Landmark Industries, Inc.

National Labor Relations Board - Board Decisions

Mar 10, 1986

278 N.L.R.B. 911 (N.L.R.B. 1986)

LANDMARK INDUSTRIES 911
Landmark Industries, Inc. and Upholsterers' Inter-
national Union of North America, Local 15,
AFL-CIO. Case 21-CA-22391(E)
10 March 1986
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND BABSON
On 20 December 1985 Administrative Law
Judge Earldean V.S. Robbins issued the attached
supplemental decision . The Applicant filed excep-
tions.
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
has decided to affirm the judge 's rulings, findings, i
and conclusions and to adopt the recommended
Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the application of the Appli-
cant, Landmark Industries , Inc., Los Angeles, Cali-
fornia, for an award under the Equal Access to
Justice Act is dismissed.
I Based on the record , we agree with the judge that the General Coun-
sel's position was substantially justified . We believe that Congress, in re-
vising the Equal Access to Justice Act, 5 U.S.C. § 504 ( 1982), as amend-
ed by Pub. L. 99-80, 99 Stat. 183 (1985), did not alter but merely clari-
fied the definition of "substantially justified ." "Substantially justified"
means more than "mere reasonableness ." H.R. Rep. 99-120 at 9 (1985).
SUPPLEMENTAL DECISION
Equal Access to Justice Act
EARLDEAN V.S. ROBBINS , Administrative Law Judge.
On 27 June 1985 I issued my decision in the above-enti-
tled proceeding finding that the Respondent, Landmark
Industries, Inc.," had not refused to bargain collectively
in good faith with the Union in violation of Section
8(a)(1) and (5) of the Act. No exceptions were filed and
on 29 July 1985 the Board adopted my decision dismiss-
ing the complaint in its.entirety.
On 23 July 1985 the Respondent filed with the Board
an application for an award of attorney fees and expenses
under the Equal Access to Justice Act. Subsequently, the
General Counsel filed a motion to dismiss this applica-
tion, asserting that it was premature , because it was filed
6 days prior to the Board 's Order adopting my recom-
mended Order . On 30 July 1985 the Board , pursuant to
r Respondent's name has been changed to Sealy Furniture-Western.
278 NLRB No. 129
Section 102 . 148(b) of the Board's Rules, issued an order
referring this matter to me for appropriate action. There-
after, on 27 August 1985 , Respondent filed a motion for
leave to refile the application for an award of attorneys
fees and expenses and memorandum of points and au-
thorities in opposition to the General Counsel 's motion
to dismiss. By supplemental order dated 29 August 1985
the Board. granted Respondent leave to refile its applica-
tions and referred the matter to me for appropriate
action. 2
On 25 September 1985 the General Counsel filed a
motion to dismiss the refiled application contending: (1)
that the General Counsel was substantially justified in
having issued the complaint and having proceeded to a
hearing; and (2) that the application is defective in that it
fails to fully document the fees and expenses incurred
solely in an "adversary adjudication" pursuant to Section
102.147(h) of the Board's Rules and Regulations.
The Equal Access to Justice Acta (EAJA) provides
that an award should be made to an eligible, prevailing
party unless the position of the agency was "substantially
justified" and "special circumstances" do not render an
award unjust .4 The EAJA does not define substantially
justified, however, its legislative history characterizes it
thusly:
The test of whether or not a Government action
is substantially justified is essentially one of reason-
ableness . Where the Government can show that this
case had a reasonable basis both in law and fact, no
award will be made . In this regard, the strong de-
terrents to contesting Government action require
that burden of proof rest 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 fact 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's 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. No. 1418 , 96th Cong., 2d Sess . 10 (1980), re-
printed in 5 U.S. Code Cong . & Ad. News, 4984, 4989.
See Enerhaul, 263 NLRB 890 (1982). See also S. Rep.
No. 253 , 96th Cong., 2d Sess . 6-7 (1980).
The meaning of "substantially justified " was further
clarified in Iowa Parcel Service , 266 NLRB 392, 392-393
i On 16 August 1985 the Board issued an order denying Respondent's
petition to increase the maximum rate for attorneys' fees.
' 5 U.S.C. § 504 (1982), as amended by Pub. L. 99-80, 99 Stat. 183
(Aug. 5, 1985).
4 5 U.S.C. § 504(axl); 5 U.S.C. § 504 (b)(1)(B).
912 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
(1983), wherein the Board adopted the following lan-
guage of the administrative law judge:
The burden of establishing substantial justification is
on the Government and the test of whether or not
governmental action is substantially justified is one
of reasonableness . The Government, to defeat an
award , must establish that its position had a reason-
able basis in fact and law. However, the fact that
the Government lost its case does not give rise to
any presumption that its position was unreasonable
and the "substantially justified" standard does not
"require the Government to establish that its deci-
sion to litigate was based on a substantial probabili-
ty of prevailing." s Moreover , as the Board has re-
cently pointed out, the Government's position
might still be deemed reasonable in fact and law
notwithstanding that the General Counsel failed to
establish a prima facie case.6
S S. Rept . No. 96-253, 96th Cong ., 1st Seas. 6-7, 14-15 (1979);
H.R. Rept . No. 96-1418, 96th Cong., 2d Sess . 10-11 (1980); Spen-
cer Y. NLRB, 111 LRRM 2065 , 2066 (D.C. Cir. 1982).
a See Enerhaul, Inc., 261 NLRB 890 (1982).
In the underlying unfair labor practice case the Gener-
al Counsel alleged that Respondent engaged in bad-faith
bargaining with the Union in violation of Section 8(a)(5)
and (1) of the National Labor Relations Act. Specifical-
ly, the General Counsel contended that statements made
by Respondent President Jerry Bertram to Union Busi-
ness Manager Raymond E. Valdez constituted an at-
tempt to "drive a wedge" between the Union and the
employees; and that Respondent's bad faith was evi-
denced by its conduct at the bargaining table which,
though not itself alleged as evidence of bad-faith bargain-
ing, when coupled with Bertam 's statements, demon-
strate that Respondent had no serious intent to reach an
agreement.
In support of this contention the General Counsel ad-
duced evidence which, if credited, would have estab-
lished that (1) during negotiations subsequent to the
strike Bertram told Valdez he had lost close to $ 100,000
since the strike began and that these losses would have
to be recouped through benefit concessions in the con-
tract-specifically mentioning vacations, holidays and
pension possibilities; (2) although the Union made a
number of concessions , Respondent never made any
counteroffers; (3) when Valdez asked Bertram what it
would take to settle the strike, Bertram said Valdez
should have thought of that before calling the strike, that
Respondent's strike losses were so large it would be im-
possible to recoup them through concessions in a collec-
tive-bargaining agreement; (4) that Bertram also told
Valdez there was no way the Union would ever come
back into the plant; and (5) after the Union had made nu-
merous concessions Bertram, for the first time, demanded
changes in the seniority and union -security provisions so
that striker replacements would not be required to join
the Union . Essentially the General Counsel argued that
this conduct , when coupled with Respondent's adamant
insistence that the piecework provision of the contract be
modified, and Bertram 's poststrike suggestions to Valdez
that the Union disclaim any interest in representing the
employees , indicated an intent on the part of Respondent
not to reach an agreement.
Although I was not persuaded by this argument, I do
not ford it unreasonable . Critical to my fording that Re-
spondent's conduct was not violative of the Act was my
conclusion that Valdez' testimony was not completely
credible and that Respondent's proposed modification of
the piecework provision was proferred and pursued in
good faith . Had I credited Valdez, and concluded to the
contrary as to Respondent's piecework position, infer-
ences adverse to Respondent's position could reasonably
have been drawn which would have adequately support-
ed the General Counsel 's position and the question of
Respondent's bad faith would have been a close one. Ac=
cordingly, I find that the General Counsel had a reasona-
ble basis both in law and fact , and therefore had substan-
tial justification, for issuing the complaint in this matter
and for prosecuting it through the hearing stage . In view
of this finding , I do not reach the other contentions set
forth in the General Counsel 's motion.
On these findings of fact and conclusions of law and
on the entire record , I issue the following recommend-
ed5
ORDER
It is ordered that the application of the applicant
Landmark Industries , Inc. for an award under the Equal
Access to Justice Act is dismissed.
a 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-
posm.