K And I Transfer & Storage, Inc. And City Cartage And Moving, Inc.

National Labor Relations Board - Board Decisions

Jun 15, 1989

295 N.L.R.B. 853 (N.L.R.B. 1989)

K & I TRANSFER & STORAGE 853
K and I Transfer & Storage, Inc., and City Cartage
and Moving, Inc. and Chauffeurs, Teamsters
and Helpers, Local Union No. 215 , a/w Inter-
national Brotherhood of Teamsters , Chauffeurs,
Warehousemen and Helpers of America, AFL-
CIO. Cases 25-CA-14937(E), 25-RC-7844,
and 25-RC-7845
June 15, 1989
SECOND SUPPLEMENTAL DECISION
AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
JOHANSEN AND CRACRAFT
On December 11, 1985, the Board issued a Sup-
plemental Decision and Order in which it adopted
the recommended Order of the administrative law
judge and dismissed the application of the Appli-
cants, K and I Transfer & Storage, Inc., and City
Cartage and Moving, Inc., Evansville, Indiana, for
an award under the Equal Access to Justice Act.'
Thereafter, the United States Court of Appeals
for the Seventh Circuit remanded the proceeding
to the Board on November 12, 1986,2 to provide
the court with its "findings and reasons or basis
therefor, on all material issues of fact, law, or dis-
cretion presented on the record." The court noted
further that the Board did not address the Appli-
cants' claim regarding its application for fees in-
curred in its opposition to the General Counsel's
motion to amend the complaint. The court pointed
out that it did not agree with the Board's view that
this was a collateral contention that did not require
discussion in the Board's Order. Finally, the court
stated that it was also unwilling to hold that the
Order "implicitly rejected" this contention.
Thereafter, the Board accepted the remand and
invited each party to file a statement of position.
The General Counsel filed a statement,3 the Appli-
cants did not.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has given full consideration to the
views of the court, the General Counsel's statement
of position, and the entire record in this proceeding
and concludes, based on the totality of circum-
stances, that the amendment alleging a violation of
the Act based on unlawful interrogation of Appli-
cants' employees by its counsel, subsequent to the
issuance of the complaint and prior to the hearing,
was not substantially justified. We shall therefore
' K & I Transfer & Storage, 277 NLRB 1063 (1985 ). Member Cracraft
was not then a member of the Board.
2 K & I Transfer & Storage v. NLRB, 805 F.2d 749 ( 1986).
a The Union concurred with the General Counsel 's position that EAJA
fees are not warranted in this case.
grant Applicants' request for attorneys' fees and ex-
penses limited to the sums the Applicants incurred
pursuant to the General Counsel's amendment to
the complaint at the hearing.
The complaint issued on November 24, 1982, and
was amended on November 30, 1982. A hearing
scheduled for February 14, 1983, was postponed
and rescheduled for April 18, 1983. Several hours
before the hearing commenced, the General Coun-
sel notified Applicants' counsel that the complaint
would be amended. After introducing into evi-
dence its pleadings and formal papers at the com-
mencement of the hearing, the General Counsel
moved to amend the complaint to add section 5(c),
which alleged that, about February 1 and 14, 1983,
the Applicants, acting through their attorneys, in-
terrogated employees unlawfully concerning their
union and concerted activities.
The Applicants' counsel objected to the amend-
ment on grounds that it had received notice of the
amendment just prior to the commencement of the
trial; no charge had been filed; there had been no
investigation; it created an ethical problem for Ap-
plicants' counsel in representing its client inasmuch
as it was being accused of wrongdoing; this same
issue had arisen before in this Region with this par-
ticular counsel for the General Counsel and was a
common trial tactic; that it is a denial of due proc-
ess; that in each case of interrogation by Appli-
cants' counsel , a Johnnie 's Poultry Co.4 warning
was given to the employee; that Applicants would
be forced to seek other counsel for this trial; that
Applicants would claim surprise if amendments
were allowed, and would ask that the case be ad-
journed and postponed for a later date at which
time Applicants could obtain other counsel to rep-
resent them; that assertedly the General Counsel
did not know which, if any, attorney actually was
involved in the alleged misconduct; and that the
professional Rules of Ethics in the State (Indiana)
indicated it would be improper for Applicants'
counsel to proceed with the case.
When the judge asked counsel for the General
Counsel, at the hearing, if he wished to adhere to
his motion to amend, even if it involved a lengthy
postponement, he answered, "Yes, sir, understand-
ing that." The judge also asked counsel for the
General Counsel about the importance of amending
the pending complaint rather than proceeding on
4 146 NLRB 770 (1964). The Board and courts have held that an em-
ployer may interrogate employees on matters involving their Sec. 7
rights without violating Sec. 8(a)(1), when the purpose is to (1) verify a
union's claimed majority status to determine whether recognition should
be extended , and (2) investigate the facts concerning issues raised in a
complaint in which interrogation is necessary in preparing the employer's
defense for trial of the case.
NLRB No. 82
854 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the proposed amendments in a separate proceeding,
and counsel responded that under Board cases he
was required to consolidate , unless there is some
extraneous reason he should not . The judge also
asked counsel for the General Counsel if the al-
leged conduct had an important bearing on the bar-
gaining order . Counsel for the General Counsel re-
sponded that the nature of the conduct was 8(a)(1)
conduct and supported a Gissel bargaining order5
alleging that , under the circumstances , a fair elec-
tion could not take place . Counsel for the General
Counsel contended that if he were not allowed to
litigate this unfair labor practice and its bearing on
employee free choice in a past or future election,
he would be precluded from litigating an important
part of this proceeding and this might tip the bal-
ance one way or the other.
In rebuttal , the Applicants' counsel made the fol-
lowing contentions : that the original complaint al-
ready had all the basic allegations in it that could
support a bargaining order , so that the General
Counsel presumably had a sufficient case before-
hand; that the new allegations created ethical prob-
lems for the counsel for the Applicants , requiring
them to withdraw from the case ; and that with the
advent of the Equal Access to Justice Act it may
not necessarily be efficient for the Board to lump
everything into one proceeding.
Notwithstanding Applicants ' argument , the judge
granted the General Counsel 's motion to amend
and also granted Applicants ' request for a 60-day
continuance so that Applicants could obtain other
counsel in light of the asserted ethical dilemma the
amendment created for Applicants ' counsel . There-
after, Applicants filed with the Board a request for
special permission to appeal the granting of the
General Counsel's motion to amend . However,
before the Board could rule on this request, the
General Counsel moved to withdraw the amend-
ment and the motion was granted by the judge.
On July 19 and 21, 1983 , the hearing continued
and was completed . On September 12, 1984, the
judge issued his decision recommending dismissal
of the complaint in its entirety and severance of
and continuance before the Board of the represen-
tation case proceedings.
Thereafter, the Applicants applied to the Board
for • an award of fees under the Equal Access to
Justice Act (EAJA).6
In his supplemental decision following the Re-
spondent's filing of an application for award of fees
and expenses the judge found that his findings and
conclusions rested primarily on credibility determi-
5 NLRB v. Gissel Packing Ca, 395 U.S. 575 ( 1969).
e EAJA, Pub L. 96-481 , 44 Stat 2325 ( 1980); Board's Rules and Regu-
lations , Sec. 102 143 et seq.
nations, and that, had contrary credibility resolu-
tions been made , the result would have been differ-
ent.
The judge found that the Respondent did not
threaten plant closure based on the testimony of
the terminal manager , Robert McKay , which he
credited over the testimony of employees Delong
and Cundiff. Regarding the judge 's conclusions
that the institution of an incentive bonus plan was
not an unlawful wage increase and that Healy's dis-
charge was not for unlawful reasons , the judge
stated that such conclusions rested on his findings
that Applicants, at the time they took those ac-
tions, did not have knowledge of their employees'
union activities and had not displayed antiunion
animus . Those findings, in turn, were premised on
his decision to credit the testimony of McKay over
that of Healy . In finding that Healy was a statutory
supervisor at the time of his discharge , the judge
stated that he rejected Healy 's testimony and relied
on the testimony of Applicants ' witnesses. Con-
cerning the conclusions pertaining to the less seri-
ous allegations of violations of Section 8(a)(1) of
the Act, the judge indicated that such conclusions
were reached in reliance on the testimony of
McKay.
With respect to the refusal to bargain allegation,
the judge found that the Union enjoyed a card ma-
jority at the time of its demand, but that a bargain-
ing order should not issue because the General
Counsel failed to show that Respondent had en-
gaged in conduct tending to preclude the holding
of a fair election.
Finally , the judge concluded that the General
Counsel was substantially justified in prosecuting
this case, and, therefore , denied the Applicants' ap-
plication for award of fees and expenses under the
Equal Access to Justice Act. The judge did not
specifically address the issue of whether the Gener-
al Counsel was substantially justified in amending
the complaint to allege interrogation by the Appli-
cants' counsel.
In his statement of position , counsel for the Gen-
eral Counsel contends that it is clear on the merits
that the position of the General Counsel in propos-
ing the amendment was substantially justified. As
the General Counsel represented on the record,
there was evidence from several employees of in-
terrogation by one of the Applicants ' two trial
counsels, Michael Schiff, in support of what is
commonly referred to as a "Johnnie's Poultry viola-
tion."7 The General Counsel states that evidence
for that allegation was discovered in trial prepara-
tion around February 14, 1983.
'Supra.
K & I TRANSFER & STORAGE
The General Counsel contends that had the
amendment been made in a more timely fashion
and had the allegation been dismissed on the merits
for whatever reason , it would be argued that the
failure of the General Counsel to win one allega-
tion of Section 8(a)(1) was not itself a victory by
the Applicants so as to be "a significant and • dis-
crete substantive portion of that proceeding."8 He
contends further that, in the normal course of af-
fairs, one allegation of an 8 (a)(1) violation among
other allegations in a case that must be tried is not
a significant portion of the case for either side.
According to the General Counsel, in this case,
the significance of the allegations in the amendment
came in large part from the procedural aspect in
the timing of the amendment and the Applicants'
action in obtaining a continuance and seeking to
appeal. The Applicants prevailed on the procedural
point when the General Counsel chose to concede
the point and abandon the substantive merits. The
General Counsel, on reconsideration during the
continuance, decided that the purposes of the Act
could best be served by withdrawing the amend-
ment.
It is the General Counsel 's view that , while it
may never be known whether the Applicants
would have ultimately prevailed on either the pro-
cedural or substantive aspects raised by the amend-
ment had such aspects reached decision, the
amendment and its withdrawal are not the kind of
actions intended to be covered as a basis for the
grant of fees under the EAJA or the Board's Rules
and Regulations implementing same . Finally, the
General Counsel contends that the application for
fees insofar as it relates to the amendment should
be denied.
We find no merit in the General Counsel's posi-
tion.9
We find that the Applicants are eligible to re-
ceive an award under the Equal Access to Justice
Act. 5 U.S.C. § 504 ( 1982), as amended by Pub. L.
99-80, 99 Stat. 183 (1985) (EAJA). We award the
fees because counsel for the General Counsel did
not sustain his burden of proof to show that his po-
sition in issuing complaint on the Johnnie 's Poultry
allegation was substantially justified.
Under EAJA, an applicant is eligible for an
award of fees and other expenses from a Govern-
ment agency if it is a prevailing party in an adver-
sary adjudication , unless the agency 's position was
substantially justified. 5 U.S.C. § 504(a)(1). The
Board 's implementing regulations provide that a
s Board 's Rules and Regulations , Sec. 102 .143(b).
s However , in all other respects we adopt the judge's findings that the
General Counsel was substantially justified in issuing the unfair labor
practice complaint.
855
party who prevails in a significant and discrete sub-
stantive portion of an adversary adjudication is eli-
gible to apply for an award of fees and expenses.
See Section 102.143 (b) of the Board 's Rules and
Regulations.
In the instant case, the General Counsel with-
drew the Johnnie's Poultry allegation before the
hearing commenced. The Board has held that a re-
spondent is the prevailing party on allegations that
the General Counsel withdraws, unless the with-
drawal is based on a settlement or mutual adjust-
ment of the issue . Shrewsbury Motors, 281 NLRB
486, 487-488 (1986). Based on Shrewsbury Motors,
we conclude that the Applicants are prevailing par-
ties concerning the Johnnie 's Poultry portion of the
amended complaint.
Having concluded that the Applicants are pre-
vailing parties, we turn to whether they prevailed
on a significant and discrete substantive portion of
the proceeding . The amendment led the Applicants
to file a request for special permission to appeal to
the Board, caused a 3 -month delay in the hearing,
and would have required the Applicants to obtain
different counsel if maintained . Further, the amend-
ed allegation concerned an agent of the Applicants
not alleged to have committed other unfair labor
practices . Thus, there has already been additional
cost resulting from the amendment and, had the
parties litigated the amended allegation, there
would have been preparation and litigation expense
additional to that which was required absent the
amendment . Consequently , we find the amended al-
legation significant. See Temp Tech Industries, 266
NLRB 730 (1983), enfd. on other grounds 756 F.2d
586 (7th Cir. 1985). Given that the amended allega-
tion arises from a totally separate set of facts from
the other complaint allegations and concerned an
agent not alleged to have committed other unfair
labor practices, we find the Johnnie's Poultry allega-
tion separable from the other allegations and there-
fore a discrete portion of the proceeding.10
Once it is established that a party prevailed in a
significant and discrete substantive portion of the
proceeding, the General Counsel may still avoid
imposition of EAJA fees by showing that he was
substantially justified in pursuing the complaint al-
legation . The burden is on the General Counsel to
prove that his position was substantially justified.
See Section 102.144(a) of the Board 's Rules and
Regulations . When , as here, the General Counsel
withdraws a complaint allegation before the hear-
ing commences and consequently the parties did
10 The court's opinion appears to treat the issue regarding the applica-
tion for fees pertaining to the amended allegation as separable in remand-
ing the case to the Board.
856 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
not litigate the facts pertaining to the allegation,
the record from which a determination is made
about substantial justification "consist[s] of the
pleadings, affidavits and other supporting docu-
ments filed by the parties in both the fee producing
and the case on the merits." H.R. Report 99-120 at
13 (1985).
The only evidence on which counsel for the
General Counsel relied to sustain his burden to
show substantial justification in this case was his
representation on the record in the underlying case
that he had evidence from several employees that
the Applicants' attorneys had unlawfully interro-
gated employees. The General Counsel's statement
was not under oath nor subject to cross-examina-
tion. It is apparent from the legislative history
quoted in the previous paragraph that Congress en-
visioned something more than a bare assertion in
order to satisfy the General Counsel's substantial
justification burden, e.g., affidavits or other sup-
porting documents. Indeed, the General Counsel
has recognized the need to open the Region's files
to substantiate reasons for issuing complaint. See
Best Bread Co., 276 NLRB 1298 (1985); see also
Shrewsbury Motors, supra. We are compelled to
conclude that the General Counsel's representation
does not constitute evidence on which the Board
may rely.
Because counsel for the General Counsel failed
to introduce evidence substantiating his claim per-
taining to the complaint amendment, we believe
that he has failed to satisfy his burden of proving
substantial justification. We therefore find that the
Applicants are entitled to attorney's fees and ex-
penses incurred pursuant to the General Counsel's
amendment of the complaint at the hearing.
CONCLUSIONS OF LAW
1. The Applicants are prevailing parties meeting
the eligibility standard of EAJA.
2. The Applicants are entitled to reasonable at-
torney 's fees and expenses limited to the sums the
Applicants incurred pursuant to the General Coun-
sel's amendment of the complaint at the hearing.
ORDER
On the filing of the Board's final decision with
the Board's Director, Division of Administration,
as required by Board Rule 102.155, the Board shall
pay reasonable attorney's fees and expenses limited
to the sums the Applicants incurred pursuant to the
General Counsel's amendment of the complaint at
the hearing, as determined at the compliance stage
of this proceeding.""
" As Applicants failed to file a statement of position, the Board is
unable to determine the specific amount at this time . Sec. 102.145(b) of
the Board's Rules provides that "No award for the attorney or agent fees
under these rules may exceed $75 per hour."