate
"Sec. 17(e).
"Id
168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
this theory, the General Counsel refers to sec. 18 which he
claims provides for deferring an employee's retirement
date if certain conditions are met .4' His argument
continues that "deferred retirements are mentioned in the
[plan] but not clarified, and therefore oral evidence is
admissible" to show "deferred retirements" were granted
these seven employees
Respondent replies, however, that the situation in issue
is specifically provided for in section 17(b), page 32 of the
Retirement Plan, at p. 19, supra. The Respondent
Company's explanation for this letter (Union's Exh. 17),
which it sent to the Regional Office on March 24, 1965, in
which reference is made in Schedule A to these seven men
as follows: "Retirement date 1/1/63" as being the result
of a careless error and careless reading of the retirement
plan provisions by the company clerk who prepared the
data.
The Testimony
David Area, Recording Secretary of Local 1304, a unit
employee, who worked in Respondent's paint department
at the Emeryville plant, testified that he was present at all
the negotiating sessions between the Company and the
Union in 1957. Area testified it was orally agreed at that
time between Company and Union conferees that "those
members [of the Union] who were over 60 years of age
would have five years from January 1958, before they
would be compelled to retire."
Lloyd Ferber, Business Representative for Local 1304,
the Union herein, testified that he was present at the
negotiations in 1957 and also in 1965 when a
collective- bargaining agreement was executed on July 7,
1965." He testified that in November 1957, during the
course of bargaining negotiations, he asked the company
officials to permit the machinist members of Local 1304
who were over 60 years of age and who would not have
the requisite five years' service to qualify for a pension at
age 65, to be allowed to work five years after the effective
date of the Plan, which was January 1, 1958, or until
January 1, 1963. This union proposal, testified Ferber,
was agreed to by the company representatives.
Ferber also testified regarding negotiations between the
Company and Union that began after the Supreme
Court's Fibreboard decision and which led to the
execution on July 7, 1965, of a collective-bargaining
agreement. He stated that the union representatives asked
the company negotiators why certain named dischargees
had not been offered reinstatement. The company
representatives, testified Ferber, produced and showed the
union negotiators a compilation captioned "Retirement
Plan Status of the Members of the East Bay Union of
Machinists, Local 1304, terminated on 7/31/59."60 This
compilation shows the compulsory retirement dates of the
seven employees to be January 1, 1963.
Robert Baldwin was employed by Fibreboard from
January 1956 through October 1959, as a personnel
official. In 1957, he met at various times over a period of
2 to 3 months with officials of all the unions who
represented employees at the Emeryville plant , including
Local 1304, the Union herein, to explain the Company's
Retirement Plan to them and to answer their questions
"Sec. 18 provides that an employee may remain in active employment
after his normal retirement date , for a period not to exceed 12 months, if
the Plan 's Board of Directors so approve
"Reap . Exh. 10(a)
"See Union 's Exh . 16, particularly , the fourth column headed
"Compulsory Ret Date."
regarding the Plan." Baldwin testified that at none of
these various informational meetings were officials of
Local 1304 told that employees whose ages were between
60 and 65 on January 1, 1958, would be entitled to work
five years after that date in order to qualify for pensions
under the Retirement Plan. The Company introduced
additional evidence showing that employees belonging to
other unions at the plant who were over 60 on the Plan's
effective date, nevertheless retired at age 65, before
putting in the required five years to qualify under the
Plan, and one such employee was Floyd Turner, a
member of the Pulp, Sulfite and Paper Mill Workers
Union which union became affiliated with the Plan on
February 1, 1958, 1 month after the Union herein and
who was compelled to retire at 65 before putting in 5
years under the Plans=
R. C. Thumann, a company official, attended all the
informational sessions in 1957 which also were attended
by officials of all the various unions representing
Respondent's employees. At these meetings the Plan was
explained and copies of the Plan distributed to the union
representatives. The Plan was discussed by those present
and questions asked by the union officials were answered
by company representatives. Thumann testified that one of
the questions involved compulsory retirement dates which
he explained to all present, including Local 1304's
representative He denied that at any of these meetings or
at any other time, he or any company representative
stated or represented to the Union, that an employee who
on January 1, 1958 (the unit eligibility date of Local
1304), who was between the ages of 60 and 65, would
have five years from January 1, 1958, before he would be
required to retire.
The issue to be decided is whether these seven
terminated employees who were between 60 and 65 years
of age on January 1, 1958, had their compulsory
retirement dates postponed to January 1, 1963, by an oral
agreement alleged to have been entered into by the
Company and Union officials.
Conclusions
It is found that the compulsory retirement dates of
Gronberg, Holmes, J. P. Johnson, and Capps occurred
prior to September 14, 1962, the beginning of the backpay
period. Crispino's compulsory retirement date was
October 1, 1962, and Hamidy and Bennett, December 1,
1962." For the reasons hereinafter explicated, Union
Representative Lloyd Ferber's testimony is not credited
that he made an oral agreement with R. C. Thumann, a
company official, that these men who were over 60 years
of age on January 1, 1958, would be allowed five years or
until January 1, 1963, in order for them to be eligible to
qualify for benefits under the Retirement Plan.
Corroborative of this finding is the following letter dated
June 21, 1957, bearing the signatures of Ferber and Area,
union officials, to the Company which reads as follows:
The Fibreboard pension plan has been presented to the
members of this union working in your plant, and has
been accepted by the Machinists in principle. However,
there is one point we would like to ask to be clarified
and also ask for consideration on, that is the fact that
the machinist group were off work for some 14 weeks
through no fault of their own during the year 1949 due
"See Resp Exhs 23 and 24(a) and (b)
"See Resp Exh 25, 26, 27, and 28.
"Another employee , L R Jobe, died on November 4, 1959, prior to the
date the backpay period commenced
FIBREBOARD PAPER PRODUCTS CORP.
to the labor difficulties with another union. We are
requesting that an adjustment be considered for the
above-stated period. We believe such adjustment could
be made in accordance' with Section 2, paragraph 1,
page 23, of the Fibreboard pension plan."
It seems incongruous that this matter referred to in the
letter above, which is much less important than the
alleged 5-year oral agreement, was in writing and, yet, the
waiving of the 5-year eligibility period was alleged to have
been agreed to orally. It is not too unreasonable to
assume, therefore, that no such oral agreement, as the
Union claims, ever existed. Further confirmation of this
finding is evidenced by Respondent's Exhibit 29, a letter
from Ferber to the Company dated December 4, 1957,
ratifying an oral agreement previously reached in the
course of negotiations regarding the Retirement Plan. This
shows the union officials knew the proper way to validate
a previously agreed upon oral understanding was to put it
in writing. By analogy, it is found no such oral agreement
existed.
With respect to the letter written on March 24, 1965,
by Attorney Plant, Respondent's counsel, to M. C.
Dempster, a compliance officer of the Board, in an effort
to obtain an agreed computation of backpay and which
lists the retirement dates of these men as January 1, 1963,
it is believed this was a coincidental error and not
confirmation of the fact that the Company agreed that the
retirement dates of these men were January 1, 1963.36 Nor
is it believed it constitutes an admission against interest as
this letter to the Regional Office was written in the course
of settlement negotiations.
Section 17 of the Retirement Plan as amplified by
subsection (e), clearly and unambiguously states that "the
normal retirement date of employees who have attained
age 60 but not 65 on January 1, 1958, shall be the first
day of any calendar month elected by the participant
following the attainment of age 65 but not later than the
first day of the calendar month next following the
attainment of the fifth birthday subsequent to January 1,
1958." The contention of the General Counsel that
Ferber's testimony of this alleged oral agreement with
Thumann is dispositive of the issue is without merit. This
testimony is neither credited nor is it "substantial
evidence."
Assuming, arguendo, such an oral agreement was
made, nevertheless, reliance on it would be a violation of
the parol evidence rule. The Board has held it will not
accept parol evidence to establish modification of a
written document;56 nor to explain its terms if the
language speaks for itself,37 as it is presumed that all oral
understandings on the subject matter are merged in the
written instrument." In view of the fact that the pertinent
provisions of Section 17(e) of the Retirement Plan are
clear and unambiguous and are not reasonably susceptible
of a different interpretation, there is no occasion nor need
for the interpretation proposed by the General Counsel
and Union.S9
Nor is the Union's argument well taken that Sections
17 and 18 of the Retirement Plan which provide for
deferred retirement-controlling. These sections are
inapplicable as they have reference to a situation where
"Resp Exh. 20.
"See Union 's Exh . 17 and Resp Exh. 28.
"Jersey Contracting Corporation , 112 NLRB 660.
"Electro Metallurgical Company. 72 NLRB 1396; Hood Corp. 147
NLRB 273.
"Petersen & Lytle, 60 NLRB 1070, fn. 1.
169
the Board of Directors may defer an employee'§
retirement for a maximum of 12 months. This is not the
case here. Accordingly, it is found that the compulsory
retirement dates of the seven individuals named above
occurred on the following dates-
Gronberg
Capps
J. P. Johnson
Holmes
Crispino
Hamidy
Bennett
February 1, 1962
June 1, 1962
August 1, 1962
September 1, 1962
October 1, 1962
December I, 1962
December 1, 1962
Severance Payments
It was agreed by the parties that severance pay is
remuneration given an employee when he is terminated
but for which he did not do any actual work. Commerce
Clearing House "Dictionary of Law Terms, Second
Edition-1953" at page 112, defines "severance pay" as "A
lump-sum payment by an employer to a worker whose
employment is permanently ended, usually for causes
beyond the worker's control. The payment is in addition
to any back wages due the worker." It would seem
implicit in paying such sum as a dismissal wage that it is
being paid to the terminated worker "in recognition of
services rendered. . . . The idea behind dismissal wages is
to aid the worker while he is seeking employment
elsewhere or adjusting himself to a new fob."60
The Company contends that severance payments made
to the employees on July 31, 1959, at the time they were
terminated, should be deducted from any backpay to
which they are found entitled. Both the General Counsel
and Union disagree with the Company's proposition. The
General Counsel claims that severance payments made
prior to the commencement of the backpay period should
not be allowed as a credit against backpay, because such
payments were in lieu of wages during a period for which
no backpay is due. He conceded severance pay is a proper
credit against backpay but only where severance wages
were paid during a period of time when backpay was
accruing, but here, he argues, the severance wage was paid
prior to the date of discharge and since backpay was not
accruing at the time, it is nondeductible.
The Union also denies Respondent's contention that
severance payments should be a deduction against
backpay because these payments were not made by the
Company to the terminated employees during the backpay
period but prior thereto, namely July 31, 1959. Inasmuch
as the backpay period did not commence to run until
September 14, 1962, argues the Union, this is not a valid
deduction as there were no continuing severance payments
to be deducted from backpay. The Union claims that
those Board decisions allowing severance pay as an offset
apply only to payments made during the backpay period
and not, as here, where no backpay was awarded by the
Board from 1959 to 1962, the so-called hiatus period.
Respondent, in answer to the General Counsel and
Union's contentions, states that upon termination of the
employees, and in consideration of severance of the
employment relationship, Fibreboard paid each of them a
dismissal allowance based upon years of service in order
to tide them over until they found other employment. It is
the Company's theory that by reason of the Board's order
requiring the terminated employees reinstatement and
"Century Papers, Inc, 155 NLRB 358, 361-362
"Labor Dictionary, P. H Casselman ( 1949) Philosophical Library, New
York, N Y
170 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
backpay, employment was not in fact severed and the
consideration for the severance allowance failed
Therefore, argues Respondent, it is entitled to be credited
with the amount of severance allowance against backpay
for the following reasons (1) it was not given as wages
but in consideration of the severance of the employment
relationship and (2) by reason of the Board's supplemental
decision, the employment relationship was not severed and
the consideration for the allowance failed
Conclusions
The General Counsel and Union's theory which would
make severance payments deductible dependent on
whether they were paid during the backpay period is a
distinction without a difference. No authority nor
convincing reasons are given for this distinction. The
undeniable fact is that a severance allowance for 2 weeks'
pay was made in good faith and in contemplation of the
employment relationship being terminated. It was not
severed inasmuch as the employees have been ordered
reinstated, so that not to permit the deduction of these
payments would be equivalent to penalizing the
Respondent as the purpose behind backpay order is to
make an employee whole and not to aggrandize him by
ordering Respondent to pay twice 61 Moreover, since the
terminations were nullified by the reinstatement order, this
resulted in a failure of consideration It is found,
therefore, that the equitable solution is to permit
deduction of these severance payments from the amount
of gross backpay owing."
Interest on Backpay
There is disagreement among the parties as to whether
these terminated employees who are entitled to backpay
should also receive interest in view of the fact that the
Board's supplemental decision contained no order that
interest be paid
Conclusions
Originally, the Board did not order payment of interest
on the net backpay award where it was not required by
the Board's original order 6' Later the Board allowed
interest on earnings lost as a result of "discrimination,"
even when the original order was silent thereon."
Thereafter, the Board on December 21, 1956, did not
disturb a Trial Examiner's holding that interest should
accrue on a quarterly basis from the end of each quarter
for which backpay is owed with interest at 6 percent per
annum.b° It is, therefore, recommended that interest be
paid on the net backpay from September 14, 1962, as
provided in Isis Plumbing & Heating Co, 138 NLRB
716
Seep 36, infra
"The General Counsel 's contention that these severance payments were
not discussed with the Union is not borne out by the facts The original
decision states that these severance payments were negotiated with the
Union although not called for under the terms of the collective - bargaining
agreement . 130 NLRB at 1573
"Mooney Aircraft, Inc. 148 NLRB 1057, 1059
"Local 138, International , Union of Operating Engineers , 151 NLRB
972,'974, Lozano Enterprises , 152 NLRB 258, 260, fn 8 Both these cases
involved flagrant examples of discrimination as distinguished from the
present case where there was no orthodox discrimination practiced,
namely, a discharge for union activities or membership
"American Compress Warehouse , 156 NLRB 267, 276, fn 35, enfd 374
F 2d 573 (C A 5)
Whether certain terminated employees forfeited their
rights to reinstatement and backpay because of
alleged picket-line violence
Immediately after the Respondent Company terminated
the unit employees on July 31, 1959, East Bay Union of
Machinists, Local 1304, United Steelworkers of America,
AFL-CIO, the Union herein, established a picket line at
the Emeryville plant at 6 p.m., on the same day. On
August 10, 1959, Ray Bradford, International
Representative of the Pulp and Sulfide Union, which
represented some of the Company's employees, was
stopped by Lincoln Beck, a picket and member of Local
1304. As Bradford attempted to enter the plant premises,
in order to arrange for his members to report for work
that day, Beck blocked him, then shoved him away from
the plant entrance and continued to push and shove him
until he stumbled and lost his balance, whereupon a
policeman intervened.
Bradford then requested the police to give him and his
men (who were Company employees and members of the
Pulp and Sulfide Union) protection in order that they
might report for work that day. While the police were
considering his request, Bradford spoke to Local 1304's
union officials who were picketing the plant entrance
After the conversation ended, Bradford then told the
police that the members of his union had decided not to
attempt to gain access to the plant as the officials of the
picketing Union, Local 1304, had "threatened" that if
they attempted to come to work that morning "their
porches would be blown off and if it took six months to
get them they would be taken care of by the machinists or
by someone.""
On August 19, 1959, about 7 a m., an automobile
containing maintenance employees was en route to the
Company's Emeryville plant to report for work. These
men were replacements hired by the independent
contractor to whom the Company had contracted the
maintenance work formerly performed by Local 1304's
members until their termination on July 31, '1959. A short
distance from the plant, on the street leading to the
entrance gate, David Area, a Local 1304 official and one
of the terminated maintenance employees," moved his
pickup truck from the curb where it was parked to the
center of the street directly in front of the independent
contractor's employees' automobile compelling it to halt
in order to avoid hitting Arca's truck. While the car was
so stopped, it was pelted with various solid objects by
persons congregated on both sides of the street. None of
the automobiles were able to enter the plant premises that
day.
Two days later, on August 21, company employees,
including the terminated employees' replacements, met at
a prearranged location, formed a caravan of six to eight
cars, and proceeded in single file , one car behind the
other, and drove at a speed of approximately 5 miles an
hour toward the plant. As they drove down the street to
the plant's gate entrance, in order to go to work, David
Area again drove his truck from the curb where it was
parked toward the center of the street and attempted to
block the first car in the caravan from entering the plant.
This first car eluded Area's truck by driving around it and
entered the plant gate The next car in line, however, was
not as successful as Area's truck rammed into this second
"The above recital is based on the credited and uncontradicted testimony
of R. C . Thumann, Director of Industrial Relations for Fibreboard
"David Area is recording secretary and on the executive board and
negotiating committee of Local 1304, and was formerly a plant steward
FIBREBOARD PAPER PRODUCTS CORP. 171
auto compelling it to come to a complete stop."
Thereupon, men who were standing on the curb, on both
sides of the street, rushed out into the roadway as soon as
this car was brought to a stop, rocked it back and forth
until it was overturned."
While the car was in an overturned position, wheels in
the air, and occupants upside down, some men threw solid
objects at it, including "a chunk of concrete." One of the
pickets who threw an object at the car was Carl Olson, a
terminated employee. Olson, from a distance of about 20
feet, threw a plastic bottle, 3 by 4 inches in size,
containing 4 ounces of yellow paint at the overturned auto
but it missed. The police then rushed to the scene of the
disturbance and under their protection and guidance, the
remaining automobiles in the caravan proceeded into the
plant premises. Shortly afterwards, the police and fire
departments righted the overturned car, and released the
trapped occupants.
On August 19, 1959, almost 3 weeks after the Union
had established its picket line at Fibreboard's Emeryville
plant, Attorneys James K. Parker and Charles Hanger, of
the law firm of Brobeck, Phleger & Harrison, who
represent the Respondent, were en route to the plant to
transact business. As they approached the plant about 10
a.m., they noticed pickets carrying signs bearing the
legend "Locket Out" in large letters and underneath it in
smaller printed words "East Bay Union of Machinists,
Local 1304." Both Parker and Hanger testified as follows:
As they were about to enter the plant premises, Lincoln
Beck, a terminated employee, walked toward them,
stopped Parker by placing his hand on Parker's chest and
asked him for identification and where he was going.
Parker answered Beck that he had business in the plant
and requested him to remove his hand from his chest so
that he would be able to enter the plant.'° After Parker
repeatedly requested Beck to permit Hanger and him to
enter the plant but to no avail, Parker's recital of what
occurred continues as follows: Beck then gave a "head
signal" toward the direction of 20 to 30 men who were
congregated a short-distance away, whereupon these men
came over to the location where Beck had stopped Parker
and Hanger and "surrounded" them in a semicircle."
Thereupon Parker asked Beck his name and after
receiving no response , one of the men in the group
surrounding them whose name was Richard Groulx, a
union official, stepped forward and struck Parker in the
stomach and in the area of his ear. Hanger, in an effort to
aid Parker, grabbed Groulx "in a big bear hug, pinning
Groulx' s arms to his side." David Area, a union official
and terminated employee, then struck Hanger twice in the
mouth dislodging two teeth." At that point in the attack,
two policemen intervened, one restraining Groulx and the
other Area, placed them both under arrest and drove them
to the Emeryville Police Station. Charles E. Hanger, the
"Area's version is that this auto "hit the front end of my truck." He
denied he had any prearranged plan with his fellow union members that
when he blocked the caravan of cars that they would then proceed to
overturn the cars of those employees trying to enter the plant to go to
work.
"Arca, who worked at the Emeryville plant for 16 years, testified he did
not recognize any of the men who tipped over the auto.
"Beck testified Parker told him "it was none of my business , that they
were going to go into the plant."
"Beck denied he gave a prearranged head signal towards his fellow
pickets to come over to where he was talking to Parker and Hanger in
order to give him help.
"Area's denial on direct examination that he struck Hanger or that he
saw anyone strike Parker is not credited Nor is Beck ' s denial on direct
examination that Area struck Hanger credited.
other attorney involved in this incident, corroborated
Parker's version of what occurred as they attempted to
enter the plant on August 19.
On August 24, 1959, the Alameda County Superior
Court of California, issued a preliminary injunction
against the Union limiting picketing to two pickets at
each gate of the plant." Thereafter, on September 4, 1959,
the preliminary injunction was modified so as to prohibit
all picketing and congregating by union members within 2
blocks of the plant 7' The Union and its members, Area,
Beck, and Olson, were later cited and found guilty on
October 7, 1959, of contempt of court for violating the
injunction of the California Superior Court by the acts
and conduct detailed above."
The question involved here is whether Area, Beck, and
Olson were rendered ineligible for reinstatement because
of their conduct described above and thus not entitled to
any backpay.
The Respondent Company contends that by reason of
the fact that each of these three men committed violence
on the picket line maintained about and in the vicinity of
the plant, following retention of the independent
contractor, that they thereby forfeited any right to
reinstatement and backpay. The Respondent claims the
Bradford incident, Beck and Area assaulting Respondent's
attorneys, preventing employees from entering the plant,
the overturning of the car, and Olson throwing an object
at the overturned automobile, is such misconduct as to bar
the three participants from reinstatement and backpay.
Respondent argues that conclusive proof of their guilt is
evidenced by the State court's contempt proceedings in
which they were found guilty of picket-line violence.
The Union, however, contends that the conduct of these
three men was, at worst, the "animal exuberance" that
occasionally occurs in the pressure of the strike situation;
that there was provocation in the employer's "flagrant and
deliberate" refusal to bargain while "secretly" negotiating
to contract out the work of men with up to 30 years'
service who only had 4 days' notice of termination and
that the findings in the State court's contempt proceedings
are neither binding on the Trial Examiner nor should it be
considered in the proceedings at bar.
The Union additionally claims there is a, more
fundamental bar to the admission of the findings and
order in the State court's contempt proceedings: namely,
the three men here involved exercised their constitutional
privilege not to testify at their trial. The Union argues
that to rely on the record given in the State court would
be equivalent to penalizing these men for exercising their
constitutional right not to testify because the State court's
findings and conclusions were based on a record bare of
the three employees' side of the story.76 Furthermore,
continues Union's counsel, Section 10(a) of the Act
requires the Board to make its own determination of what
effectuates the purposes of the Act, independently of the
determination of any other body. This is a question of
credibility of witnesses, he concludes, which the Trial
Examiner is in the best position to make a judgment. The
"Resp . Exh. 22(a).
"Rasp . Exh. 22(b).
"See Resp. Exhs . i l(a), 11(b), and 12 . See also G . C. Exhs. 4 and 5,
involving ancillary litigation in 1964 and 1965 between the parties in the
U S. Court of Appeals and California District Court of Appeals.
"Proceedings which are civil in nature permit an adverse inference to be
drawn from the failure of a party to testify even where the privilege against
self-incrimination is invoked 8 Wigmore, Evidence , Sec. 2272 (3d ed.
1940). See also Sterling-Harris Ford, Inc, 315 F 2d 277, 279 (C.A. 7),
cert. denied 375 U.S. 814, Strathmore Securities , Inc , Securities and
Exchange Commission Release No 8207, December 13, 1967
172 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
General Counsel states that none of these three former
employees engaged in any violence or any conduct or
misconduct which would warrant forfeiture of their
reinstatement and backpay.
Discussion
Where employees engage in picket-line misconduct,
inhibiting the peaceful settlement of a labor dispute, the
Board may permit the employer to refuse to reinstate
those who engaged in unlawful activities during a strike,
although the employer has not lawfully dismissed them."
Those decisions involving tortious activities by striking
employees which are sufficient to restore the employer's
power of discharge during an unfair labor practice strike,
in some instances , are difficult to reconcile and not clearly
defined by the decisions." See infra
The Supreme Court in N.L R.B. v. Fansteel
Metallurgical Corp.," indicated that any act of employee
misconduct during a strike was a bar to reinstatement.
The Court held that the "illegal" violence of the
employees in a "sit-down" strike (seizing and maintaining
possession of a plant) provided an "independent and
adequate" basis for the refusal to reinstate them. The
Court stated that any unlawful and unprotected activity
which tends to detract from the peaceful settlement of
labor disputes affords an employer the right to discharge
offending workers, regardless of his own previous
conduct.80
Subsequent cases have recognized the possibility of
abuse in automatically allowing an unfair labor practice
employer to discharge strikers for such minor incidents as
are predictable adjuncts to a heated strike, and have
refused to consider as serious enough to bar reinstatement
certain types of misconduct occurring during an unfair
labor practice strike.81 Thus, the Fansteel doctrine has
been limited to situations involving a high degree of
violence and not "minor disorders."82
The Taft-Hartley amendments added to Section 10(c), a
proviso which appears to have been designed to delineate
some conduct for which an employer might effectively
discharge his employees, by providing that an employee
cannot be reinstated who was discharged "for cause." The
legislative history of the later enacted Section 10(c)
proviso would seem to indicate that "cause" was meant to
include many acts of strike misconduct, such as activities
proscribed by Section 8(b) and in conduct violating state
and federal penal statutes." Both the Board and courts, it
would appear, engage in a discretionary balancing process
by weighing, on the one hand, whether or not
reinstatement would effectuate the policies of the Act as
against the rights of employees to engage in union
activities under Section 7 of the Act.86 Two cases have
attempted to evaluate and establish guidelines which will
aid the trier of the facts in determining what conduct will
or will not be found to be sufficient cause for an employer
to bar an employee from reinstatement.
In the first of these cases, N.L.R.B. v. Thayer Co.,8'
the Court of Appeals for the First Circuit was asked to
enforce a reinstatement order for numerous employees
who, during the course of an unfair labor practice strike,
had participated in "coercive" activities which the Board
had nonetheless characterized as protected, in accord with
the Republic analysis.86 The Board found that none of the
conduct with which it dealt "involved actual restraint,
violence, or coercion, or conduct which exceeded the
animal exuberance and mutual harassment characteristic
of such strike situations ."87 Accordingly, the Board held
that the company committed an unfair labor practice by
discharging seventeen employees for union activities. This
action provoked a strike which was broken by a state
court injunction issued on the ground that the picketing
was being conducted in an illegal manner . The company
resisted demands that it reinstate some eighty-six strikers.
It contended that their participation in illegal picketing
was not activity "protected" by Section 7 of the Act. The
Board found that the strike and picketing were
"protected" activities and ordered reinstatement.
On petition for enforcement in the court of appeals,
reinstatement was ordered as to most of the strikers. The
court said that those employees who had engaged only in
protected activities must be reinstated. The strike activity
of the remaining employees was held not to be protected,
but the court said the Board might order their
reinstatement too, if it should find reinstatement would
effectuate the policies of the Act and that the unprotected
activity did not constitute "cause" for discharge within the
meaning of Section 10(c). The court remanded the case to
the Board to make the primary administrative
determination whether the unprotected activity was cause
for discharge and, if not, whether reinstatement would be
an appropriate remedy. The court rejected this
"protected-unprotected" dichotomy as unnecessary and
inappropriate where coercive strike activities were
involved, and stated "The actual questions in this case are
whether under the circumstances the strike conduct was
cause for discharge, and if not, whether reinstatement
would effectuate the policies of the Act."88 Although the
court thus recognized the two questions posed by the
addition of the Section 10(c) proviso to the Act, it
characterized cause as depending upon the context of the
given case rather than specific acts of misconduct per se."
"Kohler Co., 128 NLRB 1062.
"Acme-Evans Co . 24 NLRB 71, 102-103, enfd . 130 F.2d 477 (C A. 7);
N.L.R B v. Longview Furniture Co, 206 F.2d 274, 276-277 (C A. 4),
remanded 110 NLRB 1734, the dissent at page 1739 ; Patterson-Sargent
Company , 115 NLRB 1627; N. L R.B v . Trumbull Asphalt Co, 327 F.2d
841 (C.A. 8); and Oneita Knitting Mills, Inc . v. N.L.R.B., 375 F.2d 385
(C.A. 4)
"306 U.S. 240 , modifying 98 F.2d 375 (C.A. 7), reversing 5 NLRB 930.
"See Southern Steamship Co. v. N.L.R.B., 316 U .S. 31, where a
mutinous ship crew 's conduct was held to be such gross misbehavior as to
preclude reinstatement.
"N.L.R.B. v. Puerto Rico Rayon Mills, inc ., 293 F .2d 941 (C.A 1),
N L.R.B . v. Wichita Television Corp., 277 F.2d 579 (C.A. 10), cert. denied
364 U.S. 871; N.L.R.B v . Cambria Clay Products Co .. 229 F.2d 433
(C.A 6); see also N.L.R B v. Washington Aluminum Co , 370 U.S. 9.
"Republic Steel Corp. v. N.L.R.B., 107 F.2d 472 at 479 (C.A. 3),
modified on other grounds 311 U.S. 7. See Victor Products Corp. v.
N L R.B , 208 F.2d 834 (C.A.D.C.); Socony Vacuum Oil Company, Inc.,
78 NLRB 1185; Standard Oil Co., 91 NLRB 783; N. L.R.B. v. Cambria
Clay Products Co., 215 F .2d 48 (C.A. 6); Dalton Telephone Co, 82
NLRB 1001, 1003 ; N.L.R.B . v. Mt. Clemens Pottery Co.. 147 F.2d 262
(C.A. 6).
"See Cox , Some Aspects of the LMRA , 1947, 61 Harvard Law Review
20-22, Vol. I Legislative History . LMRA-69, 101, 176 , 228, 318, 333,
434, 537, 542, 558, 563, 882 , 905, 912 , 917 (1948 ); Vol. 2 Legislative
History . 1572, 1555, 1593-95, and 93 Congressional Record 6518. See
N L R.B . v Dixie Shirt Co., 176 F.2d 969 , 974 (C.A. 4); Kohler Co. v.
Local 833 , 300 F . 2d 699, 705 (C.A.D.C.), cert. denied 370 U.S. 911.
"Local 833 v. N.L.R. B., 300 F .2d 699 (C.A.D.C.). N.L.R.B. v. Thayer
Co., 213 F .2d 748 (C.A. 1). Cf. N.L R.B. v. Local No. 1229 , Electrical
Workers . 346 U.S. 464; N L R B . v. Washington Aluminum Co , 370 U.S
9, where the Supreme Court noted that " It is of course true that Section 7
does not protect all concerted activities...."
6213 F.2d 748 (C.A. 1), cert . denied 348 U.S. 883.
" 107 F.2d 472 (C.A. 3), modified on other grounds 311 U.S. 7.
"H. N. Thayer Co., 99 NLRB 1122, 1133.
"213 F.2d at 754.
"213 F.2d at 753, fn. 6.
FIBREBOARD PAPER PRODUCTS CORP. 173
With regard to the application of Section 10(c), the
Thayer case has threefold significance . The court stated
that (1) reinstatement of employees who have engaged in
unprotected activities may, in some instances, "effectuate
the policies of the Act";" (2) participation in a protected
activity cannot be "cause" for discharge;" and (3
participation in an unprotected activity is not necessarily
cause for discharge."
In affirming reinstatement of those employees who had
participated only in protected activities, the court as noted
above, stated that participation in a protected activity
cannot be cause for discharge. This statement appears
inconsistent with one made by the Supreme Court in
N.L.R.B. v. Local No. 1229, IBEW, where the Court
seems to say that certain types of activity might constitute
cause for discharge even though it is protected by Section
7.93
The Board in Thayer, on remand , held that
reinstatement of employees who had engaged in coercive
activities could not effectuate the policies of the Act. The
Board reaffirmed its original "protected-unprotected"
analysis, transferring these strikers to the latter category
on the basis of the court-imposed finding that misconduct
can never be protected activity." It would seem, therefore,
that the court's definition of the limits of an employer's
discharge power is to be determined on the particular
facts in each case.9s
The second case which establishes guidelines to aid the
trier of the facts in determining what conduct will bar
reinstatement is the Kohler decision of the Court of
Appeals for the District of Columbia96 which followed the
Thayer approach of resolving reinstatement issues. The
Board had denied reinstatement to the 90 workers that
Kohler had specifically discharged for misconduct. Some
of the 90 had not participated to any greater degree than
1,700 other strikers in the acts of violence committed
during the course of the long strike." The Board found
that the presence of a great number of pickets had
resulted in a coercive effect which was as serious as active
violence,96 and thus barred employees from reinstatement.
The court, however, rejected any such basis of
disqualification for strike misconduct viewed out of the
context of employer provocations and unfair labor
practices, and remanded the reinstatement issue for
reconsideration in terms of the Thayer doctrine which
declares that the seriousness of the employer's unlawful
acts and the seriousness of the employee 's acts must be
balanced in determining whether reinstatement would
"213 F.2d 748.
"Id. at 755, fn. 13.
"Id. at 753.
"Employees of a television station were fired for distributing handbills
demeaning the quality of the station 's programs. The Board and the Court
of Appeals disagreed as to whether a concerted activity had to be
"unlawful" or merely " indefensible" to be beyond the purview of Section 7
of the Act. Jefferson Standard Broadcasting Co. 94 NLRB 1507,
enforcement denied 202 F.2d 186 , reversed 346 U.S. 464. The Supreme
Court did not discuss the Board and Appeals Court disagreement but
stated at page 477 that the employees disparaging their employer's TV
programs deprived them of the protection of Section 7 because of their
"disloyalty "
"H. N. Thayer Co., 115 NLRB 1591, 1596.
"See N.L.R.B. v . Puerto Rico Ravon Mills, Inc.. 293 F. 2d 941 (C.A. 1);
N.L.R.B. v. Efco Manufacturing , Inc., 227 F .2d 675 (C.A. 1), cert. denied
350 U.S. 1007. But see N . L.R.B. v . Wailick. 198 F 2d 477 (C.A. 3).
"Kohler Co., 128 NLRB 1062, 1194 , enforcement denied Local 833,
UAW-AFL-CIO v. N.L.R. B., 300 F . 2d 699 (C.A.D.C.), cert denied 370
US.911
"A summary of the facts appears at 128 NLRB 1145-1240.
"128 NLRB 1103-08.
effectuate the purposes of the Act."
In discussing the Thayer doctrine, the court in Kohler
did not elaborate on the meaning of "for cause" in
Section 10(c) as a statutory bar to reinstatement, but
merely stated that the issue was not raised before the
Board and, since it is a determination within the special
competence of the Board, it could not be treated upon
appeal.10° The court did, however, suggest some criteria
for determining when Section 10(c) precludes
reinstatement of employees discharged "for cause," such
as "the employer's unfair labor practices, each employee's
job history, and the relationship between the acts of
misconduct and fitness for continued service."101
In applying the various indicia established by the
decisions discussed above, and synthesizing their holdings,
it would appear that in determining whether the
employee's conduct is so aggravated as to bar
reinstatement , the following factors should be weighed in
reaching a judgment:
(1) The employer's provocation, if any, in the context of
reinstatement having as its primary purpose the
prevention of discriminatory discharges for union
activities;
(2) The post-reinstatement job contact between the
employee and employer;
(3) Whether reinstatement would exacerbate the future
employment relationship so as to result in decreased
business efficiency or serious maladjustments to the
employer's work force and its relations with its
employees;
(4) Whether the employee's conduct is so unlawful that
his continued employment by reinstatement should not
be forced on the employer because the nature of the
dischargee's misconduct renders harmonious
employer-employee relations improbable; and
(5) Whether the employee's conduct was so flagrant as
to render him unfit for further employment so that it
would not only be unreasonable to require his
reinstatement but it would also not "effectuate the
policies of the Act" nor "preserve industrial peace."102
In applying this test, a caveat of the Thayer case should
be kept in mind , namely , that certain activity may be
unprotected by Section 7 without being "cause" for
discharge in the light of all the circumstances.'" Such a
rule is a necessary corollary of the proposition that the
Board may order reinstatement of employees discharged
for participation in unprotected activities. The same
considerations that lead to the conclusion that at times the
policies of the Act may be effectuated by reinstating
employees discharged for unprotected activities also
require that not every unprotected activity should be cause
for discharge.' °'
It might be argued that "cause" as used in Section
10(c) is a concept not concrete but abstract which is to be
applied empirically and pragmatically and the definition
"300 F .2d at 702-04.
1"300 F.2d at 705 See the Board' s Decision , 128 NLRB at 1105.
"1300 F.2d at 705
"'Fibreboard Corp. v N L.R.B , 379 U.S. 203, 210; "One of the
primary purposes of the Act is to promote the peaceful settlement of
industrial disputes by subjecting labor-management controversies to the
mediatory influence of negotiation."
'"N.L.R.B. v. Thayer Co., 213 F.2d 748, 753 (C A 1) See also fn. 101,
supra.
164Id. at 755-757. Cf. N.L R B v Local No 1229, IBEW, 346 U.S. 464
at 480.
174 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
of which is left to the discretion of the Board without any
settled criteria. The merit of this interpretation (which
accounts for the difficulty encountered in attempting to
frame any general principles with respect to reinstatement
situations ), is that it enables the trier of the facts to weigh
the seriousness of employee misconduct against the
amount of employer misconduct in each case in which
reinstatement is requested.10S This subjective approach
would explain the lack of definiteness present in some
decisions with respect to what conduct by striking
employees in any given situation will be found to be
"cause" barring reinstatement and perhaps affords the
Board and courts a ratio decidendi for those cases where
reinstatement has been ordered for an employee whose
conduct does not fall within the protection of Section 7.106
Conclusions
The nature of Arca's and Beck's conduct has been
described above in detail. The seriousness of their violent
and unprotected activities is such that when weighed
against the amount of the employer's provocation, it is
believed and found that it would better effectuate the
purposes of the Act to penalize unprovoked violence by
not requiring their reinstatement and thus foster industrial
peace and harmony by strengthening the deterrents upon
violence by employees.' 07 As for Olson, who threw a small,
harmless plastic vial of paint and missed the target, it has
been held in similar situations that where an employee
fired missiles at automobiles that it was not sufficient
grounds for denying reinstatement.10B Accordingly, there is
insufficient cause to deny Olson reinstatement and
backpay.
Regardless of how Arca's and Beck's unprotected
activities are analyzed, evaluated, weighed, and balanced
in the context of the Respondent Employer's
nonprovoking conduct and the purposes and policies of
the Act, the fact remains that reinstating them would be
the equivalent of not only ignoring but condoning their
unjustifiable violence. To do this, despite the
unaggravating nature of the Company's conduct and the
technical nature of its unfair labor practice, would be the
same as placing a premium on resort to force instead of
pursuing available legal remedies and thus subvert the
principles of law and order which lie at the foundation of
society. To reinstate Arca and Beck, in the face of the
prohibition of Section 10(c) and despite their violent and
unlawful conduct, which was one-sided on their part,
would be akin to according them the same relief to which
they would have been eligible if they had engaged in
activities protected by Section 7 of the Act and thus place
a premium on force.' 09
The premium in this case then, would be approval of
their illegal acts at no risk to their jobs which would be
contrary to the explicit Congressional mandate in Section
10(c) that: "No order of the Board shall require the
reinstatement of any individual as an employee who has
been suspended or discharged, or the payment to him of
any backpay, if such individual was suspended or
16N L R B. v. Thayer Co, 213 F.2d 748 at 753.
"The legislative history of Sec 10(c) indicates the "cause" provision
was not intended "to change the existing law . " 93 Congressional
Record 6518 - 19 See Cox , The Right to Engage in Concerted Activities, 26
Indiana Law Journal 319 , 324, fn. 24.
"'See Sec . I of the Act "Declaration of Policy."
"'Kansas Milling Co. v. N. L.R B., 185 F 2d 413 (C.A. 10) modifying 86
NLRB 925; Horn Manufacturing Company, Inc, 83 NLRB 1177, 1179
(reinstatement ordered).
"'N.L R.B. v. Fansteel Metallurgical Corp . 306 U S 240, 253.
discharged for cause " It is recommended, therefore, that
Arca and Beck be refused reinstatement and any
backpay.10
Fred C. Johnson
Fred C. Johnson, who worked for Fibreboard for 23
years as a machinist, was terminated on July 31, 1959,
when the maintenance work was contracted to an
independent contractor. After he was terminated, he was
employed by a "trailer outfit" (the name of which he does
not recall) from November 1959 to approximately
February 1, 1960, as a machinist. It appears he did not
work thereafter in the Bay Area. He sold his home and
moved on May 1, 1960, from Oakland, California, to
South Lake Tahoe, California, a resort area, which is 180
miles from Oakland. He built a home at Lake Tahoe,
moved into it on July 1, 1960, and went into the real
estate business, building, buying and selling homes. Since
he moved his residence to Lake Tahoe on May 1, 1960,
which has no industrial plants, he has worked at a motel' I I
and at Vernon Cox Speciality Sales, a boat shop at $2 per
hour repairing motor boats. These jobs were for a short
duration and were performed in addition to Johnson's real
estate business. The Respondent Company reinstated him
to his former job about March 18, 1965, but Johnson quit
two weeks later, on April 2, 1965, and returned to his
home at Lake Tahoe. Since the early part of 1966, he has
been promoting a private club, called Valhalla at Lake
Tahoe, "selling memberships " He is part owner of the 9
acres of land on which this club is to be constructed.
The Respondent Employer claims that Johnson is not
entitled to any backpay because he failed to exercise due
diligence in seeking other work by deliberately causing his
gross back wages to accumulate during the backpay
period September 14, 1962, to January 18, 1965.
Discussion
A backpay order is a reparation order designed to
vindicate the public policy of the statute' I and its purpose
is to "make whole" the employee for losses which he
suffered as a result of an unfair labor practice.' I I The
discriminatee is entitled to " . . a sum of money equal to
that which [he] would normally have earned as wages
during the period from the date of his discharge to the
date of . . . offer of reinstatement, . . . less the amount
earned subsequent to discharge ....""'Of course, where
an economic shutdown occurs, backpay does not normally
accrue;1I nor are dischargees who do not normally make a
reasonable search for work entitled to backpay"' and
"'Oneita Knitting Mills. Inc v . N L R.B , 375 F 2d 385 (C A. 4).
"'Johnson relieved the owner of this motel whenever he had to be away
from his place of business
fl 'Nathanson v. N.L R. B, 344 U.S. 25, 27.
"'See Phelps Dodge Corp. v N L R B., 313 U.S 177, 197. In Waycross
Sportswear . Inc., 170 NLRB No. 139 , the Board refused to adopt the Trial
Examiner's recommendation in an 8(ax5) violation that the Respondent
should make the employees "whole , insofar as practicable , for the
monetary value of benefits, if any , which it may be shown Respondent's
employees would reasonably have been expected to receive in the past but
for Respondent's unlawful refusal to bargain "
"'Pennsylvania Greyhound Lines, Inc., I NLRB 1, affd 303 U S. 261,
Savoy Laundry, Inc, 148 NLRB 38.
,"Central Minerals Co., 59 NLRB 757; Satchwell Electric Construction
Co.. 128 NLRB 1265, 1279.
"'Phelps Dodge Corp., 313 U.S. 177. See Mooresville Cotton Mills v
N.L.R B. 110 F.2d 179 (C.A. 4), where it was held dischargee may reject
interim employment offered at locations distant from his home
FIBREBOARD PAPER PRODUCTS CORP.
discriminatees who have withdrawn from the labor market
because of disability or for other reasons , do not receive
backpay for such periods of disability ."' Due diligence in
seeking work requires an "honest good -faith effort.""'
Only actual losses of earnings must be made good.
Accordingly , deductions must be made from gross
backpay not only for actual interim earnings by the
worker for whom backpay is claimed but also for losses
which are willfully incurred ."' It is thus required to take
into account the general considerations applicable to
mitigation of damages.'"
The burden of proof that Johnson did not sufficiently
mitigate his losses and "facts which would negative the
existence of liability or which would mitigate the
liability," " ' rests on Respondent - both because it was
the original wrongdoer and because the issue is one of
affirmative defense .' 12 The employer has the burden of
establishing affirmative defenses which would mitigate his
liability, including the defense of willful loss of earnings.' 1'
The Board in New England Tank Industries , Inc., 147
NLRB 598, 601 , stated : ". . . while the general burden of
proof is on the General Counsel to establish for each
discriminatee the loss of pay which has resulted from
Respondent ' s established discriminatory conduct , i.e., the
gross backpay over the backpay period , the burden of
proof is on Respondent to show diminution of that
amount , whether such diminution results from the
claimants' willful loss of earnings , or from the
unavailability of a job at Respondent 's operation for some
reason unconnected with the discrimination."
As the "finding of an unfair labor practice . . . is
presumptive proof that some backpay is owed,"' 14 the
General Counsel's burden is limited to showing "what
would not have been taken from [the employees] if the
Company had not contravened the Act ."' "This allocation
of the burden is aptly expressed as follows : ". . . in a back
pay proceeding the burden is upon the General Counsel to
show the gross amounts of back pay due. When that has
been done , however , the burden is upon the employer to
establish facts which would negative the existence of
liability to a given employee or which would mitigate that
liability."' 16
"Making the workers whole for losses suffered on
account of an unfair labor practice is part' of the
vindication of the public policy which . the,Board enforces" ""
and a Board backpay order , the Supreme Court has
stated , "should stand unless it can be shown that it is a
patent attempt to achieve ends other than those which can
fairly be said to effectuate the policies of the Act.' 1'
"'Columbia Pictures Corp ., 82 NLRB 568; Kopman- Woracek Shoe
Mfg. Co., 66 NLRB 789, enfd . 158 F.2d 103 (C.A. 8). See American
Manufacturing Company, 167 NLRB No. 71, where it was held that a
discriminatee injured in the course of interim employment he was forced to
seek because of an 8 (aX3) discharge , was entitled to backpay for a period
of disability . As to what conduct on a picket line bars backpay , see supra.
Cf. Elmira Machine and Specialty Works , Inc., 148 NLRB 1695, 1699,
particularly fn. 3.
"'N.L.R B. v. Cashman Auto Co., 223 F . 2d 832 , 836 (C.A. 1).
"'Phelps Dodge Corp ., supra, 198.
1 'IN L.R.B . v. Seven- Up Bottling Co., 344 U.S. 344, 346.
"'See U.S. Air Conditioning Corp .. 141 NLRB 1278, 1280.
"'See 134 A.L.R. 243 , 257-270 ; Phelps Dodge Corp. V. N.L.R . B., 313
U.S. 177, 199-200 ; N.L.R.B. v. Miami Coca-Cola Co., 360 F . 2d 569, 575
(C.A. 5), Nabors v. N.L.R . B., 323 F . 2d 686 (C.A. 5); N L .R B. v. Brown
& Root , Inc., 311 F . 2d 447 , 454 (C .A. 8); Fisher Construction Co. v.
Lerche , 232 F . 2d 508 , 509 (C .A. 9); N.L . R.B. v. Boswell Co., 136 F.2d
585, 597 (C.A. 9); Mastro Plastics , 136 NLRB 1342, 1346 ; Southern Silk
Mills , Inc., 116 NLRB 769; Ozark Hardwood Co, 119 NLRB 1130, 1135;
Williston on Contracts , Sec. 1360.
"'N.L.R.B. v. Mooney Aircraft , Inc., 366 F .2d 809, 813 (C.A. 5);
N L R. B . v. Brown & Root , Inc., 311 F . 2d 447, 454 (C.A. 8)
175
The Board has adopted the common -law "loss of
earnings" rule, under which the measure of the employee's
recovery is the earnings which he has lost, less any other
earnings which he has lost, less any other earnings which
he obtained or willfully refused to obtain ."1' However,
payments do not constitute "earnings" unless awarded for
services rendered . 1"Union strike benefits , money received
from a union for picketing , insurance payments or other
collateral benefits are not considered earnings."'
The Supreme Court has also recognized that "The
computation of the amount due may not be a simple
matter . . . Congress made the relation of remedy to
policy an administrative matter , subject to limited judicial
review , and chose the Board as its agent for the purpose."' 72
The Supreme Court has likewise spoken with respect to
the quantum of proof necessary - to sustain an award of
damages , holding that "there is a clear distinction between
the measure of proof necessary to establish the fact that [a
party] sustained some damage and the measure of proof
necessary to enable [a tribunal] to fix the , amount.""'
"Certainty in the fact of damage is essential . Certainty as
to the amount goes no further than to require a basis for
a reasoned conclusion ."' "' As close approximation as the
circumstances permit . ' 11 "The wrongdoer is not entitled to
complain that [the amount of damage] cannot be
measured with the exactness and precision that would be
possible if the case , which he alone is responsible for
making , were otherwise ."' 36 In determining the amount of
backpay due , approximation of the loss by reasonable
methods is sufficient.' 37 The Board may adopt formulas
reasonably designed to produce such approximations
provided the method selected is neither arbitrary nor
unreasonable in the circumstances involved."' However,
any uncertainty is resolved against the wrongdoer whose
conduct made certainty impossible.' 31
"'N.L.R B v. Mastro Plastics Corp. 354 F.2d 170, 175, 178 (C.A 2),
cert. denied 384 U.S 972
"'Virginia Electric B Power Co. v. N L.R.B.. 319 U.S. 533, 544.
"'N.L R B. v. Brown B Root. Inc., 311 F.2d 447, 454 (C.A. 8).
I "Phelps Dodge Corp v N.L.R.B., 313 U.S 177, 197.
"'N L.R.B. v. Seven-Up Bottling Co., 344 US. 344, 346, 347. See
M.F.A. Milling Co., 170 NLRB No. Ill, where employer refused to
bargain and was ordered to pay members of union 's negotiation committee
for wages lost while attending past negotiating sessions.
"'N.L.R.B. v. Marshall Field & Co, 129 F.2d 169 (C.A 7), affd. 318
U S. 253 ; National Casket Co, I NLRB 963, 975-976.
"'N.L R.B. v. Brashear Freight Lines, Inc., 127 F.2d 198, 199-200 (C A.
8)
"'Rice Lake Creamery Co.. 151 NLRB 1113, affd. in part 365 F.2d 888
(C.A.D.C .); Standard Printing Company of Canton, 151 NLRB 963, 966,
Gullett Gin Co.. Inc. v. N.L.R B. 340 U S. 361; Eichel v. New York
Central Railroad Co. 375 U.S 253; N.L.R.B v Melrose Processing Co.,
351 F.2d 693, 101 (C A. 8). Cf. N L.R.B. v Moss Planing Mill Co. 224
F.2d 702 (C.A. 4), where the court held workmen ' s compensation
payments to be earnings for backpay purposes. See American
Manufacturing Company, 167 NLRB No. 71, with respect to workmen's
compensation awards , tolling of backpay period particularly in cases of
industrial accidents during the interim period.
"'Nathanson v. N L.R.B., 344 U.S 25, 29-30.
"'Story Parchment Paper Co. v. Paterson Parchment Paper Co., 282
U.S. 555, 562-563. See Merchandiser Press, Inc., 115 NLRB 1441.
"'N.L.R B. v. Kartarik , Inc, 227 F.2d 190, 193 (C.A. 8).
1 "Marlin-Rockwell Corp v. N.L.R.B, 133 F.2d 258, 260 (C A. 2)
'"Story Parchment Paper Co. v. Paterson Parchment Paper Co., supra,:
East Texas Steel Castings Company, Inc, 116 NLRB 1336
"'Flora and Argus Construction Co, 149 NLRB 583, 586.
'"N.L.R.B. v. Brown & Root , Inc., 311 F.2d 447, 453 (C.A. 8) Accord
N L.R.B. Y. Local 138, Operating Engineers , 380 F.2d 244 (C.A. 2). Cf.
N.L.R.B. v. Deena Artware, Inc, 228 F.2d 871, 872 (C.A. 6).
"'N L.R.B. v Miami Coca-Cola Co., 360 F.2d 569-573 (C.A. 5),
N.L R B v. District Council of Painters , No 52, Etc., 363 F 2d 204, 205
(C.A. 9).
176 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The courts of appeals have recognized that these
holdings are applicable in Labor Board backpay cases. In
one case' 69 where the court, after quoting from the above
Supreme Court cases, stated:
The principles are, of course, intended to permit a
solution of the problem of amount to be made upon any
range of facts, circumstances, or reasonable inferences,
which afford a rational basis for a conclusion."'
Accordingly, the Board has the power to order "such
affirmative action including reinstatement of employees
with or without backpay" as will effectuate the purposes
of the Act,' 41 and it is authorized to effect "a restoration
of the situation, as nearly as possible, to that which would
have obtained but for the illegal discrimination. ""'Thus,
in fashioning any remedy, it is necessary that the nature
of the unfair labor practice be looked to and the facts
upon which it is premised. This is particularly so in this
case as the Respondent ' s conduct was minimal in its
execution, devoid of union animus and concededly
economic in its motivation.
Conclusions
In applying these principles to the facts in this
proceeding, it is concluded and found that Johnson did not
make diligent and reasonable efforts to secure interim
work after his termination. The record is conclusive that
as early as 1956, Johnson had intended to retire eventually
to Lake Tahoe as evidenced by his own testimony that he
had bought a lot there three years before he built his
home at the lake. He testified, "That was one place I
always intended to retire to . when I was through
because I liked it up there ...." When his job suddenly
terminated on July 31, 1959, it accelerated the date for his
expected retirement, as indicated by the fact that eight
months later Johnson sold his home in Oakland and
moved to Lake Tahoe where he built a home on a lot he
had purchased three years earlier admittedly in
anticipation of the time when he would retire.
Johnson was in the enviable and commendable position
of having accumulated by dint of hard work, frugality and
wise investments , a sizeable competence , sufficient without
excess, to pay him an income on his own investments of
$4,448 for the year 1961; and $4,306 for 1962 and
approximately the same income for both 1963 and 1964.
With this modest nest egg supplemented by social security
payments which were in the offing, and an inchoate
pension from the Respondent Company, payable as of
September 22, 1967 , as well as his various business
ventures, he was in the happy situation of being able to
enjoy the delightful prospect of not being obliged to resort
to seeking diligently any other work. This reasonable
inference of lack of motivation and diligence in seeking
work, it would appear, is evidenced by the following
indicia : his half-hearted and lackadaisical efforts to obtain
work in the Bay Area; moving eight months after his
discharge from Oakland to Lake Tahoe where he had
purchased a lot in 1956 in anticipation of building a home
on it when he retired, and his few jobs and sporadic
"'See N.L.R.B. V. Kartarik , Inc., 227 F 2d 190, 192-193 (C.A. 8)
"See also Marlin-Rockwell Corp v. N.L R B, 133 F.2d 258, 260-261
(C.A. 2), F. W. Woolworth Co v. N L R.B., 121 F.2d 658, 663 (C.A. 2);
N L.R.B. v. Denna Artware . Inc, 228 F.2d 871 (C.A. 6), N L R.B v
Cashman Auto Co.. 223 F.2d 832, 836 (C A 1).
I "Sec. 10(c) of the Act
"'Phelps Dodge Corp. v. N.L.R.B, 313 U.S. 177, 194.
periods of employment by others (as contrasted with his
self-employment) both at Lake Tahoe and the Bay Area
from 1959 to 1965. He thereby removed himself from the
labor market. See Rutter-Rex, 158 NLRB 1414, 1420.
Corroborative of this conclusion is his acceptance in
March 1965, of Respondent's offer of reinstatement and
then almost immediately quitting his job two weeks later;
his damaging admission that he returned to his job only
because the Union importuned him to do so in connection
with this matter of backpay and that his acceptance of
reinstatement was only pro forma because he wanted to
return to his home at Lake Tahoe where he preferred to
live and where he had a job awaiting him on April 1,
1965.
Johnson's testimony with respect to registering with the
State employment agency and his Union, Local 1304, in
an effort to obtain work, impressed the trier of these facts
as being a sham and not done sincerely but rather an
automatic going through the motions in order to be
eligible for unemployment compensation. From 1962 to
1964, inclusive, he made the 360 miles round trip from
Lake Tahoe to Oakland three to six times each year. He
acknowledged he came to visit relatives in the Bay Area
and that on some of these occasions he did not call at the
union hall to ascertain if work was available.' 66
His testimony with respect to the efforts he made to
obtain work is inconsistent, self-contradictory, unspecific
and vague. For example, when he testified with respect to
companies and what employment agencies, both public
and private, he made applications with for work, he
mentioned no names, dates or specifics."' His testimony
at times was incoherent, unimpressive, and it is believed
purposefully vague and obscure .16 Many of Johnson's
self-serving statements and much of his unimpressive and
incredible testimony which was a maze of confusion,
equivocations, improbabilities and inability to recall
details were given in reply to leading and suggestive
questions when he was under examination by the General
Counsel' s representative which detracts from the weight to
be given his testimony.' 07 Little probative value has been
given to the testimony thus elicited as the vice in counsel
asking Johnson leading questions is that they suggest the
desired answers which the witness will often merely adopt"'
Liberty Coach Co., Inc., 128 NLRB 160.
In appraising the diligence of Johnson's efforts to
obtain employment, there is, of course, no requirement
that his search meet with "success: it only requires an
honest good faith effort."' 49 What constitutes such a
"44 At another point in his testimony , he inconsistently testified that
when he came to the Bay Area from his Lake Tahoe home , "I always went
down to see Mr Ferber down at the Union."
"'The only exception was his applying for jobs with the American
Machinery and Foundry Company and American Can Company but no
dates or other details were given in his testimony.
"'He testified as follows: "I mostly went to the can companies and
people that had a lot of machinery that needed repairing . In fact, I would
look at the telephone book in the morning and I would make a check in
the industrial plants, and that day I would go see two or three of them and
the next day I would go do the same thing."
"'Although Johnson was first examined by Respondent ' s counsel, his
testimony reveals that although he may not have been "hostile," neither
was he in a realistic sense Respondent ' s witness as man ifested by his
compliant and accommodating answers to the General Counsel's leading
questions on "cross -examination."
"'The following is an example of Johnson's examination by General
Counsel:
Q. Now, before you moved up to the Tahoe area , Mr. Johnson, do
you feel you had exhausted the job possibilities in the Bay Area?
* * s s n
A. I did
"'N.L.R B v Cashman Auto Co, 223 F 2d 832, 836 (C.A 1).
FIBREBOARD PAPER PRODUCTS CORP.
good-faith effort is "impossible to define
sharply,"150 as the answer necessarily depends
upon the circumstances of each particular case.151
In broad terms, however, it would seem that a good-faith
effort is best manifested not by a mechanically artificial
effort to give the false impression of seeking work but
rather by the sincere and reasonable efforts of an
individual in his circumstances to relieve his
unemployment. It requires conduct consistent with an
inclination to work and to be self-supporting, as well as
the economic climate in which the individual operates, his
skill and qualifications, or lack, his age and his personal
limitations and handicaps. It is in the context of the
foregoing that it is determined in each case whether the
employee made a sincere and reasonable effort to mitigate
the loss of earnings flowing from his discharge.
Considering all the evidence and circumstances detailed
above, the demeanor of Johnson while testifying, and
applying the principles enunciated above to the facts of
the case, it is concluded and found that Johnson did not
engage in a diligent and continuous effort to find gainful
employment during the backpay period, but, on the
contrary failed to make a reasonable search to find other
work and thereby incurred a willful loss of earnings.
Accordingly, Fred C. Johnson is not entitled to backpay.
Deductions of Pension Benefits
When the employees were terminated , Bennett , Capps,
Crispino, Fuller , Gronberg, Hamidy , Hughes, E. T.
Johnson , J. P. Johnson , Lowell Nash , and Smith elected
to take early retirement and thereafter were paid monthly
retirement benefits . Some of these men would have been
entitled to jobs during the backpay period . Since their
action was voluntary and there was no misrepresentation
when they made their election, the amounts paid as early
retirement benefits have been deducted from the backpay
"'Guidice v. Board of Review , 14 N.J. Super . 335, 82 Ad 2d , 206, 207
"'See Mooresville Cotton Mills v. N.L.R.B .. 110 F.2d 179, 181 (C.A. 4),
United Protective Workers v Ford Motor Co., 223 F 2d 49 , 52 (C.A. 7).
177
owing them resulting , in some instances , of overpayments.
See Appendix A attached to this decision and Section 20
of the Retirement Plan (Resp. Exh. 6)
Resume
1. The hourly wage rates paid Respondent's ILWU
millwrights during the backpay period from September 14,
1962, to January 18, 1965, are to be applied in computing
what the terminated maintenance machinists are to receive
in gross backpay. The rates paid the ILWU millwrights
by Fibreboard were as follows.
June 1, 1962 $3.695
June 1, 1963 - 3.795
June 1, 1964 3.895
June 1, 1965 - 3.985
2. There are 21 bargaining unit machinists jobs
available."'
3. Respondent is to be credited with severance
allowances against backpay.
4. Respondent is entitled to be credited with amounts
paid as early retirement benefits and for retirement plan
deposits owing for the backpay period, for those electing
reinstatement.
5. The compulsory retirement of employees Gronberg,
Holmes, J. P. Johnson, Capps, Crispino, Hamidy, and
Bennett fell on the dates specified at page 169.
6. F. C. Johnson is not entitled to backpay because he
failed to make diligent efforts to obtain equivalent
employment during the backpay period.
7. The terminated employees are not entitled to any
benefits during the hiatus period (August 1, 1959 -
September 14, 1962) except for computing the date on
which they will be eligible to retire.
8. The misconduct of Area and Beck bars them from
reinstatement and backpay but not Olson.
[Recommended Order omitted from publication.]
11The following accepted reinstatement Bradford , Homen , Lippert,
Longnecker , Price , Raineri, Reihl , Swisher, Weismdler , Novacek, and
Cruze who retired on October 1, 1965.