No Ho's Unique Clothing

National Labor Relations Board - Board Decisions

Nov 21, 1979

246 N.L.R.B. 537 (N.L.R.B. 1979)

NO HO'S UNIQUE CLOTHING
No Ho's Unique Clothing Warehouse, Inc., and Fresh
Water Manufacturing Inc., trading under the name
and style of, The Warehouse and District 65, Dis-
tributive Workers of America. Case 2-CA- 14972
November 21, 1979
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS JENKINS
AND PENELLO
On July 6, 1979, Administrative Law Judge Joel A.
Harmatz issued the attached Supplemental Decision
in this proceeding. Thereafter, counsel for Respon-
dent filed exceptions and a supporting brief, and
counsel for General Counsel filed exceptions and a
supporting brief and a motion to conform settlement.
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 excep-
tions, briefs, and motion and has decided to affirm the
rulings, findings,' and conclusions of the Administra-
tive Law Judge, as modified herein.
1. The General Counsel's motion to conform the
settlement seeks to include the provision that Respon-
dent place the agreed-upon gross backpay in an es-
crow account.2 The Board cannot conform a settle-
ment agreement order that has been enforced by a
court of appeals.' Therefore, the General Counsel's
motion is denied.
2. Respondent excepts to: (I) the Administrative
Law Judge's striking all of its affirmative defenses; (2)
the Administrative Law Judge's reliance upon mat-
ters not in the record; (3) the Administrative Law
Judge's determination that net backpay had been es-
tablished for the 15 discriminatees; and (4) the deter-
mination that interim earnings and willful loss of
earnings are two distinct concepts. We find that Re-
spondent's exceptions are without merit and, there-
fore, they are denied.
3. The General Counsel excepts to the Administra-
tive Law Judge's failure to the gross backpay for the
11 remaining discriminatees, who were unavailable at
the time of the backpay hearing, to be placed in es-
crow, and to the setting of the January , 1980, dead-
line for any further issuance of a backpay specifica-
I Respondent and General Counsel excepted to what was obviously a ty-
pographical error on p. I. fn. 1, 1. 2. of the Administrative Law Judge's
Supplemental Decision in that "June 6, 1978," should be "June 6, 1979." We
shall modify his Decision accordingly.
ion July 11., 1978. the Board approved the settlement agreement in this
case which was enforced by the Court of Appeals for the Second Circuit on
August 17, 1978.
1 Sec. 102.49 of the Rules and Regulations: Sec. 10(d) and (e) of the Act.
tion. The General Counsel contends as follows. The
parties had agreed in the original settlement of this
matter that the gross backpay would be placed in es-
crow upon enforcement of the Board's Order in the
Court of Appeals. Since Respondent did not do this,
it should not be a hardship on Respondent to do so
now. The Administrative Law Judge's setting of the
January 1, 1980, deadline is not in accordance with
the Board's procedures. We find merit in the General
Counsel's exceptions.
Therefore, consistent with Board precedent we
shall award to the I I discriminatees named below the
amount of gross backpay as originally set out in the
Regional Director's backpay specification and shall
order that Respondent pay it to the Regional Direc-
tor for Region 2 to be held in escrow for a period not
exceeding I year from the date of this Supplemental
Decision and Order. At the end of that year, upon
application by the Regional Director, an additional
year may be granted if the Board deems it necessary.
Further, the Regional Director shall make suitable
arrangements to afford Respondent, together with the
General Counsel's representative, an opportunity to
examine the I discriminatees as they become avail-
able regarding relevant testimony about their interim
earnings.
The Regional Director shall make any final deter-
mination whether any interim earnings are revealed
which may alter the amount of backpay due under
existing Board precedent. In the event the Regional
Director determines that deductions are warranted,
the amount so deducted will be returned to Respon-
dent. In addition, the Regional Director, when this
matter has been finally resolved, shall promptly and
no later than I year from the date of this Supplemen-
tal Decision and Order report to the Board the status
of this matter.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Rela-
tions Board hereby orders that the Respondent, No
Ho's Unique Clothing Warehouse, Inc., and Fresh
Water Manufacturing Inc., trading under the name
and style of, The Warehouse, New York, New York,
its officers, agents, successors. and assigns, shall:
I. Pay each of the following employees as net
backpay the amount set opposite each name, less tax
withholdings required by Federal and state laws:
Charles Kelly $1,564.50
Stanley Clarence Davis 330.00
Ernest Kendall $1,529.12
4 Brown and Root. Inc., 132 NLRB 486 (1961); Steve Aloi Ford Inc., 190
NLRB 661 (1971): Coast Delivery Service. Inc, 198 NLRB 1026 (1972).
246 NLRB No. 85
537
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Rosa Canales
Arnaldo Cepeda
Rene Cepeda
Antonio R. Deer
Abraham Garcia
Ronald Green
Jodie Gunderson
Arlene Hellerman
Albert Morales
William Truschew
Marcia Vega
Mary Young
86.80
48.00
213.42
835.60
711.40
2,336.00
883.20
927.96
2,134.40
671.06
2,422.00
759.80
2. Transmit to the Regional Director for Region 2,
to be held in escrow as provided in this Supplemental
Decision and Order, as appropriate, the gross back-
pay amounts determined due by the Regional Direc-
tor in his original backpay specification for the 11
discriminatees as set forth below:
Carol Logie
Kirk Grey
Carol Terry
Whitmore Kennedy
Sabine Blum
Isabel Berrios
Michele Cook
Vene Guifurta
Miriam Herskovic
Susan Jacobs
Yvonne Villarini
$2,336.00
2,149.12
2,336.00
2,149.12
2,552.00
846.00
2,320.00
2,134.40
2,784.00
1,656.00
441.60
FIRST SUPPLEMENTAL DECISION
JOEL A. HARMATZ, Administrative Law Judge: This is a
supplemental backpay proceeding involving a determina-
tion of net interim earnings under a formal settlement
agreement between Respondent No Ho's Unique Clothing
Warehouse, Inc.,' the Charging Party, District 65. Distribu-
tive Workers of America; and the General Counsel. Pursu-
ant thereto, the National Labor Relations Board through a
Decision and Order dated July 11, 1978, and the United
States Court of Appeals for the Second Circuit, through
entry of a consent judgment on August 17, 1978, directed
Respondent to cease and desist from certain alleged viola-
tions of Section 8(a)(l) and (3) of the National Labor Rela-
tions Act, herein the Act, and to reinstate and make whole
certain named discriminatees.
Subsequent to the issuance of the Board's Order and en-
try of the court decree, the Regional Director for Region 2,
on behalf of the Board and pursuant to Section 102.52, et
seq., of the Board's Rules and Regulations, Series 8, as
amended, issued on October 17, 1978, a backpay specifica-
tion and notice of hearing, setting forth the agreed-upon
gross backpay due 26-named-discriminatees, indicating re-
' Name of Respondent appears in the caption pursuant to stipulations
made at the hearing on June 6, 1978, to the general effect that Freshwater
Manufacturing Inc. and No Ho's Unique Clothing Warehouse. Inc.., are one
and the same corporate entity and that "The Warehouse" is simply a trade
name through which operations of Respondent are conducted.
ductions therein attributable to the General Counsel's ad-
missions of interim earnings of certain discriminatees, and
concluding with allegations as to the net backpay due said
individuals. An answer to the backpay specification was
filed by Respondent on November 27, 1978, and a first
amended answer was filed on December 5. 1978.
Pursuant to notice, the supplemental hearing was held in
New York, New York, on April 16 and June 6, 1979, for the
purpose of determining the interim earnings and net
amount of backpay due certain of the discriminatees. The
parties waived the filing of briefs.
Upon the entire record in this case, I make the following:
FINDINGS AND CON('CUSIONS
I. PRELIMINARY SIAlMEINI
At the outset, it is noted that the sole issue of import in
this proceeding relates to a ruling made at the hearing by
me, on motion by the General Counsel. In this regard, an
affirmative defense raised on behalf of the Respondent was
stricken, thereby foreclosing Respondent from litigating
"willful loss of earnings" as an issue through which the
backpay entitlement of the alleged discriminatees could be
reduced. The basis for said ruling is discussed below.
In other respects, no dispute of fact exists concerning the
net backpay due 15 discriminatees who were present at the
hearing. As to them, interim earnings and net backpay due
has been established beyond contravention.
II. THE RULING ON THE WILLFUL lOSS ISSUE
As indicated above, this backpay proceeding is somewhat
unique in that it inures from a formal settlement agreement.
Such a disposition of a complaint, under customary prac-
tice, occurs with specific agreement as to the precise
amount of net backpay due each discriminatee, thereby
avoiding procedures such as this. Indeed, I am mindful of
no other case where a post settlement backpay proceeding
existed as a real possibility at the time that a formal settle-
ment stipulation was executed.
To understand why this proceeding has evolved to such a
posture it is necessary to consider the deliberations leading
to settlement which began in December 1977, and tran-
spired over several weeks. Early in these discussions, it be-
came apparent that the key obstacle to the achievement of
an overall adjustment was the inability of the General
Counsel to locate all the alleged discriminatees named in
the original complaint, and thereby to present a final liqui-
dated figure as to Respondent's net backpay liability. This.
together with a question as to which, if any, of the discrim-
inatees were willing to waive right to reinstatement, was
acknowledged as a fundamental issue in a letter, dated
January 4, 1978, to me, from Anthony H. Atlas, Esq., then
counsel of record for Respondent,2 which is set forth below:
2 Apparently. Respondent elected to change counsel after execution of the
formal settlement agreement. Thus, there is no evidence that Mr. Atlas, or
any attorney associated with the firm of Jackson. Lewis. Schnitzler, and
Krupman presently represents, Respondent or remains as counsel of record
in this supplemental proceeding. As indicated. Respondent is presently rep-
resented by Richard M. Gaba. Esq.
538
NO HO'S UNIQUE CLOTHING
January 4, 1978
Re: Unique Clothing Warehouse Case No. 2-CA-14972
Dear Judge Harmatz:
We wish to advise you that the parties in the above-
captioned matter [the Employer, the Union, and the
Board] have resumed discussions in earnest regarding
the settlement of this case. Because of the necessity of
obtaining accurate information with respect to whether
the employees named in the Complaint are or are not
willing to accept re-employment and accurate informa-
tion as to the extent of back pay liability, both of
which have taken some time do do, these discussions
could not be commenced until late in December 1977.
Both the Union and the Board, the latter acting pur-
suant to your instructions, attempted to gather this in-
formation. Even as of the date of this letter, the Board
has not had responses from a substantial number of
these people despite strong efforts to contact them by
registered mail and by telephone. The General Counsel
advises that in the few days remaining prior to resump-
tion of trial, the Board will make additional efforts
along these lines.
It is the Employer's firm intention to settle this mat-
ter if an equitable settlement can be reached. In this
regard, you should know that a year end review by the
Employer of its business shows it to be in serious finan-
cial straits. In fact, its position is so serious that it
stands in technical insolvency. We have been advised
by the Employer that because of these difficulties, and
in order to avoid further financial problems, it intends
to close its business within the next 90 days. Obviously,
this fact must be taken into consideration as part of
any settlement discussions.
Because of the difficulty in determining the extent of
back pay and reinstatement liability, the settlement ne-
gotiations will not be completed prior to Monday,
January 9, 1978. We provide you with this information
so that you will be aware of the situation. Although we
will be prepared to proceed with the trial on January
9th, we feel that, if it is necessary, some additional time
should be allotted on that date to allow the parties to
complete settlement discussions.
Very truly yours,
JACKSON, LEWIS, SCHNITZLER & KRUPMAN
Anthony H. Atlas [s]
Counsel3
cc: Mr. Harvey Russack
Douglas H. White, Esq.
Mr. Nat Nattman
Thereafter, the unfair labor practice hearing was sched-
uled for resumption on January 9, 1978. However, that en-
tire day was consumed in an extensive effort to reach ad-
justment of the issues raised in the complaint. As of the
following day, January 10, 1978, settlement terms had been
agreed to with respect to the issue of reinstatement, notice
The record is hereby reopened to include the original of the above letter as
ALJ Exh. 1.
posting, and the refusal to bargain allegations. Nonetheless,
due to the continuing unavailability of data regarding the
discriminatees' interim earnings, the question of backpay
liability remained open. This, too, was ultimately resolved,
by agreement of the parties as to the gross backpay of 26
discriminatees and their further agreement that the deter-
mination of net interim earnings not then available be left
to determination through post-settlement agreement or a
limited backpay proceeding. In clarification of this latter
arrangement, I offered the following summary at the hear-
ing conducted on January 10, 1978:
... With respect to the amount of backpay ... the net
amount backpay [due] was not susceptible to interpre-
tation [sic] at this time, in that, there was no basis
whatever at this point in measuring the amount of in-
terim earnings of the 28 alleged discriminatees. how-
ever, the gross backpay due has been liquidated. In
order to achieve settlement and to mitigate the number
of issues that could be raised in any further compliance
proceedings, agreement was reached on the gross back-
pay due, with the understanding that interim earnings
would be subsequently determined to reduce those fig-
ures to net figures. It also understood that there is a
possibility that there may be some dispute on the in-
terim earnings issue. Should that be the case, then the
dispute, any such dispute, shall be resolved through
procedures set forth in the National Labor Relations
Board Rules and Regulations, Section 102.52 through
and including Section 102.59. which are the customary
backpay procedure, but it is understood and agreed
that any such proceeding shall be limited to the ques-
tion of interim earnings and shall have no bearing
whatever on the gross amount of backpay due.
This understanding was memorialized specifically in the
"Stipulation and Order," enforced by the court, after ap-
proval by the Board and me. Thus, at pp. 3 4, paragraph
(2), thereof it was stated as follows:
Make whole the following persons as set forth below.
The amounts listed after the names of said persons rep-
resents the gross backpay due each of said individuals.
to be reduced, as appropriate by interim earnings, dur-
ing the period June 10, 1977, to January 9. 1978, to be
determined either by subsequent agreement of the par-
ties, or should a dispute emerge with respect thereto,
by procedure [sic] limited to that issue as authorized by
Section 102.52 through Section 102.59 of the Rules and
Regulations and Statements of Procedure, Series 8, of
the National Labor Relations Board.4
Following issuance of the backpay specification in this
proceeding, the first amended answer filed on behalf of Re-
spondent by its current counsel who did not participate in.
and hence was not party to, the extensive deliberations by
which this settlement was achieved, recited as follows:
AS AND FOR A FIRST COMPLETE AFFIRMATIVE D)EFNSE
7. During the backpay period from June 11. 1977.
to January 9, 1978, each and every employee named in
Appendices A through Z failed to make reasonable
' The stipulation went on to specify the agreed-upon liquidated gross
backpay owing each of the 26 employees covered by the settlement.
539
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
efforts to obtain other employment, thereby engaging
in a willful loss of earnings.
AS AND FOR A SECOND COMPLETE AFFIRMATIVE D)EFENSE
8. During the backpay period from June 11, 1977 to
January 9, 1978, the respondents did not have work
available for each and every employee named in Ap-
pendices A through Z.
AS AND FOR A THIRD COMPLETE AFFIRMATIVE DEFENSE
9. Employees named in Appendices A through Z
engaged in misconduct while picketing the respon-
dent's premises so as to relieve the employer from li-
ability for backpay during the backpay period from
June 11, 1977 to January 9, 1978.
On January 17, 1979, counsel for the General Counsel
filed a motion to strike the second and third affirmative
offenses set forth in Respondent's answer. Pursuant thereto,
an order to show cause was issued by me on January 25,
1978, which concluded with the following paragraph:
Having duly considered the matter, as the stipulation
entered on behalf of the Respondent plainly and un-
mistakably recites the agreement of the parties to liqui-
date the amount of gross backpay due, absent good
and sufficient cause being showed by the Respondent
on or before February 9, 1979, the relief requested by
counsel for the General Counsel shall be granted in its
entirety.
Thereafter, by letter dated February 8, 1979, to me, from
Richard M. Gaba, Respondent signified its intention to
withdraw the second and third affirmative defenses set forth
in its first amendment answer.
Thereafter, on March 19, 1979, counsel for the General
Counsel filed a further motion to strike, challenging the first
affirmative defense as "legally irrevelant." Pursuant thereto,
a second order to show cause was issued by me on March
27, 1979, which recited as follows:
Having duly considered the matter, and in view of the
precise language of the consent stipulation entered and
approved by all parties in satisfaction of Case No. 2
CA-14972, as well as the transcript references cited by
counsel for the General Counsel in support of the in-
stant motion, together with personal recollection of the
spirit of said understanding and the considerations un-
derlying provision for a possible backpay proceeding
narrowed strictly to the issue of interim earnings, II IS
HEREBY (ONCLUDED that absent good and sufficient
cause being shown by Respondent on or before April
13, 1979, the relief requested by counsel for the Gen-
eral Counsel shall be granted in its entirety.
An opposition to the General Counsel's motion was filed
earlier on behalf of Respondent on March 19, 1979, con-
tending, in effect, that Respondent had not waived its right
to litigate the issue of willful loss of earnings in the backpay
proceeding.
The supplemental backpay hearing opened on April 16,
1976. At that time the motion to strike Respondent's first
affirmative defense was granted. The reasons expressed by
me in support of that ruling appear in the official steno-
graphic transcript. By virtue of that ruling, Respondent was
denied the opportunity to examine the discriminatees ap-
pearing in the supplemental hearing concerning their efforts
to seek gainful employment during the backpay period. To
have ruled otherwise would have condoned a reformation
of the bargain struck on behalf of Respondent and offended
the clear, unmistakable language through which the parties
memorialized their agreement.
Interim earnings and willful loss are distinct concepts
whose only common strain lies in their constituting in-
dependent grounds for a dimunition of backpay. Litigation
of each involves diverse areas of inquiry, with the former
subject to resolution upon objective facts easily docu-
mented and hence not readily subject to fabrication, and
the latter turning upon highly subjective considerations, of-
ten requiring careful analysis and relatively prolonged, hot-
ly contested litigation.
While it is true that the settlement executed herein con-
templated that a formal compliance proceeding might be
necessary, the "Stipulation and Order," consistent with the
conscious intent of the parties, narrowed the scope thereof
strictly to the issue of interim earnings. Quite obviously, the
qualifying language would have been a gratuitous, if not
fatuous, act of draftsmanship had a more comprehensive
proceeding been envisioned. The language is clear, was de-
liberately inserted, and the parties were fully mindful of its
import.
A further word is necessary in view of the observation by
Respondent's current counsel that "A backpay award is re-
medial, not punitive." It is argued that to find a waiver of
Respondent's right to litigate "willful loss of earnings"
would in the circumstances violate that principle. In this
connection it might be helpful to explore certain aspects of
the parties' agreement. It goes without saying that few set-
tlements are pure, since all bear the stamp of compromise.
The means of monetary redress adopted in this settlement
was no exception. Respondent heretofore has conceded
that, as part of the formula, it relinquished any right to
litigate disqualification from, or the tolling of backpay,
through any discriminatee's picket line misconduct or
through supervening economic causes which may have ef-
fectively eliminated job opportunities during the backpay
period. On the other side, Respondent benefited from a
compromised reduction in the gross backpay, which was
computed on an interest-free basis at less than 100 percent
of the gross amounts due and owing. These considerations
stemmed from an intent to reach a lump sum backpay set-
tlement, which until the very late stages of the negotiations
was the predicate upon which the General Counsel's par-
ticipation in the settlement was conditioned. The latter's
rigidity in this respect, together with the unavailability of
interim earnings data so requisite to liquidation of net back-
pay due, produced a stalemate which was ultimately broken
by the formula specifically set forth in the stipulation and
order. Thus, to facilitate ultimate accord, the parties agreed
that compliance machinery of the Board could provide an
effective vehicle for completing the equation by developing
the mathematical data which, while unavailable during set-
tlement deliberations, could be readily ascertained in such a
proceeding with a minimum of controversy. following court
approval of the settlement. Willful loss of earnings, as was
true of strike misconduct and supervening economic dislo-
cation issues, was totally alien to the formulation of this
540
NO HO'S UNIQUE CLOTHING
procedure, and the effort to litigate that question is founded
upon abstract argumentation through which an important
part of the quid pro quo would be nullified.
In reaffirming the ruling made at the hearing it is again
concluded that the stipulation and order, by its clear, un-
ambiguous terms, expressly foreclosed during this phase of
the proceeding consideration of any issue other than the
interim earnings of the 26 named discriminatees. Respon-
dent knowingly endorsed those terms and agreed to all ob-
ligations incurred therein while guided by highly experi-
enced labor law practitioners, and as part of the price for
the various considerations flowing to it from such a disposi-
tion of the complaint.
111. TIHE NET BACKPAY l)tUE
The investigation of interim earnings and determination
of net backpay in this proceeding relates to 15 of the 26
dischargees named in the settlement agreement.' During the
course of the hearing, counsel for the General Counsel
made reference to a 16th, Susan Jacobs, who, though not
appearing, submitted an affidavit pertaining to her interim
earnings or the lack thereof. However, as that affidavit was
not offered, and since the status of the Jacobs' claim was
not clarified by stipulation on the record, there is no basis
for a determination of the net amount due in her case at
this time.
As for the 15 who appeared and were examined as to
interim earnings, based upon their testimony the original
I Eleven of the discrminatees named in the stipulation and order were
unavailable for examination by Respondent and hence the intenim earnings
data was not developed as to them. Considering the intent of the formal
settlement, it was ruled that final determinations with respect to this group
would be inappropriate at this time and, accordingly, their names were
stricken without prejudice from the specification, subject to the understand-
ing that, at such time as they became available, a new specification would
issue through which their net backpay would be subject to liquidation. At
the resumption of the hearing held on June 6, 1979, the General Counsel was
informed by me that a deadline of January 1. 1980, would be imposed upon
him, after which no further backpay specification could issue with respect to
those not covered by the instant order.
specification was amended upon request of the General
Counsel to reflect accurately the net backpay due in their
respective cases. There being no further evidence in this
respect, the net amounts specified in the recommended Or-
der below are substantiated in full by the record.
On the basis of the foregoing findings, rulings, and con-
clusions, I hereby issue the following recommended:
ORDER6
The Respondent, No Ho's Unique Clothing Warehouse,
Inc., and Fresh Water Manufacturing. Inc.. trading under
the name and style of, The Warehouse. New York. New
York, its officers, agents, successors, and assigns, shall pay
to the following named employees as net backpay the
amount set opposite their names, less tax withholdings re-
quired by Federal and state law:
Charles Kelly
Stanley Clarence Davis
Ernest Kendall
Rosa Canales
Arnaldo Cepeda
Rene Cepeda
Antonio R. Deer
Abraham Garcia
Ronald Green
Jodie Gunderson
Arlene Hellerman
Albert Morales
William Truschew
Marcia Vega
Mary Young
$1564.50
330.00
1529.12
86.80
48.00
213.42
835.60
711.40
2336.00
883.20
927.96
2134.40
671.06
2422.00
759.80
' 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 in Sec. 102.48
of the Rules and Regulations, be adopted by the Board and become its
findings, conclusions, and Order, and all objections thereto shall be deemed
waived for all purposes.
541