Kansas Refined Helium Co.

National Labor Relations Board - Board Decisions

Sep 30, 1980

252 N.L.R.B. 1156 (N.L.R.B. 1980)

DECISIONS OF NATIONAL LABOR RELATIONS BOARD
George A. Angle d/b/a Kansas Refined Helium
Company and Oil, Chemical and Atomic Work-
ers International Union, AFL-CIO. Cases 17-
CA-3021, 17-CA-3021-2, and 17-CA-3378
September 30, 1980
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN FANNING AND M.MBIERS
JENKINS AND PENEI.IO
On June 25, 1969, the National Labor Relations
Board issued its Decison and Order' in Cases 17-
CA-3021 and 17-CA-3021-2, directing Respon-
dent, inter alia, to make whole certain employees,
including Arel Rodgers, for any loss they may
have suffered by reason of discrimination against
them in violation of Section 8(a)(1), (3), and (5) of
the National Labor Relations Act, as amended.
The Board, also on June 25, 1969, issued its Deci-
sion and Order 2 in Case 17-CA-3378 directing,
inter alia, that Respondent make whole Arel Rod-
gers for any loss of pay he may have suffered by
reason of Respondent's further discrimination
against him in violation of Section 8(a)(1), (3), and
(4) of the Act. Thereafter, on May 27, 1971, the
Board's Orders were enforced in their entirety by
the United States Court of Appeals for the District
of Columbia. 3 On January 17, 1972, the United
States Supreme Court denied Respondent's petition
for a writ of certiorari. 4
Pursuant to a backpay specification and appro-
priate notice issued and amended thereafter by the
Regional Director for Region 17, a hearing was
held on various dates between January 10, 1978,
and March 16, 1979, before Administrative Law
Judge James S. Jenson for the purpose of determin-
ing the amount of backpay due the discriminatees. 5
On April 11, 1980, the Administrative Law
Judge issued the attached Supplemental Decision.
Thereafter, the General Counsel and Respondent
filed exceptions and supporting briefs; Respondent
filed an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Supplemental Decision in light of the ex-
176 NLRB 1032
176 NLRB 1037
3 Oil. Chemical and Atomic Workerr Internaional Union, AFL-CIO v
NL. RB., 445 F.2d 237.
4 404 U S 1039.
" At the outset of the backpay hearing the parties reached agreement
on the amounts due the discriminatees, with the exception of Arel Rod-
gers.
252 NLRB No. 162
ceptions and briefs" and has decided to affirm the
rulings, findings, 7 and conclusions8 of the Adminis-
trative Law Judge and to adopt his recommended
Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and
hereby orders that the Respondent, George A.
Angle d/b/a Kansas Refined Helium Company,
Otis, Kansas, its officers, agents, successors, and as-
signs, shall take the action set forth in the said rec-
ommended Order.
I Respondent moves that the General Counsel's brief be stricken for
failing to conform to the spirit or intent of tile Board's Rules and Regula-
tions. Respondent's motion is hereby denied as lacking in merit
I Respondent has excepted to certain credibility findings made by the
Administrative Law Judge It is the Board's established policy not to
overrule an administrative law judge's resolutions with respect to credi-
bility unless the clear preponderance of all of the relevant evidence con-
vinces us that the resolutions are incorrect. Standard Dry Wall Producrts
Inc., 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have
carefully examined the record arid find no basis for reversing his findings.
8 In adopting the findings and conclusions of the Administrative Law
Judge we do not rely on any express or implied presumption that the In-
ternal Revenue Service has reviewed or approved the Rodgers' tax re-
turns in any manner. Specifically. with regard to Respondent's allegation
that the deduction of sales tax in the 1971 return should be disallowed
because sales tax was not reported as part of Rodgers' 1970 gross income
we find that Respondent relies on speculation and conjecture by its ac-
countant. The record fails to support the inference that sales taxes were
collected and thus part of the actual 1970 gross income. Accordingly Re-
spondent has failed to rneet its burden of proof. Similarly, with regard to
Respondent's contention that all adjustment should be made for the Rod-
gers' failure to state any inventory in their tax returns, we find that Re-
spondent again relies on speculation and conjecture and has not met its
burden of proof. The record does tot indicate that there was, in fact, any
irventory for the years i question We find that the method of determin-
ing interim earnings is ot arbitrary or unreasonable and we adopt the
Administrative Law Judge's conclusions.
SUPPLEMENTAL DECISION
JAMES S. JENSON, Administrative Law Judge: This
supplemental proceeding to determine the amount of
backpay due Russell Sims, Hilary Luft, Harold Straub,
and Arel Rodgers, whose employment was discrimina-
torily terminated by Respondent, was heard by me on
various dates between January 10, 1978, and March 16,
1979, in Wichita, Kansas, on the backpay specification of
the General Counsel issued on October 12, 1977, and
amended on several occasions thereafter, and Respon-
dent's answer dated November 16, 1977, likewise amend-
ed on several occasions. All parties were afforded full
opportunity to be heard, to introduce evidence, and to
examine and cross-examine witnesses. Extensive briefs
were filed by both the General Counsel and Respondent,
and have been carefully considered.
On the record before me, my observation of the de-
meanor of the witnesses, and consideration of the conten-
1156
KANSAS REFINED HELIUM COMPANY
tions and arguments of counsel and their briefs, I make
the following findings.'
The Issues
At the commencement of the hearing, the parties ad-
vised me that they had reached agreement regarding the
backpay due (I) Russell Sims in the amount of $21,500;
(2) Hilary Luft in the amount of $3,000; and (3) Harold
Straub in the amount of $4,000. Each of the discrimina-
tees testified he was satisfied with the amounts settled
upon, and checks for backpay and interest totaling the
amounts due the respective discriminatees were delivered
to the General Counsel. The settlement with respect to
those individuals is hereby approved. Remaining for de-
termination is the amount of backpay, if any, due to Arel
Rodgers. The Backpay Specification, as amended, alleges
the backpay period for Rodgers begins on September 20,
1966, the date of his initial discharge, and runs to Sep-
tember 30, 1972.2 The Respondent does not contest the
length of the backpay period. It contends, however, that
Rogers should be denied backpay for a variety of reasons
which will be discussed hereafter, and, alternatively,
that, if any backpay is awarded, that payment should be
withheld pending the resolutions of actions taken against
Rodgers by other governmental agencies. Respondent
also contests the formulas used by the General Counsel
in arriving at gross backpay, and recommends another
formula which it contends is the most accurate and ap-
propriate.
The principal issues are: (1) what formula should be
used for determining gross backpay; (2) whether Rod-
gers wrongfully concealed interim earnings; (3) whether
Rodgers sustained a willful loss of earnings; and (4)
whether the Board should rely on the tax returns of
Rodgers in determining both earned and self-employment
income for the purpose of arriving at interim earnings
and net backpay, or whether the calculations of a certi-
fied public accountant, hired by Respondent, who recon-
structed Rodgers' income from available records, are
more accurate and should therefore be used.
A. Legal Principles
It is well settled that the finding of an unfair labor
practice is presumptive proof that some backpay is owed
(N.L.R.B. v. Mastro Plastics Corporation and French
American Reeds Manufacturing Company, 354 F.2d 170,
178 (2d Cir. 1965), cert. denied 384 U.S. 972 (1966)), and
that in a backpay proceeding the sole burden on the
General Counsel is to show the gross amounts of back-
pay due-the amount the employees would have re-
ceived but for the employer's illegal conduct. (Virginia
Electric and Power Company v. N.L.R.B., 319 U.S. 533.
544 (1943)). Once that has been established, "the burden
is upon the employer to establish facts which would . . .
mitigate that liability." N.L.R.B. v. Brown & Root, Inc..
et al., 311 F.2d 447, 454 (8th Cir. 1963). It is further well
' Certain errors in the transcript have been noted and corrected.
2 The Orders of the Board pursuant to which this hearing was held are
reported at 176 NLRB 1032 (1969) and 176 NLRH 1037 (1969). A history
of the extensive litigation involving the parties hereto, including enforce-
ment and contempt proceedings, is found in George .4 Angle, 242 NLRB
744 (1979).
established that any formula which approximates what
discriminatees would have earned had they not been dis-
criminated against is acceptable if it is not unreasonable
or arbitrary in the circumstances. International Associ-
ation of Bridge, Structural and Reinforced Iron Workers
Union, Local 378, AFL-CIO (Judson Steel Corporation).,
227 NLRB 692 (1977); N.L.R.B. v. Brown & Root, Inc..
supra at 452; East Texas Steel Castings Company, Inc., 116
NLRB 1336 (1956), enfd. 255 F.2d 284 (5th Cir. 1958)
Avon Convalescent Hospital, 219 NLRB 1210, 1213 (1975).
In Bagel Bakers Council of Greater New York, et al. v.
N.L.R.B., 555 F.2d 304 (2d Cir. 1977), the court, in
granting the Board's petition for enforcement of a back-
pay order, stated:
In framing a remedy, the Board has wide discre-
tion, subject to limited judicial scrutiny. We can re-
verse only if we find that the method chosen was so
irrational as to amount to an abuse of discretion. Fi-
breboard Paper Products Corp. v. N.L.R.B., 379 U.S.
203, 216 ... (1964). . . .
A back pay award is only an approximation, ne-
cessitated by the employer's wrongful conduct. In
any case, there may be several equally valid meth-
ods of computation, each yielding a somewhat dif-
ferent result. . . . The fact that the Board necessar-
ily chose to proceed by one method rather than an-
other hardly makes out a case of abuse of discre-
tion.
Thus, it is seen that the Board is vested with broad
discretion in selecting a backpay formula appropriate to
the circumstances of a particular case. Where awards
may be only close approximations, the Board may adopt
formulas reasonably designed to produce such approxi-
mations. N.L.R.B. v. Carpenter's Union, Local 180
[Golden State Runway & Engineering Co., et al.], 433 F.2d
934 (9th Cir. 1970).
Another well-established principle is that, where there
are uncertainties or ambiguities, doubts should be re-
solved in favor of the wronged party rather than the
wrongdoer. F. M. Broadcasting Corporation d/b/a WHLI
Radio, 233 NLRB 326, 329 (1977). In United Aircraft
Corporation, 204 NLRB 1068 (1973), the Board stated
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."
As is set forth hereafter, a portion of Rodgers' earn-
ings during the backpay period came from self-employ-
ment, which the Second Circuit Court of Appeals held
in Heinrich Motors, Inc. v. N.L.R.B., 403 F.2d 145, 148
(1968), "is an adequate and a proper way for an employ-
ee to attempt to mitigate his loss of wages. Self-employ-
ment should be treated like any other interim employ-
ment in measuring backpay liability." Further, "the prin-
ciple of mitigation of damages does not require success;
it only requires an honest good-faith effort." N.L.R.B. v.
Cashman Auto Company and Red Cab Company, 223
F.2d 832, 836 (Ist Cir, 1955). See also Lloyd's Ornamen-
tal and Steel Fabricators, Inc., 211 NLRB 217 (1974);
United Aircraft Corp., supra. The law is settled that
1157
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
moneys earned during the period of discrimination from
a supplemental job which a discriminatee also held
during his or her employment with a respondent employ-
er are not deductible from gross backpay as interim earn-
ings. See Rice Lake Creamery Company, 151 NLRB 1113,
1114, fn. 4 (1965). In the instant case, prior to his unlaw-
ful discharge, Rodgers earned supplemental self-employ-
ment income from the operation of ABC Tank Truck
during his nonworking hours. The fact that during the
backpay period he devoted more time to that business is
pertinent to the extent that he is entitled to have ex-
cluded from his interim earnings only that portion of his
earnings which reflect his predischarge "moonlighting."
See Lee Cylinder Division of Golay & Co.. Inc., etc., 184
NLRB 241, 244-245 (1970).
B. Backpayformulas
My job is to consider whether the General Counsel's
formula is the proper one in view of all the facts ad-
duced by the parties and to make recommendations to
the Board as to the most accurate method of determining
the amount of backpay due. American Manufacturing
Company of Texas, 167 NLRB 520 (1967). I have there-
fore considered Respondent's proposed formula, the evi-
dence elicited at the hearing, and the briefs of the par-
ties.
Rodgers' backpay period began September 20, 1966,
and ended with the end of the third quarter of 1972.
When terminated on September 20, 1966, Rodgers was
one of four senior operators. In computing the gross
backpay for the 9 remaining days of the third quarter of
1966, the General Counsel made a projection based upon
4 8-hour days at the rate of $3.75 per hour which Rod-
gers was earning when terminated on September 20. For
the last 5 days of the quarter, the General Counsel cred-
ited him with a wage increase of 15 cents an hour which
fellow senior operator J. Ham received on September 26,
1966, for an hourly wage of $3.90. 3 Throughout the re-
mainder of the backpay period, the General Counsel as-
signed to Rodgers the amounts of wage increases given
Ham. During the third quarter of 1966, the General
Counsel assigned overtime to Rodgers based oin the
overtime he had previously worked during the quarter.
During the period that Rodgers was reinstated by the
Respondent, the General Counsel used Rodgers' actual
hours multiplied by his wage when initially terminated as
increased by Ham's wage increases. During the remain-
der of the backpay period, he determined gross backpay
by averaging the miscellaneous, regular, and overtime
hours, respectively, of "representative" employees, Ham,
Freidenberger, Straub, Bittner, and Hinman, multiplied
3 Prior to September 26, 19t6. Ham was making 5385 per hour, or 10
cents per hour more than Rodgers. Prior proceedings disclose ihlat Rod-
gers ",as one of six employ)e, unllawfully terminated on September 20(
On the follosing day, effecive September 26, all employees who re-
mained in Respondent's employ. with the exception of two who had been
hired oi June 6 and July 17. 1966. respectively. received wage increases
ranging from 15 cenlis to $1 all hour he raises were founri to hase beenl
unlawful ul fier hit di criialorar discharge. Rodgers sould also have
received a raise As Ihe raises were not based upon merit, it ca llltrt s.alid-
ly he argueLd that Roldgers would hale received an anloul less thanl the
minimum granted the oither emplhees
by Rodgers' wage when terminated on September 20, in-
creased by the amounts of increases received by Ham.
The Respondent objects to the multiplicity of formulas
utilized by the General Counsel, and contends that the
preferred backpay formulas are those which use an aver-
age of the weekly hours Rodgers actually worked for
Respondent from May 8, 1966, when Respondent's plant
was put in operation, through May 27, 1973, and a pro-
jected rate of pay based upon a percentage of the wage
increases received by a "representative" group of em-
ployees consisting of Freidenberger, Foose, Pickerill, and
Wakulich. During the periods Rodgers actually worked
for Respondent, the hours he actually worked were used
by Respondent to determine gross backpay, rather than
the averages based upon his several periods of employ-
ment between May 1966 and May 1973.
In assessing the relative merits of the proposed meth-
ods for determining gross backpay, I am mindful of the
fact that exactitude is not possible and that any two or
three different methods of computation will yield differ-
ent results. In my view, the most reliable method of ar-
riving at Rodgers gross backpay is one that combines the
formulas proposed by both the General Counsel and Re-
spondent. In this regard, the Board has stated that "it is
for the [Administrative Law Judge] to consider whether
the General Counsel's formula is the proper one in view
of all the facts adduced by the parties and to make rec-
ommendations to the Board as to the most accurate
method of determining the amounts due." (Emphasis sup-
plied.) American Manufacturing Company of Texas, 167
NLRB 520.
The representative employees which the General
Counsel has used in computing hours for backpay pur-
poses are Ham, Freidenberger, Straub, Bittner, and
Hinman. Respondent would use Freidenberger, Foose,
Pickerill, and Wakulich to arrive at average wage in-
crease figures. The Respondent would credit Rodgers
with only 71 percent of the average wage increases
granted the representative group since his May 23, 1966,
raise amounted to only 71 percent of the increase the
other senior operators received at that time.
With respect to the General Counsel's representative
group for determining hours, it is clear that, while Ham
was a senior operator-operations manager throughout the
entire backpay period, Freidenberger did not become a
senior operator until June 29, 1970, and Bittner, Straub,
and Hinman never became senior operators during the
entire backpay period. Further, those below the senior
operator-operations manager positions worked more
overtime. Compliance Officer Holt testified that he did
not consider Foose and Wakulich as representative em-
ployees because the former was a junior operator and
only worked until May 14, 1968, and the latter worked
only until January 2, 1970. The evidence shows that they
became senior operators, however, on September 26,
1966 and December 19, 1966, respectively. The Compli-
ance Officer also failed to consider Pickerill as a repre-
sentative employee even though he became a senior op-
erator on September 26, 1966, within a week after Rod-
gers' first termination. The record shows that both Ham
and Pickerill progressed financially at the same rate
I 1158
KANSAS REFINED HELIUM COMPANY
throughout the backpay period. An additional factor for
rejecting the General Counsel's formula and for adopting
the Respondent's formula for computing hours is the fact
that Respondent has operated on a 24-hour basis every
day of the year since it commenced operating and the
Compliance Officer conceded that Rodgers' work pat-
tern had been established prior to his September 20 ter-
mination. In these circumstances, I conclude that Re-
spondent's proposed formula based on Rodgers' average
hours of work prior to the unfair labor practices is the
most reliable one to use in arriving at the hours he
would have worked throughout the backpay period but
for his unlawful termination. Accordingly, I adopt Re-
spondent's computations covering regular and overtime
hours and shift differential payments due.
The unfair labor practice proceedings disclosed that
Rodgers was one of six employees unlawfully terminated
on September 20, 1966. On the following day, effective
September 26, all employees who remained in Respon-
dent's employ, with the exception of the two most recent
ones who had been hired on June 6 and July 7, 1966, re-
spectively, received wage increases ranging from 15
cents to $1 an hour. The raises were found to have been
unlawfully motivated. As those raises were not based on
merit, I conclude that, but for his engagement in protect-
ed concerted activities resulting in his unlawful dis-
charge, Rodgers would also have received the 5-cent
raise given Ham and Pickerill. Respondent argues, how-
ever, that Rodgers would have received but 71 percent
of the average pay raises received by senior operators-
operations managers throughout the backpay period, in-
cluding the September 26, 1966, raise. It based this argu-
ment on the fact Rodgers had received a 25-cent raise on
May 23, 1966, whereas the other senior operators re-
ceived raises of 35 cents.4 Regarding the rest of the pay
raises throughout the backpay period, it is noted that
both Ham and Pickerill, the two senior operators-oper-
ations managers with seniority dates approximating that
of Rodgers, received, as noted above, a 5-cent increase
on September 26, 1966; both received a 10-cent increase
on November 4, 1968, a 15-cent increase on June 29,
1970, and a 10-cent increase on August 8, 1971.5 This se-
quence of identical raises leads me to believe they were
periodic raises that were not necessarily related to merit.
Respondent's argument that Rodgers would have re-
ceived but 71 percent of those raises is rejected. Henry
Tyler, a former plant manager, testified that he reviewed
Rodgers' progress as an employee in April 1966, and told
Rodgers he needed to improve and that he would review
Rodgers' performance in 6 months. Respondent failed to
show that Rodgers' performance had not improved prior
to his termination, which in fact occurred before the end
of the 6-month period for which his performance was to
be reevaluated. It is as reasonable to assume that Rod-
gers, having been counseled that he needed to improve
and that his performance would be reviewed in 6
months, did in fact improve his performance, as it is to
assume that he did not improve. See, for example, Flora
Construction Company and Argus Construction Company
4 25/35 71 percent
r After Ihe hck pa: period rided for Rodger,, HLim alld Pickerill Icon-
illtltd 1to rcciS tC identlilal pal1 rtic
d/b/a Flora and Argus Construction Company, 149 NLRB
583, 585 (1964), enfd. 354 F.2d 107 (10th Cir. 1965). In
any event, doubts must be resolved in favor of the
wronged party rather than the wrongdoer. Accordingly,
I conclude that Rodgers should be credited with the
amounts of pay raises received by Ham and Pickerill
throughout the backpay period.
C. Contentions Regarding Interim Earnings
In the backpay specification, the General Counsel con-
ceded certain interim earnings based upon information
from social security reports and copies of the Rodgerses'
Federal income tax returns. While Respondent does not
dispute the accuracy of some of those figures, it contends
that the books and records, including the tax returns, are
not accurate and that figures compiled by its CPA more
accurately reflect interim earnings. In addition, the Re-
spondent advances a number of arguments contending
that the conduct of both Mr. and Mrs. Rodgers pre-
cludes any backpay. It is contended that, in spite of di-
rection by the Board's Compliance Officer, Rodgers
failed to keep detailed and accurate records of attempts
to obtain employment, necessitating the use of "unsigned
tax returns and a seven-page expense notebook," which
Respondent contends were incomplete and contained
substantial inaccuracies. Respondent contends that Rod-
gers' failure to respond to written questions submitted by
Respondent's CPA is indicative of the fact that he had
"successfully 'spoon-fed' self-serving and inaccurate tax
returns to the Board" which it used in computing interim
earnings, thereby frustrating "efforts to obtain the true
facts about Rodgers' unreported income." It argues that
Mrs. Rodgers deliberately destroyed order and receipt
books showing sales made by various businesses and thus
made it extremely difficult to determine the full amount
of Rodgers' income during the backpay period. Respon-
dent infers that a fire which destroyed a number of Rod-
gers' records about 1976 was a result of arson, and that
Rodgers' donation of the damaged records to a paper
drive is indicative, apparently, of a plan to prevent Re-
spondent from determining the amount of interim earn-
ings. Respondent also directs attention to the fact that
more records were destroyed by a flooded basement in
1978 when the Rodgerses were in Hawaii.
I have considered Respondent's argument that Rod-
gers should be denied all backpay, and reject it. The
Board has long recognized the value of utilizing social
security records and income tax returns in determining
interim income, and has found that "poor recordkeeping,
uncertainty as to memory, and perhaps exaggeration" do
not automatically disqualify an employee from receiving
backpay. Patrick F. Izzi, d/b/a Pat Izzi Trucking Compa-
ny, 162 NLRB 242, 245 (1966), enfd. 395 F.2d 241 (Ist
Cir. 1968). Through the use of the social security re-
cords, the Rodgerses' income tax returns, and additional
evidence adduced at the hearing, it is possible to arrive
at a "reasonable approximation" of interim earnings,
which is all that the Board and Courts require. Further,
Respondent has not shown that the Rodgerses, deliber-
ately withheld or destroyed records to prevent an audit
1159
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by Respondent's CPA or to deceive the Board. 6 In Bagel
Bakers Council of Greater New York and its Employer-
Members, 226 NLRB 622, 626 (1976), the Administrative
Law Judge, affirmed by the Board, noted that the lapse
of time between the backpay period and current pro-
ceeding necessarily had the effect of limiting the evi-
dence available. See also W. C. Nabors d/b/a W. C.
Nabors Company, 134 NLRB 1078, fn. 3 (1961), where
the Board noted a delay attributable to respondent's re-
fusal to comply with the Board's Order as enforced by
the court of appeals until contempt proceedings were
commenced.
D. Evidence and Findings as to Interim Earnings,
Interim Expenses, and Net Backpay
The backpay specification, as amended, sets forth in
detail the amounts and sources of earnings which the
General Counsel contends were derived from interim
earnings employment during the backpay period. It also
sets forth the nature and amounts of interim expenses in-
curred in seeking or holding such interim employment.
These amounts are broken down into calendar quarters,
and the net backpay sought is derived by deducting in-
terim earnings less interim expenses from gross backpay.
Respondent questions both the interim earnings and in-
terim expenses contained in the backpay specification. It
contends that the interim earnings figures are unreliable
and incomplete and that the interim expense figures are
also unreliable. It is also contended that Rodgers should
be charged with a willful loss of earnings and credited
with potential interim earnings because he was terminat-
ed from two interim employment jobs and voluntarily
quit profitable self-employment. These and corollary
matters are considered hereafter with respect to each of
the calendar quarters in dispute.
1966-Fourth Quarter: The General Counsel lists no
interim income in this quarter. Respondent would charge
Rodgers with interim earnings of $1,318.72 from the op-
eration of ABC Tank Truck. The record reveals that
prior to his unlawful discharge Rodgers had devoted
"probably as little as 2 or 3 hours per day or less" to the
operation of ABC Tank Truck. ? Following his termina-
tion, he did not devote more time for "quite a long
while." Later, however, he spent more time in the busi-
ness and as a consequence did better financially. 8 The
General Counsel would exclude from interim earnings 50
percent of Rodgers' share of the earnings or profits of
ABC Tank Truck on the ground that Rodgers had de-
voted 20 hours per week to the business before his un-
lawful discharge and 40 hours per week thereafter. He
also apportioned the yearly earnings as shown by the tax
returns equally between the quarters of the appropriate
years, showing none for 1966. Claiming that Rodgers
lost money while "moonlighting" on this job prior to his
s Respondent's witness Clyde Haynes also suffered a loss of business
records by fire in 1977.
7 ased (on a deposition given by Rodgers in 1967. Resp Exh 68
While he was present and available throughoul most of the hearing, Rod-
gers was not called to testify further on the subject
" Respondent does not contend that his failure to devote more time to
the business for an indeterminate period following his termination result-
ed ill a willful loss of earnings.
termination, Respondent would apportion to the applica-
ble quarter as interim earnings all earnings from ABC
Tank Truck. On the basis of Rodgers' 1967 deposition
that he spent "2 or 3 hours per day or less," I conclude
that he could have spent as little as I hour a day (or
even less) up to 3 hours a day operating the business. In-
asmuch as the normal workday is 8 hours, it is probable
he devoted between 12.5 percent and 37.5 percent of a
workday to ABC Tank Truck. In the absence of more
concrete evidence, I conclude that 25 percent is the most
reasonable amount to exclude as "moonlighting" from
ABC Tank Truck earnings. As noted earlier herein, it is
appropriate to exclude from interim earnings that portion
which reflects earnings from a job held prior to dis-
charge.
Respondent's CPA testified he examined the actual re-
ceipts and disbursements for ABC Tank Truck for the
period of September 20 to December 31, 1966, and found
that receipts exceeded disbursements by $179.60. He then
added a truck-lease adjustment amounting to $1,138.72,
which he considered an improper deduction because the
transaction upon which it was based was considered il-
legal by the Kansas Corporation Commission, and ar-
rived at an interim earnings figure of $1,318.32.9 Respon-
dent also contends the mileage deduction claimed by the
Rodgerses' on their Federal tax return, which is based on
an estimate of 15,000 miles driven at 10 cents per mile,
for a total of $1,500, should be disallowed and only car
expenses which it identified as totaling $19.49 should be
allowed.
The facts reveal that Rodgers operated ABC Tank
Truck with equipment and under a Kansas Corporation
Commission permit which were his father's. Respondent
argues that the amounts expended for the lease of the
equipment and use of the permit should be disallowed
because it was illegal to lease a Kansas Corporation
Commission permit. Respondent cites as authority Tank
Truck Rentals, Inc. v. Commissioner of Internal Revenue,
356 U.S. 30 (1958), decided on the same day as Commis-
sioner of Internal Revenue v. Sullivan, et al., 356 U.S. 27
(1958), relied on by the General Counsel. Tank Truck
Rentals, which I conclude is inapposite, involved the de-
ductibility of fines imposed for violations of state laws,
and stands for the proposition that a taxpayer who has
violated a state or Federal statute and incurred a fine or
penalty will not be permitted a tax deduction for its pay-
ment. In Commissioner v. Sullivan, which I find control-
ling, the Commissioner sought to disallow amounts ex-
pended by a gambling enterprise, illegal under state law,
to lease premises and hire employees. In allowing the de-
ductions, the Court stated:
If we enforce as federal policy the rule espoused by
the Commissioner in this case, we would come
close to making this type of business taxable on the
basis of its gross receipts, while all other businesses
would be taxable on the basis of net income. If that
choice is to be made, Congress should do it. The
amounts paid as wages to employees and to the
landlord as rent are "ordinary and necessary ex-
See Resp Exhs. 61, 73, and 74
1160
KANSAS REFINED HELIUM COMPANY
penses" in the accepted meaning of the words. That
is enough to permit the deduction, unless it is clear
that the allowance is a device to avoid the conse-
quences of violations of a law, as in . . . 7ank
Truck Rentals, Inc. v. Commissioner.
Accordingly, Rodgers' expenditure for the lease of the
truck and permit should be allowed as "ordinary and
necessary expense" of the business. With respect to Re-
spondent's position that the Rodgerses' estimated car
allowance deduction shown on the 1966 tax return
should be disallowed, and that the actual receipts and
disbursements for the period September 30 to December
31 should be used, it is noted that Respondent's CPA ad-
mitted that the method utilized by the Rodgerses on
their tax return-estimating miles used in the business for
the year times 10 cents per mile-was acceptable for tax
purposes. Apportioning the Rodgerses' estimated $1,500
between the quarters, and crediting the fourth quarter of
1966 with a $375 car expense, more than offsets the $179
which the Respondent would find as net income for that
quarter. Accordingly, there are no interim earnings
chargeable against gross backpay for that quarter.
1967-First and Second Quarters: The 1967 Federal
income tax return shows a net profit from ABC Tank
Truck in the amount of $2,108.95. It appears that on
June 16, the ABC Tank Truck assets were returned to
Rodgers' father. The General Counsel deleted 50 percent
of the net profit as predischarge "moonlighting" and
credited Rodgers with 50 percent to interim earning, or
$1,054.48, and apportioned it equally between the first
and second quarters of 1967.10
The Respondent, again contending that the truck lease
was unlawful, added it to the net income shown on the
1967 tax return, deleted from expenses the car mileage
allowance of $1,330 based upon 13,300 business miles at
10 cents per mile, and determined actual car expenses
and depreciation on the car totaling $601.41 was deduct-
ible, arriving at a net income for the 24 weeks from Jan-
uary I to June 16 of $4,796.54. Net income per week was
determined and assigned to the first and second quarters
of 1967 on the basis of the number of weeks, 13 in the
first quarter and I I in the shortened second quarter. As
explained in the fourth quarter section of 1966, both the
truck lease and method of computing the car mileage are
acceptable to IRS. I therefore reject Respondent's adjust-
ments in computing ABC Tank Truck's net profit and
find that Rodgers' net profit of $2,108.95 for 1967, ex-
cluding 25 percent as "moonlighting," was $1,581.71, or
$65.90 per week for 24 weeks. Apportioning that be-
tween the first and second quarters, with 13 and 11
weeks respectively, amounts to first quarter interim earn-
ings of S856.70 and second quarter interim earnings of
$724.90. The parties agree that $6.25 is deductible from
interim earnings as expenses seeking work in the first
quarter and Board's Exhibit 17 discloses that the correct
expense deduction for the second quarter is $207.80 as
claimed by Respondent.
'O In considering this same issue under the fourth quarter of 1966, 1
concluded that the most reasonable amount to exclude as "moonlighting"
was 25 percent of ABC's net profit
Third Quarter: Pursuant to an order of the United
States District Court for the District of Kansas," Rod-
gers was reinstated on July 19, 1967. However, on Sep-
tember 20, 1967, he was suspended without pay and on
October 2, 1967, he was again discharged. The suspen-
sion and discharge were found to be unlawful. During
the period from July 19 until his suspension, he received
interim earnings from Respondent amounting to $1,372,
about which there is no dispute. Respondent would also
include as interim earnings from ABC Tank Truck
$879.38 as self-employment potential from June 16 until
July 19 on the ground Rodgers had quit a profitable self-
employment business. 2 Mrs. Rodgers testified that they
quit ABC Tank Truck service because it was not making
any money and did not have enough work to continue.
One of the factors considered by the Board in deter-
mining the suitability of interim employment, is whether
the job paid wages comparable to the one held with the
original employer. As computed above, Rodgers' share
of the net profit of ABC Tank Truck for the first two
quarters of the year amounted to $65.90 per week, or
$1.65 per hour per 40-hour week, hardly comparable to
the $3.75-per-hour wage he was earning when unlawful-
ly discharged, or the $3.90-per-hour wage to which he
was entitled throughout the third quarter of the year. As
the income from his self-employment was not compara-
ble to the wages he received while working for Respon-
dent, he did not incur a "willful loss of earnings" by
ceasing to operate ABC Tank Truck. Furthermore, as
noted earlier, the principle of mitigation of damages by
self-employment "does not require success; it only re-
quires an honest good-faith effort." Heinrich Motors, Inc.
v. N.L.R.B., supra. Moreover, the record establishes, and
Respondent has not shown otherwise, that Rodgers at no
time throughout the backpay period removed himself
from the labor market. In these circumstances, Rodgers
is not chargeable with potential interim earnings from
ABC Tank Truck for the third quarter of 1967.
Fourth Quarter: Rodgers worked for Penn Life Insur-
ance as a saleman from about June 30, 1967, through
January 24, 1968. The 1967 Federal income tax return
shows he received $800 in commissions and that he in-
curred expenses totaling $1,454.61 for a net loss of
$654.61.
Respondent contends again that the car mileage
allowance should be based on actual identifiable expenses
and not on the estimated mileage, even though its CPA
acknowledged that the method used by the Rodgerses
was acceptable to the IRS. Consistent with my earlier
findings regarding car mileage deductions, I reject Re-
spondent's contention that Rodgers should be charged
with interim earnings of $117.53 from Penn Life Insur-
ance Company.
1968-First Quarter: According to the General Coun-
sel, Rodgers worked for Panhandle Construction Co.
from March 9 through April 1. The parties agree that he
earned $766.23, but disagree as to the quarter the second
" See 176 NLRB 1037
1 The potential earnings figure was arrived at by multiplying the
number of weeks (4 4) times the weekly average of earnings figure found
invalid in the preceding section.
1161
DECISIONS OF NATIONAl. LABOR REI.ATIONS BOARD
to last paycheck should be credited. I conclude that the
General Counsel is in error regarding the dates of his
employment since his paychecks disclose employment
for 4 full weeks plus I day at the beginning and I day at
the end. It would appear to me, therefore, that he
worked March 2 through April 1, and that he was paid
each Wednesday for the previous week. This being so,
his check dated March 31, which I assume was made
available to him on that date since there was no evidence
to the contrary, would be properly included in the first
quarter as the General Counsel contends, and the last
check dated April 7 would be properly included in the
second quarter.
The Rodgerses resumed the operation of ABC Tank
Truck during the first quarter. The 1968 Federal tax
return shows a net profit from the business of $161.49,
which the General Counsel has allocated to "moonlight-
ing" and interim earnings on a 50-50 basis. Respondent
would make an adjustment to the car mileage claimed to
arrive at interim earnings of $191.41. As found earlier,
the method in claiming the amount of mileage expense is
acceptable by the IRS. The appropriate amount to be ex-
cluded from interim earnings as "moonlighting," as I
have previously found, is 25 percent. Accordingly, I
conclude that the ABC Tank Truck interim earnings for
the first quarter total $121.12. The proper amount to be
deducted from interim earnings as expenses seeking work
in the quarter is $335.30.
Second Quarter: From about April 21 through July 20,
both Mr. and Mrs. Rodgers were engaged in the oper-
ation of a restaurant and filling station. The tax return
shows a net profit of $1,604.57, which the General Coun-
sel has apportioned between the second and third quar-
ters on the basis of the number of weeks in each quarter.
He then credited Rodgers with only 50 percent of the
earnings since they both operated the business. 3 Re-
spondent's CPA, after examining the tax return, estimat-
ed that the Rodgerses had understated their gross sales
by $957.55.14 His method in arriving at this conclusion
was to determine the cost of the inventory to be
$1,832.52, and to add to that an "average markup" of 33
percent, or $604.73, to arrive at what he determined the
gross "sales should be at average markup," amounting to
$2,437.25. He then made an adjustment to net income by
adding the $957.55 which he concluded was the amount
the gross sales were understated, made a further car
allowance adjustment, and spread his estimate of the net
income between the second and third quarters based on
the number of weeks in each quarter. He also assigned a
potential loss of earnings to the third quarter for the 9
weeks from July 21 until September 22 on the ground
Rodgers' sustained a willful loss of earnings because he
was discharged by the owner of the premises. The as-
sumption by Respondent's CPA that the Rodgerses had
understated sales is sheer speculation. In this regard it is
noted that the IRS has not challenged the tax return.
The burden, of course, is on Respondent to prove that
13 A wife's efforts are not chargeable to a discriminatee as his interim
earnings.
14 He theorized that the Rodgerses were either selling their products
for a price less than their cost, were consuming part of the products. "or
perhaps not reporting sales."
the figures are false, which I conclude it has failed to do.
Further, the maxim that all doubts must be resolved
against Respondent wrongdoer applies. Further, the fact
that the owner of the Quality Gas premises may have
found Rodgers to be unsuitable does not constitute a
willful loss of earnings. E.g., Harvest Queen Mill & Eleva-
tor Company, 90 NLRB 320, 338 (1950) (discriminatee
Cook discharged for refusing to work on Sundays);
Mastro Plastics Corporation, 145 NLRB 1710, 1716 (1964)
(discriminate Vargas discharged from several interim
jobs, one for being in jail for 10 days); Barberton Plastics
Products, Inc., 146 NLRB 393, 396 (1964) (discriminatee
discharged for unsatisfactory performance); Webb Manu-
facturing Inc., 174 NLRB 37, 38 (1969) (discriminatee
Cline fired for unsatisfactory work); Artim Transportation
System, Inc., 193 NLRB 179, 183 (1971) (discriminatee
discharged after argument with supervisor over working
conditions). In any event, it is clear that Rodgers did not
remove himself from the labor market but, to the con-
trary, throughout the backpay period sought and ob-
tained interim employment.'l In these circumstances it
would not be proper to charge him with potential inter-
im earnings from Quality Gasoline. Prorating Rodgers'
share of the earnings over the 13-week period of operat-
ing Quality Gas, with 10 weeks in the third quarter and 3
in the fourth, amounts to $617.14 and $185.14 interim
earnings respectively. Contrary to Respondent's conten-
tion that expenses for seeking work in the second quarter
totaled $287, Board's Exh. 17 establishes the amount at
$296.80.
Third Quarter: As set forth above, Quality Gasoline in-
terim earnings are $185.14, and Respondent's assignment
of potential earnings is rejected. There is no disagree-
ment regarding the amounts of other interim earnings
and expenses.
Fourth Quarter: Except for Respondent's contention
that Rodgers should be charged with potential interim
earnings from Quality Gasoline, which has been rejected,
the parties are in agreement regarding interim earnings
and expenses seeking work in this quarter.
1969-First Quarter: The 1969 Federal income tax
return shows a net profit of $202.45 from ABC Tank
Truck. The General Counsel would exclude 50 percent
as predischarge "moonlighting," and charge Rodgers
with $101.23 in interim earnings for the quarter. Respon-
dent, as it has done previously, has increased the net
income by $400, the amount of car expenses claimed in
the tax return, and has allowed car depreciation in the
amount of $70.73, for a net of $531.72. For reasons stated
earlier, Respondent's adjustments are rejected. Consistent
with my earlier findings that 25 percent of ABC Tank
Truck earnings should be excluded on the basis of his
predischarge "moonlighting," the interim earnings from
ABC Tank Truck for this quarter is $151.84. There is no
disagreement concerning other interim earnings and ex-
penses seeking work.
i, The weekly average earnings from 13 weeks of employment at
Quality Gasoline were 61.71 per week, or $154 per hour per 40-hour
week, an amount not comparable to his wage when discharged by Re-
spondent
1162
KANSAS REFINED HELIUM COMPANY
Second Quarter: The only disagreement in this quarter
is over the assignment of potential earnings from Mid-
States Distributing. 6 Lawrence E. Booker, an owner
and manager of both Mid-States Distributing and Kansas
Jack, Inc.," testified that Rodgers was first employed at
Mid-States from October 7, 1968, until March 24, 1969.
On the latter date Rodgers asked Booker for a $50 a
week raise, which would have been more than Booker
was making. Booker's response was to fire him. Booker
testified that Rodgers was a valuable employee and he
was happy with his work at that time. Rodgers was re-
hired on September I at the pay rate of $165 or $100
per week, and on November I was transferred to Kansas
Jack, where he was terminated on November 26 by Sales
Manager Don Miller.'8 Booker testified that Miller had
told him he terminated Rodgers because Rodgers was
trying to run his position. Rodgers testified that Miller
never gave him a reason for discharging him "except
that he was not at liberty to say." Rodgers was hired
again in June 1977, became sales manager, and was an
"excellent salesman." In these circumstances it is clear
that neither his termination from Mid-States on March
24, nor from Kansas Jack on November 26, constituted a
willful loss of earnings, and that Rodgers should not be
assessed for potential interim earnings in either instance.
General Counsel's Exhibit 17 shows that expenses seek-
ing work totaled $55.38. Expenses maintaining jobs and
seeking work in the second quarter exceeded interim
earnings.
Third Quarter: On July 2, a check in the amount of
$100 from Rankin Equipment was deposited to the Rod-
gerses joint checking account. Mrs. Rodgers testified that
the check was reimbursement for car expenses incurred
by Rodgers during the time he was trying to sell Ran-
kin's products. She testified, without contradiction, that
her husband did not receive any commissions from
Rankin. Accordingly Respondent has failed to meet the
burden of proof required to include the Rankin Equip-
ment check as interim earnings.
Respondent also seeks to prorate and include as inter-
im earnings for the third and fourth quarters one-half of
the commissions which Mrs. Rodgers received from Tri-
Tabula Company and Overland Cartographers. Received
in evidence as page 12 of Respondent's Exhibit 67 are
two Minnesota Annual Information Returns showing
Carolyn Rodgers as the recipient of commissions from
those two companies. Schedule SE (Form 1040) Compu-
tation of Social Security Tax, which was submitted to
IRS with the balance of the 1969 Federal income tax
return, reports those earnings as those of Carolyn Rod-
gers. While the record'9 shows that Rodgers worked for
Tri-Tabula in April 1969 and for Overland Cartogra-
phers in the first quarter of 1970, the earnings for those
periods are reflected in the backpay specification as in-
terim earnings in the appropriate quarters. There is, how-
'6 The original backpay specification which issued on October 2. 1977.
assigned potential interim earnings to Rodgers from Mid-States Distribut-
ing for the first three quarters in 1969 and from Kansas Jack in the fourth
quarter. These were later amended out
'7 Mid-States is a wholly owned subsidiary of Kansas Jack
' Miller. who did not testify. Was later terminated when Booker dis-
covered he was assoiated sWith a competitor
19 Last page of Board's Exh 17
ever, no evidence showing that Rodgers worked for
either company during the third or fourth quarter of
1969, or that the earnings paid Mrs. Rodgers were
earned in part by her husband. Accordingly, Respon-
dent's assignment of Tri-Tabula and Overland Cartogra-
phers commissions to Rodgers in both the third and
fourth quarters is without foundation and they are ex-
cluded from interim earnings.
Fourth Quarter: Having disallowed Kansas Jack poten-
tial earnings (and the assignment of one-half of Mrs.
Rodgers' earnings from Overland Cartographers and Tri-
Tabula to Rodgers, the remaining issue in this quarter in-
volves expenses seeking work and expense reimburse-
ment. Board's Exhibit lists $120 as expenses for traveling
to Waco, Texas, to attend a Success Motivation Institute
meeting. 20 Respondent's CPA testified that Board's Ex-
hibit 17 differed from the actual check written which
amounted to $96.72. Whether that particular check,
which is not in evidence, covered only the motel, or the
motel and food, is not shown. Nor does the evidence
show that Rodgers did not expend out-of-pocket cash to
make up the balance of the $20 which would not be re-
flected by a check. Further, it may reasonably be as-
sumed that he incurred some transportation expense in
traveling to Waco. In these circumstances, the $120
claimed as expenses by the Rodgerses is allowed; howev-
er, there is an offset of $125 which Rodgers received as
expense reimbursement from the company, leaving $5 to
be credited to interim earnings.
1970-First and Second Quarters: The amended Federal
income tax return for 1970 shows self-employment net
income for the year from American Atlas Company in
the amount of $7,935.62, which the Rodgerses reported
for social security purposes as having been divided
equally between them ($3,967.81 each) since they jointly
owned and operated the business. Included in the Ameri-
can Atlas figures is the income earned from Overland
Cartographers. The General Counsel apportioned Rod-
gers' share of the earnings from both companies equally
between the four quarters of the year, showing $991.95
in interim earnings for each quarter.
The evidence shows that American Atlas Company
was not started until June 25, 1970. Therefore, according
to Respondent, the earnings from that company should
not be apportioned equally between the four quarters of
the year, but should be placed in the third and fourth
quarters. It was determined that the earnings for the year
from Overland Cartographers totaled $3,869.57,21 which
was identified through check deposits to be 2,426.62 in
the first quarter, one-half, or $1,213.31, of which was as-
signed to Rodgers as interim earnings. Respondent was
able to identify through deposits $586.23 in earnings in
the second quarter, leaving $856.72 for which no depos-
its could be located. It nevertheless assigned the $856.72
to the second quarter for a total earnings of $1,442.95,
one-half, or $721.48, of which it assigned to Rodgers.
While I agree with Respondent that Rodgers should be
assessed interim earnings from Overland Cartographers
"' Motel and food expenses are shown on the exhibit as $90 and 30
respectis ely
21 See Accountant Mines' working papers, part of Board's Exh 56
1163
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
in the first quarter, I note that Rodgers acknowledged at
the last page of Board's Exhibit 17 that he worked for
Overland Cartographers the first 3 months of the year,
his representation thereon being that he received only
$800 for the quarter. That figure, however, appears to be
an approximation, perhaps even a guess. In any event,
the General Counsel has credited him with 50 percent of
the Overland Cartographers income for the year and the
1970 amended tax return, Board's Exhibit 13, discloses
that Mr. and Mrs. Rodgers each claimed 50 percent of
their combined income for social security self-employ-
ment tax purposes. For the additional reason that Ameri-
can Atlas did not go into business until late June, and
therefore could not have had any income during the first
two quarters, it is appropriate, as Respondent contends,
to assign the Overland Cartographers interim income to
the first two quarters. 22 In concluding that all of the
earnings from Overland Cartographers should be placed
in the first two quarters of the year, I note the represen-
tation made by the Rodgerses, in their 1970 amended tax
return, Board's Exhibit 3, that "each devoted 100 percent
to" American Atlas, which operated only during the last
two quarters. Accordingly, $1,213.31 of the Overland
Cartographers interim earnings are assigned to the first
quarter and $721.48 to the second, and the American
Atlas earnings for the year will be allocated to the third
and fourth quarters.
Respondent contends that a deposit to the Rodgerses'
joint account dated February 3, and identified as a
money order in the amount of $219.90, and another de-
posit dated January 10, and identified on the deposit slip
as Telegraphics for $147.70, should be charged to Rod-
gers as interim income.23 While these two deposits may
well have represented income to either Mr. or Mrs. Rod-
gers, Respondent failed to show that they constituted in-
terim income to Mr. Rodgers. The earnings of Mrs. Rod-
gers, of course, would not be chargeable to Mr. Rodgers
as interim income. In any event, uncertainties must be re-
solved against the wrongdoer.
Having separated the Overland Cartographers income
from that shown for American Atlas on the tax return
leaves American Atlas with $4,066.05 net income for the
last two quarters of the year. Respondent would further
extract from that figure the ABC Tank Truck or Water
Well net income and apportion it equally between the
four quarters. 24 In so doing, Respondent's CPA was able
to identify from bank deposits $311.78 income, and ex-
penses totaling $88.03, leaving a net income for the year
of $123.72, which he apportioned equally between the
quarters at $30.93 per quarter. The working papers of
the accountant who prepared the 1970 tax return dis-
closes ABC Water Well income of $311.85, and expenses
totaling $448.03, for a loss for the year of $136.18. The
records from which either accountant made his determi-
z2 Mrs. Rodgers testified that Overland Cartographers income was
earned in the first portion of the year
2a At an "April 18" meeting between Respondent's representatives and
the Rodgerses Mr. and Mrs. Rodgers stated to Respondent's CPA "that
if there are deposits, it is probably income."
24 ABC Tank Truck by then consisted of only a water well I con-
clude that the nature of the operation had changed sufficiently by this
time so that deleting 25 percent from interim earnings as "moonlighting"
income is not appropriate.
nation are not among either Respondent's or the Board's
exhibits. As doubts must be resolved against the wrong-
doer, I conclude that ABC Water Well sustained a loss
for the year of $136.18 which should be apportioned
among the four quarters in the amount of $34.05 each.
The deletion of the Overland Cartographers earnings
and the ABC Water Well loss from the amount reported
on the Federal tax return leaves American Atlas with a
net profit of $4,202.23. Respondent further deleted from
American Atlas income, a money order deposit to the
joint account dated April 9 in the amount of $234.81,
since, according to the testimony of the CPA, the money
was received prior to American Atlas' existence. It was
not shown, however, that the money order represented
earnings by Mr. Rodgers. Moreover, at page 19 of Re-
spondent's Exhibit 78, the CPA made an adjustment to
American Atlas net income from, apparently, another
money order in the amount of $219.15, and made no
mention of the $234.81 money order which its seeks to
exclude from the American Atlas net profit in the second
quarter. Respondent has failed to meet its burden of es-
tablishing that the $234.81 money order constituted Rod-
gers' interim earnings.
Third and Fourth Quarters: To arrive at the American
Atlas net profit for 1970, Respondent's CPA commenced
with the net income shown on the tax return, $7,935.62,
made numerous adjustments which had the net effect, as
noted above, of removing Overland Cartographers, and
ABC Water Well income and expenses, made further ad-
justments for commissions and expense items for which
he could locate no canceled check substantiation, made
an adjustment to disallow the car expense which had
been based on acceptable IRS procedures, made an
allowance for "actual auto expense" amounting to 39.6
percent of the amount claimed in the tax return, and de-
leted from that profit a "money order" in the amount of
$219.15.25 In addition, he increased the net income by
the amount of sales the Rodgerses received and placed in
an escrow account pursuant to an agreement dated Octo-
ber 16, 1970, which provided in pertinent part as fol-
lows: 26
7. No funds deposited in escrow shall he
withdrawable without the signature of a representa-
tive of both the First and Second Parties, and it is
anticipated that one-half of the escrow money shall
be withdrawn when the manuscript is delivered to
the printer for said Atlas, and the remaining half of
the escrow shall be withdrawn when the Atlas has
been completed by the printer.
8. In the event the First Party does not print an
Altas by May Ist, 1971, and deliver the same to the
purchasers of said Atlas, said First Party shall
refund to all purchasers of the Atlas any payment
which said purchasers may have made.
It does not appear that the amount of sales made by
American Atlas and placed in escrow during either 1970
2. It is noted that this is not the amount of the money order which he
deleted from American Atlas and assigned as interim earnings to the
second quarter.
2s Rodgers is the "First Party."
1164
KANSAS REFINED HELIUM COMPANY
or 1971 was included in gross income. The General
Counsel contended at the hearing that the escrow depos-
its were not reportable as income until released from
escrow in 1971. Accordingly, the General Counsel has
prorated the $2,485 and $3,465 placed in escrow in 1970
and 1971, respectively, among the 1971 quarters equally
since the entire amount was returned in the latter year. I
conclude this to mean that he conceded the fact $2,485
placed in escrow in 1970 was not included in gross re-
ceipts. Respondent contends that they were reportable in
the year that American Atlas made the sales and re-
ceived the money. The General Counsel did not brief his
position. I am convinced, however, that the General
Counsel's position is wrong. I have gleaned from "Mer-
ten's Law of Federal Income Taxation," sections 10.01,
10.05, and 12.105, that a taxpayer may not select the year
in which to reduce income to possession, as has been
done by the Rodgerses. The funds from the sales which
the Rodgerses made were placed in their own bank ac-
count and were under their unfettered command until
well over $1,000 was accumulated each time a check was
written to the escrow holder. Had the Rodgerses de-
faulted under the agreement, those funds would not have
been returned to them and, according to the General
Counsel's theory, would apparently have escaped tax-
ation. I am convinced this is not the law. Accordingly,
an adjustment should be made by increasing the income
of American Atlas in the amount of $2,485 for 1970 and
$3,465 for 1971.
It appears from the working papers of the Rodgerses'
accountant that $219.15 identified only as "other"
income was included in the American Atlas gross re-
ceipts. Respondent would delete that amount, which is
proper. Other adjustments which Respondent seeks to
make to the 1970 American Atlas interim earnings do
not, in my review require detailed analysis. They appear
to be based on conclusions and assumptions reached
without the benefit of the original accounting records
which may well explain the discrepancies which Respon-
dent claims exist. In this regard, Respondent would make
an adjustment for payments made to Ted Rodgers in
excess of the amount reported on IRS Form 1099. It
may well be that the Form 1099 is in error. An adjust-
ment is claimed for a $20 payment for 1969 tax return
preparation that is not a cost of doing business of Ameri-
can Atlas. That item is not listed on schedule C of the
1970 return and I note that the accountant's papers that
accompany the 1970 tax return, Board's Exhibit 56, lists
an "accounting" expense item of $20 which would be a
proper deduction. Further, the car expense adjustment
which Respondent would make to acceptable IRS com-
putations is not warranted. Accordingly, the adjustments
made for Overland Cartographers income, the ABC
Water Well loss, the money order of $219.50, and the
escrow payments leaves American Atlas with a net
income in 1970 of $6,467.73. Respondent further claims
that Rodgers understated the number of atlases sold and
seeks to make a further adjustment to net income by
adding "estimated additional book sales" of $1,613 for
1970, and "estimated unreported" book advertising and
biography sales totaling $9,004 in 1971 and $12,995.18 in
1972.27 While I am neither an expert in accounting or in
the field of taxation, I have spent many hours studying
and tracing through the many schedules prepared by Re-
spondent's CPA, the tax returns of the Rodgerses, the
record testimony, and the many exhibits and find that
many of the adjustments Respondent would make to net
income, including "estimated unreported" book advertis-
ing and biography sales, are based at least in part on
speculation, estimates, assumptions, and/or conclusions
based thereon, which, of course, are not supported by
documentary evidence. The evidence does indeed dis-
close a number of business expense deductions improper-
ly taken, and I have endeavored to make the adjustments
so that the net income from the businesses is more accu-
rately reflected. I do not conclude, however, that the de-
ductions taken reflect an attempt on the part of the Rod-
gerses to defraud the United States Government or to
undermine the Board's remedial processes. The fact that
the Rodgerses' bookkeeping is not errorless cannot be
taken as evidence of a plan to conceal earnings. Arduini
Manufacturing Corp., 162 NLRB 972, 975 (1967). Ac-
cordingly, I conclude that the adjustments which Re-
spondent seeks to make for "estimated unreported" book
advertising and biography sales for 1970, 1971, and 1972
should be disallowed, and that 50 percent of the net
income of $6,467.73 for 1970, or $3,233.87, is the proper
amount of interim earnings attributable to Rodgers and
that it should be apportioned between the third and
fourth quarters in the amount of $1,616.93 each.
Respondent also seeks to include as interim earnings in
the third quarter, checks dated August 2 for $95 and
August 26 for $57.50 from Jack Parr which were com-
missions earned by Rodgers. Mrs. Rodgers testified that
the earlier check was not reported because expenses ex-
ceeded the income and that at the years' end they forgot
about it. They also forgot about the second check. As
they were admittedly income to Rodgers, the total, or
$152.50, should be added to interim earnings for the
third quarter.
1971-First Quarter: Schedule C of the 1971 Federal
tax return for American Printing shows a loss for the
year of $1,431.66. The General Counsel initially assigned
one-half of the loss to Rodgers and apportioned it equal-
ly between the four quarters for a net loss of $178.83 per
quarter. When it was disclosed that Rodgers had not de-
clared the funds placed in escrow as income, the General
Counsel amended the backpay specification to report
one-fourth of the entire $5,950 in each 1971 quarter.2 8
This matter has been discussed in the previous section
wherein it was concluded, in agreement with Repson-
dent's contention, that $3,465, which was deposited in
escrow in 1971, is reportable as income in 1971.
Respondent seeks to make 19 adjustments to the
$1,431.66 loss reported on the tax return. The adjust-
ments are found in Respondent's Exhibit 78, page 26. By
identifying the deposits and comparing them with the tax
return, the CPA determined that two deposits had been
27 Respondent's estimate of atlases sold far exceeds the number that
were printed.
28 The General Counsel did not attribute 50 percent of the amount to
Mrs. Rodgers
1165
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
duplicated, resulting in an overstatement of sales by
$2,791.65. This is a valid adjustment. He made an adjust-
ment to delete from gross receipts $286.27 reported as
commissions from Overland Cartographers. The amount
reported in the return is incorrect as evidenced by the
pay stub showing $366.77 with a net of $286.27 after de-
ductions. The $366.17 had been prorated 50 percent to
each of the Rodgerses and included separately in interim
earnings. That adjustment is proper. A proper adjustment
was made to add back the $3,465 in escrow deposits
which had been improperly deducted as printing ex-
penses. A proper adjustment has been made to delete
$400 paid on a camera and deducted as printing expenses
while at the same time claiming depreciation on the cost
of the camera. In May 1971, the Rodgerses moved their
business into a commercial building in McPherson,
Kansas, for which they paid $175 in rent per month.
Their first check, totaling $380, included a refundable de-
posit of $175. The amount of the deposit became a refun-
dable asset of the company and was improperly deducted
as rent on the tax return. Sometime in mid-October or
early November, the Rodgerses moved into the apart-
ment which was located on the second floor of the com-
mercial building, and thereafter occupied it as a personal
residence. The building also contained a full heated base-
ment in which the business inventory was stored. The
basement also contained a Ping-Pong table and was used
for personal living an indeterminate amount of time. Re-
spondent would make an adjustment based on 50 percent
of the personal rent paid and deducted by the business.
The General Counsel would apportion only a third of
the rent to personal use. Inasmuch as the business occu-
pied one floor, the personal residence another floor, and
both the business and family shared in the use of the
basement, I conclude that the rent should be apportioned
equally between business and personal use. Accordingly,
an adjustment of $175 is warranted in 1971 to delete
from business expenses the personal portion of the rent
for the last 2 months of the year, and an adjustment in
1972 to delete one-half of the rent is also warranted. Util-
ities for the entire building were paid for and deducted
as business expenses. The adjustment for personal use
made by Respondent of $26.71 for 1971 and for one-half
of the utility bills paid and deducted by the business in
1972 is proper. When the Rodgerses moved into the
apartment above the business, they had an extention of
the downstairs business telephone installed in the apart-
ment. The entire phone bill, for both personal and busi-
ness use, was deducted as a business expense. Respondent
contends that an adjustment should be made to delete the
personal portion. Respondent determined that the Rod-
gers' average monthly phone bill for the 10 months prior
to commencing American Atlas was $54.09, and that the
average monthly phone expense for the 30 month period
American Atlas operated between July 1, 1970 and De-
cember 31, 1972, was $102.59. Respondent's CPA con-
cluded, therefore, that, while the percentage of personal
use based on "before and after" commencing American
Atlas was 52.7 percent, a conservative percentage to use
in interim earnings computations would be 30 percent.
He would therefore make an adjustment of $473.39 for
the entire year of 1971. The General Counsel concedes
in his brief that an adjustment is proper, but would
deduct the average monthly pre-American Atlas personal
expense, or $54.09. The formula used by Respondent pre-
sumes that, as more business calls were made after the
commencement of American Atlas, a proportionate in-
crease was necessarily made in personal use. This, in my
view, is not a valid assumption. Accordingly, a monthly
adjustment of $54.09, the average monthly personal
phone bill before American Atlas commenced oper-
ations, is the proper telephone adjustment and totals
$649.08 per year. 29 For reasons stated earlier, the adjust-
ment Respondent would make in the automobile
allowance is rejected.
Respondent would make a 1971 adjustment for sales
tax collected in 1970 and paid in 1971 in the amount of
$382.95 on the ground it had not been included in
income in 1970. What, if any, effect the fact that the
1970 schedule C was filed on an accrual accounting basis
had, whereas the 1971 schedule C was filed on a cash
basis, or whether Respondent's CPA took this fact into
consideration, was not revealed. In any event, no show-
ing has been made that IRS has found fault with the pro-
cedure followed in filing the tax returns for either 1970
or 1971. Consequently, the adjustment is denied.
Respondent would deduct from expenses $40 which
the CPA testified he was able to identify as interest on a
personal loan which was paid by the business. I have
been unable to find in the record any substantiating evi-
dence, and therefore deny this adjustment. Further, its
effect upon the overall backpay is relatively insignificant.
Respondent would make an adjustment for refundable
utility deposits to Kansas Power and Light Co. and the
Board of Public Utilities, totaling $125. They are refun-
dable assets and were improperly deducted as expenses.
That adjustment is proper.
Respondent contends that a deduction of $434.93 in
employer's FICA taxes was improper since it could find
no evidence of payment to the Federal Government for
those taxes. I have reviewed the cash disbursement re-
cords, Board's Exhibit 60, and have found that checks
payable to the Internal Revenue Service total
$1,627.91.30 In addition, there were checks to the Home
State Bank, numbers 5 and 135 totaling $757.61 in pay-
ment of further taxes, the entry for the former check in-
dicating "WH," and the latter merely labeled taxes. This
indicates the payment of further taxes through certified
or cashier checks. I conclude that this adjustment should
be denied.
Respondent seeks to make an adjustment of $271.57
for "loan repayments improperly deducted." The record
shows that on January 4, a relative, Ted Rodgers, was
paid $125 by check, which was deducted as commission
29 While Respondent's computations found in Resp. Exh. 60, p. 12, in-
dicate a total telephone expense of $1,577.98 paid to Southwestern Bell,
the daily cash receipts and disbursement records. Board's Exh. 60, show
there to be at least one and perhaps two other telephone systems from
which calls were made. That exhibit indicates that the total telephone ex-
pense in 1971 was $1,855.80. Two telephone bills per month leaves me to
conclude that the business was also paying the bills for the personal resi-
dence prior to moving into the apartment above the business in Novem-
ber.
3o Check numbers 460. 461. 478. 604 and 211
1166
KANSAS REFINED HELIUM COMPANY
expense. The check stub contains a notation that the
money was a loan. Mrs. Rodgers testified that the loan
was in the nature of a "draw" on future commissions.
Respondent argues that, since the Rodgerses did not sub-
stantiate that Ted Rodgers actually earned this money
later in commissions, that it was improperly deducted. I
have examined the cash receipts and disbursement re-
cords of American Atlas for 1971, Board's Exhibit 60,
and note many entries throughout the year evidencing
commission payments to Ted Rodgers. Whether the $125
loan was deducted from his later commissions is not
shown in the records. The balance of the $271.57, for
which the adjustment was sought, was not identified on
the record. As all doubts must be resolved against Re-
spondent, this adjustment is not allowed.
Respondent would make an adjustment of $1,483.53
for items included in deductions on the tax return that
were paid from the Rodgerses' personal bank account,
but "were not substantiated as business costs and there-
fore were not included as a reduction of earnings."
These items were not further identified. In the absence of
identification of the items, the doubt raised cannot be re-
moved and must be resolved against Respondent. Re-
spondent was able to identify, however, commissions
paid from the personal account which were not deducted
from earnings, and concedes that an additional $265.25 in
commissions was not included in the loss shown on the
1971 tax return. Accordingly, an additional expense ad-
justment is warranted in that amount.
Respondent would also make an adjustment to delete
as a business expense the amount of depreciation of assets
taken on the tax return on the ground that they "ulti-
mately have no cost." Respondent's CPA explained that
"depreciation, in itself, "is a concept which is based on
cost and that the theory of depreciation is a method by
which the cost of an asset is recovered through the de-
preciation process. The fact that these assets were pur-
chased with borrowed moneys which ultimately were
never repaid, well, then these assets, in essence, had no
cost and therefore the theory of depreciation would not
apply." He explained that the assets had been purchased
with borrowed money which had been repaid when the
Rodgerses obtained an SHA loan in 1973, but that the
debt had not been reduced by the SHA loan; and that,
when the SHA loan was defaulted in later years, the net
result was that the money borrowed was never repaid.
He conceded that the deduction "would probably be al-
lowed for 1971" by tax authorities, but that, if the debt
was forgiven in a later year, the depreciation for tax pur-
poses would in effect be recaptured and the economic
benefit of the forgiven debt recognized in the year it was
forgiven; and that, if a lawsuit brought by the SHA
against the Rodgerses, which is now pending, is success-
ful, and the SHA debt paid off, then the 1971 deduction
would have been proper. Accordingly, the adjustment
Respondent seeks lacks validity and is denied.
Respondent would make an "inventory adjustment" in
the amount of $6,036.95 for 1977 and $6,299.42 for 1972,
on the ground that the tax returns for those years failed
to list inventory and therefore resulted in an understate-
ment of income. The method of arriving at the inventory
adjustment is found in Respondent's Exhibit 65 and ex-
plained by the CPA on the record. He testified that he
determined the inventoriable costs which were deducted
in 1971, 1972, and through February 28, 1973, totaled
$44,487.14. The difference between that figure and the
inventory shown on the balance sheet submitted to the
SHA in March 1973, $14,582, left $29,905.14. which is
the amount he claimed should have been deducted as in-
ventoriable costs during the entire period. A percentage
was struck for each of the years between what he deter-
mined to be the inventoriable cost for each of the peri-
ods and the overall total, which was applied against the
March 1973 inventory to arrive at the understatement of
net income for each of the periods. It was claimed that,
since there was inventory on hand that did not show in
the tax return, there was, in effect, unreported income.
Just what Respondent's CPA identified from either the
1971 or 1972 tax return as "inventoriable" assets was not
spelled out in the record, and, after examination of the
two returns, I am unable to arrive at his figures. Further,
it appears from a close examination of the return and the
markings thereon that the IRS has checked the 1971
return wherein no beginning or ending inventory is
shown, and has not found fault with it."a In this regard,
the IRS has apparently found no fault with the 1972
return, Board Exhibit 50, which specifically notes in
schedule C that there was no beginning or ending inven-
tory. In any event, I would be reluctant on the basis of
Respondent's estimates and my limited knowledge of ac-
counting and taxation to conclude that the IRS was in
error. Therefore, the inventory adjustments proposed for
1971 and 1972 are denied. The net effect of the allowable
adjustments to American Printing Company interim
earnings for 1971 is to convert the loss of $1,431.66
shown on the 1971 tax return to a profit of $240.96, 50
percent of which is attributable to Rodgers and is appor-
tioned between the four quarters equally, or $30.12 per
quarter.
The 1971 tax return shows a loss of $24.60 for ABC
Water Well (called Tank Truck Service in the return),
all of which the General Counsel places in the first quar-
ter. Respondent's Exhibit 78, page 33 (also Resp. Exh.
67, page 33) sets forth Respondent's computations in ar-
riving at a net income of $38.56 for the year, which it
would apportion equally between the four quarters at
$9.64 per quarter. The tax return itemizes four business
deductions totaling $361.90, including depreciation of
$35.90, rent, salaries and wages, and electricity, while
Respondent lists only two, electricity and commissions.
In the absence of additional evidence, and as doubts must
be resolved against Respondent, I conclude that the loss
specified in the tax return is more reliable and assign it,
as the backpay specification shows, to the first quarter.
1972-First Quarter: The parties stipulated that Rod-
gers was reinstated by Respondent on March 23, that he
worked for 12 hours during that payroll period which
ended April 2, and that he was paid his first paycheck on
April 8, which falls within the second quarter. In his
brief the General Counsel concedes that interim earnings
:" Compare the markings on Board's Exh 49, a certified copy of the
1971 return hich w.as obtained from the IRS, with Board's Exh 14, the
taxpayers cops of the same return
1167
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
should be placed in the quarter in which received rather
than the quarter in which the work was performed.
There were, therefore, no interim earnings from Respon-
dent in the first quarter as alleged in the backpay specifi-
cation.
Sometime in 1971 the names of American Printing and
American Atlas were changed to Heritage Printing and
Family Heritage Society, respectively. Schedule C of the
1972 tax return shows a net profit for "Family Heritage
and Printing" of $3,478.06 with one-half, or $1,739.03, of
the profit of the "joint venture" assigned to Rodgers and
one-half to Mrs. Rodgers. Respondent seeks to make 11
adjustments to the $3,478.06 profit reported in the tax
return. The adjustments are found in Respondent's Ex-
hibit 78, page 34. The first three adjustments, totaling
$335.98, were for interest expense, salaries, and supplies
which were not deducted on the tax return. In view of
Respondent's concession, the adjustments are allowed.
Respondent's CPA was able to identify a commission
check for $8 which was voided, but which had been in-
cluded as a deduction in arriving at net income. That ad-
justment is proper. Respondent made an adjustment for
personal rent paid by the business and deducted by the
business in the amount of $1,225. That adjustment, which
is one-half the total paid and deducted as a business ex-
pense, is proper as discussed in the previous section. The
next adjustment for personal utilities paid and deducted
as a business expense is also proper as earlier found. Re-
spondent would deduct 30 percent of the yearly total, or
$503.42, for personal use of the telephone paid and de-
ducted as a business expense.3 2 In the previous section, I
concluded that the most appropriate adjustment would
be $54.09 per month. Accordingly, an adjustment of
$649.08 is justified. The auto allowance adjustment, the
adjustments claimed for "depreciation of business assets
which have no cost" and the "inventory adjustment"
have been discussed earlier and are denied. Respondent
would also make an adjustment of $126.02 for what its
CPA stated was interest paid on personal loans which
were deducted by the business. While an adjustment
would be in order if the facts to support it were proven,
I have been unable to identify in the record any substan-
tiating evidence, and therefore deny the adjustment.
Consistent with my earlier findings, the proposed in-
ventory adjustment and the adjustments for estimated ad-
ditional book advertising and biography sales are disal-
lowed. The net effect of the allowable adjustments to
Family Heritage and Printing interim earnings for 1972,
is to increase net income by $1,778.69 to $5,266.75, one-
half, or $2,628.38, of which is attributable to Rodgers as
interim earnings. 33 Apportioned between the quarters on
the basis of the number of weeks per quarter (12 weeks
in the first and third quarters and 14 weeks in the second
and fourth quarters) results in net interim earnings of
a2 Thirty percent of the total 1972 phone expense of $2,296.31 is
$688.89. See p. 12 of Resp. Exh. 60.
33 Scheduie C or the 1972 Federal income tax return recites at the
bottom of p. I that the business was a "joint venture" and assigns one-
half of the net profit to Rodgers and one-half to Mrs. Rodgers. Schedule
SE, Computation of Social Security Self-Employment Tax, claims the
one-half of the net profit from the business as Rodgers' earnings for
social security purposes.
$606.55 in the first and third quarters and $707.64 in the
second and fourth quarters.
The 1972 tax return does not disclose any business ac-
tivity from ABC Water Well (Tank Truck). The record
discloses two bank deposit slips in the first quarter of the
year totaling $220 which Mrs. Rodgers identified as
Water Well receipts. Respondent has deducted electricity
expenses amounting to $55.96, leaving a net income of
$164.04, all of which was earned in the first quarter and
constitutes interim earnings in that quarter.
On March 9, Mrs. Rodgers deposited a check from
Bonnie Gfeller in the amount of $50.78, which Respon-
dent would include as interim earnings. Mrs. Rodgers
did not recall what the check was for, but stated that
neither she nor her husband had done any work for
Gfeller in 1972. In any event, Mrs. Rodgers' earnings
would not qualify as interim earnings for her husband,
and, without evidence that the check was for a joint ven-
ture, would not be partially chargeable to him. Therefore
Respondent's contention is without merit. The same
ruling applies to the check from Gfeller to Mrs. Rodgers
in the amount of $132.73, which was deposited in the
third quarter. Mrs. Rodgers thought it was for an exer-
ciser which she had sold to Gfeller, but was not sure.
Her earnings do not constitute interim earnings attribut-
able to her husband.
Second Quarter: As noted in the preceding section,
Rodgers was reinstated by Respondent on March 23, but
did not receive a check for that quarters' work until the
second quarter. Respondent's pay records disclose that
Rodgers received seven paychecks during the second
quarter totaling $2,197.80. That amount is properly
chargeable to the second quarter as interim earnings as
contended by Respondent.
Third Quarter: Rodgers was discharged again on July
II and was reinstated on September 30, ending the back-
pay period. Respondent's records show that Rodgers re-
ceived two checks totaling $862.40 during the quarter.
That amount, of course, is attributable to third quarter
interim earnings.
1973: There was considerable testimony surrounding a
loan the Rodgerses secured from the Small Business Ad-
ministration in 1973. Respondent contends that the Rod-
gerses' "errant behavior" regarding the income tax re-
turns, the loan from the SBA, and other matters covered
herein should preclude him from recovering any back-
pay, or, in any event, that "the Board should withhold
the payment of any such backpay pending the resolution
of any action taken by the governmental agencies." I
find no justification for withholding payment of backpay.
Conclusions
Based on the foregoing and the whole record, I con-
clude that the total net backpay due Arel Rodgers is
$36,926.18.: 4 This backpay is based on the computations
set forth in Appendix A which is attached to this Supple-
mental Decision. [Appendix A omitted from publication.]
3' Appropriate credit shall be given for the principal and interest paid
Rodgers by checks dated March 1, 1974, totaling 3,500 backpay and
$1,633 in interest.
1168
KANSAS REFINED HELIUM COMPANY
Upon the foregoing findings of fact, conclusions of
law, and the entire record, and pursuant to Section 10(c)
of the Act, I hereby issue the following recommended:
ORDER3 5
The Respondent, George A. Angle d/b/a Kansas Re-
fined Helium, Otis, Kansas, its officers, agents, succes-
's In the event no exceptions are filed as provided by Sec. 102.46 of
the Rules and Regulations of the National Labor Relations Board. the
findings, conclusions. and recommended Order herein shall, as provided
sors, and assigns, shall make whole Arel Rodgers by
payment to him as net backpay the amount of $36,926.18,
plus interest accrued at the rate of 6 percent per annum
to be computed in the manner specified in Isis Plumbing
& Heating Co., 138 NLRB 716 (1962), until payment of
all backpay due, less tax withholding required by Federal
and state laws. Credit shall be given for principal and in-
terest payments made by checks dated March 1, 1974.
in Sec 102 48 of the Rules and Regulations, be adopted by he Board and
become its findings, conclusions, and Order. and all objection, thereto
shall be deemed waived for all purposes
1169