Florida Steel Corp.

National Labor Relations Board - Board Decisions

Aug 25, 1977

231 N.L.R.B. 651 (N.L.R.B. 1977)

FLORIDA STEEL CORPORATION
Florida Steel Corporation and United Steelworkers of
America, AFL-CIO. Case 12-CA-7450
August 25, 1977
DECISION AND ORDER
On May 5. 1977, Administrative Law Judge James
L. Rose issued the attached Decision in this
proceeding. Thereafter, the Respondent filed excep-
tions and a supporting brief, the General Counsel
and the Union filed reply briefs, and the Union filed
cross-exceptions.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,t and conclusions of the Administrative Law
Judge.
The General Counsel has requested the Board to
increase the interest rate awarded on backpay and
other monetary remedies from the current 6 percent
per annum to 9 percent and has submitted a detailed
brief in support of such request. For the reasons set
out below, we agree that the 6-percent interest rate is
not in line with current economic conditions.
The current interest rate was established in 1962 in
Isis Plumbing & Heating Co., 138 NLRB 716.
Although no reason was given for the choice of 6
percent, at that time 6 percent was the rate used by
the Internal Revenue Service, in suits by the
Government, and was the legal rate of interest in
most States.
The Board explained the rationale behind award-
ing interest in some detail in Isis. The statutory
obligation creates a debtor-creditor relationship
between the respondent and the discriminatee. The
purpose of interest is to compensate the discrimina-
tee for the loss of use of his or her money. In addition
to producing a more equitable result, the Board
noted that the addition of interest would encourage
more prompt compliance with Board orders without
placing a significant additional burden on the
wrongdoer.
Although the Board has in recent years refused a
number of requests to raise the interest rate 2 and has
rejected the notion of varying the rate of interest by
I The Respondent has excepted to certain credibility findings made by
the Administrative Laws Judge. It is the Board's established policy not to
overrule an Administrative Law Judge's resolutions with respect to
credibility unless the clear preponderance of all of the relevant evidence
convinces us that the resolutions are incorrect. Standard Dry Wall Products,
Ii.. 91 NLRB 544 (1950), enfd. 188 F.2d 362 (C.A. 3, 1951). We have
carefully examined the record and find no basis for reversing his findings.
Certain inadvertent errors in the Administrative Law Judge's Decision
have been noted and corrected.
' See. e.g.. Hiter Company, 220 NLRB 1230 (1975); Mercr Peninsula
Aithuhlanse Sern ie. Inc., 217 NLRB 829 (1975); Fuqua Homes Missouri, Inc.,
201 NLRB 130(1973!: TheNationalC(sh Register ompanre, 190 NLRB 581
(1971)1: Regol Aluminum, Inc., 190 NLRB 468 (1971): B & G C(hrsler-
231 NLRB No. 117
geographical area,3 we have decided to reexamine
our 15 years of experience with the 6-percent rate in
light of the General Counsel's brief, which contains
persuasive economic and legal support in justifica-
tion of an increase.
This country's economy has for some time been
caught up in an inflationary trend which the experts
predict will continue into the foreseeable future,
although perhaps at a reduced rate. To cite an
example, the purchasing power of the dollar, adjust-
ed to 1957-59 value, was $.949 in 1962 but had fallen
to $.533 by 1975.4 As a consequence of the sustained
inflationary trend, interest rates charged by private
lending institutions have increased.
Congress and state legislatures have expressed
concern over the disparity between statutory interest
rates and interest rates in the private money market.
Since 1969, the state judgment interest rate has been
increased in 24 jurisdictions.5 The judgment rate
statutes of a majority of the States now provide for
interest rates greater than 6 percent.6
In enacting the 1974 amendments raising the
interest rate applicable to Federal-tax underpay-
ments and overpayments, Congress noted its concern
that the 6-percent rate encouraged taxpayers to
"borrow" tax funds rather than pay taxes promptly. 7
Similarly, in the oversight hearings on the National
Labor Relations Act, the possibility that the 6-
percent rate makes it profitable to violate the Act
was discussed. 8
Taking into consideration all of the above factors,
we are now convinced that the flat 6-percent interest
rate no longer effectuates the policies of the Act. A
rate of interest more accurately keyed to the private
sector money market would have the effect of
encouraging timely compliance with Board orders,
discouraging the commission of unfair labor practic-
es, and more fully compensating discriminatees for
their economic losses. However, we are reluctant to
adopt the straight 9-percent rate urged by the
General Counsel. Rather, after careful consideration,
we have decided to adopt the sliding interest scale
charged or paid by the Internal Revenue Service on
the underpayment or overpayment of Federal taxes.9
A number of factors led to the choice of the
Internal Revenue Service's "adjusted prime rate" as
P!vmouth, Inc., and its successor Bill George Chr)sler-Plymouth. Inc., 186
NLRB 282 (1970).
3 Russell Motors, 198 NLRB 351 (1972).
' U.S. Department of Labor Bureau of Labor Statistics. Handbook of
Labor Statistics 1967 at 199. and Handbook of Labor Statistics 1976 at 243.
s See Appendix A. Table 1.
6 See Appendix A, Table 2.
7 Leg. His. P.L. 93-625, 1974 U.S. Code Cong. & Adm. News 7478.
7494-98.
Q Oversight Hearings on the National Labor Relations Act Before the
Subcomm on Labor-Management Relations of the House Committee on
Education and Labor. 94th Cong.. 2d Sess. at 761 (1976).
9 Pursuant to 26 U.S.C. §6621. added January 3, 1975 (P.L. 93-625. sec.
(Continued)
651
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
the Board's interest rate. First, it is directly tied to
interest rates in the private money market. Second, it
is subject to periodic semiautomatic adjustment.
Third, it is relatively easy to administer, as it cannot
be changed more frequently than once every 2 years;
adjustments are announced well ahead of the
effective date: and the rate is rounded to the nearest
whole percent.10
Therefore, we shall require that backpay be
computed utilizing the Woolworth formula," with
interest to accrue commencing with the last day of
each calendar quarter of the backpay period on the
total amount then due and owing at the "adjusted
prime interest rate" then in effect and continuing at
such rate, as modified from time to time by the
Secretary of the Treasury, until compliance with the
order. l 2
The Respondent excepted to the Administrative
Law Judge's recommended remedy which added an
"inflation factor" to the backpay award.': We do not
adopt that part of the remedy. In our view, as the
increase in interest rates is in large part caused by
inflation, our decision to key the interest rate
computed on backpay awards to the adjusted prime
interest rate utilized by the Internal Revenue Service
has the effect of adjusting backpay awards for
inflation.14
The Union excepted to the failure of Administra-
tive Law Judge Rose to grant a number of additional
remedies. In light of the clear tendency of Florida
Steel to commit the same types of violations at each
of its locations in response to organizing efforts by
the Union,' 5 we agree that the requested additional
remedies are warranted.1 6
Accordingly, we shall order that the Respondent
mail the notice to all company employees, read the
notice to all company employees, include the notice
7(a()I), 88 Stat. 2114), the Secretary of the Treasury is directed to adjust the
interest rate not more than once every 2 years to reflect changes in the
money market. The "adjusted prime rate" is defined as "90 percent of the
iaverage predominant prime rate quoted by commercial banks to large
businesses, as determined by the Board of Govenors of the Federal Reserve
System." rounded to the nearest full percent. The adjusted rate is to be
a;nounced by October 15 of any year to take effect the following February
"' See fn. 9. supra.
t F W. Woxoilworth Company, 90 NLRB 289 (1950).
12 We shall apply the current 7-percent rate to pending cases for backpay
anid other monetary awards accruing in periods prior to the issuance of this
Decision, in which the "adjusted prime interest rate" as used by the United
States Internal Revenue Service in calculating interest on tax payments was
at least 7 percent.
I: At the hearing. Administrative Law Judge Rose suggested the idea of
adjusting the backpay award, if any, to reflect changes in the value of the
dollar. and he asked the parties to brief that issue, Both the Charging Party
and the General Counsel initially argued in favor of such an adjustment.
and the Respondent opposed it. In its brief to the Board, the General
Counsel withdrew from that position and instead requested the increased
interest rate. Although we do not adopt the inflation factor, we do not agree
with the Respondent that the Administrative Law Judge acted improperly in
suggesting a novel remedy, nor do we believe that in so doing he showed
bias or prejudice.
in appropriate company publications such as em-
ployee newsletters, provide the Union access for 1
year to bulletin boards at the Tampa plant, and
furnish the Union with a list of the names and
addresses of all employees at the Tampa plant.17
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board hereby orders that the Respondent,
Florida Steel Corporation, Tampa, Florida, its
officers, agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Discharging or otherwise discriminating against
employees employed throughout its corporate facili-
ties because of their interest in, or activity on behalf
of, the Union or any other labor organization.
(b) In any other manner interfering with, restrain-
ing, or coercing employees employed throughout its
corporate facilities in the exercise of the rights
guaranteed them by Section 7 of the Act.
2. Take the following affirmative action designed
to effectuate the policies of the Act:
(a) Offer reinstatement to Donald C. Bassett and
make him whole for any loss incurred by reason of
the discrimination against him in accordance with
this Decision.
(b) Preserve and, upon request, make available to
the Board or its agents, for examination and copying,
all payroll records, social security payment records,
timecards, personnel records and reports, and all
other records necessary and relevant to analyze and
compute the amount of backpay due under the terms
of this Order.
(c) Mail a copy of the attached notice marked
"Appendix B" 8 to each employee employed
'l While Chairman Fanning may believe we have "missed the point" in
failing to adopt the recommended "inflation factor" remedy, the over-
whelming majority of American tribunals similarly engaged in restitutionary
relief do not apparently share his opinion. Furthermore, the General
Counsel in this proceeding withdrew his support for the Administrative Law
Judge's suggested remedy and advocated the alternative, not supplemental.
remedy of increased interest rates.
1, As noted by Administrative Law Judge Rose, this is the 13th Board
decision finding that the Respondent has engaged in various unfair labor
practices, and 8 other matters are currently pending before the Board.
'6 See, e.g.. Tiidee Products, Inc., 174 NLRB 705 (1969), enfd. in relevant
part sub nom. Inrernational Union of Electrical, Radio and Machine Workers,
AFL-CIO v. N.LR.B., 502 F.2d 349 (C.A.D.C., 1974); J. P. Stevens & Co.,
Inc. (Dublin-Nathaniel Plants), 171 NLRB 1202 (1968), enfd. 417 F.2d 533
(C.A. 5, 1969). As the recommended cease-and-desist order is ambiguous,
we shall clarify it to explicitly include all of the companywide facilities.
i' Chairman Fanning and Member Jenkins would require that access to
bulletin boards and the list of names and addresses be provided on a
companywide basis.
Is In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by Order
of the National Labor Relations Board" shall read "Posted Pursuant to a
652
FLORIDA STEEL CORPORATION
throughout its corporate facilities, post copies at each
of its corporate facilities, and include it in appropri-
ate company publications. Copies of said notice, on
forms provided by the Regional Director for Region
12, after being duly signed by the Respondent's
representative, shall be posted by the Respondent
immediately upon receipt thereof, and be maintained
by it for 60 consecutive days thereafter, in conspicu-
ous places, including all places where notices to
employees are customarily posted. Reasonable steps
shall be taken by the Respondent to insure that said
notices are not altered, defaced, or covered by any
other material.
(d) Convene during working time all of its
employees throughout its corporate facilities at
assembled meetings, either by shifts or departments
or otherwise, and have a responsible official of the
Respondent, at department supervisor level or above,
read to the assembled employees the contents of the
attached Appendix B.
(e) Upon request by the Union, immediately grant
the Union and its representatives reasonable access,
for a I-year period beginning with the issuance date
of this Decision, to its bulletin boards and all places
where notices to employees are customarily posted at
its Tampa plant.
(f) Upon request by the Union, made within I year
of the issuance date of the Decision, immediately
give to the Union a list of the names and addresses of
all employees employed at its Tampa plant.
(g) Notify the Regional Director for Region 12, in
writing, within 20 days from the date of this Order,
what steps the Respondent has taken to comply
herewith.
CHAIRMAN FANNING, concurring in part and dissent-
ing in part:
I concur in the decision in all respects except as
noted in footnote 17, supra, and the refusal of the
majority to adopt the "inflation factor."
The rationale behind the addition of an inflation
factor is ably explained in Administrative Law Judge
Rose's Decision. I repeat it here only because my
colleagues seem to have missed the point.
The inflation factor and the interest rate are
entirely separate and noncumulative means of
making the discriminatee whole. Interest is added to
the backpay award because the Act creates a
quasicontractual debtor-creditor relationship be-
tween the Respondent and the discriminatee.i 9 It
serves to compensate the discriminatee for the loss of
the use of his or her money during the period that the
Respondent unlawfully deprived him or her of it.
Judgment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board."
"' Isis Plumbing & Hearing Co., 138 NLRB 716 (1962).
Although the increase in the interest rate above 6
percent is to some extent caused by inflation, our
decision to allow a higher interest rate will only
compensate the discriminatee for the inflationary
effect of the loss of use of the money due and not the
loss in value of those dollars.
A simple backpay-plus-interest award does not
make the discriminatee whole because the individual
is not receiving the same purchasing power he or she
would have enjoyed if the wages had been paid when
due. In addition, the failure to adjust for inflation
allows the Respondent to profit by delaying compli-
ance as it can then pay its obligation in devalued
dollars. The inflation factor is designed to remedy
these problems by adjusting the backpay award to
the current value of the dollar.
This is not merely a hypothetical problem to be
argued by economists in ivory towers. To cite a very
real example involving the Respondent, two employ-
ees who were unlawfully discharged in 1973 had to
wait until 1976 for a final court order entitling them
to reinstatement with backpay and they are currently
involved in the compliance process.20 When they are
finally paid, they will receive dollars which have
declined in value over 25 percent. I fail to see how an
increase in the interest rate on backpay compensates
these employees for this loss in real spending power.
I would adopt Administrative Law Judge Rose's
recommendation that an inflation factor be added to
backpay awards.
20 Florida Sieel Corporation, 215 NLRB 97 (1974). enfd. 529 F.2d 1225
(C.A. 5, 1976).
Appendix A
Table I
CQanges (percent par annum) in Statutory
Judgment Interest Rates
Jurisdiction
Alaska
Arkansas
Colorado
Delavare
Idaho
Iowa
Kansas
Kentucky
Louise an
Maine
Neasachusltts
Nichigan
tiseiesippi
Nebraska
Nyw Jersey
Oklahom
South Dakota
Texas
Tennessee
Virgin Islands
Vir Kini
Prom To
6 8
6 10
6 8
6 9
6 8
5 7
6 8
6 8
5 7
6 10
6 8
5 6
6 8
6 8
6 B
6 10
6 8
8 10
6 9
6 8
6 9
6 8
Year Made
1969
1975
1975
1970
1974
1973
1969
1976
1970 or'72
1971
1974
1972
1975
1972
1972
1972
1972
1975
1975
1976
1975
1974 or'75
653
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Washington 6 8 1969
Wisconsin 5 7 1971
Wyoming 7 10 1973
The information in this chart was
drawn from the pocket supplements to
the various compilations of state
statutes. It appears in the General
Counsel's brief as footnote 22.
Table 2
Statutory Judgment Interest Rates
Alabama 6
Alaska 8
Arizona 6
Arkansas 10
California 7
Colorado 8
Connecticut 6
Delaware 6
District of
Columbia 6
Florida 6
Ceorgia 7
Hawaii 6
Idaho 8
Illinois 6
Indiana 8
Iowa 7
Kansas 8
Kentucky 8
Louisiana 7
HMaine 10
Maryland 6
aess. 8
Michigan 6
Minnesota 6
Mississippi 8
Missouri 6
Montana 6
Nebraska 8
Nevada 7
New Hampshire 6
New Jersey 8
New Mexico 6
New York 6
North Carolina 6
North Dakota 6
Ohio 6
Oklahoma 10
Oregon 6
Pennsylvania 6
Puerto Rico 6
Rhode Island 6
South Carolina 6
South Dakota 10
Tennessee 8
Texas 9
Utah 8
Vermont 8-1/2
Virgin Islands 9
Virginia 8
Washington 8
West Virginia 6
Wisconsin 7
Wyoming 10
This chart was prepared from the
various compilations of state
statutes. It appears with anno-
tations in the Ceneral Counsel's
brief as Appendix 1.
APPENDIX B
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all the parties participated,
the National Labor Relations Board has found that
we have violated the National Labor Relations Act.
We have been ordered to stop committing these
unfair labor practices, to post this notice, and to
abide by its terms.
Our employees have the right to join the United
Steelworkers of America, AFL-CIO, or any other
labor organization or to refrain from doing so.
When we discharge or discriminate against our
employees because of their interest in, or activity on
behalf of United Steelworkers of America, AFL-
CIO, we violate the law of the United States of
America.
We violated the law when we fired Donald C.
Bassett.
WE WILL NOT discharge or otherwise discrimi-
nate against our employee because they are active
on behalf of the United Steelworkers of America,
AFL-CIO, or any other labor organization.
WE WILL NOT in any other manner interfere
with, restrain, or coerce our employees in the
exercise of the rights guaranteed them by Section
7 of the Act.
WE WILL put Donald C. Bassett back to work
at his regular job and give him backpay plus
interest for any loss he suffered as a result of our
discrimination against him.
Upon request by the above-named Union, WE
WILL immediately grant it access for a l-year
period, beginning with the issuance date of the
Board's Decision and Order, to our bulletin
boards and all places where notices to employees
are customarily posted at the Tampa plant.
Upon request by the above-named Union,
made within the I-year period from the issuance
date of the Board's Decision and Order, WE WI! L
immediately give to the Union a list of the names
and addresses of all employees employed at the
Tampa plant.
FLORIDA STEEl
CORPORATION
DECISION
STATEMENT OF THE CASE
JAMES L. ROSE, Administrative Law Judge: This matter
was heard before me on March 2 and 3, 1977, at Tampa,
Florida. The General Counsel's complaint alleged that on
September 27, 1976, the Respondent discharged Donald C.
Bassett because of his union activity in violation of Section
8(a)(3) of the National Labor Relations Act, 29 U.S.C. §
151, et seq., as amended. The Respondent admitted
discharging Bassett but denied the antiunion motivation,
alleging that it had discovered Bassett made material
misrepresentations on his employment application and,
pursuant to an inflexible policy of the Company, he was
discharged.
On the basis of the record as a whole, including my
observation of the witnesses, briefs, and arguments of
counsel, I hereby make the following:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
I. THE BUSINESS OF THE RESPONDENT
The Respondent is a Florida corporation engaged in the
manufacture and distribution of steel products. In the
operation of its Tampa facility, the Respondent annually
ships goods, products, and materials directly to points
outside the State of Florida valued in excess of $50,000 per
year. The Respondent also receives at its Tampa facility
directly from points outside the State of Florida goods,
products, and materials valued in excess of $50,000
654
FLORIDA STEEL CORPORATION
annually. The Respondent admits, and I find, that it is an
employer engaged in commerce within the meaning of
Section 2(2), (6), and (7) of the Act.
11. THE LABOR ORGANIZATION INVOLVED
Respondent admits, and I find, that United Steelworkers
of America, AFL-CIO (herein the Union), is a labor
organization within the meaning of Section 2(5) of the Act.
111. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
For a number of years, the Union has been engaged in
various organizational campaigns at several of the Respon-
dent's facilities. These organizational efforts have resulted,
among other things, in 12 Board decisions finding that the
Respondent engaged in various unfair labor practices, of
which to date 5 have been enforced by the circuit courts.'
There are some eight other matters currently pending
before the Board.
The organizational campaign at the Tampa facility
began in 1974 and, following litigation over the scope of
the unit, culminated in an election held in February 1976.
A majority of votes cast at that election were for no union
and the Charging Party filed objections. At the time of the
hearing herein, the objections had been sustained and a
rerun election was pending scheduling by the Regional
Director.
Following the election there was little further union
activity among the Respondent's employees at the Tampa
facility until about September 15. On that day Estes Riffe,
the Union's principal organizer, held a meeting among
employees to reestablish the inplant organizing committee
and to recommence organizing activity looking toward the
rerun election.
About 10 or 15 employees were present at this meeting,
including Bassett. Riffe asked them to sign a petition
stating that they would be members of the inplant
organizing committee and to pass out such petition among
other employees. Bassett took a petition, and within the
next few days did in fact proffer it to other employees in
the breakroom as well as sign it himself. Bassett had earlier
been active on behalf of the Union, having become a
member of the inplant organizing committee, and had
engaged in such activity as passing out leaflets at the plant
gate, getting authorization cards signed by fellow employ-
ees; he was the Union's alternate observer and had asked
management for permission to use the closed circuit TV
prior to the election. He also testified at hearings before the
National Labor Relations Board on behalf of the Union.
On or about March 1, Bassett hurt his back while at
work. This resulted in a workmen's compensation claim by
him and he was off work until mid-August, although he
came back on or about July 14 for 2 days in an attempt to
see if he was sufficiently well to return to work.
214 NLRB 264 (1974): 215 NLRB 97 (1974). enfd. in part 529 F.2d
1225 (C.A. 5. 1976): 220 NLRB 260 (1975). 220 NLRB 225 (1975); 220
NLRB 1201 (1975). enfd. 538 F.2d 324 (C.A. 4. 1976); 221 NLRB 554
(1975): 221 NL RB 371 (1975)., enfd. 93 LRRM 2018. 82 LC 10.147: 222
NL'IRB 955 (1976). enfd. 536 F.2d 1385 (C.A. 5. 1976). 223 NLRB 174
During the investigation of the claim by the workmen's
compensation insurance carrier, Bassett was asked if he
had ever had a previous back injury. He stated that he had
hurt his back sometime in 1963 or 1964 for which he had
received a chiropractic adjustment. According to the
insurance company's files, the adjustor asked Bassett for
whom he was working when this occurred and Bassett said
it was Sheet Metal Local No. 70, out of Akron, Ohio.
Later, the claims supervisor contacted the Respondent
advising that their investigation revealed that Bassett may
have had a previous back injury while working for another
company and they should investigate to determine whether
the Company would be eligible for reimbursement pursu-
ant to the Florida special compensation act.2
Thus it was, according to the testimony of James Rogers,
the personnel supervisor of the Tampa facility, that his
department checked into Bassett's employment application
form and noted that Sheet Metal Local No. 70 was not
listed as a previous employer. From this Rogers determined
to verify the other employers listed by Bassett on his
application. As a result of this, he determined that Bassett
had made material misrepresentations with regard to the
dates he worked for various employers and the number of
previous employers, most of whom he had not put down on
his application.
Rogers testified that he first confronted Bassett with this
information on September 14, 1976, the day before the
resumption of union activity at the plant. Bassett, on the
other hand, recalls the date being September 16 or later. In
any event, both agree that Rogers did talk to Bassett on at
least three occasions concerning the misrepresentations on
the application, which Bassett readily admitted. Indeed he
told Rogers that the reason he had not put down many
previous employers in the early 1960's and before was
because he had had both drinking and family problems.
According to the testimony of Rogers and Bassett's
immediate supervisor, David Davis, Rogers gave this
information to Davis and those two met with the plant
superintendent. Then it was Davis' decision to terminate
Bassett because of the material misrepresentations on his
1971 employment application. Rogers stated that he had
no authority to discharge anyone and Davis testified that
the reason he effected the discharge was because he had
been advised of the Company's inflexible rule that anyone
who makes a misrepresentation on his application must be
discharged.
Davis was first advised of the misrepresentations by
Rogers on September 27. They met that day once with
Bassett and then a second time when Rogers told Bassett
that he was being discharged. Both Rogers and Davis deny
that Bassett's discharge had anything to do with his union
activity specifically or the union activity in general. They
both testified that the discharge was solely because of the
Company's inflexible rule to discharge anyone who makes
a material misrepresentation on his application.
(1976). 224 NLRB 45 (1976); 224 NLRB 587 (1976). and 226 NLRB 123
(1976).
2 The Florida special compensation act apparently allows for recoup-
ment of compensation payments where the injured emplo)ee had had a
previous injury to the same member and the compan) knec abx)ut it.
655
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
B. Analysis and Concluding Findings
As presented by the parties, the issue in this case is
whether Bassett was in fact discharged for making material
misrepresentations on his application, a fact that he readily
admitted both at the hearing and to the Respondent during
its investigation, or whether such was seized by the
Respondent as a pretext to discharge a known union
activist in the midst of an organizational campaign. For the
reasons hereafter given, I conclude that the Respondent's
professed reason for discharging Bassett was a pretext. The
true motive involved his union activity specifically and,
generally, was to discourage union activity.
There can be little doubt of the Respondent's substantial
animus toward labor organizations, particularly including
the Union. The fact of this animus is more than amply
demonstrated in the many Board decisions involving this
Respondent and the Charging Party.
There is also little question that Bassett was at least a
satisfactory if not more than satisfactory employee during
his 5-year tenure. Indeed, Rogers testified that the
determination to discharge Bassett was made reluctantly
because the Company hated to lose such a good employee.
The Respondent argues nevertheless that, in order to
avoid charges of disparate treatment, it had to enforce
against Bassett its inflexible rule of discharging anyone
who makes material misrepresentations on his application.
Among other alleged facts presented by the Respondent,
it is the existence of this inflexible rule that would apply in
Bassett's situation that I do not believe. I do not believe
that, absent union activity in general or Bassett's union
activity specifically, the Company would have discharged a
trained and competent crane operator 5 years after the fact
just because he failed to list all of his previous employers,
or to put the exact dates of his employment on his
application, or to state he was a high school graduate.
There is no question but that Bassett did make his
misrepresentations on his application nor is there any
question that at least he thought they were material. In
fact, he candidly admitted on cross-examination that he
failed to put down many previous employers because he
was afraid that, were the Respondent to contact them, he
would not be hired. The fact of the misrepresentations or
their materiality is not an issue here.
The question is whether after a lapse of 5 years these
misrepresentations would reasonably be considered so
serious as to require discharge in the normal course of the
Respondent's business-that is, absent union activity.
The question is not, as argued for by the Respondent,
whether on finding the misrepresentations it had "good
cause" for the discharge. No doubt an employer can
discharge an employee for having falsified his employment
application. But then, an employer can discharge an
employee for any reason or no reason at all-except for his
having engaged in union activity. As union activity does
not insulate an employee from being discharged for cause,
the existence of a traditional "good cause" does not
insulate an employer where the discharge in fact is
antiunion motivated. In this inquiry, the quality and
rationality of the purported cause becomes evidence of the
motive.
The seriousness of Bassett's offense and the necessity for
his discharge rested largely on the testimony of Rogers. It
was he who caused investigation of Bassett's application, it
was he who confronted Bassett with these matters, and it
was he who ultimately took the issue to Bassett's line
supervisors; Rogers stated that the union activity was not
discussed or involved and that the determination to
discharge Bassett rested solely upon the Company's
inflexible rule.
In this respect as in all other respects where there is a
material controversy, I specifically do not credit Rogers. I
discredit Rogers for the following reasons: First, his
demeanor convinced me that his testimony was not at all
times candid or straightforward. Second, and of substantial
importance, is his testimony about Bassett's application
form.
Bassett submitted his application on October 18. On
page two of this form, below three of the previous
employers there is a notation in ink, "Ref mailed
10/20/71." In the box on the lower left hand corner of the
same page entitled "Company Use Only" is a notation,
"Refs checked OK."
Rogers testified that the "Refs" was, he thought,
somebody's initials in the personnel department at the time
and that this notation meant that the inquiry on the
references had been sent out. This testimony, which was
given on direct, and repeated on cross and re-direct
examinations, is wholly and completely incredulous. It is
obvious that the notation in the box is in fact "Refs" and is
not someone's initials. It stands for references. Even if it is
hard to read the "Refs," that it is followed by "checked
OK" means it is not initials. A notation "(initials) checked
OK" absolutely makes no sense. It is obvious that the box
notation means that following the mailing of the referenc-
es, as indicated above on the form, they checked out to be
"OK." In common usage this means that the references
were found to be sufficiently satisfactory so as to justify
hiring the prospective employee.
This notation is so obvious and its meaning so clear that
I cannot help but conclude that, in testifying that he had no
opinion to the contrary, Rogers was deliberately attempt-
ing to mislead me on a material fact-namely, whether the
Respondent had waived any discrepancies that might have
existed in Bassett's application by checking his references
and finding them to be sufficient.
The mere fact that Rogers may have been truthful in
other respects in his testimony does not negate that in this
material respect and others he was unworthy of belief.
On its face, the application shows that Bassett's referenc-
es were checked. Even though he had given incorrect dates
for working for those companies listed and had given
incorrect reasons for termination (he said that he had been
laid off, when in fact he had been fired on one occasion),
nevertheless the Company did check his application and, if
those discrepancies were discovered, which they would
have been, he was nevertheless hired.
In addition, on its face the application shows that Bassett
did not in fact list all of his prior jobs. Though a
misrepresentation for which he was fired, this fact did not
apparently affect the Company's determination to hire him
in the first instance. That is, Bassett gave his first job as
656
FLORIDA STEEL CORPORATION
being in 1963 at a time when he was 25 years old. There
was no accounting for the seven or eight years between this
and when he finished high school. Rogers admitted that
this was a material misrepresentation on the face of the
application. If one believes that the Respondent has an
inflexible rule for discharging an employee for such
misrepresentations, it follows that the Respondent would
not hire someone where such misrepresentations are on the
face of the application. If in fact the Respondent had the
inflexible rule that Rogers testified to at the time Bassett
was hired, which was his testimony, then it follows that
Bassett would not have been hired. That he was hired tends
to prove that the rule did not exist in 1971, as Rogers
stated, nor did it exist in 1976.
Since the Company did check Bassett's references before
he was hired, this leads me further to conclude that in 1971
such misrepresentations that he may have made were not
of sufficient seriousness to preclude hiring him, and would
therefore not be of sufficient seriousness to require
discharge.
The Respondent, however, states that to be consistent it
had to discharge Bassett because it had discharged others
for making misrepresentations. Thus the Respondent
offered into evidence five other personnel folders of
employees who had been discharged for this reason.
I find on examination of these personnel folders that
none of the cases is sufficiently similar to that of Bassett so
as to establish that the Respondent does or did in fact have
an inflexible rule for discharging one who makes the type
of misrepresentations on his application that Bassett did.
For instance, Leslie G. Frye was hired on July 27, 1972,
and fired on August 1. 1972, for "False information on job
application." Immediately following her hire, the Company
made telephone checks of the references listed on her
application and in one instance found no record of
employment. The other reference checked was reported as
"bad." The necessity, of course, for correct information on
a job application is so the employing company can check
the employee's past performance in order to determine
whether or not it is worth the company's time and effort to
hire and train that employee.
Bassett's situation would have been similar to Frye's but
for the fact that the Company in fact checked his
references and found them to be satisfactory at the time he
was hired. If at that time Bassett had been discharged
because he had failed to give correct and total information
on his application, such would have been reasonable and
would have been a case similar to Frye's. That is, the
discharge would have had a rational connection generally
with the purpose of employment applications.
Donald Batchelder was hired on August 16, 1976, and
discharged a month later on September 24. He also was
discharged for having given false information on his
application; namely, he checked that he had never been
convicted of a crime when in fact he had been convicted of
manslaughter. A further check by the Company also
revealed that he had a number of arrests for various crimes.
The misrepresentation was different in kind from Bassett's
and is clearly distinguishable.
Iona G. Henderson was hired on July 7, 1975, and fired a
month later on August 7 when it was discovered that in her
application she concealed the fart that she had had an
accident involving a back injury. Again this was a material
fact concealed by the applicant and discovered within a
short period after the beginning of her employment. Again
the situation is distinguishable from Bassett's.
Lonnie Washington was hired on July 19, 1976, and fired
about a week later on July 28 when it was discovered that
he had failed to put on his application that he had
previously worked for the Respondent. Again this was a
material misrepresentation discovered during the applica-
tion check and is therefore distinguishable from Bassett's
case.
Finally is the matter of Victor Spivey, who was hired on
March 27, 1972, and fired on May 14, 1973, when it was
accidentally discovered that a previous employer had
terminated him for cause rather than laying him off, and
that he had failed to report driving accidents. This is a
situation very similar to Bassett's. However, rather than
proving the "inflexible" rule, it demonstrates that the
Respondent did not always discharge employees simply
because they made false statements of material facts on
their application forms. Thus, in memos to the Spivey
personnel file written by J. L. McLendon (unidentified on
the record but from a reading of Spivey's personnel file
offered into evidence by Respondent, clearly the manage-
ment authority who effected Spivey's discharge):
It was felt, Spivey had more than adequate opportu-
nity to change the incorrect information furnished by
him on his application. I therefore, instructed Driver
Foreman, Simons, to terminate Spivey on his return to
Tampa traffic.
I advised Spivey his termination would have to stand
due to his falsification of employment records and
failure to correct these records when he was given an
opportunity to set the record straight.
It is clear from the Company's own records that Spivey
was not discharged simply because he had made false
statements on his application. Rather, upon being con-
fronted with false statements Spivey refused to correct
them. This is substantially different from Bassett's situa-
tion. Bassett always admitted to the Respondent when
confronted that he in fact had made the misrepresentations
attributed to him. The point, however, is that rather than
showing an inflexible rule to fire employees solely because
they make material misrepresentations on their applica-
tions, the Spivey case shows that such would not have
caused his discharge had he but corrected the false
statements when confronted by McLendon.
The five discharges relied on do not, in my judgment,
establish that the Respondent has had an inflexible rule for
discharging long-term employees upon finding that they
had made misrepresentations on their applications, where
the matter misrepresented would have no particular
bearing on their established ability to do the work which
they had been doing.
An analysis of the evidence furnished by the Respon-
dent, my view of Rogers' testimony, and the fact that
657
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Bassett was a competent 5-year employee doing a skilled
job lead me to conclude that the fact that Bassett may have
made misrepresentations on his employment application
was not the reason he was discharged; it was a pretext.
As noted above, the Respondent could have discharged
Bassett for the reason asserted, any reason, or no reason at
all except for his having engaged in union or other
protected activity. However, if the asserted reason for
discharging an employee is not reasonable then that fact is
evidence that the true motive lies elsewhere. "If he (the trier
of fact) finds that the stated motive for a discharge is false,
he certainly can infer that there is another motive."
Shattuck Denn Mining Corporation v. N.L.R.B., 362 F.2d
466, 470 (C.A. 9, 1966).
Having concluded that the motive must lie elsewhere I
infer from the totality of the record that it was Bassett's
union activity in specific and the activity of the Charging
Party in general which caused the Respondent to discharge
him.
In inferring an unlawful motive, I take into consideration
not only the Respondent's proclivity for engaging in unfair
labor practices of this type and character, but also what
appears to be a company policy of committing unfair labor
practices.
As the Board said in Florida Steel Corporation, 226
NLRB 123, 124(1976):
However, Respondent's history of unfair labor practic-
es similar to those committed herein, and its recent
history of other types of flagrant violations, indicate a
course of unlawful conduct taken by Respondent in the
service of designs inimical to the collective-bargaining
process. [Citations omitted.]
I also have taken into consideration the timing of the
discharge with the union activity. The election was held in
February, objections were filed, and rerun election is now
pending scheduling. Within the context of an imminent
rerun election, and the reactivation of the organizational
campaign in September, the misrepresentations on Bas-
sett's application were found and he was discharged. I
believe that the Company knew, as indeed it passively
admitted, that Bassett was a leading activist on the part of
the Union. I also believe that the Company knew of the
renewed organizational campaign in mid-September and
knew that Bassett was involved.
The Respondent makes a point of the fact that Rogers
discovered these misrepresentations and had his first
conference with Bassett on September 14, the day before
the renewed organizational campaign. While I generally
discredit Rogers as indicated above, it really makes little
difference whether Rogers first met with Bassett on
September 14. The fact of the matter is the Respondent
knew of Bassett's union activity, there was an organization-
al campaign, the Respondent's union animus is amply
demonstrated, and he was discharged for pretextual reason.
I find that Bassett's union activities specifically and the
total context of the organizational campaign in general
were the precipitating cause of his discharge.
: Respondent offered and I rejected Bassett's timecard of September 14,
1976. to establish that Rogers did in fact meet with Bassett on September 14.
There is a notation in ink on the timecard "Met with IR." The card was
From the totality of the record I therefore conclude that
the Respondent did in fact discharge Bassett because of his
activity on behalf of the Union, in violation of Section
8(a)(3) of the Act.
REMEDY
It having been found that the Respondent has committed
the unfair labor practice alleged, I will recommend that it
cease and desist therefrom and take certain affirmative
action designed to effectuate the policies of the Act.
The Respondent will be ordered to offer Donald C.
Bassett full reinstatement to his former position of
employment or, if that position no longer exists, to a
substantially equivalent job, without prejudice to his
seniority or other rights and privileges, and to make him
whole for any loss of wages or benefits that may have been
suffered as a result of the discrimination against him, in
accordance with the formula set forth in F W. Woolworth
Company, 90 NLRB 289 (1950), and Isis Plumbing &
Heating Co., 138 NLRB 716 (1962).
The Charging Party and the General Counsel have also
requested that the notice be posted companywide because
of the Respondent's proclivity for engaging in unfair labor
practices of this type and character both at the Tampa
facility and others. Such an order will be recommended.
Florida Steel Corporation, 224 NLRB 45 (1976).
The General Counsel and the Charging Party also
request an "inflation factor" be put into the backpay
formula. That is, given this Respondent's past history of
delaying compliance with backpay orders and noting the
inflationary times in which we live whereby the dollar
steadily decreases in value, it is requested that when the
Respondent finally pays its obligation to Bassett under this
order, such payment should reflect the actual dollars that
Bassett lost.
The Respondent argues that "inflation factor" is simply
interest and therefore the question really argued by the
General Counsel and the Charging Party is whether the
rate of interest as set forth in Isis Plumbing & Heating Co.,
supra, should be increased.
For the following reasons, I will recommend that the
Board in this and future cases add an inflation factor to
backpay awards in addition to interest as provided for in
Isis Plumbing & Heating Co., supra.
First, taking into consideration the value of the dollar as
a result of inflation has little to do with interest and is in
any event a different concept. Thus, in Isis Plumbing &
Heating Co., supra at 718, the Board quoted with emphasis
the Court of Appeals for the District of Columbia, United
States v. Union Drill & Tool Corp., 183 F.2d 998, 999
(C.A.D.C., 1950), "If the obligation is in the nature of a
debt it is deemed interest-bearing, because the statutory
purpose was to create a debtor-creditor relationship and in
equity interest is allowed as a means of compensating a
creditor for loss of use of his money."
This concept of interest is traditional. One is compensat-
ed, not because the value of money changes, but because
he forgoes the use of his money. The other side of this is
identified by a recordkeeper, but no testimony was offered to show who put
that notation on the card or when. I therefore concluded that it did not tend
to prove the fact asserted by the Respondent.
658
FLORIDA STEEL CORPORATION
that one who borrows is willing to pay for the use of the
money borrowed. The money thus earned by the creditor
and spent by the debtor is interest. Therefore, interest,
generally, and in these backpay matters, specifically, would
apply whether the value of the dollar went up, down, or
stayed the same. It applies because of the debtor-creditor
relationship created.
Counsel have directed me to no case in which the Board
has considered including an inflation factor in the backpay
formula, nor has independent research disclosed any.
However, the common law courts for a number of years
have considered this matter, generally in the context of
awarding future damages. The thinking appears somewhat
mixed, with some courts taking the position that adjusting
an award of damages to include future inflation is too
speculative. E.g., Locklin v. Day-Glo Color Corporation, 429
F.2d 873 (C.A. 7, 1970). The contrary result has been
reached in increasingly numerous jurisdictions. Thus, in
United States v. English, 521 F.2d 63 (C.A. 9, 1975), the
court concluded that predicting inflationary trends may be
speculative, but so also are most elements of future
damages. The court went on to say:
Even in the short time since the cases against consider-
ing inflation in making damage awards have been
decided, inflation has become a considerably more
important factor in our economic lives. Ignoring
inflation is, in essence the same as predicting it will not
occur, or that its effects will be de minimis. While the
administrative convenience of ignoring inflation has
some appeal when inflation rates are low, to ignore
inflation when the rates are high is to ignore economic
reality. [521 F.2d at 75.]
The same principle would seem to apply in calculating
backpay to discriminatees in cases arising under this Act.
To ignore the real loss incurred by the devaluation of the
dollar is to ignore an economic reality. And since the
backpay would not be calculated until the time of
payment, there would be no speculation.
Furthermore, by working an inflation factor into the
backpay formula, the claimant is simply being made whole.
He would receive in dollars only what he lost. He would
not get an additional windfall benefit. Conversely, the
company who has wronged the employee, by having to
make him whole in dollars that he actually lost rather than
devalued dollars is not harmed. To the contrary, not to
consider an inflation factor in calculating backpay gives
the wrongdoing respondent the windfall of paying its
obligation in reduced value dollars. This is apart from the
use of the money, for which the respondent must pay 6
percent per year.
Further, to add in an inflation factor would have the
effect of treating all discriminatees, as well as all respon-
dents, alike. As it stands now, a respondent who voluntari-
ly complies with a backpay order is worse off than the
respondent who refuses to comply and upon whom the
I Although the CPI is sometimes given for selected cities. the United
States Cit) average should be used in order to give uniformity. Russell
Motors, Inc.. 198 NLRB 351 (1972).
Board has to force compliance, an exercise that often takes
months-even years. When such a recalcitrant respondent
finally complies he is paying in devalued dollars. His wrong
does not cost as much because of the delay. For much this
reason the Board changed the method of computing
backpay in Woolworth Company, supra.
In an analogous situation, the Board has recognized that
backpay should include the periodic wage increases an
employee might reasonably would have expected to have
received. Big Three Industries, Inc., 219 NLRB 881 (1975).
It is analogous because the Board is simply attempting to
make whole the employee in dollars he would have
received but for the discrimination against him.
Analogous cases, logic, and economic reality support the
position of the General Counsel and the Charging Party
that an inflation factor ought to be considered when
calculating backpay. It would follow, of course, that in
times of deflation the reverse would apply.
While predicting future inflation is difficult if not
speculative, as the common law courts have noted, supra,
calculating past inflation is fairly precise and not difficult.
The Consumer Price Index is published monthly by the
Bureau of Labor Statistics and is the accepted standard by
which the purchasing power of the dollar is calculated. 4
The relative purchasing power between two points in time
would be the inflation factor. The CPI is in percentage with
1%7 equalling 100 percent.
Thus, for any given period of backpay (normally,
quarters under the doctrine of Woolworth) the Consumer
Price Index at the beginning would be added to the
Consumer Price Index at the end. This result would be
divided by two to find the average Consumer Price Index
for that period of backpay. This figure would in turn be
subtracted from the Consumer Price Index at the time the
respondent complies to determine the percentage by which
the net backpay amount should be increased to reflect the
devalued dollar.
By way of example, assume a backpay period includes
the third quarter of 1975 (July, August, and September).
The CPI at the end of June was 160.6 and at the end of
September 163.6.5 The average:
(160.6 plus 163.6) divided by 2 = 162.1
(The end of June would be closer to the first of July than
the end of July, hence the June figure is used.)
Further assume that the net backpay to the claimant for
this quarter is $1,000 and that the respondent determined
to make payment in January 1977, at which time the CPI
was 175.3.6 The net backpay would be $1,000 plus $1,000 x
(175.3 percent - 162.1 percent) = $1,132. Thus, the net
adjusted backpay would be $1,132 reflecting the devalua-
tion of the dollar from the third quarter of 1975 to the time
that the respondent made restitution. Then because the
respondent had the use of this money, interest at 6 percent
would be added.
[Recommended Order omitted from publication.]
5 1975 LRYB 588.
6 94 LRR 163.
659