International Hat Co.Download PDFNational Labor Relations Board - Board DecisionsFeb 29, 1988287 N.L.R.B. 1351 (N.L.R.B. 1988) Copy Citation INTERNATIONAL HAT CO 1351 International Hat Co. , a Wholly-Owned Subsidiary of Interco Incorporated and Tex Barnes. Case 14-CA- 16407 29 February 1988 SECOND SUPPLEMENTAL DECISION AND ORDER By CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND BABSON On 29 September 1987 Administrative Law Judge John H. West issued the attached decision. The Respondent filed exceptions and a supporting 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 brief and has decided to affirm the judge's rulings, findings,2 and conclusions and to adopt the recommended Order. ORDER The National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent , International Hat Co., a wholly-owned subsidiary of Interco In- corporated , Piedmont , Missouri , its officers , agents, successors , and assigns pay Tex Barnes $ 15,552.31 with interest computed in the manner prescribed in New Horizons for the Retarded.3 1 The Respondent has requested oral argument The request is denied as the record, exceptions, and brief adequately present the issues and the positions of the parties 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 find no basis for reversing the findings 3 In accordance with our decision in New Horizons for the Retarded, 283 NLRB 1173 (1987), interest on and after 1 January 1987 shall be computed at the "short-term Federal rate" for the underpayment of taxes as set out in the 1986 amendment to 26 US C § 6621 Interest on amounts accrued prior to 1 January 1987 (the effective date of the 1986 amendment to 26 U S C § 6621) shall be computed in accordance with Florida Steel Corp, 231 NLRB 651 (1977) (1986), concluded that Respondent by changing the rate of pay of Barnes, a leading union adherent, to a level that substantially decreased his earnings, when in light of the admission of Richard May, its general manager, that Respondent knew some weeks in advance of implement- ing the rate change that it would fall short of its avowed objective to match or increase Barnes' previous income, demonstrates that this pay rate change would not have occurred in the manner it did if the Respondent had not desired to punish Barnes for his union activities 2 On November 21, 1986, the Board's Regional Director for Region 14 issued a backpay specification and notice of hearing3 indicating that the backpay period was from August 1, 1982, to December 31, 1985, that an appropri- ate measure of backpay due discrimmatee Barnes from August 1 through November 28, 1982, is the difference between the actual piece-work pay paid by Respondent to Barnes and the revised piece-rate work agreed to (in the absence of information from the Employer) by the parties (namely, $7.48, which represents a conversion of Barnes' piece-rate per cut during the period adjusted to an hourly rate), plus the difference between the actual average pay paid by Respondent to Barnes and the re- vised average pay calculated by dividing the total piece pay-rate earned by Barnes in the immediately preceding quarters by the number of piece-rate hours worked by Barnes in the same quarter; that an appropriate measure of the backpay due Barnes from November 29, 1982, through December 31, 1985, is the difference between the actual piece-work pay paid by Respondent to Barnes and the revised piece-rate pay calculated in Appendix B in the specification (see fn 8, infra) plus the difference between the actual average pay paid by Respondent to Barnes and the revised average pay calculated by divid- ing the total piece-rate pay earned by discriminatee Barnes in the immediately preceding quarter by the number of piece-work hours worked by Barnes during the same quarter ; that the net backpay due Barnes is the sum of money computed by adding together the differ- ence between the actual piece work paid and the revised piece work Respondent should have paid plus the differ- ence between the average pay Respondent actually paid and the revised average pay Respondent should have paid during the calendar quarter, that the total net back- pay due Barnes for lost wages is $14,849.11; and that the total net additional vacation pay due Barnes is the sum Michael T. Jamison, Esq., for the General Counsel. Lynn Chipperfield, Esq., of St Louis, Missouri, for the Respondent. SUPPLEMENTAL DECISION JOHN H. WEST, Administrative Law Judge. The Na- tional Labor Relations Board (Board) in its supplemental decision ' see International Hat Co., 281 NLRB 336 1 The United States Court of Appeals for the Eighth Circuit in Inter- national Hat Co Y NLRB, 771 F 2d 1170 (8th Cir 1985), remanded this case to the Board to determine whether under NLRB v Transportation Management Corp, 462 U S 393 (1983), the employers setting the rate of pay at a level that substantially decreased his earnings would have oc- curred in the absence of employee Tex Barnes' union activities 2 Another of Respondent's supervisors, Assistant Plant Manager George Davis , testified in the underlying unfair labor practice trial that before the rate change he told Respondent 's personnel director , Joe Pol- niewicz, that the way to get rid of Barnes , who Respondent regarded as a "troublemaker ," would be to hurt him financially so that he would quit 3 Therein it is indicated that Respondent waived its right under Sec 10(e) and (f) of the National Labor Relations Act (Act) to contest either the propriety of the Board's Supplemental Order issued on September 8, 1986, or the findings of fact and conclusions of law underlying that Order 287 NLRB No. 147 1352 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD of the annual net vacation payments due for each year of the backpay period is $703.20.4 In its answer Respondent contests the formulas and calculations " utilized in the specification . It contends that Barnes would be made whole with $5978.97 in wages and $292 for vacation.6 A supplemental hearing was held herein on January 9, 1987, at St . Louis, Missouri . On the entire record thus made, including my observation of the demeanor of the witnesses , and after due consideration of the briefs filed by General Counsel and counsel for Respondent,? I make the following findings of fact and conclusions of law. Karen Rengstorf, the compliance supervisor for Region 14 of the Board , testified that the Board's remedy specified that Barnes' level of earnings was to be re- stored to that level prior to that which existed in August 1982; that prior to August 1982 Barnes was paid at a piece rate that was based on the number of dozens of cuts of these various cap parts that he made times vari- ous varying rates or schedules depending on the type of part that he made . He was also paid an average pay for other types of work that was not piece rate. The average pay is calculated based on the prior quarters ' piece rate amount that would be . . . converted to an hourly rate. For instance, if the prior quarter the individual made a certain piece rate , the total amount of the piece rate would be divided by the total number of piece-rate hours to come up with what would have been an hourly rate or figure for the piece rate . Then that amount is used in the subsequent quarter for his average rate for types of work that he would be doing that was not piece-rate work. He also received other pay . He received a double rate of pay for piece rate for any amount that he cut or any caps that he cut for orders of less than 25 dozen . He also received average pay for any excess material he cut over and above what was specifically listed in the schedule that he was allowed to do ; that in order to come up with a formula for the amount of cents per cut you would have to divide a dollar per hour figure by the number of cuts ; that all the parties agree that is the formula to use and so the determination would be, first of all, to decide what is a dollar rate that you are going to use ; that $7.48 was used because that was the amount that all parties agreed was the average rate of pay that Barnes received during the second quarter of 1982, which would be the quarter preceding the beginning of the violations that started in August 1982 and that amount , $7.48, is ulti- mately based on his piece -rate work; that there is no 4 This figure reflects the amount as amended at this backpay trial, which will be treated , infra While the specification also spoke to profit- sharing benefits, during the trial it was demonstrated that Barnes is not entitled to any additional profit -sharing amounts and any increase in his pay would not in any way increase the amount to which he was entitled In view of this, the merits of the profit -sharing allegation will not be dis- cussed further 5 It also denies the profit -sharing allegation in the specification. This figure reflects an amendment made at this trial in response to the aforementioned change in the specification As the Board 's Rules and Regulations do not provide for a reply brief, the General Counsel 's motion to strike Respondent 's reply brief is granted. exact method and you can not convert exactly so many dozens equals so many cuts and, therefore in order to provide an accurate amount of money due at that point the parties took an hourly rate of $7.48 which is the second quarter 's average rate and miltiplied it by the Employer's figures for Barnes' actual piece -work hours, 264.209, which is in row 1 of Appendix A to the specifi- cation, and which appendix is attached hereto; that by multiplying that $7.48, row 5 by row 1, you come up with the revised piece -work pay, which is row 6; that the Employer supplied what Barnes was actually paid for piecework from August 1 to September 30, 1982, which is row 4; that by subtracting the difference from what Barnes should have made at $7.48 per hour, which is the $1975.39 you come up with the balance due to Barnes of $503.89 ; that one source material was Barnes himself, who submitted a conversion sheet, General Counsel's Exhibit 2, that converts the number of dozens of parts of caps that he produced into the number of cuts that he produced for the period from April 5 through July 2, 1982, which , as noted above, immediately pre- cedes the unfair labor practices that began in August; that Barnes kept a job tally; that by adding the entire amount of cuts for all the days for that particular period you come up with the total number of 70,821, which is indicated on that last sheet of the conversion chart; that there were no figures available from the Employer as to the amount of cuts that Barnes had for the period prior to the backpay period ; that Barnes explained also how he converted the dozens per cut because he knew the type which the job called for, the type of pieces that were in- volved , the number of plies or the number of layers of material that would be used in order to arrive at the cuts ; that the total hours of 488.25 on the last page of General Counsel 's Exhibit 2 would be total hours work- ing at either piece rate or also working something else other than piece rate ; that Barnes also kept track daily of the amount of average hours that he worked , which are hours that he worked on other than piece-work type of work; that by adding all the average hours for all the days in that particular period he came up with 191.9846 and by subtracting the 191 . 9846 from the 488.25, you come up with the total number of piece -work hours that Barnes worked during that period, which is 296 .265; that by dividing the number of total cuts for the period, which is 70,821, by the total piece-work hours , which is 296.265 , the result is the total number of cuts per hour that Barnes had during that period , which is 239 .046124, that is the total cut per hour rate for Barnes immediately prior to the discrimination ; that the formula for deter- mining the rate of the cents per cut is to take the $7.48 per hour, which is the average rate from the second quarter of 1982, divide it by the number of cuts per hour, which for Barnes during the second quarter of 1982 was 239.046124 , and the result is .031292 per cut or 3.1 cent per cut rounded off;" that this is the piece rate that was 9 The summary in G.C. Exh. 2, which is table 2 or App. B to the backpay specification, reads as follows- Continued INTERNATIONAL HAT CO 1353 used throughout the remainder of the backpay period, November 11, 1982, through December 31, 1985, that the 3 1 cent represents what Barnes would have received had he been on a cut rate during the second quarter of 1982 although he was actually paid on a dozen rate and the 3 1 cent was then carried forward on row 5 of Ap- pendix A as the revised piece-rate per cut, that by multi- plying the revised piece rate of 3 1 cent times the number of cuts, which were provided by the Employer, row 5 times row 2, you come up with Row 6 which is total revised piece-work pay that Barnes should have re- ceived during the respective period, that that is the figure that the General Counsel feels Barnes would have earned had he been paid at the appropriate rate, that be- ginning November 29, 1982, the Employer started paying Barnes per cut at the rate of 1 9 cent per cut; that by subtracting the actual piece-work pay, what Barnes re- ceived at 1 9 cent, from the amount that he should have received at 3 1 cent you come up with a balance due, which is row 7; that there were times Barnes did not perform piece rate, but was paid at an hourly rate of pay or what is called an average rate of pay, that the average rate of pay for the quarter is based on the prior quarter's piece-rate pay converted to an hourly rate obtained by dividing the prior quarter's total piece-work pay by the number of piece rate hours to come up with an hourly figure, or what Barnes would have earned if he was paid an hourly basis rather than a piece-work pay, that in the first three columns of Appendix A to the specification that conversion could not be used because there is not sufficient information in order to be able to make that computation and so the $7 48, which was the average rate for the second quarter was carried forward through December 31, 1982; that beginning with the first quarter of 1983 the correct calculation could be made because Barnes was on a piece rate and all the information is available to make the computations, that in the first quar- ter of 1983, in order to arrive at the revised average rate of pay, you would have to divide the revised piece-work pay that Barnes was earning for the prior period of time by the number of piece-work hours that he had during that period of time and then carrying that figure forward into the second quarter of 1983, that then that figure was multiplied by the Employer, provided average hours for Barnes to come up with the average pay Barnes should have received during each involved particular period of time; that by subtracting the amount of average pay that the Employer actually paid Barnes, which is row 10, from row 12, 'which is what he should have received at the correct average rate of pay, the difference, which is shown in row 13, is the amount that is due Barnes for average pay, that by adding the piece-work balance due amount that is shown in column 7, plus the average pay balance due amount that is in row 13, you get a subtotal for that particular quarter, that Barnes was paid at the average rate of pay for his vacation time and because he always took vacation in July each year the actual aver- age rate would also show up in the third quarter of each year, that using the revised average rate, which was what he should have been paid at the 3 1 cent per cut amount for 1983 he should have been paid the revised average rate, which is shown in item or row 11 of Ap- pendix A; that by subtracting the actual average rate paid from the revised average rate, which he should have been paid, you come up with a difference or a bal- ance due; that Barnes received 80 hours of vacation, so multiplying 80 times the balance due you come up with the amount due for vacation for 1983 and similarly for 1984 and 1985, that the total vacation pay still owed Barnes amounts to $703.20;9 that the only difference be- tween the General Counsel's backpay specification and the Company's backpay specification is that the General Counsel divides $7.48 an hour by 239 cuts and the Re- spondent divides $7.48 an hour by 300 cuts, that the figure $7 48 represents the average rate of pay Barnes earned during the second quarter of 1982, but the only way to be able to accurately reflect what Barnes should have earned would be to be able to determine how much he would have been paid per cut had he been on a per- cut basis rather than on a per-dozen basis during the second quarter; that the figure 300 cuts was mentioned in terms of what the Employer assertedly used in trying to figure out a piece-rate figure for Barnes but this was dis- counted for several reasons, namely, it was an arbitrary figure in that there was not any basis for that 300 cuts amount, particularly in view of the administrative law judge's decision in which he specifically found that in October 1982 the Employer told Barnes that they esti- mated that he could produce 300 cuts per hour at a level of earnings at 1.9 cent per cut and the judge used_it in 9 G C Exh 3, a revised table reads as follows Year Calculation of Revised Piece Rate (Item 5, Appendix A) Total cuts for second quarter, 1982-70,821 Total hours worked-488 25 Average or "TW" hours-191 9846 Total piece-work hours-296 2651 Total cuts per hour-239 0461242 $7 483 (piece rate per hour)- 239 046124-3 1291 cents per cut I Total hours worked minus average (TW) hours 2 Total cuts for second quarter, 1982, divided by total piece-work hours 3 The agreed-on conversion of piece rate to hourly rate for the period 8/1-11/28/82 (see fn 2 of item 5, App A) divided by total cuts per hour Additional Vacation Due Actual Avg. Rate Paid' Revised Avg Drff Hrs. Total" Rate2 1983 ............... 5 15 901 3 86 80 $308 80 1984 ................ 6 24 871 2 47 80 197.60 1984 ............. 5 98 844 2.46 80 196.20 $703.20 ' The actual average rate paid for third quarter of each respective year as reflected in item 9 of the Appendix. 2 The revised average rate of third quarter of each respective year as reflected in item 11 of the Appendix 3 The figure in the "Diff." column multiplied by the figure in the "Hrs ." column 1354 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD his decision to show how that figure was drastically less than Barnes' earnings prior to the unfair labor practice violations ; and also the Employer assertedly was relying on some type of a timestudy it had conducted, which showed that Barnes could make 300 cuts per hour; that Barnes indicated that that particular timestudy was on a very limited duration , on a very easy material that was not difficult to make more cuts and would not be repre- sentative of the number of cuts that it would take in a normal or a representative period of time ; that by limit- ing Barnes' hourly rate to $7.48 during the entire period of time does not take into consideration his productivity because Barnes , according to the judge's determination, was an extremely productive employee earning before Respondent changed his method of pay substantially more per hour than other cutters at other of Respond- ent's plants, whereas after the unfair labor practices began in August 1982 he earned substantially less per hour than other cutters at other of the Employer's plants; that during the first quarter of 1982 Barnes per- formed 271 cuts per hour ; and that during the second quarter of 1982, as indicated above , he had 239 cuts per hour. - Respondent . called Barnes who testified that he con- verted the per-dozen figures to per-cut figures on Gener- al Counsel 's Exhibit 2 sometime in 1984 ; that he thought his records showed that he had over 270 cuts per hour in the first quarter of 1982;10 that as demonstrated by Re- spondent 's Exhibit 3 he had a total of 2490 cuts on May 20, 1983 ; that he did not believe that he worked more than an 8-hour day on May 20, 1983, but it was possible that he did ; that sometimes he makes over 300 cuts an hour and on some items he can exceed 355 cuts an hour; and that while he has had these high numbers of cuts an hour, he cannot do it all day long. May testified that Barnes was an excellent cutter; that he surreptitiously observed the number of cuts Barnes made during a 45-minute period , but May could not re- member the date other than that it was after August 1982; that he believed that there were two spreads that he timed, and on the first Barnes averaged about 400 10 R. Exh . I with respect to 1982 was verified by Barnes, and with respect to 1983, 1984 , and 1985 was based on the General Counsel 's back- pay specification. Tex Barnes' Cuts Per Quarter 1982-1st Quarter: 2d Quarter: 1983-1st Quarter: 2d Quarter: 3d Quarter 4th Quarter: 1984-1st Quarter: 2d Quarter: 3d Quarter 4th Quarter: 1985-1st Quarter: 2d Quarter: 3d Quarter: 4th Quarter: 271 cuts per hour 239 cuts per hour 262.08 cuts per hour 290.85 cuts per hour 270.56 cuts per hour 285.26 cuts per hour 313 46 cuts per hour 280.96 cuts per hour 269 66 cuts per hour 271.01 cuts per hour 297.89 cuts per hour 272 28 cuts per hour 285.73 cuts per hour 277.46 cuts per hour cuts per hour and in the second one it was slightly above 400 cuts per hour ; and that he participated in the deci- sion to change the method of calculating Barnes' wages in 1982. On rebuttal , Barnes testified that when the method of calculating his wages was changed in 1982 his pay was substantially reduced and he had to try to work a lot harder and exert himself more in an attempt to maintain the same level of pay he had before the discrimination. Barnes introduced General Counsel 's Exhibits 5 and 7, which show the number of cuts per hour and related in- formation between April 4 and July 22 , 1982, and be- tween January 4 and April 2, 1982 , respectively. [ 1 Contentions On brief General Counsel contends that Respondent's theory is based on the assumption that Barnes could have averaged some 300 or more cuts an hour in order to maintain the $7.48 average ; that the judge dealt with that same assertion by Respondent in the backpay hearing, page 6 of his decision in which he points out that prior to Respondent 's discrimination Barnes was being paid by the dozens rather than the cuts and that Respondent's conversion of 300 or so dozen per hour to 300 or more cuts per hour is faulty ; that the error of Respondent's reasoning is that Barnes must work at an unreasonably high level of proficiency , i.e., 300 or so cuts an hour, in order to offset Respondent 's discriminatorily induced lower piece rate ; that it has never been the Board's posi- tion that the discriminatee must work harder to offset a respondent 's discrimination , but rather the Board places a burden on Respondent to undo its discrimination, espe- cially where, as here, the Board has specifically directed Respondent to restore the discriminatee 's earnings to a level prior to the discrimination ; that the General Coun- sel's formula more adequately accomplishes this where, in viewing row 11 of the backpay specification, an aver- age of the revised averages rates derived through the General Counsel 's formula would still pay Barnes an $8.41 hourly rate throughout the backpay period; that this figure is still less than the highest average hourly rate of $8 . 84, which Barnes earned prior to the backpay period ; that using an arbitrary figure of 300 cuts per hour or even averaging the number of cuts Barnes had actual- ly made subsequent to August 1, 1982, does not take into consideration the unlawful violations found by the Board with respect to the elimination of the double rate for cut- ting 25 dozen or less parts and average pay for cutting excess material ; that both of these considerations are fac- tored into the General Counsel's formula because the piece rate per hour as well as the number of cuts used in the General Counsel 's formula are the actual figures at- tributable to Barnes during the quarter immediately pre- ceding Respondent's unlawful actions; that using the General Counsel's formula results in the ability to equate Barnes' earnings at the per-dozen rate with what he would have earned had he been paid at the per-cut rate during the quarter immediately preceding the violations; 11 He also introduced G C. Exh. 4, which reviews R. Exh . 2. Barnes had the underlying documentation for his summaries INTERNATIONAL HAT CO that using other than the General Counsel's cut per hour results in a misleading comparison of unrelated figures, that applying the General Counsel's formula throughout the backpay period, Barnes would be compensated based on his actual productivity, that the backpay formula sub- mitted in the backpay specification is the most accurate means by which to compensate Charging Party Barnes for Respondent's discrimination; and that although there are approximations in backpay proceedings, such uncer- tainty is always to be resolved against the wrongdoer Respondent, on brief, contends that throughout his employment by International Hat Barnes was capable of making, and did make, at least 300 cuts per hour; that this figure is supported by the General Counsel's evi- dence, by Barnes' own testimony at the arbitration hear- ing and at the backpay hearing, by May's testimony at both hearings, and by Jim McGlynn's testimony at the arbitration hearing, that based on 300 cuts per hour Barnes' backpay award should be based on a raise in his piece-rate pay to 2 49 cents per cut, which results in a backpay award (exclusive of interest) of $6270 97, that the General Counsel has failed to establish that Barnes was capable of only 239 cuts per hour, and that Re- spondent's evidence overwhelmingly supports the con- clusion that Barnes was capable of making and did make over 300 cuts per hour. Analysis In this type of proceeding the General Counsel has the burden of establishing as nearly as possible what the em- ployee would have earned but for the unlawful conduct of a respondent. Phelps Dodge Corp. v. NLRB, 313 U.S 177 (1941), and NLRB v Brown & Root, Inc, 311 F 2d 447 (8th Cir. 1963) The General Counsel has the burden of establishing a formula for the calculation of gross backpay due to the employee, but in many cases it is dif- ficult to ascertain the precise amount due and, therefore, a wide range of discretion is accorded the fashioning of 1355 such a formula provided it is reasonably designed to produce approximations and it is not arbitrary and unrea- sonable Once the General Counsel has established a rea- sonable formula, the burden then falls on Respondent to establish facts that would negate or diminish the exist- ence of liability Brown & Root, Inc , supra Board calcu- lations based on calendar quarters have been approved Id In my opinion, the General Counsel has met his burden. And for the reasons the General Counsel gives on brief, as mentioned above, Respondent's position re- garding the 300 cuts per hour is not well taken The only management witness called by Respondent who spoke of cuts per hour, May, had a hand in the unlawful conduct that gave rise to this proceeding and he based his posi- tion, at least in part, on a timestudy he allegedly con- ducted for 45 minutes when Barnes had 400 or slightly more cuts. When Respondent called Barnes, he readily conceded that he could exceed 300 or 350 cuts per hour, but he pointed out that he could not do this all day What Barnes could do during a 45-minute period is not determinative. All things considered, Respondent has not demonstrated that the General Counsel's approach is ar- bitrary or unreasonable in these circumstances. ORDER 12 The Respondent, International Hat Co., a wholly- owned subsidiary of Interco Incorporated, Piedmont, Missouri, its officers, agents, successors, and assigns, are ordered to pay Tex Barnes $15,552 31 with interest com- puted in the manner prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987) See generally Isis Plumbing Co., 138 NLRB 716 (1962) 12 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 Copy with citationCopy as parenthetical citation