McLoughlin Manufacturing Corp.

National Labor Relations Board - Board Decisions

Aug 1, 1975

219 N.L.R.B. 920 (N.L.R.B. 1975)

920 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
McLoughlin Manufacturing Corporation ; Lady Jo,
Inc.; J . Sidney Smith, Individually and as a Director
and Officer of McLoughlin Manufacturing Corpo-
ration and Lady Jo, Inc .; Walter Eckerling, Individ-
ually and as a Director and Officer of McLoughlin
Manufacturing Corporation and Lady Jo, Inc. and
International Ladies' Garment Workers' Union,
AFL-CIO. Case 25-CA-2397
August 1, 1975
SECOND SUPPLEMENTAL DECISION AND
ORDER'
BY CHAIRMAN MURPHY AND MEMBERS FANNING
AND PENELLO
On April 17, 1975, Administrative Law Judge
Henry L. Jalette issued the attached Second Supple-
mental Decision in this proceeding. Thereafter, Re-
spondent Walter Eckerling filed exceptions and a
supporting brief and Respondent J. Sidney Smith
filed exceptions. The General Counsel filed a brief in
answer to the exceptions.
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 Second Supplemental Decision in light of the
exceptions and briefs and has decided to affirm the
rulings, findings, and conclusions of the Administra-
tive Law Judge and to adopt his recommended Or-
der.
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 Respondents McLoughlin Manufacturing
Corporation ; Lady Jo, Inc.; J. Sidney Smith; and
Walter Eckerling, Peru , Indiana , their officers,
agents, successors , and assigns, shall take the action
set forth in the said recommended Order.
i The Board's Supplemental Decision and Order appears at 182 NLRB
958 (1970); its original Decision and Order at 164 NLRB 140 (1967)
SECOND SUPPLEMENTAL DECISION
HENRY L. JALETFE, Administrative Law Judge: This is a
supplementary proceeding to determine the amount of
backpay due former employees of the above-named Re-
spondents for any loss of earnings they may have suffered
as a result of the Respondents' unfair labor practices in
violation of Section 8(a)(1) and (5) of the Act. On June 1,
1970, the National Labor Relations Board issued a Supple-
mental Decision and Order finding that the above-named
Respondents violated Section 8(a)(1) and (5) of the Act by
closing operations of a plant in Peru, Indiana, without no-
tice to, or consultation with, the above-named labor orga-
nization which was the exclusive bargaining representative
of the employees at the plant.' On September 6, 1972, the
United States Court of Appeals for the District of Colum-
bia entered a judgment enforcing the Board's Order. 463
F.2d 907. On November 21, 1974, a controversy existing
over the amount of backpay due under the terms of the
Board's Order as enforced by the judgment of the court of
appeals, the Regional Director of Region 25 issued a back-
pay specification and notice of hearing.
In due course, Respondent McLoughlin Manufacturing
Corporation (hereinafter referred to as Respondent Mc-
Loughlin), Respondent Walter Eckerling (hereinafter re-
ferred to as Respondent Eckerling), and Respondent J.
Sidney Smith (hereinafter referred to as Respondent
Smith) filed their answers. No answer was filed by Respon-
dent Lady Jo, Inc. On February 25, 1975,2 General Coun-
sel filed a motion to strike certain portions of Respondents'
answers to backpay specification and a motion that certain
allegations of the backpay specification be deemed to be
admitted to be true. A response was duly filed by Respon-
dents McLoughlin and Eckerling and General Counsel's
motions were referred to the Administrative Law Judge
assigned to the case for ruling at the hearing. On March 6,
the Regional Director issued an amendment to the back-
pay specification. Answers to the amendment were due on
March 17, the date of the hearing. None had been filed as
of that date, nor since.
On March 17, hearing on the backpay specification, as
amended,3 was held in Peru, Indiana. None of the Respon-
dents appeared. The record indicates that the Respondents
were on notice of the hearing and chose not to attend .4 In
the circumstances, hearing was held in accordance with the
notice given.
No evidence was introduced at the hearing. General
Counsel asked for ruling on the motions filed before hear-
ing and moved for summary judgment. The motions were
i The Board's Supplemental Decision and Order is reported at 182 NLRB
958 (1970).
2 Unless otherwise indicated , all dates hereinafter are 1975.
3 The specification was further amended at the hearing ; however, there
was no prejudice to Respondents as the amendment was for the purpose of
conceding interim earnings not previously known to the General Counsel.
The record indicates that all Respondents were served with the backpay
specification and notice of hearing. The original hearing date was changed
and an order rescheduling hearing was issued on January 10, which was not
delivered to Respondents McLoughlin , Lady Jo, and Smith . On March 11,
a telegram was sent to all parties notifying them of the date of the hearing.
The record shows delivery on Respondents Eckerling and Smith, but not
Respondents McLoughlin and Lady Jo. However , as both Smith and Ecker-
ling were officers of Respondents McLoughlin and Lady Jo, service on
either of them constituted service of the order rescheduling hearing. Addi-
tionally, service was made on Earl Yaffe , attorney for Respondents Mc-
Loughlin and Eckerling , and John Bacheller, Jr., attorney for Respondent
Smith . and correspondence to them from General Counsel indicates that
Respondents were on notice of the hearing to be held on March 17.
219 NLRB No. 113
McLOUGHLIN MANUFACTURING CORPORATION, ET AL. 921
taken under advisement for ruling herein.
Upon the entire record in this proceeding, I make the
following:
Ruling on Motions
A. Failure To File Answer
As noted earlier, Respondent Lady Jo has filed no an-
swer to the backpay specification . The only explanation
offered for such failure was offered by Walter Eckerling,
who was an officer and director of Respondent Lady Jo,
and who averred in response to General Counsel's motion
that the allegation of the specification be admitted to be
true as to Respondent Lady Jo, that Lady Jo is now aban-
doned and defunct. No evidence was adduced to support
the averment so that the record does not permit a finding
of defunctness as an explanation for the failure to file an
answer . If Respondent Lady Jo is in fact defunct it may
not be able to comply with the order herein recommend-
ed.5 This is not a matter of determination at this time. The
issue at present is the amount of backpay which Respon-
dent Lady Jo is liable for. As no answer was filed by Re-
spondent Lady Jo as required by Section 102.54 of the
Board's Rules and Regulations , Series 8, as amended (here-
inafter referred to as Sec. 102 .54), I deem the allegations of
the backpay specification , as amended, to be true and here-
by grant General Counsel 's Motion for Summary Judg-
ment against Respondent Lady Jo.
B. Motion To Strike Portions of Respondents' Answers 6
1. Defunctness of Respondent McLoughlin
Respondent McLoughlin has filed an answer to the
backpay specification which General Counsel moved be
stricken for failure to conform to the requirements of Sec-
tion 102.54. In response to such motion , Respondent Eck-
erling averred that Respondent McLoughlin was aban-
doned in November 1974 and became defunct. No
evidence was adduced in support of this averment and,
accordingly , for the reason given above with respect to a
like averment by Respondent Lady Jo, should an order
against Respondent McLoughlin be otherwise warranted,
the averment of defunctness is insufficient to withhold is-
suance of an order against it.7
3 It is not entirely clear what is intended by the averment that Respondent
Lady Jo is defunct and abandoned . Does this mean the corporation is dis-
solved and that the charter was surrendered? In most jurisdictions, statutes
govern the dissolution of corporations and impose restrictions and obliga-
tions on dissolution to preserve assets and protect creditors . Thus , even if
Respondent Lady Jo is defunct, it may be liable to suit under statutes of the
State of Alabama.
6 Respondent Smith adopted and incorporated in his answer the aver-
ments in the answer of Respondents McLoughlin and Eckerling. To the
extent General Counsel 's motion to strike portions of Respondents Mc-
Loughlin's and Eckerling's answer is granted, it is granted to Respondent
Smith 's answer.
7 The observations of In. 5 apply equally to Respondent McLoughlin.
2. Identity of discriminatees
The unfair labor practice committed by Respondents
herein was the relocation of a plant in Peru, Indiana, to
Uniontown, Alabama, without bargaining with the Union
about the effects of the relocation upon employees at the
Peru plant. To remedy this unfair labor practice, the Board
ordered Respondents to make the former Peru plant em-
ployees whole for any loss of pay they may have suffered
by reason of Respondent's relocation of the Peru plant, for
the period from June 10 to September 1, 1965. In enforcing
the Board's Order, the court of appeals agreed that an
award of backpay was appropriate; however, it modified
the beginning of the backpay period from June 10 to April
6, 1965.
The backpay specification issued by the Regional Direc-
tor named 75 employees entitled to backpay under the
terms of the Board's Order as enforced by the court. In
describing how the identity of these individuals was de-
termined, the backpay specification stated in paragraph 2
thereof "The discriminatees who are to be made whole for
losses suffered during the backpay period of April 6
through September 1, 1965, were identified from individual
and payroll records furnished to the National Labor Rela-
tions Board by the Respondents. These discriminatees are
identified and set forth in Appendix A."
In answer to the foregoing allegation, Respondents Mc-
Loughlin and Eckerling stated as follows: "Respondents
further state that they have no knowledge of how alleged
discriminatees were actually identified by the Regional
Counsel and deny that the persons named in Appendix A
are discriminatees within the meaning of the Act."
General Counsel asserts that this answer should be
stricken for failure to meet the requirements of Section
102.54 which provides, in pertinent part, that "The respon-
dent shall specifically admit, deny, or explain each and
every allegation of the specification, unless the respondent
is without knowledge, in which case the respondent shall so
state , such statement operating as a denial . Denials shall
fairly meet the substance of the allegations of the specifica-
tion denied. When a respondent intends to deny only a
part of an allegation, the respondent shall specify so much
of it as is true and shall deny only the remainder. As to all
matters within the knowledge of the respondent, including
but not limited to the various factors entering into the com-
putation of gross backpay, a general denial shall not suff-
ice."
It is clear that Respondents, McLoughlin's and
Eckerling 's answer to paragraph 2 of the backpay spec-
ification set forth above fails to meet the requirements of
Section 102.54. -The subject matter of the allegation in
paragraph 2 of the backpay specification is the-identity of
the former employees of Respondents whom Respondents
have been ordered to make whole and whose identity has
been alleged to have been obtained from the records of
Respondents. Respondents do not specifically- deny that
the individuals named in the backpay specification were its
employees during the backpay period, and, as this is a mat-
ter within the knowledge of Respondents, their failure to
do so is a failure to meet the requirements of Section
102.54. Accordingly, General Counsel's motion to strike
922 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Respondents' answer to paragraph 2 of the backpay spec-
ification is hereby granted.'
3. Gross backpay
Paragraph 3 of the backpay specification alleges that the
gross backpay was determined as follows : "The quarterly
gross backpay for each discriminatee was determined by
taking an average of the weekly earnings for each discrimi-
natee for the quarter preceding the backpay period. In
other words the gross backpay earned by each discrimina-
tee in the first quarter of 1965 was divided by the number
of weeks actually worked, thereby arriving at an average
weekly income . This amount is also reflected in Appendix
A."
In paragraph 3 of their answer, Respondents McLough-
lin and Eckerling have entered a general denial of allega-
tions described above. As noted above, a general denial of
"the various factors entering into the computation of gross
backpay" shall not suffice . Section 102.54 expressly states
"As to such matters, if the respondent disputes either the
accuracy of the figures in the specification or the premises
on which they are based, he shall specifically state the basis
for his disagreement, setting forth in detail his position as
to the applicable premises and furnishing the appropriate
supporting figures ." As Respondents McLoughlin's and
Eckerling's answer to paragraph 3 of the backpay spec-
ification fails to meet the requirements of Section 102.54, it
is hereby stricken.
In the case of Respondent Smith, he averred that he did
not have access to the records necessary to compute gross
backpay and therefore demanded strict proof thereof. Such
averment is insufficient basis for a general denial . Smith is,
or was , president of Respondents McLoughlin and Lady
Jo, and a principal stockholder. He therefore had access to
corporate records at one time . According to paragraph 2 of
the backpay specification , the discriminatees were identi-
fied from individual and payroll records furnished to the
Board by Respondents. If such records were available to
the Board, presumably they were available to Respondent
Smith. In any event, Respondent Smith has not stated
what, if any, steps he took to gain access to the records.
Accordingly, I deem this portion of Respondent Smith's
answer to be insufficient and it is hereby stricken.
4. Unemployment compensation
In paragraph 5 of their answer , Respondents dispute the
accuracy of the net backpay allegations of the specification
on the ground that the backpay specification has not taken
into account amounts received by the discriminatees as un-
employment compensation . Amounts received as unem-
ployment compensation are not deductible from the
amounts due discriminatees as gross backpay. N.L.R.B. v.
Gullets Gin Co., 340 U.S. 361 (1951). Accordingly, para-
graph 5 of the answer of Respondents McLoughlin and
Eckerling is hereby stricken?
6 Par. 9 of Respondents' answer appears to reiterate the same defense For
5. Vacation pay
Paragraph 7 of the backpay specification alleges that va-
cation pay was computed as follows: "Vacation pay due
each discriminatee was determined by Respondents' past
policy, practice , and bargaining agreement procedure in
that the amount paid for each hour of vacation pay to
which an employee is entitled was based on the worker's
average hourly rate for 1 year beginning January 1 to De-
cember 31 of the previous year. The vacation plan was
thereafter based on the formula : (a) One week 's vacation
pay for employees on the payroll for 1 year, but less than 3
years . (b) One-and-one -half week's vacation pay for em-
ployees on the payroll for 3 years , but less than 5 years. (c)
Two weeks of vacation pay for employees on the payroll
for 5 years or more."
Respondents have made a general denial of this allega-
tion which on its face relates to matters within the knowl-
edge of Respondents . Accordingly, as the general denial
fails to meet the requirements of Section 102.54 , Respon.
dents' answer to paragraph 7 of the backpay specification
is hereby stricken.
6. The backpay period
Paragraph 8 of the backpay specification , as amended,
contains the specific computations for each of the discrimi-
natees, including the backpay period for each . In para-
graphs 8(a), (b), and (c), Respondents deny that the back-
pay period begins on the date stated or ends on the date
stated , or that the amount is stated correctly. The backpay
period was fixed by the Board 's Order, as modified by the
court, from April 6 to September 1, 1965. The backpay
periods alleged in the specification are predicated on that
Order and modified in individual cases to conform to each
discriminatee 's layoff history in the period from April 6 to
September 1, 1965. Thus , it is matter contained in the
books and records of Respondents and within their knowl-
edge . Accordingly , a general denial is insufficient under
Section 102 .54, and paragraphs 8(a), (b), and (c) of the
answer are hereby stricken.
In further answer, Respondents alleged that the backpay
figures were distorted by reason of General Counsel's fail-
ure to take into account large turnover in employment ex-
perienced by Respondents throughout their existence at
Peru whereby "a large number of the alleged discrimina-
tees would have quit their employment of their own accord
in the normal course of events." In his motion to strike,
General Counsel asserts that such allegation of Respon-
dents is wild conjecture which cannot properly form a ba-
sis for computing backpay liability . Whether General
Counsel was requesting that the averment be stricken is not
clear , but it is not necessary to do so . The burden was on
Respondents to adduce evidence in support of their aver-
ment and they failed to do so.
The same conclusion applies to Respondents ' averment
that during the backpay period there was much work avail-
able in Peru . No evidence was adduced in support of the
averment.
reasons given above, par. 9 of the answer is stricken to the extent that it 9 The same defense is repeated in par. 8 of the answer. It is hereby
disputes the identity of the discnminatees stricken.
McLOUGHLIN MANUFACTURING CORPORATION , ET AL. 923
7. The individual liability of Walter Eckerling and
J. Sidney Smith
The principal defense of Respondents Eckerling and
Smith is that nothing in the Act , the Rules and Regulations
of the Board , or the findings or decisions of the Trial Ex-
aminer , the Board , or the court were intended to create a
personal liability on their part to pay backpay to the al-
leged discriminatees . Respondent Smith enlarges on this
defense by asserting that there has been no finding that he
is or has been an employer engaged in commerce within
the meaning of the Act.
General Counsel moved to strike the foregoing defense
on the ground that the issue had been previously decided
against Respondents Eckerling and Smith and was not now
reviewable . I agree . The record herein indicates that the
Order which was issued by the Board in its Supplemental
Decision and Order specifically ordered not only Respon-
dents McLoughlin and Lady Jo, but also Respondents
Eckerling and Smith to make whole their former employees
at the Peru , Indiana , plant , and the Judgment of the Unit-
ed States Court of Appeals for the District of Columbia,
dated September 6, 1972 , specifically orders Eckerling and
Smith (along with the corporate entities) to make whole the
former employees . Thus , it appears that Respondents Eck-
erling and Smith , by their answers, are attempting to reliti-
gate an issue already decided adversely to them . As there
appear no grounds to warrant relitigation , averments of the
answers denying individual liability are stricken.
On the basis of the foregoing rulings and the entire rec-
ord, I hereby grant General Counsel's Motion for Summa-
ry Judgment and make the following:
FINDINGS OF FACT AND CONCLUSIONS OF LAW
1. The backpay period is from April 6 , 1965, through
September 1, 1965.
2. The discriminatees identified and set forth in Appen-
dix A of the backpay specification are the employees enti-
tled to backpay under the terms of the Board 's Supplemen-
tal Decision and Order as modified by the Court of
Appeals for the District of Columbia.
3. An appropriate measure of the gross backpay due
each of the discriminatees herein is an average of his week-
ly earnings for the quarter preceding the backpay period
(i.e., the gross pay earned by each discriminatee in the first
quarter of 1965 divided by the number of weeks actually
worked) multiplied by the number of weeks in each quarter
of the backpay period during which each discriminatee was
entitled to backpay.
4. An appropriate measure of the vacation pay due each
discriminatee is the workers ' average hourly rate for 1 year,
beginning January 1 to December 31 of the previous year,
with each discriminatee receiving vacation pay on a formu-
la of I week 's vacation pay for employees on the payroll
for 1 year, but less than 3 years; 1-1/2 weeks for employees
on the payroll for 3 years , but less than 5 years; and 2
weeks for employees on the payroll for 5 or more years.
On the basis of the foregoing , and the concessions of the
Regional Director in the backpay specification , as amend-
ed, with regard to the interim earnings of the discrimina-
tees , as adjusted for expenses alleged to have been incurred
and which I find on the basis of the pleadings were incur-
red, I find that the discriminatees named in the backpay
specification are entitled to backpay in the amounts set
forth in the backpay specification, as amended , and I con-
clude that Respondents' obligation to make employees
whole in accordance with the Board 's Supplemental Order
as enforced by the Court of Appeals for the District of
Columbia shall be fulfilled by paying to such discrimina-
tees the amount set opposite their names in the recom-
mended Order below.
On the basis of the foregoing findings and conclusions, I
recommend that the Board issue the following recommend-
ed:
ORDER
Respondents McLoughlin Manufacturing Corporation,
Lady Jo, Inc ., J. Sidney Smith , and Walter Eckerling, their
officers , agents , successors and assigns , shall pay to the
following named employees as net backpay the amount set
opposite their names , less any tax withholding required by
law, plus interest at the rate of 6 percent per annum in
accordance with the formula prescribed in Isis Plumbing &
Heating Co., 138 NLRB 716 (1962).
Anni Ainora $273.45
Mary Badger $613.91
Edith Bardsley $244.68
Ruth Bayless $367.46
Harriet E. (Townsend) Bellar $ 181.51
Joy Lou Binion $873.33
Margaret Bonney $141.74
Katharine M. Brown $ 187.60
Alma Bryant $795.08
Ethel Carson $703.37
Opal Carter $920.28
Maxine J . (Phelps) Clark $778.70
Paulette Clayton $791.80
Marguerite E. Click $621.10
Kathleen K. Conner $679.63
Eleanor Jean Copeland $472.14
Erba Copeland $561.34
Isa Cress $620.44
Dorothy M. Crist $575.24
Ruth A . (Watts) Curnen $641.25
Ruth Douglas $308.44
Alice Easterday $461.92
Alma Fitzpatrick $780.92
Florence Flohr $401.89
Charlene F. (Bobo) Friedersdorf $ 4.02
Gertrude (Keplinger) Garber $900.85
Minnie L. Gillium $702.66
Evelyn Golding $904.80
Ruth Gordon $646.36
Ethel Mae Grandstaff $ 92.95
Faye E. Grimes $387.44
Dora Hack $509.44
Mary (Harmon) Hackett $231.69
Alice Hendrix $590.81
924 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Mossie Hendrix $441.14 Willodean L . Nelson $750.90
Vicki A. Hendrix $511.94 Maggie Ann Richardson $337.50
Dorothy Hightshoe $248.23 Donnabelle Rose $ 63.81
Treva Hileman $389.00 Oma Jean Sanders $331.01
Diana Householder $275.20 Sylvia K. Sharp $492.47
Louise Howard $563.48 Vivian Sharp $727.00
Marcella L . Hudson $ 42.43 Ruth M . Shepler NONE
Mieko Johns $302.43 Lois Smith $195.40
Anamarie D . Johnston $815.51 Margaret L. Smith $775.39
Marilyn Jones $552.00 Patty L. Smith $ 45.53
Irene Joseph $720.52 Beulah C. Sparks $355.36
Anna Bell LaFerney $392.08 Flossie F . Spencer $ 74.82
Betty Lesher $231.48 Dorothy J. Stewart $ 46.02
Wilma L. (Engel) Linkenhoker $392.69 Faye Sunday $643.28
Goldie Losher $460.24 Velma D. Sutton $720.44
Ethel Mae McComas $230.71 Verna Tillett $837.76
Florence Martin $511.07 Anna Floyd Vignary $483.34
Ruth Meischke $176.07 Esther J. Watley $191.29
Ruth Miles $445.65 Esther Weaver $371.41
Margaret J. Mills $365.53 Evelyn Williams $600.92
Frances L. Mossler $819.38