Fugazy Continental Corp.Download PDFNational Labor Relations Board - Board DecisionsSep 30, 1985276 N.L.R.B. 1334 (N.L.R.B. 1985) Copy Citation 1334 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Fugazy Continental Corp . and Aldo Capella and Albert Shiffman and Eugene Ritter and Thomas P. Green and Lloyd Lipoff and Joseph Acquila and Paul Osit. Cases 29-CA-4773, 29-CA- 4817, 29-CA-4825, 29-CA-4391, 29-CA- 4391-2, 29-CA-4391-3, and 29-CA-4391-4. 30 September 1985 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS DENNIS AND JOHANSEN On 7 February 1984 Administrative Law Judge Arthur A. Herman issued the attached supplemen- tal decision.' The Respondent and the General Counsel each filed exceptions and supporting briefs, and the General Counsel filed an answering brief. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision and the record in light of the exceptions and briefsa and has decided to affirm the judge's rulings, findings,3 and conclusions4 and to adopt the recommended Order as modified. 1. The judge found that Paul Osit had interim earnings of $640 greater than reflected in the back- pay specification and, accordingly, reduced Osit's net backpay by that amount. We find merit to the General Counsel's exception to this finding. Osit testified that during the backpay period he was employed by Massachusetts Indemnity and Life Insurance Company, where he earned an aver- age of $200 per week, minus nonreimbursed travel expenses averaging between $30 and $40 per week. Based on this testimony, the judge concluded that Osit had $640 in interim earnings for the month of March 1976. Osit testified further, however, that while he began working for this Company at the i The Board's Decision and Order is reported at 231 NLRB 1344 (1977), affd 603 F.2d 214 (2d Cir 1979). 2 The Respondent's request for consideration by the full Board and its motion to submit its original exceptions , rejected by the Executive Secre- tary's office for failure to comply with the Board's Rules and Regula- tions, are denied. 2 The Respondent has excepted to some of the judge's credibility find- ings . The Board 's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect Standard Dry Wall Products, 91 NLRB 544 (1950), enfd 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and fmd no basis for reversing the findings We also find without merit the Respondent's allegations of bias 4 With the exceptions noted below, Chairman Dotson agrees with the conclusions reached by the judge regarding the discriminatees' duty to mitigate the Respondent 's backpay liability In reaching these conclu- sions, however, the Chairman relies on the analysis set forth in Brady v. Thurston Motor Lines, No 83-1765 (4th Cir Feb. 6, 1985) end of March or the beginning of April, he was not successful in making any sales and, consequently, did not earn any income, for the first couple of weeks. Accordingly, we find that the judge erred in crediting Osit with interim earnings for 4 weeks in March, and we shall increase his backpay award by that amount. 2. We also fmd merit in part to the Respondent's exception to the backpay award to Carl Roa. Roa admitted he did not seek employment during the month of February 1976, the initial period covered by the backpay specification, or explain his failure to do so. -5 Accordingly, we shall reduce his back- pay for the first quarter of 1976 from $1518 to $759. 3. The Respondent has excepted to the backpay awards made to Cornelius Evans and Michael Os- terhoudt on the grounds that the General Counsel failed to produce the claimants and the claimants failed to testify on their own behalf. The Respond- ent relies on NLRB v. Mastro Plastics Corp., 354 F.2d 170 (2d Cir. 1965), cert. denied 384 U.S. 972 (1966), to support its contention that these individ- uals' claims should be dismissed. Once a gross backpay figure has been deter- mined based on the amount a discriminatee would have earned in the absence of discrimination by a respondent, less net interim earnings, the burden is on the respondent to prove that a claimant willful- ly incurred loss of earnings during the backpay period, or for some other reason is not entitled to receive backpay for the period of discrimination. Brown & Root, Inc., 132 NLRB 486, 495 (1961), enfd. 311 F.2d 447 (8th Cir. 1963). The Board has held that the General Counsel does not have the obligation to produce the discriminatees at the hearing to testify in this regard. Woonsocket Health Centre, 263 NLRB 1367 (1982). The Court of Ap- peals for the Second Circuit, however, has held that where a respondent has raised the issue of willful loss of earnings in its pleadings, "the Gener- al Counsel ha[s] the burden of producing testimony by each available discriminatee that a willful loss of earnings was not incurred." Mastro Plastics Corp., above at 175. We find it unnecessary to determine whether the General Counsel or a respondent gen- erally has the burden to produce discriminatees be- cause, even assuming that the court's rule is appli- cable, we find that the circumstances of this case demonstrate that the General Counsel has met this burden regarding claimants Evans and Osterhoudt. 5 We cannot find on this record that Roa had a reasonable belief that his recall to employment with the Respondent was imminent and accord- ingly that his failure to search for work in February was excused. 276 NLRB No. 152 FUGAZY CONTINENTAL CORP. The General Counsel asserts, without contradic- tion, that during pretrial discussions with the judge and the Respondent's counsel regarding the sched- uling of witnesses, the Respondent's counsel specif- ically informed the General Counsel that it had no interest in examining Evans or Osterhoudt to con- tradict the backpay amounts set forth in the specifi- cation. Accordingly, the General Counsel did not schedule or call these claimants as witnesses. There is no indication that the Respondent objected at the trial to the claimants ' absence, sought subpoenas, or in any manner reconsidered its pretrial position that it acquiesced in the backpay amount claimed by the General Counsel. We will not permit the Respond- ent, having admitted its liability, to change its posi- tion and contend that the General Counsel present- ed an insufficient case . Accordingly, the Respond- ent's exception to these backpay awards is without merit. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge, as modified herein, and orders that the Re- spondent, Fugazy Continental Corporation, Queens, New York, its officers, agents, successors, and assigns, shall pay the amounts set forth in the Order, except that the net backpay to be paid to Paul Osit shall be $5050 and the net backpay to be paid to Carl Roa shall be $10,510. Patricia McM. Bartels, Esq., for the General Counsel. Sanford E. Pollack, Esq ., and Stuart M. Kirshenbaum, Esq. (Milman, Naness & Pollack), for the Respondent. SUPPLEMENTAL DECISION STATEMENT OF THE CASE ARTHUR A. HERMAN, Administrative Law Judge. On September 14, 1977, the National Labor Relations Board issued its Decision and Order' in the above-entitled pro- ceedings in which it directed that Respondent, Fugazy Continental Corp., its officers, agents, successors, and as- signs, reinstate and make whole certain employees for losses' resulting from Respondent's unfair labor prac- tices, violations of Section 8(a)(1), (3), and (4) of the Na- tional Labor Relations Act. On March 20, 1979, the United States Court of Appeals for the Second Circuit entered its judgments enforcing in full the Board's Order, including its backpay provisions. A controversy having arisen over the amounts of backpay due under the terms of the Order, the Regional Director for Region 29 on May 30, 1980, issued and duly served on Respond- ent a backpay specification and notice of hearing, alleg- 1 231 NLRB 1344 (1977) 2 The administrative law judge also ordered Respondent to complete the sale of a limousine to David Miller, as it had previously contracted to do. 3 603 F.2d 214 1335 ing the amounts of backpay due under the Board's Order and notifying Respondent that it should file a timely answer complying with the Board's Rules and Regula- tions. On July 28, 1980, Respondent filed an answer to the backpay specification. On being informed by the General Counsel that the answer did not conform with applicable rules and regulations, Respondent filed a first amended answer on December 2, 1980, and a second amended answer dated December 23, 1980. Believing that the first amended answer still did not conform with the applica- ble rules, the General Counsel filed with the Board a motion to strike portions of Respondent's answer, with appendixes attached, and a motion for partial summary judgment dated December 15, 1980. On March 26, 1982, in a supplemental decision and order,4 the Board granted the General Counsel's motion to strike paragraphs 2, 3, 4, 9, 11, and 12, and any appendixes thereto of Respond- ent's answers, and also granted the General Counsel's motion for partial summary judgment with respect to backpay specification paragraphs II (backpay period), III, including Appendix A (money due to discriminatees for November and December 1975),5 IV, including sub- section I of Appendix B (gross backpay due), and IX (re- imbursement of car down payment to David Miller). The Board denied the General Counsel's motion to strike paragraphs 6, 7, and 13 of Respondent's answer, as well as the General Counsel's motion for partial summary judgment with respect to backpay specification para- graphs VI (net backpay) and VII (computation of fran- chise equity). On the issues thus joined, the matter was heard by me at Brooklyn, New York, during 15 days between Decem- ber 6, 1982, and January 14, 1983. At the hearing, the parties were represented by counsel and were given full opportunity to examine and cross-examine witnesses, to present evidence, and to file briefs and reply briefs. On my observation of the witnesses, and on due con- sideration given to the contentions and arguments con- tained in the briefs and reply briefs filed by the General Counsel and Respondent's counsel, and on the entire record in this case, I make the following FINDINGS OF FACT Inasmuch as the Board has granted the General Coun- sel's motion for partial summary judgment with respect to several aspects of the backpay specification, as stated above, there is no longer any dispute before me as to the backpay period, the formula used to compute gross back- 4 260 NLRB 1225 (1982) Pursuant to a motion to the Board to clarify and modify order made by the General Counsel on February 23, 1983, the Board corrected its order on July 1, 1983, and substituted the follow- ing language in fn. 9 in its entirety: Inasmuch as the court of appeals enforced the Board's Order pro- viding for interest to be paid at the rate of 7 percent for periods prior to August 25, 1977, when the "adjusted prime interest rate" as used by the Internal Revenue Service in calculating interest on tax payments was at least 7 percent, Florida Steel Corporation, 231 NLRB 651 (1977), that rate shall be used in computing interest due on backpay See also Florida Steel Corp., 234 NLRB 1089 (1978) All of the discriminatees were employed as limousine operators by the Respondent which provides limousine service to the public 1336 DECISIONS OF NATIONAL LABOR RELATIONS BOARD pay, the moneys due the discriminatees for November and December 1975, the gross backpay amounts due the discriminatees which are set forth in the appendixes to the specification, and the reimbursement of Miller's down payment on his car. Therefore, the two major issues to be resolved by me involve the net backpay, if any, to be awarded to each of the discriminatees, and a determination as to whether the discriminatees are enti- tled to be reimbursed the franchise money they paid to Respondent upon entering their employment. In addition, there are several items of lesser magnitude which shall be enumerated below and dealt with accordingly. Of prime concern, initially, are the net backpay figures in the specification which Respondent disputes vocifer- ously. It is Respondent's contention, in the main, that the discriminatees failed to properly seek gainful interim em- ployment during the acknowledged backpay period of February 1976 through December 1977. In its discussion of each discriminates, Respondent relies on varied rea- sons to prove its point, namely, the discriminatee failed to remain in the labor market, or the discriminatee re- fused to accept substantially equivalent employment, or the discriminatee did not diligently search for alternative work, or where the discriminatee had obtained alterna- tive work, he voluntarily quit without just cause. In ad- vance of my discussion of the claim of each of the discri- minatees, I feel it would be worthwhile to set forth the basic legal principles pertaining to backpay claims that have been put forth and adopted by the Board in prior cases. 1. LEGAL PRINCIPLES Initially, it should be stated that the finding of any unfair labor practice and discriminatory discharge is pre- sumptive proof that some backpay is owed by the em- ployer,6 and that in a backpay proceeding the sole burden on the General Counsel is to show the gross amounts of backpay due-the amount the employees would have received but for the employer's illegal con- duct.? Once that has been established, "the burden is upon the employer to establish facts which would nega- tive the existence of liability to a given employee or which would mitigate that liability."s Thus," all of Re- spondent's contentions, as stated above, are valid reasons for reducing or eliminating the employee's backpay claims if the Respondent meets its burden and establishes such facts. It is not sufficient, however, that an Employ- er simply avers that there was much work available during the backpay period. Such a claim must be sup- ported by evidence.9 And, the employer must show that if the discriminatees had applied for work they would have been hired-110 Also, a discriminatee is not required 6 NLRB v. Mastro Plastics Corp., 354 F 2d 170, 178 (2d Cis 1965), cert. denied 384 U.S 972 (1966). ' Mastro Plastics Corp, 136 NLRB 1342, 1346 (1962) 8 NLRB v. Brown & Root, 311 F 2d 447, 454 (8th Cir 1963). See Phelps Dodge Corp. v NLRB, 313 U.S 177, 198-200 (1975). 9 McLoughlin Mfg. Corp, 219 NLRB 920, 922 (1975) 10 Champa Linen Service Co, 222 NLRB 940, 942 (1976). to apply "for each and every possible job that might have existed" in the industry." Another well-established principle is, as the Board stated in United Aircraft Corp., 204 NLRB 1068 (1973), that "the backpay claimant should receive the benefit of any doubt rather than the Respondent, the wrongdoer responsible for the existence of any uncertainty and against whom any uncertainty must be resolved." In ad- dition, it should be noted that while it is the Board's stated principle that a discriminates who accepts appro- priate employment at lower pay should not be penalized and required to seek employment at a higher wage,12 the discriminatee is equally not required to accept employ- ment which is not at least the same or better than the work from which he had been discriminatorily dis- charged. H. THE BACKPAY CLAIMANTS A. The York Limousine Discriminatees Subsequent to their discharge by Respondent , Eugene Ritter, Eero Kotti, Albert Shiffman, Ernest Seltzer, and Henry Selter formed a joint venture in February 1976, known as York Limousine, an enterprise similar to that of Respondent, but certainly not in the same league. Each of the five claimants retained 80 percent of his bookings, from which he paid his own limousine ex- penses, and the balance was used to pay York's operating expenses , i.e., rent, telephone, and advertising. The un- controverted evidence established that except for Ernest and Henry Seltzer, two brothers who alternated days at York (the same as they did when employed by Respond- ent), the other joint venturers worked full time at their new endeavor. Ritter worked at York throughout the entire backpay period; Shiffman worked regularly until he had a heart attack in the second quarter of 1976;13 Henry Seltzer left York after the second quarter of 1976;14 Ernest Seltzer left York at the beginning of 1977 ;15 and Kotti worked at York for the entire backpay period. Ritter credibly testified that he devoted full time to York, as did the other participants; that he did not apply for unemployment insurance nor did he seek other employment. His income tax returns for the period were introduced into evidence, and Ritter stated that these re- turns were never challenged by the Internal Revenue Service. According to the backpay specification, as amended, the amount of backpay due Ritter from the Respondent, after deduction of his interim earnings , is $23,003. Ernest Seltzer testified that he worked for Respondent from 1967 until 1975 when the franchise that he shared with his brother, Henry, was terminated by Respondent. As partners on the one franchise, Ernest and Henry al- ternated their workdays. Ernest had been a postal service 11 Madison Courier, 202 NLRB 808, 814 (1973) 12 Sioux Falls Stock Yards, 236 NLRB 542, 570 (1978). 13 The backpay specification makes no claim for backpay for Shiffman after the first quarter of 1977 14 No backpay is claimed for Henry Seltzer after the second quarter of 1976 is Ernest Seltzer's backpay claim only covers 1976. FUGAZY CONTINENTAL CORP. employee for over 34 years until 1979 when he retired on a pension, and after he and his brother were terminat- ed by Respondent, they joined with Ritter, Shiffman, and Kotti to form York and operated as described above. Ernest did not look for another job nor did he apply for unemployment insurance. According to the backpay specification, the amount of backpay due Ernest Seltzer from the Respondent is $9074. Henry Seltzer testified that during the time he worked for Respondent, he also worked for the City of New York; and, that after his discharge by Respondent, he continued to work for the City of New York while he worked at York Limousine. The witness testified that each weekday he would make himself available for work at Fugazy after he finished working for the city, and that if a job presented itself during the daytime hours, he had Joe Sullivan cover for him, for which he paid Sullivan; and that he alternated on weekends with his brother Ernest. He continued the same practice at York. Henry Seltzer's testimony clearly shows me that he regarded his job with the City of New York as his main source of income, and he credibly testified that, although his income at York was much less than that at Fugazy, he still put in the same hours at York as he did at Fugazy. According to the backpay specification, the amount of backpay due Henry Seltzer from the Respondent is $1161. Eero Kotti worked at York during the entire backpay period, but died before the commencement of the instant proceeding. Several of York's joint ventures credibly tes- tified that Kotti worked at York on a regular basis, and his income tax return for 1976-1977 bears this out. Kotti's widow died in 1982. After the close of this pro- ceeding, the General Counsel sent me a letter from the Finnish Consul, dated March 4, 1983, which states that Kotti's widow, in her will, left her entire estate to her niece, Kaarin Kallio, and the niece's husband, Yrjo Olavi Kallio.16 Inasmuch as Kotti died intestate leaving a widow and no children, his estate passes to his widow, and on her death to her heirs. Respondent has offered no evidence to refute the testimony of the joint venturers that Kotti worked on a regular basis for York during the backpay period. According to the backpay specification, the amount of backpay due Eero Kotti from the Re- spondent is $22,836. It appears that Albert Shiffman died in 1981, prior to the commencement of this proceeding. Ritter testified that Shiffman worked just about every day during 1976 for York, and also for the first 3 or 4 months of 1977. This evidence was corroborated by several other joint venturers of York, without contradiction by Respondent. Mrs. Shiffman lives in Florida and was subpoenaed by Respondent to appear and give testimony in this pro- ceeding. During the course of this hearing, but prior to her appearance, Respondent withdrew the subpoena and Mrs. Shiffman did not testify. According to the backpay specification, the amount of backpay due Albert Shiff- man from the Respondent is $12,597. 16 I take official notice of the letter and mark it ALJ Each 1, together with the General Counsel's covering letter dated July 14, 1983 1337 Respondent contends that the claimants who formed York and thereby went into competition with Respond- ent had entered into a self-defeating enterprise. Respond- ent claims that the claimants should have known that their amateurish venture could not succeed and that such action by the claimants should not be viewed as an at- tempt by the claimants to seek substantially equivalent employment, a prerequisite to a backpay claim. Indeed, Respondent considers such action as a willful removal from the job market, and seeks to have these claimants' backpay claims nullified. In addition, Respondent intro- duced into evidence "Yellow Page" ads listing available limousine services at which the claimants could have ap- plied for jobs but did not. Moreover, Respondent con- tends that the failure of these claimants to produce York's books and records to verify their claims should be viewed negatively, and that the income tax returns of the individuals for 1976 and 1977 are suspect. It has long been established by the Board that self-em- ployment is an adequate and proper way for a discrimin- atee to attempt to mitigate loss of wages.17 And, in af- firming the Board's position, the circuit court stated that "Self-employment should be treated like any other inter- im employment in measuring backpay liability. Although the General Counsel has the burden of going forward with evidence that the employee has not willfully in- curred a loss of earnings, the ultimate burden of proving a willful loss is on the employer." [Emphasis added.]" 8 This burden has not been met by Respondent. By con- jecture, surmise, and innuendo, Respondent attempts to discredit the discriminatees' testimony and their efforts at self-employment, and seeks to invalidate their claims. But, despite the legal principle that Respondent has the burden to establish facts which would either negate or mitigate its liability, it has failed to do so. Time after time, Respondent called for the production of the discri- minatees income tax returns, and their W-2 and 1099 forms, but at no time did it introduce any evidence to prove that the discriminatees' figures were inaccurate. Concerning its contention that the discriminatees did not attempt to seek employment from the "Yellow Page" ads it introduced into evidence, it should be noted that at no time did Respondent introduce evidence to show that any of the limousine services were seeking drivers. In fact, the purpose of the ads were to attract business, and not to be considered a "Help Wanted" column. In the case of Henry Seltzer, Respondent contends in its reply brief that since ,the administrative law judge and that Board failed to include Seltzer's name among the list of discriminatees, his claim should be dismissed. Howev- er, it has been established that Henry and Ernest Seltzer shared one franchise when they worked at Fugazy and the backpay specification is based on the figures that each earned separately. In addition, it should be noted that the Board in its Supplemental Decision and Order, issued March 26, 1982,19 at 1226 fn. 8, included Henry 17 Heinrich Motors, 166 NLRB 783 (1967). 18 Heinrich Motors v. NLRB , 403 F 2d 145, 148 (2d. Cu 1968) 19 260 NLRB 1225 (1982). 1338 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Seltzer among a group of the discriminatees, and also in- cluded his name, along with his brother, Ernest, in its Order at 1227, listing those who are entitled to receive payment for the months of November and December 1975. As for the claims of Kotti and Shiffman, Board law is quite clear that the death of a discriminatee does not remove the need for a backpay remedy.20 "And, indeed, where a discriminatee has died, the Board has specifical- ly ordered his estate made whole for any financial loss suffered as a result of the unlawful conduct against him."2 t Inasmuch as the evidence established who the heirs of Kotti and Shiffman are, they shall be the benefi- ciaries in this proceeding. For all of the foregoing reasons, I reject Respondent's argument that those five discriminatees who formed York originally should be denied backpay. Accordingly, I find that Respondent has not met its burden of proving willful idleness or loss of earnings on the part of any of the above discriminatees and I shall award each of them the amount set forth in the backpay specification. B. Lloyd Lipoff Lipoff credibly testified that in mid-January 1976, he went to work for Carey Cadillac as a driver and has continued working for Carey ever since . Carey's method of operation is quite similar to that of Respondent; both required their drivers to purchase franchises and both dispatch their drivers on assignment in a similar fashion. The shift, however, from Fugazy (whose title includes the name "Continental") to Carey (whose title includes the name "Cadillac") necessitated the sale by Lipoff of his Lincoln Continental in 1976, and his purchase of a Cadillac for the new job. It was Lipoff s uncontroverted testimony that he worked for Carey on an average of 5 days a week throughout 1976.22 The General Counsel introduced Lipoff s 1975 income tax return into evi- dence. According to the backpay specification, the amount of backpay due Lloyd Lipoff from Respondent is $5245. Although Respondent has the burden of establish- ing affirmatively that the discriminatee sustained a willful loss of earnings in order to mitigate its liability, Respond- ent has not introduced any evidence and I find that it has failed to meet its burden of proof. Lipoff, even before the commencement of the backpay period, sought and obtained the exact same employment that he enjoyed with Respondent, and Board law requires no greater effort. Accordingly, I shall award Lipoff the amount set forth in the backpay specification. C. Aldo Capella Capella, a college graduate, worked for Fugazy as a driver for approximately 2 to 4 months before being dis- criminatorily terminated. During a 3-4 year period prior to working for Fugazy, Capella worked for WNEW as a desk assistant at a minimum wage ; he managed a 20 Lauderdale Lakes General Hospital, 239 NLRB 895 (1978) 21 Ibid. 22 Despite the fact that the backpay period has been set from February 1976 to December 1977, it is noted that there is no claim for Lipoff beyond 1976. McDonald's store at $175 per week; he was also em- ployed at the Hotel Granada, and then he worked as a cab driver out of the Selbert Garage. Almost immediate- ly after termination at Fugazy, Capella decided that he no longer wished to be a limousine driver, and so he never applied to other limousine services. He filed for unemployment insurance and registered with the New York State Employment Service, but he was not referred by them for a job interview. He testified he visited many employment agencies, that he was looking for a lower or mid-level management position, but was not able to obtain work. In addition, Capella sent out about a hun- dred resumes to companies listed in Barron's directory and did not receive a single response. Capella also visited firms in response to newspaper ads addressed to college graduates and was unsuccessful. He also looked into the possibility of buying a route; in fact, he checked out about 20 of them, and eventually, in 1977, he purchased a franchise for $19,500 for home delivery of newspapers. Respondent contends that Capella did not properly seek employment and thereby mitigate Fugazy's potential liability. I disagree. In my opinion, Capella viewed his employment at Fugazy as that of a self-employed person in business for himself and, therefore, in addition to seek- ing regular employment, he sought franchise enterprises after he was discriminatorily terminated by Respondent. The fact that he was unsuccessful in his search until some time in 1977 does not in any way add up to willful loss of income in 1976. I find that he exercised due dili- gence in his search for work, the Respondent offered no evidence to the contrary, and I shall award Capella the amount of backpay stated in her specification, namely, $17,280. D. Thomas Monahan Monahan had been employed by Respondent for 4 or 5 months when he was terminated. For a few months after his termination by Fugazy, Monahan was unable to get a job, despite his efforts at doing so. He sought em- ployment at several limousine services and he checked the Yellow Pages and the ads in the New York Times. In March 1976, he was hired by Dav-El, a limousine service, and he worked there until December 1976, when he started his own limousine service, Chad Limousine. Chad did not show a net profit in its first year of oper- ation, despite Monahan's efforts to generate business by distribution of business cards and letter advertising to about 20-30 corporations. Respondent contends that Monahan's decision to go into business for himself should be viewed as an improp- er effort to mitigate Fugazy's liability. I disagree. As stated in Heinrich Motors supra, self-employment is an adequate and proper way for a discriminatee to attempt to mitigate loss of wages, and shall be treated like any other interim employment in measuring backpay liability. In addition, Respondent casts aspersions on Monahan's efforts to obtain work by waiting outside night clubs, and calls this "hustling and hacking." By Respondent's own witnesses' definition, such efforts by a self-employed limousine driver do not deserve such a connotation. FUGAZY CONTINENTAL CORP. Accordingly, I shall award Monahan the amount of backpay stated in the specification, namely, $22,858.23 E. Andrew Salamone Salamone, a retired police officer, worked at Fugazy as a limousine driver for about a year when he was dis- criminatorily discharged. He then leased a limousine and operated his own limousine service during 1976-1977. Part of the time the service was called its Limousine Service, and part of the time, Salamone joined in with other former Fugazy drivers, using either the name Pride or York as an overall name for the service. However, each driver operated his own business and had his own expenses. Salamone credibly testified on three occasions during this hearing, stating how diligently he pursued this new endeavor, and produced for Respondent's pe- rusal 1976-1977 business checks and income tax returns. Yet, Respondent was not able to produce any evidence to contradict the figures presented by Salamone. Re- spondent argues that Salamone did not seek employment during the critical period and therefore should be barred from receiving backpay. As stated above with regard to other drivers, similarly situated, Salamone's attempt to earn a living as an independent contractor is an accepta- ble way for a discriminatee to attempt to mitigate the Respondent's liability. If such effort proves unsuccessful, the burden lies with Respondent, the perpetrator of the unfair labor practice, not the discriminatee. Accordingly, I shall award Salamone $15,081, the amount of backpay stated in the specification. F. Steve Pepper After Respondent terminated Pepper in 1975, Pepper started his own business, SJP Limousine Service, on Jan- uary 3, 1976, and continued in that business until Febru- ary 1979. Old customers of his continued to use his serv- ices and he obtained new customers through recommen- dation and the use of the Yellow Pages in New Jersey. Pepper credibly testified that he made himself available for work 7 days a week at all hours. Business improved so much through 1976 that in 1977 he purchased a second limousine and hired a part-time driver. During the course of Pepper's examination by Re- spondent's counsel, Pepper stated, "I netted more money in 1977 than I did ever at Fugazy." Inasmuch as the General Counsel's backpay computations makes a claim for Pepper for 1977, I questioned the discriminatee, and elicited the following information: In 1975, during the 10 months that Pepper worked for Fugazy, he netted ap- proximately $11,000; In 1977, Pepper netted $10,707 for a 12-month period. Undoubtedly, therefore, Pepper 23 During the course of the hearing, Monahan was quoted by the re- porter in the transcript to have said, "I think I made $17,000 while I was there " After eliciting the fact that Monahan worked for Dav-El for 7 months, counsel for Respondent then asked, "So you made roughly $1,000 a month," and Monahan agreed. At a later date, during the hear- ing, the General Counsel moved to have the transcript amended to,read "$7,000" in place of "$17,000." In light of the testimony that followed, as quoted, the motion is granted In addition , the General Counsel, in its brief, moved to amend the transcript wherein the several words were misused throughout. Hearing no objection from Respondent, the motion to amend is granted. 1339 earned less in 1977 than in 1975, and the General Coun- sel's computation reflect figures on a 12-month basis. I credit those figures. Respondent, again, contends =that Pepper removed himself from the job market when he sought self-employ- ment and therefore should be denied backpay. For the reasons stated above, I disagree, -and I award Pepper the amount of backpay stated in the specification, $10,274. G. Edward Moore After Moore retired as a police officer, he went to work for Fugazy as a limousine driver. He worked for Respondent for 2-3/4 years when he was terminated. He then joined with James Kelly, Andrew Salamone, San- ford Adler, and James Eagleston, all former franchisees of Fugazy,-to form-Pride Limousine, in order to split ex- penses for a room and telephone. Each continued to service his own customers and fees were not shared. After about 2 years at Pride, Moore and Adler left to form B & G Limousine, a business which they still oper- ate. However, for the critical period of 1976-1977, Moore worked out of Pride, and he credibly testified that during that period he did not net a profit. Inasmuch as Respondent offered no evidence to refute Moore's tes- timony, I credit Moore and award him the amount stated in the backpay specification namely, $14,383. H. Joseph Aquila Aquila was employed by Fugazy in November 1975. In January 1976, after Aquila's termination by Fugazy, he registered with two employment, agencies, Office Temporaries and Greyhound Temporaries. Aquila start- ed his first job for Greyhound in either January or Feb- ruary 1976 and continued there until April. In April he went to work for Capitol Bus Company and worked there until he quit in October 1976. Aquila credibly testi- fied that he was a resident of North Bergen, New Jersey, and that he left Capitol because within the 6-month period that he had worked there, the company had changed his starting point three times, namely, from Har- risburg, Pennsylvania, to Washington, D.C., to Pottsville, Pennsylvania. According to -the backpay specification, Aquila then returned to temporary work through Oistens of Northern New Jersey for the fourth quarter of 1976 and all of 1977. I find no willful loss of earnings by Aquila in leaving the Capitol job. The latter proved to be a more burden- some job than the one Aquila held with Fugazy. The law cannot require a discriminatee to stay on a job which requires him to move to different locations on three occasions in a 6-month period, when the record shows that he was able to live with his family while pre- viously employed by the perpetrator of the unfair labor practice. Moreover, his ability to remain employed throughout the critical period attests to his efforts to mitigate damages. Accordingly, I shall award Aquila the full amount stated in the backpay specification, namely, $1223. 1340 DECISIONS OF NATIONAL LABOR RELATIONS BOARD 1. Ernest Roane Subsequent to his discharge by Fugazy, Roane went to work for Carey Cadillac in January 1976, and is still working at Carey. The records show that during 1976- 1977, Roane earned less at Carey than at Fugazy. Roane credibly testified that working for Carey was very simi- lar to the way he worked at Fugzy. In both instances, he used his own car, purchased a franchise, worked a full week, paid his own car expenses, and was contacted by two-way radio or waited for a call in the drivers' ready room located on the employer's premises. Despite these similarities, Respondent constantly refers to Roane as an independent contractor and argues that Roane thereby removed himself from the job market. I disagree. With- out reaching a conclusion whether Roane was an em- ployee of Carey, as he was found to be at Fugazy, or an independent contractor, there can be no question but that Roane was engaged in exactly the smae work at Carey as he was doing at Fugazy when he was discriminatorily discharged. The Board law is clear that a discriminatee is entitled to backpay when he accepts substantially equiva- lent employment. Certainly, no more can be asked of any employee in order to mitigate a backpay claim. Accord- ingly, I shall award Roane the amount stated in the back- pay specification, namely, $21,084. J. Paul Osit On his discharge by Fugazy, Osit sought employment at Carey Cadillac, but was turned down. In March 1976, he obtained employment at Massachusetts Indemnity and Life Insurance as a commission salesman for accident and health policies. Osit testified that his commission checks average about $200 a week; he was not compen- sated for travel expenses, which average between $30 and $40 per week. By Labor Day, 1976, Osit saw that he could not make a living as an insurance salesman, and so he quit the job. During the next 4 to 5 weeks, Osit sought employment by checking newpaper ads for sales jobs. In late October 1976, Osit was hired by S.M. Rose Chevrolet as a car salesman on salary plus commission.24 After about 4 or 5 weeks, Osit was laid off because busi- ness was slow. When he applied for unemployment in- surance , Osit filled out forms for employment, indicating that he desired sales employment, but was not referred out to any work. In addition, Osit responded to new- paper ads but was unsuccessful in obtaining work.25 In April 1977, Osit became a franchise limousine operator for Carey Cadillac, and has continued in that position ever since. Respondent contends that Osit claims for backpay should be dismissed because he removed himself from the limousine service business, and because he quit the job he held at Massachusetts Indemnity. However, the 24 Osit testified that he had a job for 1 week selling BIC pens over the telephone. He quit because he was under the impression when hired that he would be selling a complete line of office supplies . Osit cannot remem- ber whether he had this job before or after S . M Rose. 25 Osit admitted that he turned down an offer made by a chemical company . When pressed for a reason, he stated that the offer merely was for him to go out to the street and sell the products, and that is not what he was looking for Also, he had established a minimum for himself of $200 a week Board has held that a discriminatee is not required to accept employment in the same field as that from which he was discharged,26 and further, he is not required to remain at a job which is economically unfeasible.27 Under the circumstances, and in light of the fact that Osit did work in every quarter, except one, during the critical period, I do not believe that his actions constitute a willful loss of earnings, and I will allow him backpay as outlined below. By Osit's own admission, his interim earnings while employed by Massachusetts Indemnity in the first quarter of 1976 was $200 a week less about $40 for expenses, times 4 weeks in March 1976, or a total of $640. In the second quarter of 1976, his interim earnings were $1920, and in the third quarter of 1976, he earned $1280.28 Ap- plying these earnings to the backpay computation, I find the net backpay due Osit to be as follows-211 Yr. /Qtr. Gross Backpay Interim Earnings Net Backpay 1976(1) $1143 $ 640 $ 503 (2) 1714 1920 0 (3) 1714 1280 434 (4) 1714 825 889 1977(1) 1714 0 1714 (2) 1714 1424 290 (3) 1714 1424 290 (4) 1714 1424 290 $4410 K. Carl Roa Roa credibly testified that after he was terminated by Fugazy in December 1975, he waited until about March or April 1976 before seeking other employment. It was his belief that Respondent might call him back to work. When that did not happen, Roa called several limousine companies for a job, but to no avail. There was no work available. From time to time he would call the limousine companies again but no jobs were offered to him. In the summer of 1976, Roa sought employment in drycleaning stores; he had previously been in that business. But, again, no jobs were available. In October 1976, he ap- proached York Limousine, and was given some weekend jobs, using one of the other driver's car. In January 1977, Roa purchased his own car, and throughout the rest of the year, Roa became a regular , expense-sharing member of York Limousine. The above facts were elicited from Roa on direct ex- amination . The opening questions on cross-examination dealing with the receipt of a subpoena and a notice to produce certain records were negatively responded to. Whereupon, counsel for Respondent decided to withhold his cross-examination of Roa until he could effect service 26 Southeastern Envelope Co, 246 NLRB 423, 431 (1979). 27 Champa Linen Service , supra at 942. ZS Having quit on Labor Day, Osit's earnings are for July and August. 29 The General Counsel, in its brief, moved to amend Osit's backpay specification to reduce the net backpay to $5160. In view of my findings, the motion is denied , and my figures substituted. FUGAZY CONTINENTAL CORP. of a subpoena upon Roa seeking the production of records. Roa was advised by me that he could expect to be called back to testify and to bring with him whatever documents would be requested by Respondent's counsel. Rca stated his present home address on the record and was excused until he received the subpoena. At no time, thereafter, during the course of the hearing, did Roa's name come up again. Respondent's counsel did not notify me of any attempt to serve Roa with a subpoena, nor did he advise me that he would request the General Counsel to seek subpoena enforcement. After the hearing closed, I received a motion to dismiss Roa's claim on the grounds that Roa "willfully refused to return" to the hearing. Inasmuch as Respondent's counsel never re- called Roa to the stand, nor placed on the record his contention regarding Roa, I see no reason to grant Re- spondent's motion, nor to reopen the record. Therefore, Respondent's motion is denied. I find Roa's testimony to be credible, that he sought appropriate employment, and that he was sincere in his efforts to obtain work. I conclude that Respondent has failed to sustain its burden of proving that Roa willfully failed to seek suitable interim employment or that the al- leged backpay, as set out in the backpay specification as amended, is less than alleged. Accordingly, I find Re- spondent's net backpay liability in Roa's case to be $11,269. L. Emmanuel Lewis In February 1976, after his discharge by Respondent, Lewis applied at various employment agencies and sev- eral companies for employment as a driver. He also filed for unemployment insurance and responded to a number of newpaper advertisements. During the second quarter of 1976, he obtained employment at the Anaconda Co., and continuously worked there through the third quar- ter. He then got a job with the Federal Paper Board Co., and worked there into the fourth quarter of 1977 when he was replaced by an employee whom Lewis had re- placed when he first started working at Federal. Through the balance of the fourth quarter of 1977, Lewis continued to look for work just as he had in the beginning of 1976. The facts show that because of his efforts and success in seeking employment, Lewis reduced Respondent's backpay liability tremendously. In fact for five of the eight critical quarters used to compute Respondent's li- ability, no claim at all was made for backpay. As for the balance, Respondent has not met its burden of proving that Lewis willfully failed to seek suitable interim em- ployment. Accordingly, I find Respondent's net backpay liability to be $2729. M..Stanlev Rocke Up until June 1975, Rocke was a salaried employee for Respondent.30 In June 1975, Rocke bought a franchise 30 The transcript refers to this type of driver as a house driver. As such, Rocke was paid per hour 1341 and leased a car from Fugazy. After he was terminated, Fugazy took back the car. Not having a vehicle to drive, Rocke sought employment as a security guard in Febru- ary 1976. He was hired in March or April 1976 by Burger King as a part-time employee; as such, he worked at different locations as vacancies occurred, and was paid by the hour. After a short period of time, Rocke was assigned to one location on a permanent basis, and worked a regular 8-hour day, 5-day week at a wage lower than that realized at Fugazy. This continued through 1976-1977. Respondent contends that Rocke's claim should be dis- missed because: (1) He made no effort to secure employ- ment as a driver or chauffeur; (2) he accepted a position which earned him far less than he had been earning at Fugazy; and (3) the General Counsel erred in its project- ed figures by ignoring the fact that Rocke finished "in the hole" for the period June-November 1975.31 As stated above, a discriminatee's failure to seek the same type of employment from which he was discharged does not make him ineligible for backpay,32 nor is he re- quired to seek employment at a higher rate when his in- terim employment is at a lower rate.33 And, a close ex- amination of Respondent's Exhibit 13 reveals the fact that Rocke's earnings exceeded his obligations. One need only look at two items , "Amount due driver" and "Ad- vances on Commissions" to ascertain that the General Counsel did not err in compiling its projected figures. Once, again, I conclude that Respondent has failed to sus- tain its burden of proving that Rocke willfully failed to seek suitable interim employment, or that the alleged backpay is incorrect. 1, therefore, award Rocke the net backpay amount stated in the backpay specification, namely, $5238. N. Thomas Green After Respondent terminated him, Green took a job with Horizon Limousine Service as general manager. After about 7 months he was terminated because of a disagreement with his employer. From July 1976, the time of his termination at Horizon, until November 1976, when he obtained employment at Esquire Cadillac, Green tried in various ways to obtain employment. He sent out resumes, made telephone calls, and answered newspaper ads. He contacted Carey Cadillac and other limousine companies, and spoke to many individuals whom he chauffeured while working at Fugazy. During his 12 years with Fugazy, Green chauffeured and also acted as a dispatcher. And so, in addition to seeking driving jobs, Green also sought dispatching jobs. Prior to working at Fugazy, Green worked as a salesman and sales manager in automobile agencies, and he, therefore, looked for workin that field after he left Horizon. Final- ly, in November 1976, he was hired by Esquire as a dis- patcher. That job lasted only a month. Green credibly testified that he was let go because Esquire could not 31 "In the hole" meant that a driver's expenses were greater than his income . See R. Exh 13. 32 Southeastern Envelope Co., supra at 431. 33 Sioux Falls Stock Yards, supra at 570; Champa Linen Service Co., supra at 942. 1342 DECISIONS OF NATIONAL LABOR RELATIONS BOARD afford him. In early 1977, Green was hired by Hayes Oldsmobile as a salesman , and he continued to work for Hayes into the final quarter of 1977. Green's claim for backpay is limited to just two quar- ters during the entire critical backpay period of eight quarters . Inasmuch as Respondent has not met its burden of proving that Green willfully failed to seek suitable in- terim employment , I find Green's claim to be justified, and I award him the amount stated in the backpay speci- fication, namely, `$1480. 0. Frank Scalavino Scalavino started driving for Fugazy in October 1975. He, like the other striking drivers, was discriminatorily terminated in December 1975. He attempted to return to work in December 1975, but was refused reinstatement. However , in August 1976,. he signed a new franchise agreement and note with Fugazy and was reinstated. Scalavino 's backpay claim, therefore , is limited to the first three quarters of 1976. Scalavino credibly testified that , beginning in February 1976, he sought various chauffeur positions through newspaper ads and employment agencies . He had several interviews but was not hired. For 3 weeks during Febru- ary 1976, Scalavmo helped his father out in his egg de- livery business for which he received no compensation; in March, his father went out of business. In April 1976, Scalavino registered with the state employment agency looking for chauffeuring positions but none were avail- able. In May through July, Scalavino restricted'his em- ployment availability to nights because he had a sick daughter in the hospital and visited her during the day- time. Respondent contends that Scalavino willfully' incurred a loss of earnings when he restricted his job availability to nights. I disagree. Scalavino credibly testified that during his tenure with Fugazy, he worked many times on the night shift, and that night-shift work was com- monplace in the chauffeuring business . I find, therefore, that he did not remove himself from the job market by specifying night work, and Respondent did not produce any evidence to prove otherwise . In addition , ' Respond- ent again contends that, since the claimant did not produce documentation to support this claim , negative inferences should be drawn and the claim dismissed. Again, I disagree. It is Respondent 's burden to establish facts that will mitigate its liability, and that Respondent has failed to do. Also, although Scalavino admitted that he gratuitously assisted his father for 3 weeks in Febru- ary 1976, 1 do not find that such action removed him from the labor market as Respondent would have me be- lieve. Respondent offered no evidence to support that contention and, to the contrary, Scalavino credibly stated that during February 1976, he responded to many newspaper ads and applied to employment -agencies. Under the circumstances, I find that Scalavino should be made whole according 'to' the backpay specification, i.e., in the amount of $4889. P. Steven LeGrady LeGrady was deceased at the time of the hearing. He passed away in March 1978 , after the backpay period. Agnes LeGrady, the discriminatee 's widow, credibly tes- tified that the deceased had been a bartender for more than 30 years ; that after quitting being a bartender in 1975, at the age of 65, LeGrady went to work for Fugazy as a chauffeur . On retirement from being a bar- tender, LeGrady received a monthly pension from the bartenders ' union. After he was discriminatorily termi- nated in December 1975 , he went to work as a chauffeur for Horizon Limousine Service in January 1976. Le- Grady worked at Horizon until June 1976, at which time, according to Mrs. LeGrady, he left because either Horizon went out of business or was going out of busi- ness. LeGrady did not work after that, despite the fact, as testified to by Mrs. LeGrady, that he sought employ- ment as a chauffeur through newpaper ads and by con- tacting limousine services . Respondent introduced into evidence LeGrady's 1976 and 1977 income tax returns; in the box marked "Occupation," LeGrady had marked "Chauffeur-Retired" on the 1976 return and "Retired" on the 1977 return. Respondent contends that LeGrady 's use of the word "retired" on his income tax returns show a state of mind which removed him from the job market and therefore makes him ineligible for a backpay claim. I disagree. I conclude that the use of the word "retired" was merely an explanation to the Internal Revenue Service of his status vis -a-vis his previous 30 years as a bartender. Inas- much as 'I credit Mrs. LeGrady who testified , without contradiction , that LeGrady sought and obtained em- ployment with Horizon and continued to seek employ- ment thereafter, I find that LeGrady's use of the word "retired" has no bearing on his right to be recompensed accordingly herein. Respondent further contends that the failure of LeGrady's estate to preserve and produce Le- Grady's records regarding his efforts to obtain work should vitiate his claim . I disagree . A discriminatee is not automatically disqualified from backpay because of poor recordkeeping or uncertainty as to memory . The burden is on the Respondent, the one who committed the unfair labor practice , to attempt to show where the discrimina- tee failed to mitigate the backpay claim. This the Re- spondent has failed to do. Even to the question of when or if Horizon went out of business, Respondent offered no independent evidence to remove the doubt. Certainly, it could have sought out Horizon personnel or checked out public records as to Horizon 's status, but it failed to do so. In fact , Respondent submitted no probative evi- dence that LeGrady had not made a diligent search for employment. I conclude, therefore, that LeGrady should be made whole as stated in the backpay specification, namely, $11,188. Q. Max Gans Gans testified that he was discriminatorily terminated by Fugazy in December 1975. On February 19, 1976, Gans signed a new franchise agreement with Respondent and a promissory note (to be discussed, infra), and re- turned to work that day. The claim, therefore, for back- FUGAZY CONTINENTAL CORP. pay is limited to 18 days in February 1976, in the amount of $447. Inasmuch as Respondent adduced no evidence that Gans deliberately failed to mitigate backpay, I con- clude that backpay should be paid to Gans in accordance with the backpay specification. R. Cornelius Evans and Michael Osterhoudt Neither Evans nor Osterhoudt was called to testify at the backpay hearing. However, the record is void of any statement by Respondent to show Respondent's disap- proval of their absence. Yet, Respondent, for the first time in its brief, seeks to have such claims dismissed be- cause of their failure to appear and testify. I disagree. While it is customary for the General Counsel to produce backpay claimants for examination by Respond- ent, such function is merely advisory and cooperative.34 Since Respondent voiced no objection, at the hearing, to the discriminatees' absence, I must assume that Respond- ent acquiesced in their claims. Therefore, despite Re- spondent's contention, in its brief, that such absentees' claims be dismissed, I conclude that the claims of Evans and Osterhoudt be upheld despite their nonappearance at the hearing, and I award them the amounts stated in the backpay specification, namely, to Evans, $690, and to Osterhoudt, $386. S. David Miller After Miller's termination by Fugazy in December 1975, he went to work as a limousine driver for BP Lim- ousine in January 1976.35 While continuing to work for BP, Miller and another former employee of Fugazy, Mi- chael Osterhoudt, formed the Progressive Hill City Radio Cab, Inc. in June 1976. The latter was a taxicab service that operated in Summit, New Jersey, whereas BP's operation was similar to that of Fugazy. BP's driv- ers received their assignments generally by the use of beepers; they were paid a percentage of their billings; and they were charged for the expenses of the vehicle. Miller credibly testified, uncontrovertedly, that he does not recall ever turning down an assignment of BP. Miller further stated that Progressive hired between 10 and 12 cab drivers to perform the work, while he and Oster- houdt managed the operation, drawing a weekly wage of $100. To fulfill his obligation to both endeavors, Miller worked 16-17 hours a day during a 6-7 day week. De- spite the minimal wage that they took for themselves and despite their efforts to generate business at Progressive Cab, Miller and Osterhoudt were forced to go out of business in June 1977, because of skyrocketing gas prices and the increases in the cost of repairs and insurance. However, Miller continued to work for BP during the remainder of the backpay period. Respondent contends that Miller removed himself from the job market when he went to work for BP and therefore should have his claim dismissed. I disagree. In taking a job with BP, Miller was performing exactly the 84 See Cornwell Co., 171 NLRB 342 fn 2 (1968). as 1 give no special significance to the late revelation that Miller's wife was a part owner of BP Limousine. In fact, I was impressed with Miller's sincerity, and I find him to be a thoroughly honest witness with a great ability to recall long-past events. 1343 same work that he did at Fugazy, and no discriminatee is required to do more. Also, Miller even attempted to aug- ment his income by starting a second endeavor and thus reduce Respondent's liability. The fact that it proved to be unsuccessful does not bring discredit to Miller nor justify Respondent's contention. In addition, by showing Miller his tax returns for 1975-1977, Respondent gets Miller to state that he earned more in 1976 than in 1975, and thus Respondent contends that there is no backpay due for 1976.36 Because Respondent had not paid Miller for November and December 1975, the gross pay for 1975 on the tax return does not reflect Miller's actual income. And, because the General Counsel in its back- pay figures included November and December 1974 to arrive at an accurate earnings figure for 1975 to compare to 1976 earnings, I believe the backpay amount requested is correct. Accordingly, I award Miller the amount stated in the specification, namely, $7072. This concludes my listing of 24 discriminatees who I have found are entitled to receive backpay. I have con- sidered Respondent's arguments that they should be denied backpay, and I reject them. I do not agree with Respondent that the discriminatees failed to secure com- parable employment or willfully incurred losses of earn- ings by engaging in self-employment. Rather, I find that Respondent has failed to meet is burden to establish facts that would mitigate its liability. Since all doubts must be resolved against Respondent, the wrongdoer herein, and negative inferences will not be drawn against the discri- minatees, I reject Respondent's defenses and find that the amended backpay specification accurately sets forth Re- spondent's backpay liability except where I have indicat- ed changes.37 Of the 17 remaining discriminatees, 3 have abondoned their claims completely,38 and 14 have assorted claims other than backpay as do some of the 24 discriminatees listed above. III. THE FRANCHISE EQUITY CLAIMS Prior to becoming employed by Respondent, each dis- criminatee was required to purchase a franchise from Re- spondent which gave the discriminatee the privilege of working for Respondent.39 The discriminatee either paid in full for the franchise, or made a downpayment and ex- ecuted a promissory note for the difference, payable with interest on a monthly basis for a period, usually 5 years. The pertinent provisions of the franchise agreement, in summary, are as follows: (a) The quid pro quo of the agreement-In exchange for the granting of permission to drive a limousine for Fugazy, and to use Fugazy's name, and to have available Fugazy's booking, dispatching, billing, and collection fa- cilities, and to be provided by Fugazy with uniform and 36 The backpay specification figures for 1975 do not jibe with the dis- criminatees ' income tax returns because the former is a projected figure of what the savings would be if the discriminatee had worked a full year, whereas the latter reflect only a 10-month figure which is what the dis- criminatees actually earned from January through October 1975 s7 Column B of Appendix E, attached hereto, reflects my findings 88 H Finkel , A Grady, and J. Grady. 39 See sample franchise agreement , G.C. Exh, 2. 1344 DECISIONS OF NATIONAL LABOR RELATIONS BOARD sales aids, the driver agrees to pay a franchise fee to Fugazy. (b) The agreement is for a period of 2 years renewable at the option of the driver for additional 2-year terms without paying any additional franchise fee. (c) The driver agrees to conduct himself properly when operating his vehicle, and he, at his own expense, must maintain a radio-equipped vehicle, and pay all ex- penses in the operation and maintenance of the vehicle. (d) The driver may sell the franchise after securing the consent of Fugazy, and Fugazy agrees not to unreason- ably withhold such consent. (e) Fugazy has- the right to terminate the franchise upon the occurence of specified events. In the event of termination, no portion of the franchise fee shall be re- funded.4 ° Thus, on December 12, 1975, Respondent unlawfully terminated the franchises of all of the discriminatees,41 and the backpay specification seeks reimbursement of the moneys spent by the remaining discriminatees, based on the market value of the franchises as of December 1975, which the General Counsel concluded to be $7500 for a sedan, and $12,500 for a limousine. In the remedy portion of his decision in the previous case, referring to the franchise agreement, Administrative Law Judge Herbert Silberman stated: Each of the franchise drivers who was unlaw- fully discharged by Respondent had entered into a franchise agreement with Respondent pursuant to which he agreed to pay a stipulated price for the franchise. Respondent's witnesses have testi- fied that the value of these franchises fluctuate. If between the date on which each such franchise driver should have been offered reinstatement and the date on which Respondent does offer him unconditional reinstatement the value of his franchise has fallen, that is a capital loss which the franchise driver will suffer due to no fault on his part. Accordingly, in order to make the fran- chise drivers whole for all losses suffered by reason of Respondent's discrimination against them, I shall also recommend that Respondent pay to each franchise driver the difference be- tween the value of his franchise as of the date on which Respondent should have offered that driver reinstatement to his former position and the date on which Respondent does offer him re- instatement 42 Respondent contends, inter alia, that since Judge Sil- berman's order limits the discriminatees' franchise remedy to a possible capital loss, an award by me of the franchise equity would be going beyond the scope of 40 In the underlying unfair labor practice proceeding, the judge noted that the driver had no corresponding right to cancel his agreement and obtain the refund of his franchise fee. In addition, the judge found that the act of termination of the franchises by Fugazy on December 12, 1975, was not because of one of the events enumerated in the agreement, but constituted an unlawful discharge of the drivers. 41 No claim is made for reimbursement of the franchise equity for Evans, Finkel, A. Grady, J Grady, Middlebrook, N. Sanguedolce, and J Vieto. 42 231 NLRB 1344, 1359 (1977). Judge Silberman's order and not be an appropriate remedy.43 The General Counsel contends that in order for me to effectuate the policies of the Act, I should award the full market value of each discriminatee's fran- chise at the time of the unlawful termination on Decem- ber 12, 1975. In my analysis of Judge Silberman's decision, I come to the conclusion that he gave much thought to the fran- chise agreements and their worth to each dlscriminatee. His dissection of the agreement's parts, and his attempt at a remedial solution that would compensate the discri- minatees for the unlawful act of the Respondent, showed his awareness and concern for the problem.44 However, in his eagerness for a solution, I believe that Judge Sil- berman made the assumption that reinstatement of the discriminatees was a foregone conclusion, and that a remedy limiting their franchise interest to a possible cap- ital loss was sufficient. The evidence, however, shows that the vast majority of the discriminatees did not come back to work and that by March 1976, practically all of the discriminatees had been replaced.45 Under the cir- cumstances, and as a result of Respondent's unlawful act of termination, the discriminatee stood to suffer the loss of their entire capital investment. As a matter of fact, the uncontroverted testimony of many of the discriminatees was to the effect that despite their efforts to get Re- spondent to repurchase their franchise after their termi- nation, or to at least aid them in getting a purchaser for them, Respondent spurned them entirely.46 Section 10(c) of the Act empowers the Board in reme- dying unfair labor practices "[t]o take such affirmative action including reinstatement of employees, with or without backpay, as will effectuate the policies of the Act [emphasis added]." Thus, Section 10(c) of the Act (29 U.S.C. §160 (c)) accords the Board considerable discre- tion in fashioning remedies for unfair labor practices. NLRB v. Gissel Packing Co., 395 U.S. 575, 612 fn. 32 (1969); Virginia Electric Co. v. NLRB, 319 U.S. 533, 540 (1943). Absent constitutional considerations, a Board re- medial order may not be disturbed "unless it can be shown that [it] is a patent attempt to achieve ends other than those wich can fairly be said to effectuate the poli- cies of the Act." Virginia Electric Co. v. NLRB, 319 U.S. at 540 (1943). In devising remedies, the Board seeks to restore the parties, to the extent practicable, to the situation that would have obtained but for the unfair labor practices. This remedial principle has been applied by the Board, and approved by the courts, in a wide variety of circum- stances. See, for example, Fibreboard Corp. v. NLRB, 379 49 It should be noted that Judge Silberman provided in his Order that each of the discriminatees be made "whole for any loss of earnings and other losses he may have suffered by reason of Respondent's unlawful discrimination against him " 231 NLRB 1344, 1360 (1977) 44 In its supplemental decision and order, the Board also recognized the problem and ordered the instant hearing with one of its purposes being to resolve the issue of franchise equity. See 260 NLRB 1225, 1227 (1982) 45 See G C. Exhs. 26 and 34. 46 One exception was Max Gans. Gans sold his franchise to another driver for $7000 and was able to recoup $5500 of the $7500 he paid for the franchise Even in this instance, Respondent withheld $1500 as a transfer fee FUGAZY CONTINENTAL CORP. U.S. 203, 216 (1964) (order requiring resumption of sub- contracted operation was proper where "[t]here has been no showing that the Board's order restoring the status quo ante to insure meaningful bargaining is not well de- signed to promote the policies of the Act"); NLRB v. Gissel Packing Co., 395 U.S. 575, 612 (1969) ("perhaps the only fair way to effectuate employee rights is to rees- tablish the conditions as they existed before the employ- er's unlawful campaign" by issuance of a bargaining order); Hinson v. NLRB, 428 F.2d 133, 136 (8th Cir. 1970) (order requiring payment of health, welfare, and retirement benefit contributions was proper; for "[t]he Board must be given broad authority under [Section 10(c)] to restore the status quo ante and to make whole any losses suffered by employees because of the unfair labor practices"). Therefore, the question of what remedy should be awarded depends upon my determina- tion that such a remedy is necessary to effectuate the policies of the Act. Moreover, the Board has extended the make-whole provision of the backpay order to cover not only wages, but, where appropriate, other emolu- ments of employment, including vacation benefits,47 bo- nuses,48 shares in profit sharing programs,49 pension coverage,50 and loss suffered by reason of eviction.51 In the instant case, we have a Respondent who has sold franchises to its drivers, unlawfully terminated the fran- chises, retained the moneys received from the drivers, and subsequently resold the franchises to other drivers. To allow the Respondent to retain the proceeds of the discrimmatees franchises under such circumstances in un- conscionable. Unjust enrichment of an employer at the hands of its employees has no place in the Act. To remedy such a situation and to effectuate the policies of the Act, I shall order Respondent to reimburse each of the discriminatees to the full extent of his investment in his franchise.52 Respondent further contends that Judge Silberman's order to reinstate the discriminatees restores to the dis- criminatees their right to sell their franchises, and that therefore no remedial order for the reimbursement of the franchise equity is appropriate. As stated above, the op- portunity for the discriminatees to sell their franchises was eliminated by the Respondent when it, Itself, resold the existing franchises to new employees. Also, the evi- dence established that Respondent refused to cooperate when approached by several discriminatees who sought to sell their franchises and, in fact, withheld approval of possible sales. 4' Richard W Kasse Co, 162 NLRB 1320, 1325 (1966). 48 United Shoe Mach. Corp., 96 NLRB 1309 (1951) 49 International Harvester Co., 169 NLRB 787 (1968) 5° Richard W. Kasse Co., supra at 1326. 51 Kohler Co., 128 NLRB 1062, 1114 (1960) 52 1 note that par. VII of the backpay specification outlines the method of computing the value of the franchise and the amount to be reimbursed to the discruninatee I find this to be an acceptable method of computa- tion, and in the absence of any evidence to the contrary by Respondent, I find the figures in App. C of the backpay specification, as amended, to be accurate and I order the Respondent to reimburse the discriminatees ac- cordingly. I also note that no claim for franchise equity was made for anyone who accepted reinstatement and was not assessed a penalty. 1345 Accordingly, I shall recommend that Respondent re- imburse each of the discriminatees their franchieg equity as outlined in Column C of the attached Appett4 t F. IV. MONEYS DUE DISCRIMINATEES FOR NOVEIm3ER- DECEMBER 1975 In its Supplemental Decision and Ytrder issued on March 26, 1982,53 the Board found that the net amounts due employees for work performed during the months of November and December 1975 are as stated in the com- putations contained in Appendix A of the specification, 54 and ordered that payment thereof be made by Respond- ent to each named employee. In its Order, the Board listed the employees with the amount due next to each name. However, Appendix A was amended, at the hearing, to include November-December 1975, amounts due to four discriminatees for whom Respondent had not pro- vided information as requested in the General Counsel's subpoena, and for whom the November-December 1975 figures were unknown. The General Counsel's compli- ance officer testified that the figures used for these four employees were estimated based on their recollection of what their gross earnings were for the period, but that the expense figures were actual expenses gleaned from prior months. Respondent did not adduce any evidence to disprove the General Counsel's calculations. Accord- ingly, in addition to the awards granted by the Board in its Supplemental Decision, I shall award the following four employees the amounts listed for November-Decem- ber 1975: Calvin Middlebrook $1867.05 David Miller 2508.00 Stanley A. Rocke 169.80 Michael F. Wall 1098.81 V. REIMBURSEMENT OF REINSTATEMENT PENALTY PAID BY MAX GANS AND CALVIN MIDDLEBROOK As stated above,-5,5 Gans returned to Respondent on February 19, 1976. Gans testified, without contradiction, that he was told by Respondent that they would allow him to come back to work if he signed a new franchise agreement, and a promissory note for an additional $2700 payable at the rate of $225 per month, over a 12-month period. Gans complied. Respondent's records show that these amounts were deducted over the 12-month period, and Gans further testified that an additional amount of $225 was deducted later on. Respondent offered no evi- dence to refute Gans' testimony. In May 1979, Gans sold his franchise. 56 Middlebrook testified that when he asked to be rehired by Respondent, he was told, "If you want to come back, you know that there is a penalty . . . . It has to be 52 260 NLRB 1225, 1227 (1982) 54 App. A is based on Respondent's records of what is owed to the Respondent by the discnmmatees for gas and oil purchases from Re- spondent, and for repairs and maintenance performed by Respondent, which is deducted from the net due the drivers ss See sec. II,Q. 66 See G C. Exh. 13. 1346 DECISIONS OF NATIONAL LABOR RELATIONS BOARD $2700 that you have to pay over a period of 12 months and that will be deducted each month out of your check." Middlebrook agreed and signed a statement to that effect. Middlebrook further testified that monthly deductions were made from his paychecks until the entire $2700 was paid. He worked for Respondent until 1978 when he left, and no money was refunded to him. Respondent offered no evidence to the contrary. The General Counsel contends, and Judge Silberman found 57 that the conditional offer of reinstatement vio- lated the Act, and that therefore Gans and Middlebrook are entitled to be reimbursed for the moneys deducted by Respondent. I agree, and I award Gans and Middlebrook reimbursement of $2925 and $2700, respectively. VI. REIMBURSEMENT TO DAVID MILLER OF CAR DOWN PAYMENT LESS REASONABLE USE FEE Paragraph IX of the backpay specification seeks the reimbursement of a $5000 downpayment made by David Miller to Respondent towards the purchase of a Lincoln sedan in July 1975, less an adjustment downward to re- flect a reasonable-use charge for the 6-month period from July 1975 to the end of the year, as ordered by the Board in its Supplemental Decision.58 As stated above, footnote 2, Judge Silberman had ordered Respondent to complete the sale of the car, on request of Miller, and the Board adopted the Order. Despite Miller's written request for completion of the sale, Respondent rejected Miller's request. The sole question before me, therefore, is whether to adjust Miller's payment of $5000 down- ward to reflect the reasonable-use charge. Miller testified that the agreed price of the sedan was $9200. He also stated that car leasing companies usually leased cars over a 3-year period, that his accountant de- preciated cars on a straight-line basis, and that straight line was one of several acceptable methods permitted by the Internal Revenue Service. The General Counsel's compliance officer testified that after consulting tax re- turns filed by many drivers who owned their own vehi- cles, and consulting with Miller, and consulting Internal Revenue Service publications, he determined that straight-line depreciation was an acceptable method to IRS, and that 3 years is the recommended service life of a car. Accepting those premises, the compliance officer divided the price of the car ($9200) by the number of months in a 3-year period (36) and came up with a monthly straight-line depreciation fee of $256, which he then multiplied by the number of months Miller used the car (6), and arrived at a use figure of $1536. He then sub- tracted that figure from Miller's payment ($5000), and the General Counsel seeks the difference, $3464.59 Respondent's witness, Barton Rapaport, testified that he was the owner and president of a limousine service, that the business was just 4 months old, that prior to going into the limousine service business he sold life in- surance, was a financial consultant, and also did some 57 231 NLRB 1344, 1357 (1977) 58 260 NLRB 1225, 1227 (1982) s9 The General Counsel introduced into evidence the 1981 Internal Revenue Service Publication 534 entitled Depreciation (G C. Exh. 35), and the compliance officer testified that the same publication for 1975- 1977 was not available pension administration, all interrelated. Rapaport stated that he used that double declining balance method over a 3-year period, that the law has changed recently but that the new method approximates the method he uses, L -id that, as far as he knew, IRS still accepted the straight- line depreciatton method also. He stated that ars were worthless after 3 years, that therefore, the heaviest de- preciation has to come in the first 6 months, and that the percentage of the purchase price to be depreciated in the first 6 months is about 25 percent. Based on these figures Respondent would deduct 25 percent from the purchase price ($9200) which would be $2300, and then subtract the latter figure from the amount Miller paid ($5000), leaving a balance due Miller of $2700. My review of the IRS Publication 534 for 198160 re- veals the fact that cars are classified as a 3-year property, and that the recovery period for the life of the car is as follows: 1st year 25% 2d year 38% 3d year 27% Applying the 1st year figure to the instant case, 25 per- cent of the purchase price ($9200) would be $2300 divid- ed in half because Miller only had 6 months use of the vehicle, $1150, and subtracting that amount from what Miller paid for the car ($500), leaves a balance due of $3850, a figure which is more than the General Counsel is seeking. My review of the IRS Publication 334 (Tax Guide for Small Business-1976 Edition-For Use in Preparing 1975 Returns),6' at 93, states: Any reasonable method that is consistently applied may be used in computing depreciation. The three methods most generally used are: 1) Straight line; 2) Declining balance; and 3) Sum of the years-digits. Since I found agreement on two points: Both sides and the IRS agree that a car is a 3-year property and both sides agree that straight-line depreciation is an acceptable method for the IRS, I shall adopt the General Counsel's method of computation and award Miller the sum of $3464 as reimbursement for the car he was to have pur- chased from Respondent. CONCLUSIONS AND REMEDY For the reasons set forth above, I find that Respondent has failed to meet its burden to show, by credible or pro- bative evidence, that the conduct or events it has assert- ed as grounds for mitigation of its backpay liability war- rant any diminution of the amounts found due in the backpay specification, as amended, except where I have modified them hereinabove. Moreover, I find that the re- imbursement to the discriminatees of their franchise so See pp . 2-3 of G.C. Exh 35 61 G.C Exh 40. FUGAZY CONTINENTAL CORP. 1347 equity at its market value in December 1975 is a justifi- able award which will prevent a transgressor from reap- ing the benefits of its illegal acts and become unjustly en- riched. In addition, I find the reimbursement of the pen- alty claims to Gans and Middlebrook to be just and proper, as well as the return of Miller's down payment less the reasonable use fee. Inasmuch as the Board has granted summary judgment regarding the amounts due discriminatees for November-December 1975 those amounts too shall be awarded accordingly. In conclusion, therefore, I find that the Respondent's obligation to the discriminatees herein will be discharged by the payment to them of the respective amounts set forth in the attached Appendix E. Such payments shall be payable with interest thereon accrued to the date of payment as specified by the Board in its corrected Order and described in footnote 4, supra, minus any tax with- holdings required by Federal and state laws. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed62 ORDER The Respondent, Fugazy Continental Corp., Queens, New York, it officers, agents, successors, and assigns, shall satisfy its obligation to make whole the discrimina- tees here involved by payment to them of the amounts listed below in the attached Appendix E, together with interest to be paid at the rate of 7 percent for periods prior to August 25, 1977, when the "adjusted prime in- terest rate" as used by the Internal Revenue Service in calculating interest on tax payments was at least 7 per- cent, Florida Steel Corp., 231 NLRB 651 (1977); that ad- justed prime rate shall be used in computing interest due on backpay from August 26, 1977, and continuing until the date this decision is complied with, minus any tax withholdings required by Federal and state law. See also Florida Steel Corp., 234 NLRB 1089 (1978). 62 If no exceptions are filed as provided by Sec. 102.46 of the Board's Rules and Regulations, the findings, conclusions , and recommended Order shall, as provided in Sec. 102 .48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses. APPENDIX E SUMMARY NAM" 1 Adler S. 2 Aquila, J. 3 Capella, A. 4 Doca, F. 5 Eagleston, J. 6 Evans, C. 7 Feinstein, H. 8 Finkel, H. 9 Gans, M. 10 Grady, A. 1I Grady, J. 12 Green, T. 13 Kelly, E. 14 Kotti, E. 15 LeGrady, S. 16 Lewis, E. 17 Lipoff, L. 18 Manzione, L. 19 McCann, D. 20 Meyer, G. 21 Middlebrook, C. 22 Miller, D. 23 Monahan, T. 24 Moore, E. 25 Osit, P. 26 Osterhoudt, M. 27 Pepper S. 28 Richter, A. 29 Ritter, E. 30 Roa, C. 31 Roane, E. 32 Rocke, S. 33 Salamone, A. NOV/DEC MONEYS FRAN- EQUITY PENAL- TY &c TOTAL (APP A) CHISE (APP. C) OTHER DUE. CLAIMS $-0- $-0- $3,498.01 -0- $ 3,498.01 359.89 1 ,223.00 2,500.00 -0- 4,082.89 575.64 17,280.00 2,865.85 -0- 20,721.49 230.92 -0- 5,120.03 -0- 5,350.95 -0- -0- 4,398.38 -0- 4,398.38 -0- 690.00 -0- -0- 690.00 -0- -0- -0- -0- 3,532.45 -0- -0- 3,532.45 -0- -0- 1,010.76 447.00 2,000.00 $2,925.00 6,382.76 -0- -0- -0- -0- No claim -0- -0- -0- -0- No claim -0- 1,480.00 5,918.25 -0- 7,398.25 -0- -0- 5,731.73 -0- 5,731.73 1,397.32 22,836.00 8,364.57 -0- 32,597.89 778.30 11,188.00 6,782.40 -0. 18,748.70 274.48 2,729.00 1,673.74 -0- 4,677.23 1,279.36 5,245.00 7,500.00 -0- 14,024.36 720.76 -0- 11,416.49 -0- 8,220.76 1,521.97 -0- 11,416.49 -0- 12,938.46 306,43 -0- 12,500.00 -0- 12,806.43 1,867.05 -0- -0- 2,700.00 4,567.05 2,508.00 7,072.00 7,500.00 3,464.00 20,544.00 1,320.62 22,858 .00 497.91 -0- 24,676.53 932.68 14,383.00 11,581.97 -0- 26,897.65 -0- 4,410.00 7,500.00 -0- 11,910.00 -0- 386.00 2,639.00 -0- 3,025.00 360.86 10,274.00 7,500.00 -0- 18,134.86 3,207.21 -0- 9,075,48 -0- 12,282.69 1,457.11 23,003.00 10,048.75 -0- 34,508.86 487.48 11,269.00 4,247.84 -0- 16,004.32 1,410.47 21,084,00 7,500.00 -0- 29,994.47 169.80 5,238.00 1,331.23 -0- 6,739.03 442.60 15,081.00 5,923.75 -0- 21,447.35 1348 DECISIONS OF NATIONAL LABOR RELATIONS BOARD NAME NOV/DEC MONEYS (APP A) FRAN- CHISE EQUITY (APP. C) PENAL- TY& OTHER CLAIMS TOTAL DUE 34 Sanguedolce , N. 253.81 -0- -0- -0- 233.81 35 Scalavino , F. 141.47 4,889.00 4,211 .09 -0- 9,241.56 36 Seltzer , E. 976.68' 9,074.00 6,250.00 -0- 16,300.68 37 Seltzer, H. 845 .21 1,161 .00 6,250.00 4)- 8,256.21 38 Shiffman, A. 1,775.46 12,597.00 7,634.60 -0- 22,007.06 39 Tusa, M. 777.62 -0- 7,083.15 4- 7,860.77 40 Vieto, J. 1,692.83 -0- -0- -0- 1,692.83 41 Wall, M. 1,098 .81 -0- 5,673.75 -0- 6,772.56 TOTALS $30,161.60 $225,897.00 $203,750.43 S9;089.00 $468,898.03 Copy with citationCopy as parenthetical citation