Kansas City House & Window Cleaning Co., Its Agent And/Or Joint Employers

National Labor Relations Board - Board Decisions

Sep 30, 1985

276 N.L.R.B. 1410 (N.L.R.B. 1985)

1410 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
John Keller d/b/a Union Carbide Building Co. and
Schmelzer-Wysong Management Co., its Agent
and or Joint Employers and Schmelzer -Wysong
Management Co. and Building Maintenance
Company d/b/a Kansas City House & Window
Cleaning Co ., its Agent and/or Joint Employers
and Service Employees International Union
Local No. 96, AFL-CIO. Case 17-CA-
10019(E)
30 September 1985
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND BABSON
On 12 July 1984 Administrative Law Judge Joan
Wieder issued the attached supplemental decision.
The Applicant, Schmelzer-Wysong Management
Company (Schmelzer-Wysong) filed exceptions and
a supporting brief, 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 supplemental deci-
sion and the record in light of the exceptions and
briefs and has decided to affirm the judge's rulings,
findings, and conclusions and to adopt the recom-
mended Order.
We agree with the judge that the General Coun-
sel's position in the underlying proceeding was sub-
stantially justified and that an award of fees and ex-
penses under the Equal Access to Justice Act
(EAJA) is not warranted. In adopting the judge's
findings and conclusions, we note the following.
The complaint in the underlying proceeding al-
leged that Applicant Schmelzer-Wysong and Co-
Respondents John Keller d/b/a Union Carbide
Building Co. (UCBC) and Building Maintenance
Company d/b/a Kansas City House & Window
Cleaning Co. (KC House)' violated Section 8(a)(5),
(3), and (1) of the Act by subcontracting bargain-
ing unit work in derogation of an existing collec-
tive-bargaining agreement and by discharging bar-
gaining unit employees covered by that agreement
in order to evade contractual obligations to the
Union.
On 14 March 1984 a Board panel2 adopted the
judge's findings that although Applicant Schmel-
zer-Wysong was a joint employer with and agent
of Co-Respondent UCBC, it was not a joint em-
ployer with Co-Respondent KC House of the serv-
x Co-Respondents UCBC and KC House have not filed applications
for fees and expenses
2 269 NLRB 144 (1984)
ice and maintenance employees at issue. Accord-
ingly, the Board found that when the employees
under the direct employ of Co-Respondent KC
House were terminated allegedly contrary to the
terms of a contractual restriction against subcon-
tracting, Applicant Schmelzer-Wysong did not vio-
late the Act. The Board therefore dismissed the
complaint.
As found by the judge in her supplemental deci-
sion the alleged joint employer status and interrela-
tionship of Applicant Schmelzer-Wysong and Co-
Respondents UCBC and KC House regarding the
employment and collective-bargaining obligations
toward the service and maintenance employees was
"not of such patent clarity as to be readily suscepti-
ble of resolution without resort to the crucible-like
testing of an evidentiary hearing." We agree with
the General Counsel that testimony of KC House
Vice President Gary Carpenter, if credited, could
have established that Applicant Schmelzer-Wysong
may have codetermined matters governing essential
terms and conditions of employment of the service
and maintenance employees at issue. Thus the Gen-
eral Counsel contends that in Carpenter's testimony
regarding the circumstances of KC House's entry
into a subcontract with Schmelzer-Wysong and
UCBC to employ service and maintenance employ-
ees, Carpenter initially testified that acceptance of
an outstanding collective-bargaining agreement
with the Union (to which Schmelzer-Wysong and
UCBC were a party) was central to KC House's
award of the subcontract. This agreement was ne-
gotiated with the Union by the Building Owners
Management Association (BOMA) and executed
and honored over many years by Charles
Schmelzer of Schmelzer-Wysong to cover terms
and conditions of employment of the service and
maintenance employees at issue. Carpenter testified:
Q. What was it, in your mind, that forced
you to accept the BOMA agreement and pay
according to the BOMA contract the wages
and fringes to these employees?
A. What caused me to do that?
Q. Yes.
A. I wanted the job and it was a virtual im-
possibility to go in there under a janitorial di-
vision contract.
Q. And did you understand that in terms of
when you negotiated your contract with
Schmelzer-Wysong?
A. Was I aware of that?
Q. Yes.
A. Yes sir, I was.
Q. Did Mr. Schmelzer ever tell you that or
talk to you about that or was this something
276 NLRB No. 160
UNION CARBIDE BUILDING CO.
A. When I bid the job he said keep it in
mind that this is a BOMA building. Of course,
that was common knowledge of me anyway.
This testimony (if credited) could have established
that terms and conditions of employment of the
service and maintenance employees were effective-
ly established by Applicant Schmelzer-Wysong.3
Later in his testimony, however, Carpenter re-
ferred to bargaining agreements other than the
BOMA agreement executed by Schmelzer-Wysong
and UCBC that may have governed the terms and
conditions of employment of the service and main-
tenance employees. Considering Carpenter's testi-
mony as a whole , including his cross-examination,
the Board agreed with the judge that the evidence
failed to establish conclusively that Schmelzer-
Wysong and UCBC were responsible along with
KC House for the wage rates and other terms and
conditions of employment applied by KC House to
the service and maintenance employees. Had Car-
penter's initial testimony been credited as presented
by the General Counsel, a finding could have been
made that Applicant Schmelzer-Wysong codeter-
mined wages and other terms and conditions of
employment and therefore was a joint employer
with KC House. As the General Counsel's theory
of the complaint was dependent on a finding of
joint employer status among the Respondents,4 we
find that the General Counsel's position was sub-
stantially justified.5 Accordingly, we shall deny the
application for fees and expenses.
ORDER
The recommended Order of the administrative
law judge is adopted and the application of
Schmelzer-Wysong Management Co. for attorney
fees and expenses under the Equal Access to Jus-
tice Act is denied.
8 This contention is further supported by Charles Schmelzer's execu-
tion of a successor BOMA agreement in 1979 (after the subcontract with
KC House) covering the identical unit of building employees as the pred-
ecessor agreement that antedated the subcontract
4 It is clear that any bargaining agreement covering the service and
maintenance employees was effectively abrogated by virtue of the cancel-
lation of the KC House subcontract and that the two employees were
thereby terminated In the absence of a Ending that Applicant Schmelzer-
wysong was a joint employer of these employees , the complaint was dis-
missed
We believe that Congress , in revising the Equal Access to Justice
Act, 5 U S.C § 504 ( 1982), as amended by Pub L 99-80, 99 Stat. 183
(1985), did not alter but merely clarified the definition of "substantially
justified ." "Substantially justified" means more than "mere reasonable-
ness." H R. Rep . 99-120 at 9 (1985).
SUPPLEMENTAL DECISION
1411
(Equal Access to Justice Act)
JOAN WIEDER , Administrative Law Judge. On 14
March 1984 , the National Labor Relations Board issued
a Decision and Order ' adopting my recommended Order
which , inter alia, dismissed the complaint in its entirety.
On 16 April 1984 Schmelzer -Wysong Management
Company (Applicant or Respondent) filed with the
Board in Washington, D.C., an Application for Attor-
ney's Fees and Expenses , pursuant to the provisions of
the Equal Access to Justice Act (EAJA), Pub. L. 96-
481, 94 Stat. 2325 (1980) and Section 102.43 of the
Board's Rules and Regulations . By Order dated 12 April
1984, the Board referred this application to me.
On 26 April 1984 the General Counsel filed a motion
to dismiss the application . On 8 May 1984 the Applicant
filed a response in opposition to the motion and sought a
determination of all its claims. On 16 May 1984 I issued
an order denying the General Counsel's motion to dis-
miss. On 5 June 1984 the General Counsel filed an
answer to the application . On 8 June 1984 the Applicant
filed a reply to the General Counsel's answer.
Considering the entire record in the underlying pro-
ceeding and this supplemental proceeding , I make the
following
FINDINGS OF FACT
Background
The underlying proceeding considered the allegation
that Respondents violated Section 8(a)(1), (3 ), and (5) of
the Act by unilaterally terminating a contract with the
employees ' representative (Union) and seeking to have
their work performed by nonunion employees . The gra-
vamen of the complaint is that the relationship between
the various Respondents was that of joint employers. Of
the various Respondents , only Schmelzer-Wysong Man-
agement Company has applied for an award of attorney's
fees and expenses.
Analysis and Conclusions
Under the EAJA, a party who prevails in litigation
before an administrative agency is entitled, upon applica-
tion, to attorney 's fees and certain other expenses unless
the Government can establish that its position in the liti-
gation was "substantially justified" or that special cir-
cumstances render an award unjust . 5 U.S.C. § 504(a)(1)
and (B).
The initial issue in this proceeding is whether the posi-
tion of the General Counsel was "substantially justified."
The EAJA does not define this term , but the Act's legis-
lative history provides the following indication of rea-
sonableness of action:
The test of whether or not a Government action
is substantially justified is essentially one of reason-
ableness . Where the Government can show that its
case had a reasonable basis both in law and fact, no
1 269 NLRB 144 (1984)
1412 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
award will be made. In this regard , the strong de-
terrents to contesting Government action require
that the burden of proof rests with the Government.
This allocation of the burden , in fact, reflects a gen-
eral tendency to place the burden of proof on the
party who has readier access to and knowledge of
the facts in question . The committee believes that it
is far easier for the Government, which has control
of the evidence , to prove the reasonableness of its
action than it is for a private party to marshal the
facts to prove that the Government was unreason-
able.
The standard, however, should not be read to
raise a presumption that the Government position
was not substantially justified , simply because it lost
the case . Nor, in fact, does the standard require the
Government to establish that its decision to litigate
was based on a substantial probability of prevailing.
H.R. Rep. 1418, 96th Cong., 2d Sess . 10 (1980), reprinted
in 5 U.S. Code Cong. & Ad. News 4984, 4989. See Ener-
haul, Inc., 263 NLRB 890 (1982). See also S . Rep. 253,
96th Cong., 2d Sess. 6-7 (1980).
Section 102.144(a) of the Board's Rules and Regula-
tions places the burden on the General Counsel of prov-
ing substantial justification for issuing the complaint and
that its position in the proceeding was reasonable in law
and fact. As held in Derickson Co., 270 NLRB 516, 518
(1984):
The Board has further held that it is immaterial that
the General Counsel may not have established a
prima facie case of a violation. t 0 However, for the
General Counsel's position to be substantially justi-
fied within the meaning of Section 102.144(a), the
General Counsel must present evidence which, if
credited by the fact finder, would constitute a prima
facie case of unlawful conduct. I t
fl° Enerhaul, Inc, 263 NLRB 890 (1982).
11 Tim's Big M, 266 NLRB 665 (1983)
In the underlying case, the complaint alleged viola-
tions of Section 8(a)(5), (3), and (1) of the National
Labor Relations Act. The issues centered around the re-
lationship between the parties,2 which the General
Counsel averred were agents and/or joint employers. I
found that UCBC and S-W were joint employers but not
S-W and KC House. Based on this finding, the com-
plaint was dismissed. While the facts were previously un-
2 John Keller d/b/a Union Carbide Building Company (UCBC),
Schmelzer-Wysong Management Co. (S-W ), and Building Maintenance
Company d/b/a Kansas City House and Window Cleaning Company
(KC House).
controverted, all parties recognized that in determining
the relationship between S-W and KC House , the credi-
bility of witnesses was a key. For example, S-W's brief
in opposition to the General Counsel 's and Union's ex-
ceptions and cross -exceptions to my decision , dated 3
December 1982, on page 2, admits that the rejection of
the General Counsel's and Union 's charges was "based
on factual findings which [were] required by credible
competent and persuasive evidence . In contrast , the Gen-
eral Counsel's and the Union 's exceptions should be dis-
missed since they are not supported by substantial evi-
dence, especially when considered in light of the Admin-
istrative Law Judge's credibility resolutions in favor of
KC House, S-W, and Keller (UCBC) on the above cru-
cial issues."
The General Counsel had reasonable basis to believe
that Respondents were joint employers and thus respon-
sible for each other's actions, if I credited certain of the
proffered testimony and/or found the totality of the facts
in this case supported a finding of joint employer status.
Credibility and total facts dealing with the companies'
interrelationships were not of such patent clarity as to be
readily susceptible of resolution without resort to the
crucible -like testing of an evidentiary hearing . None of
the key witnesses was shown to be patently or obviously
incredible prior to the issuance of the complaint or
before trial. I resolved the credibility issues in favor of
Respondents after they cross-examined the General
Counsel's witnesses and presented their own case. How-
ever, absent such evidence , the facts would have sup-
ported a finding that the General Counsel supported a
prima facie case of Respondent 's alleged violation of
Section 8(a)(1), (3), and (5) of the Act. I therefore find
that the General Counsel's case was reasonable in law
and fact, and was "substantially justified " within the
meaning of Section 102.144(a). SME Cement, Inc., 267
NLRB 763 fn. 1 (1983); Enerhaul, Inc., supra; and Bask
Paint & Sandblast Co., 270 NLRB 514 (1984).
Having found that the General Counsel had substantial
justification for issuing the complaint in the case and for
prosecuting it through the trial, I issue the following rec-
ommendeds
ORDER
The application for an award of fees and expenses
under the Equal Access to Justice Act of Respondent
Schmelzer-Wysong Management Company is denied.
8 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