Ozark Hardwood Co.

National Labor Relations Board - Board Decisions

Dec 19, 1957

119 N.L.R.B. 1130 (N.L.R.B. 1957)

1130 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
personnel department employees except messengers , confidential employees,
and supervisors as defined in the Act.
WESTINGHOUSE AIR BRAKE COMPANY
AIR BRAKE PLANT),
Employer.
Dated------------------- By-------------------------------------------
(Representative) (Title)
This notice must remain posted for 60 days from the date hereof, and must not be
altered, defaced, or covered by any other material.
Ozark Hardwood Company and General Drivers and Helpers,
Local 373, International Brotherhood of Teamsters, Chauffeurs,-
Warehousemen and Helpers of America .' Case No. 32-CA-72.
December 19,1957
SUPPLEMENTAL DECISION AND ORDER
On November 3, 19507 the Board issued a Decision and Order in the
above-entitled proceeding,2 finding, inter alia, that Respondent had
violated Section 8 (a) (3) and (1) of the Act by discharging certain of
its employees, herein called ' the Claimants. The Board therefore
ordered that the Respondent and its "officers, agents, successors, and
assigns" make the Claimants whole for any loss of pay which they may
have suffered as a result of the discrimination against them.
On March 7, 1952, the Court of Appeals for the Eighth Circuit en-
forced the Board's Order.3 Thereafter, on March 11, 1953, on motion
of the Board, the court authorized the Board to conduct a supplemental
proceeding to determine whether Ozark Hardwood Manufacturing
Company, herein called Ozark Manufacturing, was a "successor" of
Respondent, responsible for remedying its unfair labor practices.
On March 23, 1953, the Board directed that the record in this case
be opened and remanded the case to the Regional Director for the
Fifteenth Region for the purpose of conducting a further hearing on
the question of whether Ozark Manufacturing is a "successor" of
Respondent jointly obligated with it to comply with the Board's
Order, as enforced, and to determine the specific amounts of back pay
due under the back-pay provisions of its Order. Pursuant to said
remand, a hearing was held before Trial Examiner Reeves Hilton.
. On June 11, 1956, Trial Examiner Hilton issued his Supplemental
Intermediate Report, a copy of which is attached hereto, in which he
found that most of the claimants were entitled to certain specific
amounts of back pay.
i The Board having been notified by the AFL-CIO that it deems the Teamsters ' certifi-
cate of affiliation revoked by convention action, the Identification of this Union is hereby
amended.
9 91 NLRB 1443.
3 194 F. 2d 963.
119 NLRB No. 129.
OZARK HARDWOOD COMPANY 1131
The Board has reviewed the rulings of the Trial Examiner made at
the hearing and finds that no prejudicial error was committed. The
rulings are hereby affirmed. The Board has considered the Supple-
mental Intermediate Report, the exceptions and briefs, and the entire
record in this case and hereby adopts the findings, conclusions, and
recommendations of the Trial Examiner, with the exceptions, addi-
tions, and modifications set forth below 4
1. We agree with the Trial Examiner's finding that Ozark Manu-
facturing is responsible for remedying the unfair labor practices here-
tofore found. In so concluding, we find, as the Trial Examiner in
effect did, and for the reasons fully set forth in the Supplemental
Intermediate Report, that Respondent's default on its Merchant
National Bank loan, the purchase of Respondent's property at the fore-
closure sale resulting from the default on the bank loan, and the forma-
tion of, and transfer of Respondent's assets to, Ozark Manufacturing
were all steps taken to evade Respondent's obligation under the
Board's Order herein. In these circumstances, it is manifest that
Ozark Manufacturing, as well as Respondent, is obligated under the
Act to remedy the unfair labor practices in this case.'
Our ultimate conclusion as to Ozark Manufacturing's liability
would be the same even were we to agree with Ozark Manufacturing
that it is not the instrumentality of evasion found by the Trial Ex-
aminer. For the facts make it abundantly clear that Ozark Manu-
facturing is but the alter ego of Respondent and, as such, is a "suc-
cessor" under the Board's Order responsible for the back-pay liability
of Respondents Thus, the record shows that at the foreclosure sale
Respondent's plant was purchased by J. D. Knight and Noel H. Jones,
2 of Respondent's stockholders and directors, and Mrs. Joe B. Mills,
the wife of a third; these 2 persons transferred the property to Ozark
Manufacturing, which they had formed and of which they were the
officers and sole stockholders; Ozark Manufacturing continued to op-
erate Respondent's plant, manufacturing substantially the same prod-
ucts as the Respondent, with virtually the same employees and
supervisory hierarchy, including Joe B. Mills, an officer and stock-
holder of Respondent, as well as its general manager, who figured
4 The Trial Examiner found, in accordance with a statement made by the General
Counsel at the hearing, that the General Counsel "was waiving all rights to reinstatement
and back pay" due James Payne under the original Order. However , the record , as cor-
rected , clearly shows that the General Counsel has not waived either Payne 's right to
reinstatement of his right to any back pay due him since the hearing.
s Regal Knitwear Company v . N. L. R. B., 324 U. S. 9.
In this connection the Supreme Court has held that Board orders are binding upon
successors and assigns who operate as "merely a disguised continuance of the old em-
ployer ." Regal Knitwear Company v. N. L. R. B., supra ; Southport Petroleum Company v.
N. L. R. Ii., 315 U. S. 100. See also Dickey v. N. L. R. B., 217 F. 2d 052 (C. A. 6) ;
N. L. R. B. v. Coal Creek Coal Company, 204 F. 2d 579 (C. A. 10) ; N. L. R. B. v. New Madrid
Manufacturing Company, 215 F. 2d 908 (C. A. 8) ; Venetian Blind Workers ' Union Local
No. 2565 ( Ambassador Venetian Blind Company ), 110 NLRB 780.
1132 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
prominently in the commission of the unfair labor practices herein
and who, became adviser to, and later plant manager of, Ozark
Manufacturing.
Upon the entire record, we conclude that both Respondent and
Ozark Manufacturing are liable for the back pay due Claimants as
the result of Respondent's discrimination against them.'
2. We adopt the formula recommended by the Trial Examiner for
the computation of the back pay due the Claimants." The formula
proposed by Respondent differs from that of the Trial Examiner
mainly in the following respects : (1) It would not allocate available
jobs to the alleged skilled and semiskilled employees in the flooring
department on a seniority basis nor would it compute the weekly
gross back pay of these employees, as the back pay of all other Claim-
ants was computed, i. e., by multiplying the average hours worked
each week in the department by the Claimants' wage rates; and (2)
it would not utilize the "1-year-absence-from-work" rule used by the
Trial Examiner in determining the seniority status of the Claimants.
With regard to (1), the record does not support the alleged factual
basis for Respondent's formula, namely, the day-to-day indispensa-
bility of 16 skilled and semiskilled employees in the flooring depart-
ment. And insofar as Respondent would compute the back pay on
the basis of the average earnings of other graders, in the cases of
the Claimants who were graders, or on the basis of the actual earnings
of employees who served in similar classifications, in the cases of the
other flooring department employees, the record affords no basis for
making such computations in any of the cases for the period after
June 1951. Indeed, it appears that an accurate computation on this
basis is not at all possible in most of the cases, for the employment
records of the Companies involved do not list the job classifications of
employees. With respect to (2), although Respondent attacks the
"1-year rule" as an arbitrary one, the record upon which this case
must be decided does not confirm Respondent's contention. The Trial
Examiner has applied the rule in determining the seniority status of
claimants and nonclaimants alike and, significantly, Respondent does
not challenge the resulting seniority standings of the nonclaimants.
Considering the record developed at the hearing and the data com-
prising the Companies' employment records, we find that the back-
s All these circumstances make noteworthy the court ' s answer to Respondent 's conten-
tion in the enforcement proceeding that the words "successors and assigns" should be
deleted from the Board's Order because its plant had been sold in foreclosure proceedings
since the Order. The court, rejecting this contention, stated that : ". . . this naked fact
alone does not give its contention as to the words "successors and assigns" any more
concreteness of appeal, for we do not know who the purchaser is, what operations the
purchaser intends to carry on, or what the basis of relationship involved may be." 194
F. 2d at 966.
B Respondent's contention that its liability for back pay does not extend beyond
April 1951, when its plant was sold at the foreclosure sale, is, under the circumstances of
this case, plainly without merit. Southport Petroleum Company v. X. L. R. B., supra.
OZARK HARDWOOD COMPANY 1133
pay formula proposed by the Trial Examiner is a reasonable and
equitable one for the purpose of carrying out the terms of the back-pay
order herein.
3. Respondent would deny back pay in virtually every case from
December 2, 1949, when the Union struck its plant, until the Claimant
manifested a willingness to return to work. The Respondent's posi-
tion here is based on the contention that had the Claimants not been
discharged in May 1949, they would not, as Union adherents, have
worked while picketing was in progress. However, in Merchandiser
Press, Inc.,' the Board rejected a similar contention, stating that:
"Because the Respondent's unlawful discrimination has made it im-
possible to ascertain whether these employees [who went on strike sub-
sequent to their discriminatory discharge] would have gone on strike
in the absence of such discrimination, -the uncertainty must be re-
solved against the Respondent. We find, therefore, that the employees
here are entitled to back pay from the time of their discriminatory
discharge until receipt by them of the Respondent's letters offering
them unconditional reinstatement." For the same reason, we reject
Respondent's contention.
4. Nor do we find merit in Respondent's contention that certain of
the Claimants who served in the Armed Forces of the United States
after their termination by respondent lost their right to back pay for
the period following their discharge from the Armed Forces because
they did not, within 90 days thereafter, apply for reinstatement. It
was not incumbent upon the Claimants involved to seek reinstatement
in order to preserve their right to back pay for the periods in question."
5. We also reject Respondent's contention that the claimants who
availed themselves of the GI job-training program thereby voluntarily
removed themselves from the labor market and hence are not entitled
to back pay for the period of their enrollment in the program. We
share the Trial Examiner's view that the period of enrollment should
not be excluded from the back-pay period 11 and adopt his finding, to
which the General Counsel has not excepted, that the allowances re-
ceived thereunder must be considered as interim earnings, deductible
from gross back pay.
6. Respondent raises an issue of willful idleness in certain of the
cases,12, claiming that the Claimants failed to make a reasonable and
e 115 NLRB 1441. See also East Texas Castings Company, Inc., 116 NLRB 1336.
1o Cannon Manufacturing Corporation , 71 NLRB 1059 , 1093-1094 ; The Electric City
Dyeing Co ., 79 NLRB 872, 876-877.
11 Taylor Manufacturing Company, Incorporated, 83 NLRB 142, enfd. 222 F. 2d 719
(C. A. 5) ; Somerville Cream Company, Inc., 106 NLRB 1155.
12 In R. L. Martin's case, Respondent also claims that the Claimant was mentally in-
capacitated for employment during most of the back-pay period and hence is not entitled
to the back-pay award of the Trial Examiner. It does not appear, however, that Martin's
mental condition has undergone a change since his employment with Respondent. And
the record shows that during the period in question Martin worked at odd jobs and
1134 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
diligent effort to find employment during specified periods of idleness.
While accepting evidence of registration with a State employment
service as conclusive evidence of a reasonable search, the Respondent,
relying on Harvest Queen Hill cf Elevator Company,13 contends, that
the burden is on the General Counsel in these cases to show that a rea-
sonable search for other employment has been made.
Subsequent to the hearing in this case, the Board issued its Decision
in Southern Silk Mills," holding that "As before, the burden will re-
main on the Employer to show that there has been a failure to make
reasonable search for other employment." 15 but modifying the Har-
vest Queen rule which treated registration with a State employment
service as conclusive evidence that a reasonable search for employ-
ment has been made as follows : ". . . we shall no longer give con-
clusive weight to registration with such agencies in determining the
issue of reasonable search, but shall treat such registration as a factor
to be given greater or less weight depending upon all the circum-
stances in each case ." Although the Intermediate Report in this case
issued prior to Southern Silk, the Trial Examiner applied the rule
enunciated in Southern Silk to this case," and , except in the case of
Filo Hill," concluded that the evidence failed to establish any willful
idleness on the part of the Claimants.
We have carefully examined the evidence bearing on the issue of
reasonable search, such as the employment situation in the Clarksville
area and the nature and extent of the search for employment made by
the Claimants, both in and away from the Clarksville area, including
their registrations with public employment agencies, and, except as
noted hereinafter, we are in accord with the Trial Examiner's con-
clusion that the companies involved have not met the burden incumbent
upon them of proving willful idleness during the back-pay period
when the Claimants were out of work. In our review of the record,
we have applied the Southern Silk test to periods when Claimants were
registered, as well as to the period of the Union's picketing, which we
registered with the employment service , frequently reporting to that office in search of
work. As noted by the Trial Examiner , there is no evidence that Martin ever refused an
offer of work or gave up new employment . Under the circumstances , Respondent's con-
tention must be rejected.
Is 90 NLRB 320.
14 116 NLRB 769.
15 See also Brotherhood of Painters, Decorators K Paperhangers of America, etc. (Lauren
Burt, Inc ., of Colorado ), 114 NLRB 295 , 298; N. L. R. B. v . J. G. Boswell Co.,.136 F. 2d
585, 597 (C. A. 9).
16 Thus, the Trial Examiner , in disposing of the Respondent 's charge of willful idleness,
states that he "does not rely exclusively upon registration , or lack of registration, as
determinative of the question of willful losses but has considered the testimonies of, the
Claimants concerning efforts they made seeking employment."
SS In the absence of exceptions by the General Counsel to the Trial Examiner 's finding
that Hill is not entitled to back pay for the period after July 31, 1949, as contended by
Respondent , we adopt that finding , without comment.
OZARK HARDWOOD COMPANY 1135
have held could not be eliminated from the back-pay period as urged
by Respondent."
Our finding that Respondent has failed to establish willful idleness
embraces the period of Henry Boren's unemployment in July and
August 1950, concerning which the record affirmatively shows no
pending registration with a public employment office but is silent as
to any efforts made by Boren to find work. In the Harvest Queen
case wherein registration was regarded as conclusive evidence of a
reasonable search for work, the Board expressed itself in the instant
connection as follows : "If evidence showing a failure of registration
is adduced, additional evidence may then be presented to prove that
no other reasonable effort to obtain desirable new employment has been
made." And it has been made quite plain that the burden is upon a
respondent to establish this fact.19 While Southern Silk modified
Harvest Queen, it did so only by treating registration as a factor in
determining the issue of reasonable search, rather than as conclusive
evidence of such a search, and this on the theory that "Government
employment services are but one of several means which are normally
used by unemployed persons in seeking new employment." Clearly,
therefore, no change was affected or intended in the existing policy
of requiring a respondent to prove more than nonregistration to defeat
a back-pay claim. And we see no valid reason for now shifting
the burden of proof in this connection from the Respondent, who had
the opportunity at the hearing to show that Boren did not make the
requisite search for employment.
We also agree with the Trial Examiner that J. L. Barnes made a
diligent search for employment during the period from the first part
of November 1950, when he quit his job at Pine Bluff, Arkansas, and
returned to Clarksville after being notified by the Army that he had
passed his physical examination and would be inducted within about
10 days, until January 16, 1951, when. he was finally inducted. Thus,
during this period Barnes registered with the State employment
service, looked for farmwork, and contacted two industrial plants in
his search for employment. In view of these circumstances, we reject
Respondent's contention that Barnes is not entitled to back pay for
the period of idleness preceding his induction.20
Is As the case of Homer Currier , discussed below, demonstrates , we have not , of course,
considered picket-line activity as relieving a Claimant of the obligation to make a reason-
able search for interim employment.
10 Harvest Queen Mill & Elevator Company . supra ; Seampru /e, Incorporated, 103 NLRB
763. Insofar as Venetian Blind Workers' Union Local No. 2565 ( Ambassador Venetian
Blind Company ), 110 NLRB 780, may have contained language holding that a dis-
criminates has the burden to prove that he made a reasonable search for employment, it
was erroneous not only under the present rule of the Southern Silk Mill case but also
under the then-existing rule of the Harvest Queen case. Accordingly, in this respect the
Venetian Blind Workers' Union case is no longer controlling precedent.
20 We therefore find it unnecessary to concern ourselves with the alternative reason
relied upon by the Trial Examiner in this connection.
1136 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Our disagreement with the Trial Examiner noted above is with
respect to the following situations : 21
John B. Bartlett was discharged from the United States Marine
Corps on July 1, 1952. He spent the next 2 weeks visiting with his
family, during which period he made no search for work. The Trial
Examiner considered Bartlett to be eligible for back pay during these
2 weeks. In view of the circumstances, we do not agree that he was.
As Bartlett was erroneously credited by the Trial Examiner with gross
back pay of $74 for the 2-week pay period ending July 16, 1952, and
as the net back pay allowed Bartlett for this quarter amounts to only
$45.39, we find that Bartlett is not entitled to any back pay for the
third quarter of 1952. Thus adjusted, the net back pay due Bartlett
is $408.67.
Garland Curtis spent a week during the first part of January 1951
on vacation. We agree with Respondent that he was not entitled to
back pay for this period. Accordingly, we shall reduce the net back
pay allowed Curtis by the Trial Examiner for the first quarter of 1951
by $52.28, which represents the amount allowed Curtis by the Trial
Examiner for the week ending January 10. Thus adjusted, the net
back pay due Curtis is $832.76.
Homer Currier admitted serving on the Union's picket line for "a
couple of months." When asked whether he looked for work during
this time, he testified that "Once in a while I did." We find that Cur-
rier did not diligently seek employment while on the picket line and
that he thereby incurred a willful loss of earnings. While the record
does not identify the precise 2-month period when Currier served as a
picket, it indicates that it was probably in December 1949 and January
1950. We shall reduce the Trial Examiner's gross back-pay allowance
of $387.80 for the fourth quarter of 1949 by $121.10, Currier's gross
back pay for December 1949, which leaves a gross back-pay allowance
for this quarter of $266.70, from which we shall deduct November
1949 interim earnings of $74.70, leaving $192 due Currier as net back
pay for the quarter. And we shall reduce the Trial Examiner's
$462.75 gross back-pay figure for the first quarter of 1950 by $177,
the gross back pay allowed Currier for January 1950, leaving a gross
back-pay allowance for this quarter of $285.75, from which we shall
deduct February 1950 interim earnings of $65.10, leaving $220.65 due
Currier as net back pay for the quarter. Thus adjusted, the total net
back pay due Currier is $3,287.81.
Troy Turner quit a job in Clio, Michigan, about the first of October
1950 "to come back to Clarksville to go into Service." He joined the
211n making the necessary back-pay computations we have rounded out the periods of
time involved, considering 3 or more days as a week's pay period.
OZARK HARDWOOD COMPANY 1137
United States Air Force on December 19, 1950. Between the afore-
mentioned dates, Turner was unemployed and admittedly did not look
for work. So far as the record shows, Turner's decision to quit his
job at the beginning of October was a wholly voluntary one. On these
facts we find that Turner withdrew from the labor market during this
period of idleness just prior to entering the military service and that
he is therefore not entitled to the $510.30 allowed him by. the Trial
Examiner for the fourth quarter of 1950. We shall reduce his net
back-pay allowance by that amount. So reduced, the net back pay
due Turner is $1,003.13.
Kenneth Davis quit a job in Oakland, California, on September 10,
1950, upon receiving notification to appear for a physical examination
for induction into the military service. He returned to Clarksville,
arriving about September 13, and underwent his physical examina-
tion. He was not inducted until November 28, 1950. From the time
he arrived in Clarksville until November 28, Davis, unlike J. L.
Barnes, admittedly did not look for work. No back pay is awarded
Davis by the Trial Examiner for the third quarter of 1950 because
Davis' interim earnings exceeded the amount he would have earned in
Respondent's employ during this quarter. However, the Trial Ex-
aminer has allowed Davis back pay for the fourth quarter of 1950 for
the period until his induction. With this award we are unable to
agree, for we cannot attribute Davis' loss of income during this period
of idleness to the Respondent. We shall, therefore, reduce Davis' net
back pay by $334.40, the amount credited him by the Trial Examiner
for the quarter in question. So reduced, the net back pay due Davis
is $587.14.
Bill Friend joined the picket line on the day it was formed and
served as a picket for the next 2 weeks, during which time he admit-
tedly did not look for work. We find that Friend thereby withdrew
from the labor market and is not entitled to any back pay for these 2
weeks in December 1949. His net back-pay allowance of $277.17 for
the fourth quarter of 1949 will therefore be reduced by $55.44, the
amount granted him by the Trial Examiner for the 2-week pay pe-
riod ending December 14. This leaves $1,144.83 due Friend as net
back pay.
Lum Fisher served on the picket line from December 3, 1949, until
it was abandoned on July 7, 1950, during which time he received $10
a week from the Union. But for his finding that Fisher sought farm-
work during this period the Trial Examiner would not have awarded
the Claimant any back pay for these approximately 7 months. How-
ever, the record does not support the Trial Examiner's finding of a
search for farmwork during this particular period nor does it show
476321--58-vo1. 119- 7 3
1138 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
that Fisher was engaged in anything but his picket-line activity
throughout this time. Under the circumstances, we find that Fisher
did not make the requisite search for work from December 3, 1949,
to July 7, 1950, and that the following changes must be made in his
back-pay computations : The gross back-pay allowance of $360.10 for
the fourth quarter of 1949 must be reduced by $112.45, Fisher's earn-
ings for the December 1949 pay period, leaving a net back-pay figure
of $247.65*for this quarter; the net back-pay allowance of $462.75 for
the first quarter of 1950 must be deducted from the total net back pay
allowed Fisher; the net back-pay allowance of $452.25 for the second
quarter of 1950 must also be deducted from Fisher's total net back
pay; and the amount of $27.75, representing Fisher's allowance for
the week ending July 5, 1950, must be deducted from the gross back
pay allowed Fisher for the third quarter of 1950. In the latter con-
nection, the Trial Examiner has deducted $72 as interim earnings
from the gross back pay due Fisher for the third quarter. But the
record shows an additional $36 earned subsequent to the time Fisher
abandoned the picket line which must also be deducted as interim
earnings for this period?2 Deducting the aforementioned $27.75 and
$108 figures from the $452.95 gross back pay credited Fisher for this
third quarter, we find the net back pay due Fisher this quarter to be
$317.20. Thus adjusted, Fisher's net back pay amounts to $6,088.60.
• Marvin Warren, L. H. Carter, Jack Daniels, and Marvin Knuckles
each quit jobs obtained subsequent to their termination by Respondent,
under the circumstances described below :
Warren quit a job with the Union Pacific Coal Company obtained
on or about September 1, 1949, after a week's work, for which he was
paid $77.38. His pay with Respondent at this time would have been
77 cents an hour. Warren testified that he quit this job with the coal
company to return to Clarksville because he "couldn't find housing"
for his family at the job site in Hanna, Wyoming. The record does
not show what search for housing was made by Warren during his
short stay in Wyoming, during all or most of which he was busy at
work. Warren also quit a job in Denver, Colorado, in 1951 to return
to Clarksville, assigning as the reason therefor that he would "rather
lot be home than in Denver, Colorado, and I had a job here [in
Clarksville] that paid practically as much as that one there did."
Knuckles quit a job with the Navy at Mare Island, California, after
earning $204 for the month of November 1950. At Respondent's
establishment, he would have been paid 80 cents an hour at this time.
Knuckles testified that he quit this job because "At that time I did
=The Trial Examiner erroneously treated this amount as having been earned during
the second quarter.
OZARK HARDWOOD COMPANY 1139
not have sufficient funds to pay my rent in advance and buy furniture
and stuff at that time to rent a civilian home and live and -take care
of my children so I returned to Arkansas...."
Daniels quit a job with the Geneva Steel Company in Dragerton,
Utah, on August 6, 1951, at which he earned $2.36 an hour. He
would have earned 80 cents an hour with Respondent at this time.
The reason assigned for his quitting this job and returning to Clarks-
ville, where he had lived rent free in a house owned .by his father, was
that he was unable to obtain housing for his family. As in Warren's
case, this Claimant did not detail his alleged search for living, quar-
ters. In 1952, Daniels quit a job in Iowa, also assigning lack of
housing as the reason therefor.
Carter quit a job with Laclede Steel Company, Granite City, Illi-
nois, during the first week in September 1950, after 8 days of work
which earned him $52.35. His pay with Respondent at the time would
have been 75 cents an hour. Carter left the Granite City job because
his wife would not join him there and he "couldn't make enough to
keep her up back here [in Arkansas] with the kids and me out there."
The foregoing makes it plain that the jobs which the Claimants
quit paid wages at least comparable to the ones they held with Re-
spondent. It does not appear that the jobs were any more burdensome
than those with Respondent or that they were unsuited to persons of
the Claimants' skill and experience. Having obtained jobs substan-
tially equivalent to the ones they lost with Respondent, the Claimants
could not abandon them except for justifiable cause, without incurring
a willful loss of earnings within the meaning of the decisions. In
none of the cases do we find adequate reason for the quit. While the
absence of housing accommodations may justify the quitting of em-
ployment, we do not find that such a reason entered into the decisions
here to quit. In every case, it appears to us, the reason the Claimant
left his work was his preference for residing in his hometown, where
he might enjoy the personal benefits and advantages accruing there-
from. While these Claimants were not obligated, in the'first instance,
to leave the Clarksville area in their quest for work,23 they could not,
having obtained employment of the type described above, voluntarily
relinquish such employment to return home under the circumstances
herein without incurring what constitutes a willful loss of earnings
for the period subsequent to their quitting.24 Each Claimant, there-
fore, is entitled only to the back pay due him up to the time he quit
23 American Bottling Company, 116 NLRB 1303.
2 Compare the case of Billy Skidgell who was forced to give up employment in Superior,
Wisconsin , because of a skin condition caused by the climate . Such a quitting, we find, is
for a justifiable cause.
1140 DECISIONS OF NATIONAL LABOR RELATIONS BOARD.
his new employment 26 In view thereof, we shall enter a back-pay
order in these cases in the following amounts :
Warren-$525.91, net back pay for the period of the discrimina-
tion through the pay week ending September 7-,1949.26
Knuckles-$2,128.62, net back pay for the period of the discrimina-
tion through the pay week ending November 29, 1950.21
Daniels-$1,519.47, net back pay for the period of the discrimina-
tion through the pay week ending August 8, 1951.
Carter-$1,655.45, net back pay for the period of discrimination
through the pay week ending September 6, 1950.28
ORDER
Upon the basis of the supplemental findings of fact and the entire
record in this case , and pursuant to Section 10 (c) of the National
Labor Relations Act, as amended, the National Labor Relations
Board hereby orders that the Respondent, Ozark Hardwood Com-
pany, its officers, agents, successors , and assigns, including Ozark
Hardwood Manufacturing Company, shall pay to the discriminatees
involved in this proceeding as net back pay for the period from May
16, 1949, to March 31, 1954, the amounts set out below opposite their
names , as follows : 29
Dewey Accord-------------------------------------- $4,616.97
John L. Barnes-------------------------------------- 1,284.81
John Bartlett--------------------------------------- 408.67
L. G. Bartlett--------------------------------------- 188.70
Harold Boren --------------- -------------- ---------- 3,847.15
Lloyd H. Carter ------------------------------------ 1,655.45
Homer Currier-------------------------------------- 3,287.81
Garland Curtis-------------------------------------- 832.76
Jack Daniels ----------------------------------------- 1,519.47
zs Member Bean would not, however , terminate the back pay awarded to Carter as of
the time he ceased to work for the Laclede Steel Company . The record discloses that
Carter, almost immediately after returning from Granite City to Clarksville , began work-
ing for a construction company in a job that apparently was more remunerative than his
job with Laclede Steel. In these circumstances , Member Bean would not find that a
willful loss of interim earnings has been established in Carter 's case upon the basis merely
of his having quit the Laclede Steel job . Accordingly, Member Bean would award Carter
the full amount found due him by the Trial Examiner as set out in the Intermediate
Report.
s While Warren earned $77 . 38 in Wyoming, his expenses in connection with the trip to
Wyoming exceeded that amount so that the Wyoming wages are not deductible as interim
earnings.
21 As computed by the Trial Examiner , Knuckles ' expenses exceeded his interim earnings
during this period. No exceptions were directed to the expense allowances of the Trial
Examiner herein.
28 From the gross back pay of $304.50 due Carter for the third quarter of 1950 has been
deducted net interim earnings of $28.85, which figure was arrived at by deducting ex-
penses in connection with his trip to Granite City of $23 . 50 from the interim earnings
of $52.35.
29 No exceptions were filed to the Trial Examiner ' s disposition in the cases of L. G.
Bartlett and Marvin Nichols. We accordingly adopt his disposition in these cases.
OZARK HARDWOOD COMPANY 1141
Kenneth Davis-------------------------------------
Leonard William Duke-------------------------------
Lum Fisher-----------------------------------------
Bill Friend-----------------------------------------
Filo Hill-------------=-----------------------------
Marvin Knuckles -----------------------------------
Robert L. Martin------------------------------------
Lewis Merritt-------------------------------------
Earl Morrow----------------------------------------
Marvin Nichols --------------------------------------
Herman Owens-------------------------------------
James Payne ----------------------------------------
W.B. Rinke----------------------------------------
Billy Skidgell---------------------------------------
Troy Turner ---------------------------------------
Marvin Warren ------------------------------------
James Wade---------------------------------------
Ira Wolfe------------------------------------------
30
$587.14
2,488.80
6,088.60
1,144.83
264.40
2,128.62
8,282.80
4,618.47
2,928.67
None
2,691.75
None
2,664.44
1,771.65
1,003.13
525.91
553.02
3,302.00
MEMBER RODGERS, dissenting in part :
I agree with the majority's disposition of this case except as to the
finding that Harold Boren is entitled to back pay for July and August
1950. I would find that Boren incurred a willful loss of earnings
during those 2 months.
The period in question dates back to some 5 years before the hearing,
at a time when Boren had left Arkansas, where Respondent's plant
was located, for California. While it may be that the burden was on
the Respondent, even in these circumstances, to show that a reasonable
search for employment was not then made by Boren, I am satisfied
that the Respondent has sustained that burden. It proved at the
hearing that Boren did not register "with any employment service
or anything out there" in an effort to obtain employment during this
period of idleness in a foreign State. Such evidence, I believe, gave
rise to a prima facie case in favor of the Respondent, 3t making it in-
cumbent upon the General Counsel to come forward with evidence in
rebuttal thereof. But no such evidence was forthcoming. Boren him-
self was silent as to his efforts, if any, to secure employment during the
months in question. The prima facie case of the Respondent was there-
8u The net back pay due Duke prior to the Trial Examiner's deduction of $72 for the
1952 Second quarter figure was $2,560.80, rather than $2,506.80, as stated In the Inter-
mediate Report. And Appendix A attached to the Intermediate Report inadvertently
shows the net back pay due Duke to be $2,388.80, rather than $2,488.80, the correct
amount due him.
- If, as was announced in Southern Silk, registration is to be treated "as a factor to be
given greater or-less weight depending upon all the circumstances in each case," a claim-
ant's failure to register should be similarly appraised in determining the issue of reason-
able search.
DECISIONS OF NATIONAL LABOR RELATIONS BOARD1142
fore not overthrown and clearly suffices to satisfy its burden herein.
Faced with a similar situation in Venetian Blind Workers' Union Local
,No. 2565,32 the Board found that the Claimant therein had not made
the required search for employment . It should find that Boren was
equally derelict in his duty in this matter.
MEMBER ' JENTCINS took no part in the consideration of the above
Supplemental Decision and Order.
110 NLRB 780, 788
SUPPLEMENTAL INTERMEDIATE REPORT
STATEMENT OF THE CASE
This proceeding is on remand for the purpose of determining: (1) Whether Ozark
Hardwood Manufacturing Company (herein called Manufacturing Company) is a
successor to Ozark Hardwood Company (herein called Hardwood Company or the
Respondent ) to the extent that it is responsible for remedying certain unfair labor
practices found to have been committed by Hardwood Company; and (2) the amount
of back pay due 27 discriminatees.
On November 3, 1950, the National Labor Relations Board (herein called the
Board), after usual proceedings, entered its Decision and Order (91 NLRB 1443)
wherein it found that Hardwood Company had interfered with the rights of its em-
ployees guaranteed under Section 7 of the Labor Management Relations Act (herein
called the Act) and had discriminatorily discharged 27 of its employees. In its
Order the Board directed that Hardwood Company, "its officers, agents, successors,
and assigns ," cease from engaging in proscribed conduct; offer reinstatement to 25
employees (2 had already been reinstated); make whole 27 employees for loss of
earnings suffered from the date of discharge to the date of offer of reinstatement,
less their net earnings in that period ; and post appropriate notices.
About March 27, 1951, the Board filed its petition to enforce the order in the
Circuit Court of Appeals for the Eighth Circuit.
In the meantime, the chancery court of Johnson County, Arkansas, on March 15,
1951, entered its decree in the case of The Merchants National Bank of Fort Smith,
Arkansas v. Ozark Hardwood Company, et al., to foreclose a mortgage and directed
that, a public auction be held on April 2, 1951, of all Hardwood Company's assets
covered by the mortgage.
On March 31, the Board filed a petition with the circuit court praying that the
sale be enjoined and for other ' relief, notice of this action having been given to
counsel for the Respondent by telegram, dated March 30. (R 5, 6.) 1 On March
31, the court refused the Board 's application for a temporary restraining order and
on April 6 entered its opinion denying the relief requested. (188 F. 2d 354.)
As detailed below, the sale was held on April 2.
On March 7, 1952, the circuit court issued its decision granting the Board's petition
for enforcement (194 F. 2d 963), and on April 1 entered its decree enforcing the
Order of the Board.
On January 2, 1953, the Board filed a petition with the circuit court praying that
it be authorized to conduct a supplemental proceeding and issue a supplemental deci-
sion and order determining ( 1) whether Manufacturing Company and its officers and
directors as successors in interest to Hardwood Company and its officers and agents
were jointly liable for compliance with the terms of the Board's Order as enforced
by the court, and (2) the amount of back pay due under the Order.
On March 11 , 1953, the court entered its order granting in substance the relief
requested in prayer (1) and denying prayer (2) because no grant of authority was
necessary to entitle the Board to make such determination . (GC 1-A.)
On March 23, 1953, the Board duly issued an order reopening the record and
remanding the case to the Regional Director for the Fifteenth Region (New Orleans,
Louisiana), for further hearing on the above issues. (GC 1-B-F. )
On April 3, 1953, Manufacturing Company moved the circuit court to vacate
its order. of March 11, because the court had already determined the validity of the
foreclosure proceedings in the State court . On May 9, the court denied the motion:
1 References to exhibits are designated "GC" for General Counsel , "R" for the Re-
spondent, and "Mfg." for Manufacturing Company.
OZARK HARDWOOD COMPANY 1143
On May 19, 1953 , the Regional Director issued his notice of hearing in accord-
ance with the provisions of the Board's order of March 23. Thereafter , on Septem-
ber 14 , 1953 , a hearing was held before the duly designated Trial Examiner at
Clarksville , Arkansas , and on September 15, the case was postponed sine die in
order that the parties might conduct further investigation of the matter and attempt
to resolve the issues through negotiation . The parties being unable to reach agree-
ment, the Trial Examiner, with the consent of counsel and upon due notice , there-
upon resumed the hearing at Clarksville between September 20 and 28, 1955, at
which time all the discriminatees and other witnesses available in and about Clarks-
ville appeared and testified . Since many of the discriminatees had left the area for
other parts of the country , the hearing , with the consent of counsel , was resumed
at the following places during 1955, for the purpose of obtaining the testimony of
these individuals : Detroit, Michigan , October 10; Kansas City, Missouri , October
25; San Francisco , California , November 17 and 18; and Fort Smith, Arkansas,
December 7.
At all times the parties were represented by counsel and were afforded opportunity
to be heard, to examine and cross -examine witnesses , and to introduce evidence
relevant to the issues herein . Counsel waived oral argument at the conclusion of
the hearing and later submitted briefs which have been considered by the Trial
Examiner.
Upon the entire record in the case, and from his observation of the witnesses, the
Trial Examiner makes the following:
FINDINGS OF FACT
1. THE SUCCESSORSHIP ISSUE
A. Organization and operations of Hardwood Company
There is no factual dispute concerning the background, organization, and business
operations of Hardwood Company, as well as the financial affairs of the companies
and their officers, so, on the basis of the testimony of Joe Mills, as corroborated in
many respects by other witnesses, and various stipulations of counsel, the Trial
Examiner finds the facts to be as described below.
In 1941 or 1942, Mills and Noel Jones formed a partnership under the trade name
of Ozark Hardwood Company and commenced a sawmill operation at Clarksville
producing principally yellow pine and some hardwood in unfinished form, from
rough lumber purchased from independent lumber operators. In 1945, J. D. Knight
was admitted to the partnership, which continued, at least the pine operation, until
about April 1947. In this period Mills supervised the plant working force which in
1946 comprised approximately 25 employees and a planer mill foreman.
About July 1, 1946, Ozark Hardwood Company was incorporated under the laws
of the State of Arkansas with Jones as president, Knight as vice president, and Mills
as secretary-treasurer, and each owning one-third of the corporate stock. Mrs.
Mills (or Ada Mills) was employed as bookkeeper by Hardwood Company. Around
the time of incorporation, Hardwood Company commenced construction of a new
plant, located about one-half mile from the old one, which was completed sometime
in 1948. However, production started in some departments about April 1947.
While the pine operation continued at the old plant during the period of new con-
struction, that plant was eventually dismantled and 1 or 2 pieces of machinery were
moved to the new location. The limited operations at the old plant, plus normal
turnover, resulted in a reduction in the working force, and when Hardwood Com-
pany occupied the new plant an unstated number of these men became its employees.
The operations of Hardwood Company differed from those of the partnership
in that about 80 percent of its products consisted of finished hardwood lumber, a
small percentage of finished yellow pine, and wooden pallets used in the shipment
of merchandise. Hardwood Company, as related by Mills, was engaged in "manu-
facturing from the stump," that is, the rough tree or log was brought to the plant
where it was cut into lumber, graded and dressed, then sent to one of the depart-
ments-flooring, pallet or pine-where it was processed into the finished product.
Hardwood Company purchased substantially all of its logs from independent logging
contractors since it owned very little land. Mills further stated that Hardwood
Company created nearly 100 percent of its production needs until it finally closed
down the large sawmill about August 17, 1949, at which time it apparently obtained
lumber from outside sources of supply.
Mills, Jones, and Knight each invested $22,000 in Hardwood Company at the time
of its formation. Thereafter, Hardwood Company obtained a loan in the sum of
$200,000 from the Merchants National Bank of Fort Smith, in which the Recon-
1144 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
struction Finance Corporation participated , which loan was secured by a mortgage
dated August 5, 1946, covering the assets of Hardwood Company, including certain
timberland, and duly recorded in the mortgage records of Johnson County, Arkansas.
This loan was used by the Company to complete the building of its plant, to pay for
some of the equipment , and as capital with which to operate.
About February 2, 1948, Hardwood Company obtained a second loan in the sum
of $300,000 from Merchants National Bank, through the RFC, which was likewise
secured by a mortgage, except that the timberland was not specifically mentioned
in this instrument although it did contain a general clause covering all of its assets.
The foregoing sum was used to pay off the balance due on the initial loan and to
provide additional operating capital.
On May 3, 1947, Hardwood Company executed promissory notes to its officers
and Mrs. Mills, in the following amounts , payable on demand, with interest at 4
percent: Joe Mills, $15,000; J. D. Knight, $46,700; Noel H. Jones, $46,700; Nebo
Lumber Company (Noel H. Jones), $35,000, and Ada Mills, $17,270. (GC 6.)
Each of the payees testified that the notes represented moneys advanced by them to
Hardwood Company at various times prior to May 3, 1947. While the notes were
unsecured at the time of delivery, Hardwood Company subsequently, on January 16,
1950, executed a mortgage covering its property and assets to the payees in the
above amounts, except that a payment of $10,000 had been made on Joe Mills' note
reducing the principal sum to $5,000 , and reciting that all accrued interest had been
paid to date and that the mortgage was subordinate to the prior mortgage held by
Merchants National Bank for the RFC loan. (GC 7.) During the year 1950,
Hardwood Company made certain payments of interest and principal , so as of about
January 1951, the principal sum due upon each note was as follows: Joe Mills,
$5,000; J. D. Knight, $46,700; Noel H. Jones, $46,700; Nebo Lumber Company,
$30,000, and Ada Mills, $10,901.29. On January 5, 1951, Joe Mills endorsed his
note to his wife in settlement of some financial affairs between them.
About April 11, 1950, Hardwood Company obtained another loan from Merchants
National Bank in the sum of $15,000, payable in 90 days and secured by a mortgage
upon its assets, this mortgage being subject to the mortgage covering the RFC loan
but superior to the mortgage held by the officers of Hardwood Company and Ada
Mills, securing their notes described above. (R-11--G.)
The parties stipulated that Hardwood Company failed to make its monthly pay-
ment on the RFC loan in the sum of $ 6,000 on December 1, 1950, and likewise
failed to meet its monthly payments through April 1, 1951. On January 31, 1951,
RFC, in accordance with the terms of the loan, took over the servicing thereof from
the Merchants National Bank,2 at which time the unpaid balance amounted to
$188,453.69.
B. The foreclosure proceedings
In early March 1951, Merchants National Bank filed a complaint in the chancery
court of Johnson County against Hardwood Company, Joe and Ada Mills, Knight,
and Jones , praying judgment for $15,000 and foreclosure of the mortgage securing
the note, subject to the RFC mortgage. (R-11-A.)
On March 13, the individual defendants filed their answer admitting that the plain-
tiff was entitled to the relief requested . These defendants also filed a cross -complaint
against Hardwood Company praying judgment in the following amounts: Ada Mills
$15,901.29, Knight $46,700, and Jones $76,700, and foreclosure of their mortgage
securing the notes, subject to the prior mortgages held by RFC and Merchants
National Bank . (R-11-B.)
On March 14, Hardwood Company filed its answer to the complaint admitting
that the plaintiff was entitled to the judgment and relief requested. (R-11-F-2.)
The matter having been submitted on the pleadings , the court on March 15 entered
its decree, in which it found that the note held by Merchants National Bank was
past due and unpaid, that it was entitled to have its mortgage foreclosed , and that
the plaintiff recover from the defendants, jointly and severally, the sum of $15.622.50,
with interest, which under the terms of the mortgage would constitute a first lien
against the property of Hardwood Company subject to prior mortgage. (R-11-G.)
2 The bank actually loaned the money with RFC guaranteeing 75 percent of the original
sum and with the bank having the privilege of requesting RFC, at anytime , to purchase
its 75 percent and to take over the servicing of the loan and forwarding to the bank its
25 percent principal and interest as payments were collected . When RFC took over the
servicing of the loan it paid 75 percent of the then outstanding principal and interest to
the bank.
OZARK HARDWOOD COMPANY 1145
The court also found that Hardwood Company had failed to pay the notes de-
scribed in the cross-complaint, that they were entitled to have their mortgage fore-
closed and that Ada Mills, Knight, and Jones recover from Hardwood Company
the sum of $15,901.29, $46,700, and $76,700, respectively, which under the terms
of their mortgage would constitute a second lien upon the property of Hardwood
Company, subject to the prior mortgages held by RFC and Merchants National Bank.
The court also found that the aforesaid notes stand on a parity as to the lien of the
mortgage.
The decree further provided that if the above-mentioned sums, with interest and
costs, were not paid within 5 days, the court would appoint a commissioner to sell
the property at public sale to the highest bidder.
The decree further provided that if Ada Mills, Knight, and Jones should 'become
the purchaser at such sale they might credit the amount of their bid upon their re-
spective judgments at the time of the confirmation of the sale.
As appears in the commissioner's report, dated April 9, the property was offered
at public auction and bought in by Ada Mills, Knight, and Jones for the sum of
$107,414,3 that sum being the highest bid made at the sale.4 (R-11 I.) In accord-
ance with the provisions of the decree the property was sold subject to the prior
mortgages held by RFC and Merchants National Bank. Under the terms of the
sale the purchasers were required to pay the judgment obtained by Merchants Na-
tional Bank in the amount of $17,114.21 in cash to the commissioner, which they
did, and to take credit for the balance of their bid upon their judgments.
Thereafter, the court entered its order confirming the sale and directed the
commissioner to deliver his deed to the purchasers. (R-11-J.)
On April 2, the discriminatees, through their attorneys, moved for leave to inter-
vene in the proceedings on the ground that Hardwood Company was indebted to them
in the approximate sum of $60,000, that the claims of Ada Mills, Knight, and Jones
were invalid, that they have made no effort to preserve the assets of Hardwood
Company and encouraged the institution of these proceedings in order to dissipate
the assets of Hardwood Company and thereby avoid payment of the amounts due
to the intervenors and other creditors. (R-11-K.) The motion, which was opposed
by the defendants, was denied on April 10. (R-11-L-M.)
Ada Mills said that she, Knight, and Jones discussed the foreclosure proceedings
and all were aware of the fact that they might be required to purchase the property
in order to protect their investments. Consequently, they had a representative,
Charlie Gardner, attend the sale and purchase the property for them. Concerning
the RFC loan, she stated that when Hardwood Company defaulted in some of its
payments during 1949, both RFC and the bank agreed these payments could be
made at the end of the note. However, when Hardwood Company again defaulted in
1950 and 1951, she said the RFC threatened to foreclose under the terms of its
mortgage. Mrs. Mills was not certain whether these threats were ever made in
writing and, at the request of the General Counsel, promised to check her files for
any such communications. No letters of this character were produced at the
hearing.
Joe Mills testified that in addition to its secured obligations, Hardwood Company
as of April 2, 1951, had outstanding accounts payable amounting to between $55,000
and $60,000, most of which were 3 to 5 months in arrears. Mills was able to pay
off this indebtedness by June 30, 1951, through his efforts in collecting the accounts
receivable. At the time of the foreclosure sale Mills said that Harwood Company
owned about 2,000 acres of timberland which were not covered by the RFC mortgage.
Following a meeting between Mills and officials of the RFC and the bank on July
18, 1951, the parties stipulated that this land was sold to Leslie and Marjorie Bryant
on August 13 for $12,235 and the next day $12,000 was paid to RFC on its loan.
Ada Mills also testified that in addition to the unencumbered land mentioned
above, Hardwood Company, on April 2, had about $4,000 in cash, which it retained.
She could not recall for what purposes the money was used, other than probably
for the payment of Joe Mills' salary, Counsel for Hardwood Company stipulated,
which was satisfactory to the General Counsel, that part of the money was paid
to him for legal services rendered in connection with the instant case and other
matters.
3 The interest of these individuals in the bid is as follows : Ada Mills 111/ percent,
Knight 331/... percent. and Jones 55 percent, the same percentages that their respective in-
terests bear to the total judgments on their respective judgments on their cross-complaint.
4 Counsel stipulated two other bids were made at the sale : Merchants National Bank
bid $17,114.21, while a representative of Bryant Stave and Heading Company offered
$35,000.
1146 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Joe Mills remained on the payroll of Hardwood Company from April 2 until about
July 30, during which time he maintained office space at the plant apparently for
the purpose of liquidating the accounts payable and receivable and in performance
of his duties as adviser to the officers of Manufacturing Company. On August 1,
Mills became general manager of Manufacturing Company.
Counsel stipulated that although Hardwood Company has not engaged in business
since the foreclosure sale it is authorized to do so and has not been dissolved by
act of the stockholders or by operation of law. None of the stockholders of Hard-
wood Company, as stated by Mills, have ever received back any of their capital
investment.
C. Organization and financing of Manufacturing Company
Mrs. Mills testified that she, Knight, and Jones discussed the formation of a new
corporation in the latter part of March, shortly before the sale, and on April 2
articles of incorporation were duly issued to Manufacturing Company. (GC-26.)
Knight is president of Manufacturing Company, Jones, vice president, and Mrs. Mills,
secretary-treasurer, and each owns one-third of the stock therein. While Mrs. Mills
knew the Board had issued an order against Hardwood Company at or about the
time of the sale, she asserted that this fact was not mentioned in the discussions lead-
ing to the formation of Manufacturing Company. Knight could not recall when he
first learned of the Board's order and could not remember whether he had discussed
the same with Jones and Joe Mills. Jones likewise denied that he had any knowledge
of the Board's order at or about the date of issuance, and while he admitted discuss-
ing poor business conditions with Knight and Joe Mills he again denied that the sub-
ject of the order or the amount of back pay that might be due thereunder was ever
brought into these discussions. Jones conceded that he learned of the Board order at
some later, undisclosed date.
Mrs. Mills stated, that she and her sister, Mrs. Knight, raised between $16,000 and
$17,000 to purchase the property in accordance with the terms of the foreclosure
sale. Subsequently, around April 10, she, Knight, and Jones each put up $5,000
as operating capital in Manufacturing Company, which sum they borrowed from
Peoples Exchange Bank of Russellville, on their personal note .5
'Counsel stipulated that on April 11, Knight, Jones, and Ada Mills, by deed of
conveyance, duly recorded, sold to Manufacturing Company the identical property
purchased by them at the foreclosure sale for the sum of $107,414. Counsel further
stipulated that the vendors received no cash in this transaction but accepted notes
from Manufacturing Company, secured by a vendor's lien, subject to the RFC
mortgage, in the following amounts: Knight $35,955.17; Jones $55,369.91; and
Ada Mills $16,089.22.8
Counsel further stipulated that about the time that Manufacturing Company pur-
chased the inventory of Hardwood Company, the latter company was indebted to
Merchants National Bank in the sum of $20,000, which indebtedness was secured
by warehouse receipts on its inventory, which was assumed by Manufacturing Com-
pany. Counsel also stipulated that on June 6, 1951, Merchants National Bank
demanded payment of this indebtedness and that payment was made by Manufacturing
Company from the proceeds of a loan of $40,000 from McElroy Bank, Fayetteville,
Arkansas, secured by warehouse receipts dated June 6, 1951.
About September 11, 1951, Manufacturing Company reached an agreement
with RFC whereby it assumed the balance of the RFC loan.
About September 17, 1954, as stipulated by counsel, Manufacturing Company
obtained a loan in the sum of $150,000 from the First National Bank of Fort Smith,
Arkansas, in which the Small Business Administration participated, which was used
to pay off about $65,000 due under the RFC loan, about $15,000 in accumulated
insurance premiums, some $8,500 in outstanding obligations, and the balance for
operating capital. In order to secure the foregoing loan, Knight, Jones, and Ada
Mills (together with Joe Mills) executed their promissory note and agreed to
subordinate their vendors' lien to the mortgage executed to secure this loan.
Operations and Personnel of Manufacturing Company
Joe Mills testified that he heard the results of the sale around noon of April 2,
and later that day called a meeting of all the employees at which time he informed
them of the sale, and that Hardwood Company had no plant to operate and since he
5 Joe Mills was signatory on this note.
0 The record discloses neither the maturity date of these notes nor the method of
payment.
OZARK HARDWOOD COMPANY 1147
did not know whether the purchasers would reopen it he advised the workers to look
for other jobs. Following the meeting Mills gave instructions to the foremen to
shut . down the plant and this task was accomplished in 3 or 4 days , except for
certain equipment used in the woods which was hauled to the plant for storage.
According to Mills, all employees were discharged on April 2 , with the exception:
of a small crew to complete the shutdown operations.
On April 12, Manufacturing Company commenced operations under the super-
vision of Jones, an experienced lumber operator . Prior thereto , Mills discussed
procedures for reopening the plant with Jones and Mrs. Mills and , apparently, the
discussion ended with Jones stating the foreman would advise Mills which depart-
ment would first begin operations . Mills also discussed certain supervisory per-
sonnel and suggested that Gus Gillian , woods foreman , be retired because of his
age and eligibility to draw social security benefits and that he be replaced by
J. W. Brown, which recommendation was followed . Mills had no discussion as to
which employees of Hardwood Company should be hired and he did not contact
any of these workers regarding employment when Manufacturing Company began
operations.
Ada Mills stated that on April 12 , O. D. Brown was foreman of the flooring
plant and pine mill, John Ferguson was pallet plant foreman , and J . W. Brown was
woods foreman . O. D. Brown and Ferguson held similar positions with Hard-
wood Company , while J. W. Brown was employed in a nonsupervisory capacity.
She further stated that when O . D. Brown left Manufacturing Company about
July 4, 1951 , Ferguson became superintendent and Loy Higgins replaced him as
foreman of the flooring plant and pine mill and Sam Baskins (or Baskin) was
made foreman of the pallet plant . ( Mfg. 2. ) Higgins and Baskins had been
employed by Hardwood Company for a number of years. (GC 3.)
Mills testified that from the outset of operations at the plant by the partnership,
and throughout its existence , the various companies recruited their workers within
a radius of 15 or 20 miles of Clarksville . He further stated that when Manufactur-
ing Company began operations the employees of Hardwood Company were asked
to come back and a substantial ' number of these workers were employed . In this
respect the payroll records of Hardwood Company for the week ending April 4,
1951, the last full workweek , show a total of 117 employees , including 5 office
workers. ( Mfg. 4 ; GC 8.) For the week ending April 11, Hardwood Company
had 46 workers but only 11 of these individuals , excluding 4 office employees,
worked more than 3 days in that period . (R 7.) Similar records for Manufacturing
Company for the week ending April 18 , the first week of operations , show that
it had 119 employees , including 3 office employees . ( Mfg. 5 .) The parties
stipulated that 5 employees who were on Hardwood Company's payroll for April
4' do not appear on the first payroll of Manufacturing Company, and that the
latter's records contain the names of 7 employees who were not on the above
payroll of Hardwood Company.
Mills said that in the interval April 12 to August 1 he was at the plant prac-
tically every day he was in town (about 40 percent of his time ) and consulted with
Jones, who spent about half his time at the plant , on production and personnel
matters. At the time of the sale Hardwood Company had on hand about 6 unfilled
orders so when Manufacturing Company commenced production Mills contacted
these customers , advised them of the sale , and offered to fill their orders, which
offers were accepted by all of the customers except 1. Since Hardwood Company
left only a small inventory of finished products , Manufacturing Company filled
these orders through its own production facilities and shipped and billed the
customers in its name. Mills also solicited business from both old and prospective
customers and in the first year of operation succeeded in obtaining some 90 new
accounts for Manufacturing Company, representing about 65 percent of its total
customers . Mills estimated that by March 31, 1951 , 75 percent of all accounts
were new customers and at the time of this hearing the ratio had increased to about
90 percent . (Mfg. 3-A-B-C. )
As previously stated, Hardwood Company produced oak flooring , straight pine
lumber , common sidings, and hardwood pallets. About 80 percent of its produc-
tion consisted of hardwood and the remaining 20 percent pine lumber. When
Jones assumed supervision of the plant he immediately changed the method of
cutting or sawing logs in order to obtain a better grade of lumber , which required
some training of log crews by Brown , woods foreman. Likewise when the lumber
was placed in the dry kiln this process demanded more skill and supervision on
the part of the operator than the method used by Hardwood Company. Sometime
in August 1951 , Manufacturing Company began producing parquet flooring and
furniture dimensions (component parts to make the frame ), and in September and
1148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
October, respectively, added a new line of molding and molding trims and the
production of truck stakes and truck body parts. In 1952 the Company com-
menced the manufacture of special type pallets, box spring frames, and custom
sidings and in 1953 church furniture dimensions and kiddie play equipment were
added to its products. Since Hardwood Company did not have equipment capable
of manufacturing some of the new products, such as parquet flooring, furniture
dimensions, and box spring frames, Manufacturing Company purchased new
machinery valued at approximately $30,000. According to Mills practically all
the employees had to receive additional training in the processing of the new
products. Manufacturing Company in its operations uses about 40 percent pine
and 60 percent hardwood lumber. With respect to obtaining raw materials, Mills
stated that Manufacturing Company buys and manufactures from the log into
lumber in about 50 percent of its. operations, seemingly from timber rights it has
acquired, while the remaining 50 percent is purchased from outside lumber
operators. Mills named about nine such operators located in Arkansas with whom
Manufacturing Company has been doing business but who had had no similar
dealings with Hardwood Company.
Contentions of the Parties
The General Counsel, in his brief, takes the position that the.officers and stock-
holders of Hardwood Company, by permitting the foreclosure sale to occur, or
actively seeking foreclosure proceedings, in order to evade their statutory obligations
as well as those of the Respondent, Manufacturing Company is liable, as their
creature, for the unremedied unfair labor practices of Hardwood Company. In
addition, the General Counsel urges that the relationship between the companies
is of such a nature that Manufacturing Company is simply the alter ego of Hardwood
Company and therefore may be compelled to remedy the unfair labor practices on
the theory of successor organization.
Manufacturing Company asserts that financial difficulties of Hardwood Company
culminated in the sale of the plant following appropriate foreclosure proceedings
instituted by a bona fide creditor, and eventual transfer of the property to it, and
that the sale was not effected to avoid Hardwood Company's obligations under the
order of the Board.
Counsel for Hardwood Company does not touch upon the subject of successor
responsibility in his brief but his position throughout the hearing, if not in direct ac-
cord with the theory of Manufacturing Company, is certainly not in conflict
therewith.
In short, Manufacturing Company also urges that the State court's determination
of the validity of the mortgage held by the officers and stockholders may not be
collaterally attacked in this proceeding. On the other hand, the General Counsel
argues the matter is not res judicata insofar as the issues herein are concerned.
Concluding Findings
The scope of the proceeding on remand
Counsel for Manufacturing Company argues that the validity of the mortgage
executed by Hardwood Company to Joe and Ada Mills, Knight, and Jones having
been judicially determined by the State court, and this action having been upheld
by the circuit court by its refusal to grant the Board's petition for injunctive relief
restraining the sale or distributing the assets of Hardwood Company, is decisive of
that matter, consequently the attempt to litigate the same question in this case is
improper.
The Trial Examiner cannot agree with that proposition for the reason that the
State court decided the matter on issues different from those presented here and
the denial of injunctive relief to the Board occurred in a preliminary proceeding,
albeit the circuit court did state that the final decree of the State court did present
an "insurmountable obstacle in the way of the Board's petition.. . .. However,
in granting enforcement of the Board's Order the circuit court, in overruling the
Respondent's contention that the words "successors and assigns" should be deleted
from the Order because the plant had been sold in foreclosure proceedings, stated:
(supra, p. 966)
But this naked fact alone does not give its contention as to the words "succes-
sors and assigns" any more concreteness of appeal, for we do not know who
the purchaser is, what operations the purchaser intends to carry on, or what
the basis of relationship involved may be. Nor are these facts matters about
which we need have any present concern.
OZARK HARDWOOD COMPANY 1149
Finally, the circuit court in its order of March 11, 1953, authorized the Board to,
conduct a supplemental proceeding for the purpose of determining the relationship
of Manufacturing Company to Hardwood Company and its status and obligation, if
any, as alleged "successor" of Hardwood Company, "within the legal meaning and
intendment of that term as used in the Board's order and the enforcement order of
this court, for the purposes of compliance with the provisions of that order."
In view of the specific language used in the above opinion and order the Trial
Examiner concluded, and now concludes, that the supplemental proceeding encom-
passed an inquiry of all the facts and circumstances bearing upon the relationship
of Manufacturing Company to Hardwood Company, including the sale or transfer
of any assets between the companies. This was the basis on which this hearing
was conducted.
The Obligation of Manufacturing Company to Comply With the Terms of the
Board's Order as Enforced by the Court
The foreclosure proceedings
At the outset it must be pointed out that the General Counsel does not question
the validity or propriety of the loans made by or through the RFC to Hardwood
Company and the legal obligations created under the mortgages to secure those
loans. The same is true of the Merchants National Bank loan, other than certain in-
ferences drawn from the fact that foreclosure proceedings were instituted. It is
sufficient to state that the record conclusively proves the validity of the foregoing
loans and mortgages and the Trial Examiner so finds.
Although not directly attacking the legal aspects of the mortgage executed in favor
of the officers and stockholders of Hardwood Company and Ada Mills, the General
Counsel asserts that there was no necessity for the mortgage and that the noteholders
in obtaining the mortgage were motivated by a desire to have their indebtedness
preferred over possible claims of the discriminatees as a consequence of the issuance
of the complaint. Thus, it is argued that since the noteholders waited over 2 years
before obtaining security for their notes and as they have advanced no valid reasons
for resorting to this action, it must be presumed that they were prompted by the
aforementioned motives. As further support for his theory the General Counsel
attaches significance to the fact that the mortgage was obtained only 4 days after
the issuance of the complaint in this case. This argument is persuasive on the ques-
tion of motive but it cannot be said that the mortgage is invalid for it is undisputed
that it was given to secure notes which in turn were based upon valuable considera-
tion granted by the noteholders to Hardwood Company.
The General Counsel contends that the circumstances which led to foreclosure
action by Merchants National Bank and the formation of Manufacturing Company
warrant the conclusion that Hardwood Company and its officers resorted to these
means in order to evade remedying the unfair labor practices found by the Board.
Before discussing this phase of the case the Trial Examiner wishes to point out that
there is no evidence, or even contention, indicating any arrangement between the
bank and Hardwood Company, or its officers and stockholders, or Ada Mills whereby
these individuals, through foreclosure proceedings, might obtain preferment of their
claims to the detriment of the Board and the rights of the discharges under the
order of the Board.
Here the facts disclose that in March 1951, and for some time prior thereto, Hard-
wood Company, Joe and Ada Mills, Knight, and Jones made no payments, except
some interest, on their note to the bank in the sum of $15,000, yet when the prop-
erty was purchased on April 2 by Ada Mills, Knight, and Jones, they raised
$17,114.21 in cash to satisfy the bank's judgment. In addition, about April 10,
these individuals, as officers and stockholders of Manufacturing Company, were able
to borrow $15,000 from Peoples Exchange Bank of Russellville, on their personal
note (with Joe Mills on the note), and then about June 6, Manufacturing Company
and its officers and stockholders were able to obtain another loan of $40,000 from
the McElroy Bank. Moreover, during the approximate period April 1950 to April
1951, Hardwood Company paid some $5,000 in interest to Joe and Ada Mills, Knight,
and Jones on their notes dated May 3, 1947, and secured by the mortgage of January
16, 1950, and sometime between the latter date and March 13, 1951, the date of the
filing of the cross-complaint in the foreclosure case, payment or payments of interest
and principal had reduced Ada Mills' note from $17,270 to $10,901.29. These
facts clearly negate the contention that the Hardwood Company and its officers
were unable to make any payments on the Merchants National Bank note solely for
financial reasons. Certainly, it is incongruous to say that while Hardwood Company
could make substantial payments on its indebtedness to its officers, and stockholders
1150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and Ada Mills, it was in no financial position to curtail its bank loan. Again, it is-
neither reasonable nor plausible to believe that Hardwood Company and its officers
could not have obtained funds to meet payments on the bank loan, had they so
desired , for immediately following the public sale 2 of the 3 officers and the wife
of the third had no difficulty in raising money to satisfy the bank's judgment, to
obtain $15,000 capital for Manufacturing Company, and within 2 months to borrow
$40,000 from another bank . Nor is there any persuasive evidence concerning Hard-
wood Company 's alleged poor financial condition at or about the time in question.
It is true that Joe Mills testified business was bad, that the Company owed $55,000
to $60,000 on open accounts, and that the RFC loan was in default, with some threat
of foreclosure under its mortgage. This testimony is not convincing, for Mills also
testified that he was able to pay the accounts payable out of proceeds from the
accounts receivable and the RFC not only took no steps in regard to foreclosing on
its loan but on the contrary agreed to assumption of this debt by Manufacturing
Company.?
Equally insubstantial is Joe Mills' assertion that production and sales were very
low about November 1950 and he had difficulty in keeping the plant open. If such
conditions existed they would certainly be reflected in the number of workers employed
at that time in comparison to the number employed before and after the critical
period. At the hearing Hardwood Company offered in evidence a tabulation giving
the total number of all employees on its payroll, on a weekly basis, from May 18,
1949, to April 11, 1951. (R. 12.) These records show that from January to March
1950, seemingly a subnormal period, the total number of employees varied from a
low of 63 to a high of 103, the weekly average being about 78, and, from April
through October the number varied from 90 to 128, with an average of about 113
employees per week. For the 5 payroll periods in November, the Company had
118, 116, 114, 119, and 117 employees, respectively, and for the 4 periods in Decem-
ber it employed 112, 115, 116, and 115 workers, respectively. From January to
April 4, 1951, the records show that the total number of employees varied from
100 to 121, and averaged about 114 workers each week. The employment figures
plainly refute the testimony of Mills that production and sales were so very low
he had trouble keeping the plant open, for, if this was the fact, it is unbelievable that
Hardwood Company would not have reduced the number of its employees, as it
obviously did in the early part of 1950, rather than maintain its normal working
force throughout the period in question.
The reasons advanced by Hardwood Company and Manufacturing Company in
explanation of their actions are. anything but compelling or forceful. Indeed, when
these reasons are considered in the light of all the evidence the conclusion must be
reached that they not only fail to substantiate the contentions of the corporations
but, on the contrary, by direction and inference strongly support the proposition
that the foreclosure action could have been easily averted by the old corporation
and that the formation of the new corporation, for the purposes stated, was wholly
unnecessary.
This conclusion is supported by the decision of the Second Circuit in N. L. R. B.
v. E. C. Brown Co., at al. (184 F. 2d 829). There Brown Company shut down its
factory and about 2 months later it was reopened by a new corporation, Production
Line Manufacturers, Inc., whose officers were high salaried employees of Brown
Company. Brown Company and Production Line signed an agreement whereby the
4 Counsel for Manufacturing Company, in his brief refers to a meeting at Clarksville on
July 18, 1951, between RFC officials and Joe Mills, Knight, and Jones at which time they
-discussed the status of the loan and the application of proceeds from the sale of timber-
land owned by Hardwood Company on the note. At the hearing counsel stipulated that if
T. H. Duke. an official of RFC, was called as a witness he would testify he attended this
meeting but had no independent recollection of what transpired. However, the next day.
in line with his practice, he prepared a memorandum for the official files giving his version
of the events which occurred and while he could identify his signature thereon, neverthe-
less the memorandum would not refresh his recollection as to what took place at this
conference. Counsel for Hardwood Company and Manufacturing Company objected to the
receipt in evidence of this document and the Trial Examiner reserved ruling thereon.
(GC 10.) The Trial Examiner is of the opinion that his memorandum may be received
in evidence as proper past recollection recorded and so concludes . ( Custom Underwear
Manufacturing company, 108 NLRB 117, 119-120, footnote 3.) While the Trial Examiner
.does not rely upon 'this document to support the findings herein, it is interesting to note
that Duke expresses the following opinion therein : "Our collateral is worth several times
the unpaid balance' of our debt, and , there is no question whether or not our loan is a
mood one."
OZARK HARDWOOD COMPANY 1151
latter leased the building and equipment and produced sprayers which it sold to
Brown Company. The agreement also provided that the new corporation would
purchase its own materials to the extent its credit allowed and the old company
agreed to use its credit for this purpose, if necessary. Under these circumstances
the court stated that respondents were required to establish with utmost cogency
any other conclusion than the Board's before its findings of unfair labor practices
would be disturbed. The respondents explained that (1) the shutdown was neces-
sary to remedy defects in its products and (2) losses had so impaired the old cor-
poration's credit it could no longer finance its operations. The court rejected the
first explanation although the old company did have trouble with its product and
spent over $63,000 in reconditioning defective sprayers. Likewise, the court re-
fused to accept the second explanation, stating: (p. 832)
If on the other hand the defects in the "sprayers" are supposed to' have injured
the power of the old company to borrow, we are not told by what reasoning
the credit of the new company would be stronger: a company with a capital
of $100, managed by officials of the old company, unable to make any profits
of its own, and with a credit so feeble as to require the backing of the credit
of the old company. Such explanations, instead of being an answer to the
inferences, naturally following from the sequence of events we have described,
only serve to confirm them.
Finally, there is nothing in the Act which denies the Board, or the court in this
instance, the power to inquire fully into the circumstances bearing upon the fore-
closure action in order to determine if the purposes of the Act are being thwarted
thereby. The Supreme Court so held in The Wallace Corporation v. N. L. R. B. (323
U. S. 248). In that case in an attempt to resolve a labor dispute a settlement agree-
ment, approved by the Board, was signed by the company, a CIO union, and an
independent union. Following a consent election held pursuant to the agreement,
the Board certified the Independent as the bargaining representative of the employees.
The company and the Independent then signed a closed-shop contract with knowl-
edge that the Independent intended, by refusing membership to CIO employees, to
oust them from their jobs. This they did and the company discharged the CIO
adherents. In subsequent unfair labor practice proceedings the Board found the
contract was illegal because the Independent had been established, maintained, or
assisted by the company, consequently the discharges thereunder were in violation
of Section 8 (3) of the Act. Neither the Board nor the circuit court found that
the company engaged in any conspiracy to bring about the discharge of the CIO
members, but that the company did sign the contract knowing the Independent
proposed to refuse to admit them to membership and thereby accomplish the same
purpose. The company contended that the findings as to company domination were
unsupported by evidence because the evidence on that subject antedated the settle-
ment agreement and certification, hence improperly admitted, and that the Board, on
the basis of general principles governing estoppel, could not go behind the settle-
ment agreement and certification. The court held that principle had no application
because the differences in origin and function between administrative bodies and
courts "preclude wholesale transplantation of the rules and procedure, trial, and re-
view which have evolved from history and experience of courts." (Citing Federal
Communications Commission v. Pottsville Broadcasting Co., 309 U. S. 134, 143.)
With respect to the Board's power to fashion its procedure in the attempted settle-
ment of labor disputes to accomplish the purposes of the Act, the court said:
(p. 253)
We cannot, by incorporating the judicial concept of estoppel into its procedure,
render the Board powerless to prevent an obvious frustration of the Act's
purposes.
Here we have a situation where Hardwood Company claims it was in such financial
straits that it could not pay, or arrange to pay, an indebtedness which was relatively
small in comparison to its other obligations. Yet, when a judgment was entered
against it and its officers, two of the latter and Ada Mills quickly raised sufficient
funds to satisfy the same with interest, court costs, and commissions. Further, no
plausible explanation is advanced as to the necessity of a new corporation to
straighten out or salvage the affairs of the old corporation. Certainly, if Knight,
Jones, and Joe Mills as officers and stockholders of Hardwood Company were unable
to successfully manage the business, how then could Knight, Jones, and Ada Mills,
through the simple expedient of a new corporation, expect to overcome the financial
difficulties suffered by the old corporation, especially when it is considered that they
took over the same plant and equipment, practically the identical working forte,
1] 52 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
and assumed all secured debts, which were in substantial amounts. It is also sig-
nificant that Joe Mills, although still on Hardwood Company's payroll, acted as
adviser to the officers of Manufacturing Company from the very beginning, and
within about 3 months after he had closed out the affairs of the old corporation,
became general manager of the new corporation . Again, the question must be
asked, how could Manufacturing Company overcome the alleged difficulties en-
countered by Hardwood Company under virtually the same leadership which was
responsible for the predicament in which the old corporation purportedly found
itself?
The facts refute the contention that the formation of the new corporation was
prompted by the poor financial condition of the old corporation for it is clear that
had the moneys been advanced to it , instead of the new one , those problems would
have been solved. The net result of the procedures followed is that the noteholders
of Hardwood Company ended up with its property and assets , so they clearly
strengthened their positions as creditors. In like manner, Knight and Jones bettered
their positions insofar as their initial investments in Hardwood Company are con-
cerned. Admittedly , Joe Mills, at least on the surface , might lose his original invest-
ment'in Hardwood Company, but it must be remembered that by transferring his
note to his wife he technically removed himself from the advantages acquired by
the other noteholders and, in any event, he would up as plant manager under the
new setup . Equally important is the fact that Hardwood Company was able to
pay off all its unsecured creditors . The single obligation of Hardwood Company
untouched and unsatisfied under the plan was the fulfillment of its statutory duty
for back pay as provided in the order of the Board. Consequently , the Board , acting
in the public interest on behalf of the discriminatees , is the only one to suffer as a
result of the chain of events set in motion by Hardwood Company and its officers.
As aptly stated in the E. C. Brown case, the explanations offered by the corporations,
instead of being an answer to the logical inference that these acts were motivated
by a desire to escape liability under the Board 's order , simply serve to confirm that
inference.
The Trial Examiner therefore concludes and finds that the only reasonable in-
ference to be drawn from the course of conduct pursued by Hardwood Company and
its officers is that they permitted the bank loan to become in default , knowing that
the natural and legal sequence of this action would be the institution of foreclosure
proceedings , and the ensuing advantages to be derived to the noteholders of Hard-
wood Company and the avoidance of corporate and officer liability under the Board's
order of reinstatement and back pay for the dischargees . To hold otherwise would
give sanction to a plan or strategy which would completely frustrate the Board's
attempt to effectuate the purposes of the Act and to prevent the commission of unfair
labor practices through its order and the decree of enforcement entered by the circuit
court. The fact that a portion of the plan or strategy has received judicial approval
by a State court in an action involving bare, narrow legal principles is immaterial
and has no authoritative effect upon the issues in this matter.
The Responsibility of Manufacturing Company as Successor of Hardwood Company
to Remedy the Unfair Labor Practices
As already found, Knight , Jones, and Ada Mills discussed the formation of a new
corporation in the latter part of March and immediately following their purchase
of the property on April 2 it became a de jure corporation . The organization,
financing , and acquiring of property by Manufacturing Company is described above
and will not be repeated here.
The question for determination , as propounded by the circuit court, is whether
Manufacturing Company is a successor corporation within the legal meaning and
intendment of that term as used in the Board 's Order and enforcement order of the
court for the purpose of compliance with the provisions of that order.
Counsel for Manufacturing Company, among other grounds , relies upon the pro-
priety of the purchase of the plant and equipment at the foreclosure sale and the
right of Knight , Jones, and Ada Mills to form a new corporation with any officers
they chose to elect as an answer to the General Counsel's contention that Manu-
facturing Company is liable for compliance with the Board 's Order on the successor-
ship theory.
The liability of a successor or assign for remedying unfair labor practices com-
mitted by its predecessor seems reasonably well settled.
In Regal Knitwear Company v . N. L. R. B . ( 324 U . S. 9), the Supreme Court
held that the term "successor and assigns" in an enforcement order may not enlarge
OZARK HARDWOOD COMPANY 1153
its scope beyond that defined in rule 65 (d) of the Federal Rules of Civil Procedure.8
However, where the respondent seeks to evade an order through successors and
assigns, they are then brought within the scope of the rule, for the Court pointed
out that Board orders are binding upon successors and assigns who operate as
"merely a disguised continuance of the old employer," citing Southport Petroleum
Company v. N. L. R. B. (315 U. S. 100, 106). On this point the Court also referred
to its decision in Walling v. Reuter Company (321 U. S. 671, 674), wherein it held
that orders to restrain violation of the Fair Labor Standards Act are not only enforce-
able "against the corporation, its agents and officers and those individuals associated
with it in the conduct of its business, but it may also, in appropriate circumstances,
be enforced against those to whom the business may have been transferred whether
as a means of evading the judgment or for other reasons." The Court expressly
stated that in these cases "the reference is not merely to succession but to a relation
between the defendant and the successor which might of itself establish liability
within the terms of Rule 65."
Subsequent to this decision the Board in the Alexander Milburn case (78 NLRB
747) held that even a bona fide purchaser of a business is responsible for remedying
his predecessor's unfair labor practices if he buys the business with knowledge of a
Board proceeding against his predecessor on account of such unfair labor practices,
and if he continues to operate the business with the same supervisory personnel,
and without any discernible change in labor policy. In reaching this conclusion the
Board did not interpret the Regal Knitwear case as implying that a successor as
presently involved was not responsible for remedying the unfair labor practices of
its predecessor.
However, the Court of Appeals for the Tenth Circuit in N. L. R. B. v. Birdsall-
Stockdale Motor Company (208 F. 2d 234), refused to follow the doctrine announced
in the Alexander Milburn case and later cases. There the court held that the sale
of the respondent's business to a bona fide buyer, Johnson Pontiac, Inc., with knowl-
edge of an unfair labor practice proceeding was insufficient to charge the buyer with
responsibility for remedying the unfair labor practice although it continued to
operate substantially the same business with the same personnel. In reaching this
conclusion the court relied upon the principles declared in the Regal Knitwear case,
namely, that liability is predicated not merely on succession but the relationship
between the defendant and the successor which might of itself establish liability within
the meaning of rule 65. The court found that such a relationship did not exist, for
Johnson neither had nor acquired any interest in Birdsall and the same was true
of Birdsall; that Johnson was not an instrumentality through which Birdsall sought
to evade the Board's order; that it had not been in active concert or participation
with Birdsall in violation of the order; and that Johnson's operations were not merely
a disguised continuance of the old operations. On the contrary, the court found
Johnson was a bona fide buyer in nowise associated with and acting wholly independ-
ent of Birdsall; therefore, the order was not enforceable against Johnson.
Shortly after the issuance of the above decision, the Board decided to reexamine the
Alexander Milburn doctrine, which it had applied in Symns Grocer Co. (103 NLRB
622). In that case the Board held that the sale of Symns' business to Idaho Whole-
sale Grocery Company, a subsidiary of a competitor, rendered Idaho responsible
for remedying the unfair labor practices of Symns, even though the sale was not
made to evade Symns' liability under the Act and Idaho had not engaged in any
unlawful acts. In its Supplemental Decision 9 (109 NLRB 346) the Board stated
that the rule expressed in the Regal Knitwear case defining the classes of persons
bound by orders of Federal courts does not "reach persons who purchase the business
of a party litigant under the conditions governing Idaho's purchase of Symns'
business in the instant case." The Board concluded that there was no statutory
warrant for finding Idaho responsible for remedying the unfair labor practices of
Symns and entered an amended order in conformity with its decision.
The rule in the Symns case was followed by the Board in T. A. Tredway and
S. E. Taylor, partners, d/b/a Diaper Jean Manufacturing Company, et al. (109
8 The rule provides :
Every order granting an injunction and every restraining order . . . is binding only
upon the parties to the action, their officers, agents, servants, employees, and attor-
neys, and upon those persons in active concert or participation with them who receive
notice of the order by personal service or otherwise.
9A petition to enforce the original order had been filed in the Court of Appeals for the
Ninth Circuit. However, the court granted the Board's motion to withdraw the petition
without prejudice and the case was returned to the Board for further consideration.
476321--58-vol. 119-74
1154 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
NLRB 1045), where it had before it the question of liability of some six companies
and an individual, Mrs. T. A. Tredway, for certain unfair labor practices found to
have been committed by the partnership respondent and T. A. Tredway d/b/a
Randy Sportswear Manufacturing Company. Sometime after the commission of
the unfair labor practices Randy Sportswear, Inc., was formed with Mr. and Mrs.
Tredway owning two-thirds of the stock and the remainder being held by new
stockholders who contributed substantial money to the corporation. While the
new corporation carried on the same business as Randy Sportswear Manufacturing
Company, the Board found it was not the alter ego of the partnership or Randy
Sportswear Manufacturing Company, hence not liable for remedying the unfair
labor practices, since the plant was located in a different community from the old
company and the new stockholders, including Mrs. Tredway,10 were in no way
involved in the unfair labor practices of the entities or had any interest whatever
in those companies. However, the Board found that the formation of Taylor Manu-
facturing Company by one of the partners, S. E. Taylor, was part of a plan which
culminated in moving certain operations of the partnership respondent to another
location and, therefore, this company was liable for all the unfair labor practices
consequent upon that move.
The foregoing authorities do not support Manufacturing Company's position that
it is not a successor corporation and responsible for remedying the unfair labor
practices, for the facts upon which those decisions were based are easily distinguish-
able from the facts in the present case. Here it must be considered that Knight and
Jones being officers of Hardwood Company at the time of the commission of the
unfair labor practices are plainly included within the class of persons bound by the
order as defined in Rule 65. This is true despite their hazy testimony concerning
actual knowledge of the order. Ada Mills admitted she was aware of the order
and since she was employed as bookkeeper by Hardwood Company she, too, comes
within the definition of persons bound by the order as set forth in the above rule.
Unquestionably, Joe Mills is bound by the order for he was an officer at the time
in question and later counseled the officers of the new corporation and joined its
staff in a top managerial position. These facts establish liability upon the new
corporation and its officers on the principle announced in the Regal Knitwear case,
and followed in Birdsall-Stockdale, that responsibility of a successor company is
predicated not merely on succession but the relationship "between the defendant and
the successor which might of itself establish liability within the terms of Rule 65."
In the opinion of the Trial Examiner it would be difficult to envision a closer
relationship between the predecessor and successor entities and their officers than
presented here.
Counsel for Manufacturing Company cites N. L. R. B. v. Tupelo Garment Company
(122 F. 2d 603 (C. A. 5) on contempt) to support his argument that Knight,
Jones, and Ada Mills had the right to purchase the property, to form their own
corporation, and to elect officers of their own choosing. There the court refused
to adjudge certain companies in contempt on the theory that they were successors
to the respondent which had been voluntarily dissolved by its directors and stock-
holders. Thereafter, some of its property was acquired by its landlord, a realty
corporation, which in turn sold the same to new corporations. Some, but not all,
of the officers and stockholders of the new companies had been officers and stock-
holders of the old company. The court held that the stockholders had the right
to dissolve the old company and form new companies to purchase the equipment;
therefore they were not successors to the old company. It is sufficient to point out
that the Tupelo case was decided prior to the Regal Knitwear case and subsequently
the circuit court in LeTourneau Company v. N. L. R. B. (150 F. 2d 1012) .11 adopted
the principle laid down in the Regal Knitwear case. Moreover, the Board in a recent
case, J. W. Rex Company (115 NLRB 775), held that the respondent was not entitled
to exemption from liability for unfair labor practices on the ground that it was a bona
fide successor because:
since it appears that the officers of the Respondent herein are substantially
identical with those of its predecessor, including Mr. J. W. Rex as president and
in charge of labor relations for both companies, and were in control of the
predecessor during the commission of the admitted unfair labor practice, we
10 The Board dismissed the complaint as to Mrs. Tredway because she had no interest
in the partnership or Randy Sportswear Manufacturing Company separate and apart
from that of her husband and there was no evidence that she was acting as an agent for
these entities, either directly or indirectly.
11 Reversed on other grounds in N. L. R. B. Y. LeTourneau Company, 324 U. S. 793.
OZARK HARDWOOD COMPANY 1155
find that the Respondent is not a bona fide successor . . . whose knowledge of
and privity with the predecessor 's violation of the Act removes it from the
exception . See Oriole Motor Coach Lines, Inc., 114 NLRB 808.
The Court of Appeals for the Eighth Circuit approved the doctrine of the Regal
Xnitwear case in N. L . R. B. v. New Madrid Manufacturing Company ( 215 F. 2d
-908) and held that the purchaser of equipment and machinery of the respondent,
who had been manager of the plant before the sale and who had participated in
.:some of the unfair labor practices committed by the respondent , must be regarded
.as more than a naked purchaser-successor to the business , even though removed
to a different location , and may be held liable for remedying the unfair labor
;practices found to have been committed.
In view of the circumstances leading to the formation of Manufacturing Com-
pany, as found above, and the fact that two of its officers and stockholders were
associated with Hardwood Company in similar capacities , that its third officer and
stockholder had been employed in a responsible position by the old company, and
-that its adviser and plant manager had been an officer and stockholder in the old
corporation , all this occurring during the period when the unfair labor practices
were committed , leads the Trial Examiner to conclude and find that it is not, and
was not , a bona fide purchaser within the meaning of that term and, that Manu-
facturing Company is nothing more than the alter ego of Hardwood Company.
Accordingly , it is responsible for remedying the outstanding unfair labor practices
committed by Hardwood Company.
Other arguments urged by counsel for Manufacturing Company have been
considered and rejected as insubstantial and not affecting the issues herein. Thus,
the Trial Examiner cannot see how the manner in which the plant was shut down
after the sale bears any relation to the motive therefor and, certainly , the new
corporation experienced no difficulty in resuming full operations within a short
time. Nor can the Trial Examiner attach any importance to slight changes that
may have occurred among the supervisory personnel over a period of time, or the
fact that the new management may have obtained raw materials from another
source. Again , granting that Manufacturing Company obtained new customers,
many of them a year or two after resumption of operations , that factor has little
,or no weight when considered in the light of the findings herein . Finally, the Trial
Examiner fails to see where there has been any substantial change in plant opera-
tions by Manufacturing Company. It is true that the new company did add some
products not produced by the old company, but these slight expansions , which might
be expected , did not vary the basic character of the business , required only little
additional machinery , and were manufactured by the same working force after some
training on the particular operation . The foregoing contentions , even if accepted,
would not alter or affect the findings and conclusions set forth above.
H. THE BACK-PAY ISSUE
A. The Board's order
The Board , having found that Hardwood Company discriminatorily discharged
27 employees , entered its order requiring the Respondent to offer reinstatement to
each of the employees to his former or substantially equivalent position without
prejudice to his seniority or other rights and privileges and to make him whole for
any. loss of pay he may have suffered during the period from the date of discharge,
May 16 , 1949, to the date of the offer of reinstatement . The order provides that
loss of pay is to be determined by deducting net interim earnings from the sum
each would normally have earned , computed on a quarterly calendar basis. The
order further provides that as L. G . Bartlett and Marvin Nichols were reinstated
they shall be made whole, in the same manner, from the date of discharge to the
date of reinstatement , which period in Bartlett 's case runs from May 16 to July 25,
1949, and in Nichols ' case from May 16 to November 1949.
The parties being unable to reach agreement as to the amount of back pay due
the discriminatees , the matter was remanded for determination of that question.
B. The positions of the parties
1. The back-pay period
The General Counsel contends that since no offers of reinstatement have been
made to the dischargees , except as stated , back pay continues to run until such
time as appropriate offers are made.
1156 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Hardwood Company claims that the period ends on December 1, 1949, because
the following day the Union placed a picket line at the plant, which was maintained
until about July 7, 1950, 12 and since the discriminatees were union members and
either performed picket duty at one time or another, or acquiesced in the action,
they would not have worked while picketing was in progress. As a consequence,
the Respondent argues that the discriminatees must be denied back pay from the
date of the formation of the picket line until they applied for reinstatement, and
as none of them made any such application, the back-pay period terminates as of
December 1, 1949.
The Respondent further contends that in any event, it is not liable for back
pay subsequent to April 4, 1951, the last full.workweek following the sale of the-
plant.
Manufacturing Company, apart from its denial of any responsibility, does not
touch upon the subject of back pay in its brief, although at the hearing its.
counsel cross-examined the discriminatees concerning their interim earnings.
subsequent to April 12, 1951, and whether they had applied for employment after
this date.
Concluding Findings
Counsel for Hardwood Company relies upon the decision in Kitty Clover, Inc..
(103 NLRB 1665), and other cases,13 which hold that where employees are dis-
criminatorily discharged while engaged in a strike it is the practice of the Board to:
award back pay from the date of an unconditional application for reinstatement.
rather than the date of discharge because loss of wages cannot be conclusively
attributed to their discharge until the employees have indicated a willingness to.
abandon the strike. The Board affirmed that practice in a recent case, Brookville
Glove Company, 114 NLRB 213. Unquestionably, the policy adopted by the-
Board in these cases is sound, but it has no application in the present matter for
the unlawful discharges preceded the picketing by approximately 6 months. Under
these circumstances, and as clearly pointed out in the Kitty Clover case, the Board
follows the well-established principle that an employee who is wrongfully dis-
charged is entitled to back pay from the date of his discharge to the date he is
offered reinstatement, despite the fact that he may have engaged in a strike or
picketing subsequent to his discharge. The Court of Appeals for the Ninth Circuit
rejected contentions identical to those raised by the Respondent in N. L. R. B. v.
"Cowell Portland Cement Company (148 F. 2d 237, cert. denied 326 U. S. 735)..
There the company made certain objections to the reinstatement and back-pay,
paragraphs of the Board's order and in passing upon these questions the court
stated: (p.245)
One objection is that some of the employees mentioned in these paragraphs
participated in a strike called by Local 356 on July 17, 1937-after respondent
had discriminatorily discharged them. This is not a valid objection.
Another objection is that some of the employees mentioned in these para-
graphs-employees whom respondent discriminatorily discharged-have not
applied for reinstatement. This is not a valid objection.
To the same effect in Spitzer Motor Sales, Inc. (102 NLRB 437, 453; enfd. per
curiam, N. L. R. B. v. Spitzer Motor Sales, Inc., 211 F. 2d 235 (C. A. 2));
and The Rivoli Mills, Inc. (104 NLRB 169, 170). Moreover, if the Respondent
had had any sincere desire to find out whether the picketing discriminatees
were willing to return to work, all it had to do was make an offer of reinstatement
to them. It is undisputed that no offers were ever made, so the Respondent by its
own action foreclosed any answer to the question of whether the dischargees would
have abandoned the picket line and returned to work. The Trial Examiner there-
fore concludes and finds that the picketing did not toll the running of back pay or
impose any obligation upon the discriminatees to apply for reinstatement.
In view of the findings and conclusions in respect to the successorship issue and
the absence of any offers of reinstatement, the Trial Examiner further finds and
concludes that the back-pay period commences May 16, 1949, and runs until
such time as valid offers of reinstatement are made to the discriminatees.
12 On this date the Missouri -Pacific Railroad Company, which had a siding into the-
plant ,. obtained a State court injunction against picketing because its switching crews
refused to cross the picket line.
19 L. G . Everist, Inc ., 103 NLRB 308 ; Wheatland. Electric Cooperative , Inc., 102 NLRB
1119: Kallaher & Mee, Inc., 87 NLRB 410; N. L. If. ft. v. Cowl Creek Coal ' Company,
204 F . 2d 579 (C. A. 10).
OZARK HARDWOOD COMPANY 1157
2. The back-pay formula
Preliminary Statement
The General Counsel and the Respondent being unable to reach agreement on the
question of the amount of back pay, the matter was remanded for further hearing
to determine that issue. As appears above, the hearing was opened on September
14, 1953, and the next day the matter was continued sine die in order that counsel
might further investigate and attempt to resolve the matter. Efforts toward resolu-
tion of the issues again being unsuccessful, the Trial Examiner resumed the hearing.
Prior to the resumption on September 20, 1955, the Trial Examiner served an order
upon the parties, dated July 25, requiring the General Counsel to file his specifica-
tion, or computation, of back pay on or before August 16, and directing the Respond-
ent and Manufacturing Company to file specific answers to the computation within
20 days after service thereof. (GC 1-K.) The General Counsel duly filed his
computation and while the answers of the Respondent and Manufacturing Company
were of a general nature the Trial Examiner, at the hearing, considered them ade-
quate for the purposes of the proceeding. (GC 1-N, 0, P, Q, R.) During the
course of the hearing the Respondent presented its written formula for determining
back pay and in its brief filed after the hearing submitted a computation of the
amounts due the discriminatees under its formula. The Trial Examiner received
the foregoing computation and formula in evidence at the hearing as pleadings sub-
ject to proof of the allegations contained therein.
a. The General Counsel's computation
To support the appropriateness of his computation, the General Counsel offered
the testimony of Harry Brinkman, employed by the Board as an industrial analyst.14
Brickman stated that his principal duties relate to processing of complicated back-pay
cases and that the present matter was assigned to him for the purpose of determining
the amounts of back pay due the discriminatees, hereafter referred to as the Claim-
ants, and that he prepared the computations submitted herein. (GC 3, 4, 5.) Brick-
man testified at length on both direct and cross-examination concerned his computa-
tion, and his testimony is summarized below:
A study of the Respondent's payroll and other records disclosed that there was an
insufficient number of available jobs for the Claimants during some portions of the
back-pay period, therefore, some method had to be adopted in order to determine
priority among the Claimants and other employees for the jobs available. Brickman
thereupon prepared a seniority list on the basis of four departments, limited to those
departments in which the Claimants had been employed. These departments consist
of.: Flooring, pallet, planer, and green chain, resaw, and yards. He admitted that
he considered using seniority on a plantwide basis but selected the departmental sys-
tem because he could identify these departments from the payroll, it would reduce
the complexity of the computations to departments in which the Claimants had
worked, and would afford a more accurate determination than the larger unit by
reason of fewer differences in employment experiences in the particular departments.
Having determined upon departmental seniority, Brickman then prepared a list
for each department containing the names of all employees appearing on the payroll
for the week ending May 18, 1949, plus employees who had been employed prior
thereto but later separated, and then reemployed within 1 year subsequent to that
date. 'However, employees, excluding the Claimants, who worked for the Respond-
ent prior to May 18, 1949, and whose employment was terminated and who were
not employed thereafter are not included in the list. Also excluded from the list
are new employees hired for the first time subsequent to May 18, 1949, but the hours
employed by them are included in the computation of average hours worked. The
seniority of all employees appearing on the list is computed from the date he was
first employed by the Respondent, where there has been no break in his service for
more than 1 year. In these cases where the employee was separated from his em-
ployment and rehired more'than 1 year later his seniority is determined from the
date of reemployment. This system adequately covers periods when the employee
is unable to work because of illness or has been laid off for economic reasons and
then returns to work within a relatively short time. Absences of this character do
not normally break an employee's service and, as related by Brickman, a study of
seniority practices in nonunionized plants discloses that a majority of the companies
surveyed regarded a 1-year period as the dividing line between retention and loss of
14 Brickman has been employed in this capacity since about June 1946, and estimated he
has analyzed or handled between 30 and 50 cases involving back-pay issues.
1158 DECISIONS OF NATIONAL LABOR RELATIQNS BOARD
seniority.15 Brickman applied this system to both Claimants and nonclaimant
employees.
Finally, Brickman chose to use the departmental seniority system because the.Re-
spondent's records do not set forth job classifications, with the possible exception of
graders in the flooring department. Counsel -for the Respondent affirmed this fact
in his letter to representatives of the Board dated January 7, 1954 (GC 27), as well?
as during the hearing when he again conceded the records contain no job classifica-
tions and that "the only way we can get that is the actual work they performed."
When cross-examined upon the latter assertion, Brickman said that while he was.
cognizant of the testimony of the Claimants given at the original hearing in respect
to the type of work they performed prior to their discharge, there was no evidence-
showing the jobs held by employees "who came on" after their discharges.
In addition to the foregoing reasons for selecting the above method was the matter,
of transfers. Brickman said that while he found some transfers among three of the
departments, there was no clear policy on this subject, and he could not definitely
conclude "when and to where particular employees would be transferred at any
given time." But even this limited practice did not apply to the pallet plant employees
for the records disclosed that during periods when this department was shut down or
the number of workers reduced there was no worthwhile transfer of employees to
other departments. In respect to the green chain, resaw, and yards department,
Brickman stated each category is in effect a separate unit but he consolidated them•
for the purposes of the computation since the records revealed such a substantial in-
terchange or transfer of employees that it was difficult to determine where a particu-
lar employee would be working when all three units were in operation.
In accordance with this formula Brickman prepared tables for each department, on
a quarterly calendar basis, reconstructing the employment picture at the plant had'
the Claimants not been unlawfully discharged. (GC 3-B.) These tables, as ex-
plained by Brickman, using as a typical example the flooring department for the
second quarter of 1949, set forth the names of both Claimants' and nonclaimant
employees in the order of their seniority, with the names of the Claimants being under-
lined. The next column represents the number of hours of employment each of the
Claimants would have received for the week ending indicated, absent discrimination.
Check marks appearing opposite the names of nonclaimant employees indicate they
actually worked that week while a dash or short line means they did not work in
that period. Thus, for the week ending May 25 there were 21 jobs available, which:
would have been filled by 21 employees, both Claimants and nonclaimant employees,
in the order of their seniority, so counting down that number, and eliminating 3 non-
claimant employees who did not actually work, James Payne is the last employee on
the list who would have been employed in that period. The last employee to be-
employed is indicated by a double line opposite his name in each payroll period. The
figures appearing opposite the names of the Claimants represent the average adjusted'
hours worked in the payroll period by the nonclaimant employees, which figures are,
tabulated (in the extreme right column) to show the quarterly summation of the
number of hours the Claimants would have worked.
In arriving at the average adjusted hours Brickman included only employees who,
worked 24 hours or more during any 5-day workweek and in instances where the work-
week was 4 days, he excluded employees who worked less than 16 hours. Where
an employee was thus excluded from the computation of average hours, his job
was not counted as an available position. When the workweek was 3 days or less
all employees who worked were included in the average. This method takes care
of the ordinary cases of absenteeism. Overtime is also accounted for by converting
it into straight time, e. g., if an employee worked 44 hours in a week 4 hours would
be at overtime rates, so his time would be computed at 46 hours straight time.
Brickman conceded there were probably some employees who did not work over-
time, and since replacements of the Claimants cannot be identified, he took the
middle ground between the extremes of employment, so where one employee worked
60 hours in a given week and another worked 30 hours he struck an average of 45
hours. After making these adjustments Brickman took the number of jobs avail-
able and divided them into hours to reach the average adjusted hours.
Gross back pay was then determined by multiplying the average adjusted hours
the Claimants would have been employed by the hourly rate of pay for the par-
ticular department. As the pay rates were increased during the back-pay period,
Brickman prepared a table (GC 3-D) showing the hourly rate of each Claimant
prior to his discharge and the increases subsequently granted, as well as the effect
25 Studies in Personnel Policies No. 110, National Industrial Conference Board.
OZARK HARDWOOD COMPANY 1159
thereof. In applying the higher rates Brickman did not consider individual pay
raises but only those of a general or class nature, which it is reasonable to assume
would have been granted to the Claimants had they not been unlawfully discharged.
Brickman gave full explanations of his table. The first increase, January 4, 1950,
was the result of an increase in the minimum wage law raising the minimum rate to
75 cents per hour, and all employees then below that figure were raised to the
minimum rate. In addition the Respondent had 8 employees in the flooring depart-
ment who were earning from 75 cents to 77 cents an hour and raised 4 of them to
80 cents per hour. Of those employees receiving the increase, Isaac Moberly and
John Brown were graders and Coy Dickerson and Cecil Lewis were old employees
in the department. Of the 3 employees denied the increase, 2 were newly hired
and the third had been in the department but a short time. Accordingly, Brickman
applied the increases to 6 Claimants, 3 of whom were graders, John Bartlett, Bill
Friend, and Marvin Warren, and the remaining 3, L. G. Bartlett, Garland Curtis,
and Troy Turner, who had comparable seniority and pay rates to the other em-
ployees granted the increases. On March 15, 1950, Dickerson and Lewis, then the
only employees who had been employed in the 75-cents-an-hour group prior to
May 16, 1959, were raised to 85 cents and 90 cents per hour, respectively, and
Moberly, the only identifiable grader, was increased to 90 cents an hour. For these
reasons the 90 cents rate was allowed the 3 Claimants who were graders, and the
3 Claimants with similar service were allowed 85 cents per hour. The raises of
September 27, 1950, and January 23, 1953, were in effect general increases of 5
cents an hour, as 70 out of 83 workers received the former increase and 84 out
91 were granted the latter raise.
Brickman's gross-back-pay computation is based primarily, if not exclusively,.
upon records of the Respondent and he did not conduct any independent investi-
gation as to its hiring, firing, and layoff practices, the method of operations in the
particular departments, or the normal work habits of the employees. Again, Brick-
man assumed the Claimants would have worked when jobs were available but agreed:
if a Claimant was sick for a week or more (short periods are automatically accounted
for) his computation would have to be altered to take care of such a condition.
Brickman knew of the formation of Manufacturing Company in April 1951, but
did not attempt to make any distinction between the corporations insofar as the
application of his computation was concerned.
Interim Earnings and Net Back Pay
As part of his computation, the General Counsel submitted an account of the
earnings of each Claimant, on a quarterly basis, from the date of his discharge
through the first quarter of 1954, which shows the earnings in employment covered
by the Social Security Act and earnings from other employment not reported there-
under, and the total amount of the earnings. (GC 4.) Counsel stipulated
that the interim earnings certified by an official of the Social Security Administra-
tion are correct and accurate and required no additional proof or identification. At..
the hearing the Claimants testified as to their unreported earnings as well as expenses
incurred in seeking employment and were fully cross-examined on these subjects.
The General Counsel completes his computation with a summary setting forth
the amount of net back pay due to each Claimant. (GC 5.)
The General Counsel at the time of the filing of his brief also amended his exhibit
setting forth interim earnings, Exhibit No. 4, by another document identical in form
entitled "Interim Earnings, Revised to Proof, General Counsel Exhibit 4." In like
manner his back-pay computation is amended and "Revised to Conform to Proof,
General Counsel Exhibit Number 5." For the purposes of identification, and as
these amendments do no more than follow the testimony, the Trial Examiner will
receive them in evidence as General Counsel's Exhibits Nos. 4-B and 5-B.16 For
instance, counsel stipulated that the earnings reported by Social Security for the
1e In his brief the General Counsel speaks of substituting the amended sheets for its-
like page in "G. C. No. 4-A." During the hearing the Trial Examiner admitted in evi-
dence General Counsel's Exhibit No. 4-A, which consists of a number of certifications by
an official of the Social Security Administration of reported interim earnings of many
Claimants for the calendar year 1954 and in some instances through the first quarter of
1955. In like manner the General Counsel submitted gross-back-pay computations for the
same period which were received in evidence as General Counsel's Exhibit No. 5-A. As
stated below. the Trial Examiner has used March 31, 1954, as the cutoff date in this-
proceeding and where the contents of these exhibits extend beyond that date they were
received only as pleadings.
1160 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
second quarter of 1949 as appears in General Counsel's Exhibit No. 4, included
earnings from Hardwood Company, which should be eliminated.17 The General
Counsel further concedes certain changes be made in his back-pay computation,
which changes are contained in an appendix to his brief.
b. The Respondent's formula
In essence counsel for the Respondent in his brief argues that: The General
Counsel's formula should be rejected because the seniority list not only arbitrarily
fixes the date of employment by using the 1-year rule but it is inaccurate as to some
dates and violates its employment policy; it does not recognize the type of work
performed by the Claimants or their work habits; and the grouping of green chain,
resaw, and yard into one department is contrary to its employment practices.
In respect to his computation, counsel for the Respondent, during the cross-exam-
ination of Brickman, requested time within which to prepare a document showing
the employment history of the Claimants, which would be presented to Brickman
for "verification and agreement" and then submitted to the Trial Examiner for
receipt in evidence as Respondent's Exhibit No. 2. All counsel agreed to this
procedure. Counsel for the Respondent conceded the list would not contain job
classifications of the Claimants. On October 18, 1955, the Trial Examiner received
the exhibit and the General Counsel by letter dated February 28, 1956, advised the
Trial Examiner that a check of the exhibit revealed a number of discrepancies and
he could not agree to the accuracy or introduction of the document. In view of
the stipulation of counsel, the receipt of the exhibit in evidence may stand since
it was admitted as a pleading and the contents thereof subject to proof.
About November 8, 1955, the Respondent mailed its formula to the General
Counsel with a copy to the Trial Examiner. On December 28, the General Counsel
forwarded the original to the Trial Examiner and while he agreed that the formula
might be marked for identification as Respondent's Exhibit No. 8 (c), he did not
thereby waive his objections at the hearing to the timeliness of the filing of the
formula and his right for an opportunity to examine witnesses thereon. Since this
exhibit does not indicate it was received in evidence, the Trial Examiner now re-
ceives the same as a pleading and as Respondent's Exhibit No. 8 (c). No testimony
was offered in support of the contents subsequent to its initial receipt by the General
Counsel, so the second ground of his objection becomes moot.
The Respondent's formula classifies the employees in the flooring department into
skilled and unskilled workers in the order of their seniority. The skilled workers,
numbering 16, are classified as graders, end matcher-feeders, side matcher-feeders,
knotsaw operators, and ripsaw operators. Although the Respondent speaks of five
job classifications, counsel admits that only in the case of graders can the replace-
ments of the Claimants be identified with any degree of certainty. In determining
the amount of back pay due to the graders the Respondent has taken the earnings
of the replacements, which varied between 2 and 3 employees, and averaged their
earnings on a quarterly basis. Gross back pay for Claimants in the remaining four
classifications, when eligible and available for employment, is determined "by use
of the same method used by Mr. Brickman . . . and supplemented from informa-
tion from employees as to history of work personnel of replacements." In its
formula the Respondent has eliminated certain intervals in the back-pay period
when the Claimants were found to be "ineligible" for employment for such reasons
as picketing at the plant, service in the Armed Forces, and failure to make reason-
able efforts to obtain other employment. Counsel for the Respondent admits that
jobs were always available for skilled employees during the period when the Claim-
ants were eligible to work. The 'Respondent then places the unskilled employees
upon a seniority list and computes their gross back pay on the basis that they would
have been employed, when eligible, in jobs for which they were qualified, after all
skilled employees had been employed. In fixing the seniority of the skilled and un-
skilled employees the Respondent used the seniority list prepared by Brickman and
conformed it to the document setting forth the employment record of the individual
Claimants. (R 2.) The Resnnn'lent also adopts the General Counsel's determina-
tion of the number of jobs available during the back-pay period. (GC 3, Table B.)
Thus, for the week ending May 25, 1949, there were 21 jobs available in the flooring
department, 16 of which would have been filled by skilled employees and 5 by un-
skilled workers. The Respondent contends that under the revised seniority list
none of the Claimants would have worked, for W. B. Rinke, who has the highest
seniority among the Claimants, is number 7 on the list of unskilled workers. The
17 For explanation of later reference, see footnote 24.
OZARK HARDWOOD COMPANY 1161
Respondent states that where the Claimants are eligible to receive back pay under
its formula the average hours and average rate of pay used by Brickman are
applicable.
The Respondent treats the remaining Claimants as being in the same departments
utilized by the General Counsel , namely, planer, pallet, and resaw and yards. In
each of these departments the Respondent has set up a revised seniority list and,
as in the flooring department , follows the General Counsel's formula for average
hours and earnings for Claimants it believes to be eligible and qualified to work.
The Respondent, as stated above, objects to the 1-year cutoff date adopted by
the General Counsel in establishing seniority of the employees. As an example
of the arbitrariness of this method the Respondent, in its brief, cites the case of
Lum Fisher who "terminated" his employment February 10, 1949, and was rehired
on April 2. Counsel urges that since Fisher had been working only 6 weeks prior
to his discharge his seniority should not be established as of the date of his initial
employment, which the General Counsel fixes as December 3, 1947.18 However,
the Respondent has not used the date of his last rehire for the purpose of seniority
but places his initial employment as of January 7, 1948, which is approximately 1
month later than the General Counsel's date. In like manner the Respondent has
revised the initial date of employment for all but 5 or 6 of the Claimants so that
these individuals have less seniority under the Respondent's system than the one
used by the General Counsel. However, there is little or no dispute as to the
seniority date of the nonclaimant employees.
Joe Mills testified there was no seniority system at the plant and when layoffs
had to be made they were accomplished on the basis of efficiency and qualifications
of the workers, and where these factors were equal Mills said, "We would probably
give them [jobs] to the older man." He further stated that where a worker left his
employment and later reapplied for a job he would not be hired unless he had the
necessary qualifications for any available positions and the fact that he had been
an employee was not determinative of whether he would be reemployed. Mills did
not testify in regard to job classifications or other employment practices other than
a brief, sketchy reference to graders 19 and the transfer of sawmill employees, upon
its being closed down, to other departments.
In computing net back pay the Respondent has used two back-pay periods-the
first is from date of discharge to the date of the picketing, December 2, 1949,
and the second runs from the date of discharge to April 4, 1951, the last payroll
period after the sale of the plant. In the latter case the Respondent has uniformly
eliminated the entire period the picketing took place. The Respondent raises various
questions affecting the back pay of certain Claimants such as old age, mental condition,
service in the Armed Forces, and failure to show "reasonable and diligent search
for work." These cases are discussed below.
Except as stated above, the Respondent does not contest the accuracy of the
interim earnings of the Claimants as substantiated by social security records and
their testimony at the hearing, nor does he question the validity of expenses incurred
by some Claimants in searching for work outside the area. The Trial Examiner
will therefore accept and adopt the General Counsel's formula in respect to net
interim earnings. Finally, as the Respondent uses April 4, 1951, as the cutoff date
for back pay and interposes no objections to the accuracy of the General Counsel's
computations beyond that point, the Trial Examiner accepts and adopts these
determinations and all discussions in regard to questions raised by the Respondent
are limited to the date fixed by it.
Concluding Findings
The Respondent contends that two fundamental principles must be considered in
establishing a back-pay formula: first, the type of work performed by the discrim-
inatee at the time of his discharge and, second, the employment practices of the
employer particularly these relating to a reduction in force and the hiring and firing
of employees. By applying these standards it can be determined with reasonable
18 The Respondent points out that Fisher drew unemployment compensation during the
period of his unemployment "when he could have been working." No explanation is
offered as to how Fisher could have qualified for compensation benefits if he had volun-
tarily quit his employment or was discharged for cause.
19 When Mills was asked about graders employed during the week of shutdown of the
plant, he replied, "Well, John Brown was the son of O. B. Brown and he was prepar-
ing-no , sir, we didn't have him grading . We were preparing the equipment so we could
close it down, in other words, for storage."
1162 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
certainty what the discriminatee would normally have earned, absent his unlawful
discharge. The Respondent claims that the General Counsel has given no con-
sideration to these factors in either his seniority list or formula for computing back
pay.
The Trial Examiner agreed that the most satisfactory method of determining gross
back pay is to compute the hours and the rate of pay of the replacement of the
•discriminatee during the back-pay period. This formula can be easily applied in
cases which involve only a few'discrlminatees and their replacements can be readily
identified. The same is true where there are a large number of discriminatees,
provided their replacements can be identified individually or by means of a job
classification system. Here the Respondent concedes it has never had such a system,
except that graders could be distinguished from other employees. Consequently, it
would be futile and meaningless to attempt to fix gross back pay for the Claimants
on the basis of the hours and earnings of their replacements where neither the pay-
roll records nor the evidence disclose the names of the replacements 20 and the total
absence of job classifications. Any doubt that might exist as to the correctness of
this conclusion is eliminated by the Respondent for, in spite of arguments to the
contrary, its formula for determining gross back pay for Claimants in the planer,
pallet, and resaw and yard departments is not bottomed on the replacement theory
but follows the method adopted by the General Counsel of allotting available jobs
on the basis of seniority, with certain changes as to the standing of some Claimants
on the seniority list. It strikes the Trial Examiner that the real dispute between. the
General Counsel and the Respondent concerning their formulas centers upon job
classifications in the flooring department and the date of employment of the Claimants
in all departments for seniority purposes. Briefly, the General Counsel has allocated
available jobs in the flooring department to all employees, Claimants and non-
claimants alike, on a seniority basis. Although Brickman said that graders could
be identified to January 1950 by their pay rate, he did not "allot time of graders to
graders" because the short period would not be representative and because he assumed
the three Claimants who had been employed in this capacity would have continued to
work after their discharge and would have received the average hours worked in
the department. On the other hand, while the Respondent concedes that in the
flooring plant only replacements for graders can be ascertained with any degree of
accuracy, it nevertheless proceeds to compute gross back pay of the remaining
Claimants in the department on the basis of four job classifications, plus the unskilled
-employees. By reason of the admission by the Respondent that it maintained no
job classifications and the lack of any testimony by Joe Mills, or any other witness,
in regard to the type of job performed by the so-called replacements for the Claimants
in the flooring plant, the Trial Examiner must reject the contentions directed against
the General Counsel's formula as well as the Respondent's formula. In so doing, and
in declining to recognize a separate group for graders, the Trial Examiner believes
that the General Counsel's treatment of graders is reasonable and fully supported
by Brickman's testimony. Certainly, his assumption that graders would have had
continued employment is clearly in line with the Respondent's concession that jobs
were available for skilled workers at all times, so it is immaterial whether the graders
:are treated separately or in a group composing all flooring department employees,
insofar as gross back pay is concerned.
The Trial Examiner sees nothing unreasonable in the General Counsel's use of
-the 1-year-absence-from-work rule for determining the breaking point in an employee's
seniority. The General Counsel has applied this rule to both Claimants and non-
claimants, so it cannot be said that he has acted arbitrarily or thereby attempted to
favor the Claimants over the nonclaimants.
c. The appropriate formula
It is, of course , well established that the requirement of back pay is an appropriate
:remedy under the Act (N. L. R. B. v. Jones & Laughlin Steel Corporation , 301 U. S.
1, 40-50) and the purpose thereof is twofold: to discourage the discharge of employees
contrary to the Act ( Waterman Steamship Corporation v. N. L. R . B., on contempt,
119 F. 2d 760, 763 (C. A. 5 ) ), and to restore the dischargee to the position , as nearly
as possible , which would have obtained but for the illegal discrimination (Eagle-Picher
Mining and Smelting Company , 16 NLRB 727, 824, enfd. 119 F. 2d 903 (C. A. 8) ).
ro The only evidence on this subject comes from the Claimants at the original hearing
where they testified in regard to the type of work they were performing at the time of
-their discharge. In view of the circumstances and facts occurring subsequent thereto as
developed in this bearing the original testimony is neither impressive nor controlling.
OZARK HARDWOOD COMPANY 1163
In passing upon the power and discretion of the Board to award back pay as part of its
,remedial action against unfair labor practices, the Supreme Court, in Phelps Dodge
eCorp. v. N. L. R. B., 313 U. S. 177, stated at page 198:
The remedy of back pay, it must be remembered, is entrusted to the Board's
discretion; it is not mechanically compelled by the Act. And in applying its
authority over back pay orders, the Board has not used stereotyped formulas
but has availed itself of the freedom given it by Congress to attain just results in
diverse, complicated situations.
Having determined that the remedy of back pay is necessary, the Board is required
only to use reasonable methods in selecting the formula to be adopted in effectively
carrying out the terms of its order. (N. L. R. B. v. Kartarik, Inc., 227 F. 2d 190
(C. A. 8); N. L. R. B. v. Deena Artware, Inc., 228 F. 2d 871 (C. A. 6); Sifers
Candy Company, 92 NLRB 1220, 1234-1235.)
The Trial Examiner concludes and finds on the basis of the evidence herein that
the formula presented by the General Counsel is appropriate and reasonable. Ac-
cordingly, the Trial Examiner recommends its adoption.
As stated earlier in this report the Respondent (except for two discriminatees)
has not offered reinstatement to the Claimants so the back-pay period runs from
the date of discharge until such time as appropriate offers are made. However,
the Trial Examiner, in line with his ruling at the hearing, computes back pay only
through the first quarter of 1954. The Trial Examiner so ruled because the General
Counsel's computation, although submitted in August 1955, does not go beyond
that date, and when he examined several Claimants in an attempt to bring interim
earnings up to date the Trial Examiner concluded that he was simply conducting
an investigation which was too time-consuming and improper in a remand proceed-
ing. Of.course, it would be preferable to use a later date, but this is not a serious
problem since the order is still open and back pay accruing thereafter can be
,determined by the same formula. (Sifers Candy Co., supra, footnote 7).
A. Respondent's claim of willful losses and other factors affecting the amount of
back pay
The Trial Examiner believes it proper to dispose of certain objections directed
by the Respondent against all or particular groups of the Claimants.
The Respondent introduced no independent evidence to support its claim of willful
losses and the only direct testimony on this subject comes from the Claimants. It is
true that many of the Claimants had long periods in which they were unemployed,
but. that is understandable when consideration is given to all the evidence. Thus,
Joe Mills testified that Clarksville has a population of approximately 4,500, is located
in the Arkansas River Valley, and its principal industries are farming and timber.
In addition to the Respondent's operations there are about 5 industrial plants 21 and
or. 2. mines in and around Clarksville. The Respondent is the largest industrial
employer and has always obtained its labor force within a radius of 15 miles of
Clarksville. In the light of these circumstances it is no wonder that the Claimants
experienced difficulty in obtaining employment. As a consequence those Claimants
who remained in the area, with the exception of trips to nearby cities and towns
:looking for work, have accumulated large sums of net back pay. Conversely, those
who finally left the area were successful in finding better-paying jobs,
albeit their employment while residents of the community was practically nil. The
Trial Examiner is convinced that there were not only few job opportunities but
-actually a surplus of labor in the area. These conclusions are substantiated by the
-fact that none of the Claimants who registered with the State Employment Service
Division were ever referred to any jobs. Moreover, the Trial Examiner is further
convinced, from his opportunity to closely observe the appearance, demeanor, and
'education of the Claimants, that none of them enjoyed an economic or financial
status as would enable them to avoid or refuse employment, irrespective of whether
it might have been comparable to the work they performed for the Respondent. The
Supreme Court, in the Phelps Dodge case, supra, held that the Board has wide dis-
cretion to keep willful losses within reasonable bounds through its flexible procedural
devices and has the "power to avoid delays and difficulties incident to passing on re-
mote and speculative claims by employers, while at the same time it may give appro-
priate weight to a clearly unjustifiable refusal to take desirable new employment"
(pp. 199, 200).
21 Galloway Lumber Co., Pierce Lumber Co., Priebe Processing Plant, Clarksville Machine
Co., and a brick plant.
1164 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Following this decision the Board stated its doctrine on the subject of willful`
losses in the Ohio Public Service case,22 which was later modified by Harvest Queen
Mill & Elevator Company (90 NLRB 320, 321, 322). In the latter case the Board
held that registration by a claimant with a State employment service is conclusive
evidence that a reasonable search for employment has been made. Where that
fact has been established any party urging diminution of a back-pay award "will
be restricted to the introduction of evidence showing that the claimant, without good
cause, rejected an offer of, or gave up, desirable new employment." Where the
evidence shows a failure of registration, "additional evidence may then be presented
to prove that no reasonable effort to obtain desirable new employment has been
made."
The Respondent argues that this doctrine has been criticized in N. L. R. B. v.
Pugh and Barr, Inc. (207 F. 2d 409 (C. A. 4)). There the court held that mere
registration with a State agency was insufficient to support the conclusion that the
claimant made diligent search for work, in view of the large amount of the back-
pay award and the absence of any finding of special circumstances justifying the
same. The court remanded the matter to the Board for further consideration.
Thereafter the Board issued its Supplemental Decision in which it found the claim-
ant was entitled to back pay in the same amount as set forth in the initial award.
In passing upon this award the court stated that while the amount was larger than
it would have allowed, there was substantial evidence to support the Board's order
and entered its order enforcing the same. (N. L. R. B. v. Pugh and Barr, Inc.,
231 F. 2d 558.)
The Trial Examiner concludes and finds that there is no evidence to sustain
the Respondent's blanket charge of willful idleness on the part of the Claimants.
In so concluding the Trial Examiner, as appears below, does not rely exclusively
upon registration, or lack of registration, as determinative of the question of willful
losses but has considered the testimonies of the Claimants concerning efforts they
made seeking employment.
The Respondent mentions the failure of unnamed Claimants to apply for rein-
statement within 90 days after discharge from the Armed Forces which "furnishes
additional basis for disqualification" for back pay. It is undisputed that the Re-
spondent, except in two instances, has refused to offer reinstatement to any of the
Claimants, so it is reasonable to assume that even if these unnamed individuals had
made application for reemployment they would have been denied reinstatement.
Certainly, the Respondent gives no indication that it would have reemployed them
had they done so. On the contrary two Claimants, Curtis and Warren, actually
applied for reinstatement during the back-pay period but were never reemployed.
Again, a third claimant, Rinke, when cross-examined as to the reasons why he did
not apply for reemployment after his discharge from the service, stated:
I was ordered by the Sheriff to stay off the property, I would be throwed in the
jug if I ever set foot on it again, and I am not going back until I am called back.
The Trial Examiner finds that any application by Claimants in this category would
have been fruitless and meaningless; therefore, the Trial Examiner rejects the
Respondent's assertion as being without merit.
The Cases of Filo Hill, Ira Wolfe, and Lum Fisher
The Respondent contends in its brief that Hill, flooring department, and Wolfe
and Fisher, resaw and yards department, were unable to perform their work because
of old age and would have been the first employees to be released in the event of a
reduction in force. Back pay for Hill is terminated as of August 1949, Wolfe,
August 1950, and Fisher, September 1950. Joe Mills testified that Hill, a common
laborer, was retained only because of a labor shortage and by reason of his age
"would have been replaced at anytime we could have had a more efficient employee
to replace him." Fisher, he stated, was old and inefficient and would have been
replaced by a more efficient employee when available. The same reason applied to
Wolfe except Mills made no mention of his age. Each of the Claimants, according
to Mills, could have been replaced with workers from the sawmill when that depart-
ment shut down on August 17, 1949. As of the date of this hearing Hill was
68 years old and Fisher and Wolfe were 64 years of age. The Respondent's argu-
ment that these Claimants would have been replaced at an early date by more
efficient employees is purely speculative and without merit. In N. L. R. B. v. Reed
22 52 NLRB 725, 729; enfd. 144 F. 2d 252 (C. A. 6), cert. denied 324 U. S. 857.
OZARK HARDWOOD COMPANY 1165
& Prince Manufacturing Company (130 F. 2d 765, 767-768 (C. A. 1) on contempt),
the company asserted that one of the discriminatees would have been laid off on
certain hypothetical dates even though it had not discriminatorily discharged him.
In rejecting this defense the court declared:
Because of his labor activities Sullivan was unlawfully deprived of his posi-
tion for the full four year period. What respondent would have actually
done as regards Sullivan's employment [ absent discrimination ] is, of course, a
matter of hindsight.
(See also, Sifers Candy Company, supra, p. 1234.) Again, the same court, in
N. L. R. B. v. Republican Publishing Company (180 F. 2d 437, 440 on contempt)
had occasion to pass upon the respondents' defense that the discriminatee was too
old to be reinstated to his former job. The court pointed out that there was no
suggestion the discriminatee was too old at the time of his discharge and, while he
was 4 years older than he was at that date, the respondents "are certainly entitled
to no advantage from their own delay in repairing the unfair practice, as ordered
by the Board and by this court."
Accordingly, the Trial Examiner rejects this contention on the part of the
Respondent.
Other objections directed against these Claimants are discussed below:
Hill
Hill had worked as a miner for about 20 years and therefore was eligible for
pension under the United Mine Workers of America (UMW) pension fund. In
August 1949, he drew his first pension check but, due to either protracted contract
negotiations between the UMW and the coal operators or a lack of UMW funds, he
did not draw his second check until about September 1950. Apparently, Hill has
been receiving his pension regularly since that date, but in any event, the General
Counsel concedes he is not entitled to back pay after August 1, 1950. Hill further
stated it was his understanding that for the first 3 years of his retirement he could not
work and draw his pension. Within a week or so after his discharge, Hill registered
with the State Employment Security Division and regularly reported to that office,
without-being assigned a job. Throughout his back-pay period Hill had only two
jobs, chopping cotton in June 1949 and picking peaches in the third quarter of 1949,
for which he received $12.35 and $15, respectively. He further testified that during
August 1949, he sought employment in and about Fort Smith, without success, and
between that date and April 1950, when he registered with the State office, he
inquired for work but "never did go to no certain employer." About June 1, 1950,
Hill again registered with the State Employment Security Division.
The Trial Examiner, on the basis of Hill's testimony, finds that he made reason-
able efforts to obtain employment from May 16 to about August 1949. On the
latter date he became eligible for retirement and drew his first pension check.
After that date he made no worthwhile attempts to find work and in the opinion
of the Trial Examiner he withdrew from the labor market. The fact that he may
have registered for employment in June 1950 is wholly inadequate to explain his
actions toward securing employment both prior and subsequent to that date.
Accordingly, the Trial Examiner finds that Hill's back-pay period runs from May
16 to July 31, 1949, and is computed as follows:
Goss back pay for the second quarter, 256 hours at 65 cents per hour, $166.40;
interim earnings, employed by Jeff Estep, $12.35, net back pay, $154.05. For
July, 193 hours, at 65 cents per hour, $125.45; interim earnings, employed by a
Mr. King, $1.5, net back pay $110.45. Total net back pay, $264.40.,
Wolfe
The Respondent claims that while Wolfe worked his farm he was not self-
employed, and the meagreness of his interim earnings indicate that he • was not
diligent in seeking employment.
Wolfe registered with the State Employment Security Division shortly after his
discharge and registered the second time on April 13, 1950. Wolfe testified he
owned and operated a farm during the time he worked for the Respondent from
which he derived his support plus a little money from the sale of stock. Following
his discharge Wolfe farmed on a somewhat larger scale , which the General
Counsel has considered as self-employment and credited the Respondent with
interim earnings therefrom computed on the basis of 60 cents per hour for time
spent by Wolfe in this employment. The computation is in line with Wolfe's testi-
1166 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
mony concerning the time devoted to farming and the average hourly rate for-
farmwork . In addition - to this employment , Wolfe sought other work and, when
jobs were available, worked as a carpenter 's helper , cut and baled hay, built a
barn , mowed lots, worked in sorghum , and picked peaches. The Trial Examiner-
is fully convinced that Wolfe made diligent efforts to secure work and that the-
General Counsel 's formula for determining his back pay is certainly reasonable and
is adopted . It seems plain that the Respondent seeks to avoid liability for back pay
to Wolfe because he would have been replaced because of his age and he could not:
secure employment for the same reason . These contentions are rejected.
Fisher
The Respondent asserts that Fisher did not make reasonable efforts to secure-
work and retired after his discharge.
Fisher registered with the State Employment Security Division shortly -after -his.
discharge and again registered about May 1950. (GC 19.) Fisher had 'little-
employment until the third or fourth quarters of 1950 when he became rather-
steadily employed. His record prior to that date shows that he earned only $35
picking peaches, in the third quarter of 1949, and nothing in the fourth quarter or-
the first quarter of 1950. In the second and third quarters of 1950, he earned $32'
and $76, respectively, again picking peaches. Fisher's earnings from the date of his
discharge to the fall of 1950 is anything but impressive and the Trial Examiner-
would be inclined to block out this period, except for the fact that he testified on
cross-examination that in this interval he went to various farmers looking for-
work. In view of his uncontradicted testimony, and the fact that there was a labor
surplus in the area, the Trial Examiner finds that Fisher made reasonable efforts
to obtain work and that he did not willfully incur any losses. The Trial Examiner-
adopts the General Counsel's formula and back-pay computation for Fisher.
The Case of Robert L. Martin
The Respondent, in line with Joe Mills' testimony, claims that Martin would'
have been replaced at some time subsequent to his discharge because of his mental'
condition. At the hearing counsel stipulated that Martin was adjudged an :incom-
petent on March 21, 1953, by the Probate Court of Johnson County and his wife-
was appointed his guardian and qualified and acted in that capacity for him. The
parties further stipulated that Martin "could not make coherent and detailed
answers to questions on direct and cross-examination relative to time, dates and'
parties worked for and amounts earned," except in 3 or 4 instances, and he could
not be examined "concerning search for work." Counsel also stipulated that Mrs.
Martin died in July 1955, but prior thereto she turned over to the General Counsel'
certain memoranda she had maintained showing the names of employers by whom
Martin had been employed, the dates thereof and amounts received, covering-
periods both before and after her appointment as guardian. These records, plus
identification cards issued by the State Employment Security Division, were offered'
and received in evidence. (GC 21-A-B-C, 22, 23, 24.)
The Respondent computes back pay for Martin to September 7, 1949, in >the•
sum of $375.25, and asserts that thereafter he was mentally incapacitated for
employment and made no showing of reasonable and diligent search for wor-k.
The General Counsel contends that Martin. desnite his handicap, performed
satisfactory services for the Respondent as a laborer from April 1946 until May 19,.
1949, that he was able to obtain similar jobs at various times subsequent to his
discharge, and that he is the same today as he was in 1946 and 1949. Accordingly,
the General Counsel applies his formula to Martin the same as other Claimants
and states that although Martin is able-bodied he has difficulty in securing employ-
ment, consequently he has suffered greater economic distress than other Claimants.
Martin's back pay through the first quarter of 1954, amounts to $8,282.80.
For the reasons stated above, the Trial Examiner finds no merit to the Respond-
ent's contention that Martin would have been replaced at some unstated time, even
though he had not been illegally discharged. Of course, the Respondent's objection
to Martin is based upon his mental condition as stipulated by counsel and as evi-
denced by the State court adjudication. The Trial Examiner, nevertheless, is of the
opinion that Martin's mental condition does not excuse the Respondent from per-
forming its statutory obligation in respect to him. In the R-publican Publishing case,
supra, the same defense was advanced by the respondents, namely, that the dis-
criminatee, one Frank MacCarthy, "is not now physically and mentally fit to carry
OZARK HARDWOOD , COMPANY 1167
out the duties of a newspaper photographer ." The court disposed of this contention
in the following language : (p. 440)
If this were assumed to be the fact , it would in no way tend to establish in-
ability on the part of respondents to obey our decree of May 12, 1949, directing
respondents to offer MacCarthy immediate reinstatement to his former position.
In failing to make the offer , respondents are undoubtedly in contempt of our
decree. If there had been some supervening change of circumstances which
made compliance with our decree unjust or inappropriate , respondents should
promptly have moved this court for modification of the decree, setting forth
in detail the facts deemed to warrant such modification . Instead of doing that,
respondents sat tight and did nothing, until called into court to answer the
petition for a contempt citation.
The court thereupon adjudged the respondents in civil contempt of its decree and
required the respondents to purge themselves of such contempt by forthwith offering
the discriminatee immediate and full reinstatement , with back pay.
The foregoing decision , bottomed on facts identical to these involving Martin, is
decisive of the present issue. Here, the Respondent raised no objection to Martin's
mental condition at the original hearing and has not requested modification of the
court 's decree in this respect , despite Mills' assertion that he knew of Martin's con-
dition in May 1949. The Respondent , of course , could have tested Martin's com-
petency to work , assuming there was some deterioration in his condition , by offering
him reinstatement and giving him an opportunity to perform his job duties. How-
ever, the Respondent 's failure to do so precludes any resolution of this question.
The Trial Examiner therefore concludes and finds that Martin's back-pay period runs
from the date of discharge to the date of an offer of reinstatement.
In this connection , the Trial Examiner wishes to point out that Martin was
judicially declared an incompetent on March 21, 1953, which undoubtedly restricted
his legal capacity to act for himself in certain matters. However, the Respondent
did not request modification of the decree on this ground and Martin has been
employed subsequent thereto. In disposing of such a situation , the court, in Re-
publican Publishing Company, supra , (p. 400 ), said if an offer of reinstatement
should be made, "and after a reasonable period of trial respondents should in good
faith remove him from that job because of his inability to render proper perform-
ance, that would be a different situation ." The Trial Examiner , under all the cir-
cumstances , does not consider the adjudication of Martin sufficient to excuse the
Respondent from complying with the provisions of the Board 's order as enforced
by the court.23
There is no question but Martin 's interim earnings , as detailed by the General
Counsel , are low. Thus, in the second quarter of 1949, he earned $96.10, but had
no further earnings through the second quarter of 1950. Thereafter , the record
shows that he earned relatively small sums at various jobs , such as hay , orchard
and timberwork , mining, apparently some farming , and employment for one industrial
firm, Cudahy Packing Company . The record also discloses that Martin was contin-
uously registered with the State Employment Security Division and regularly reported
to the office from May 19 , 1949 , to September 17, 1953. (GC 23 , 24.) There
is no evidence that he was ever referred to any jobs by the agency. Martin 's registra-
tion for employment, plus his willingness to accept any kind of work , as clearly
appears from his interim earnings record , leads the Trial Examiner to conclude that,
although he was under handicap in the labor field, he did make reasonable efforts
to obtain employment . Certainly , there is no evidence that he ever refused an offer
of, or gave up, new employment.
The Trial Examiner therefore adopts the General Counsel 's determination of the
amount of back pay due Martin.
GI Job-Training Benefits; Dewey Accord , Garland Curtis , and Earl Morrow
The Respondent takes the position that Accord, planer department , and Curtis
and Morrow , flooring department , by enrolling under the GI job-training program
are not entitled to back pay during the period of their enrollment because they
removed themselves from the labor market the same as if they had been serving
in the Armed Forces or attended school . The General Counsel concedes that
payments to these Claimants by the Government for work performed should be
23 In Phelps Dodge Corporation ( 28 NLRB 442, 487-488), the Board conditioned re-
instatement of a discriminatee , alleged to have had silicosis , upon examination by an
impartial physician and certification of his fitness for employment.
1168 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
deducted as interim earnings, but benefits received for a part-time educational
program cannot be considered as compensation for services rendered, therefore
not deductible as interim earnings.
Accord testified he spent all his life on the farm and secured his first outside
employment with the Respondent. He further stated he could not read or write
and he had had but 3 months' education, which he obtained while serving 4 years
in the Armed Forces, commencing sometime in 1940. Immediately following his
discharge in May 1949, Accord obtained a job chopping cotton for his landlord which
lasted about 1 week and he was paid $27. He then registered with the State Employ-
ment Security Division and reported every 2 weeks but was never referred to a job and
drew unemployment compensation for the full term. In addition to his registration,
Accord applied for work at Galloway Lumber Company, a service station at nearby
Hartman, and sought employment from 15 or 20 farmers in the area. Accord was
unsuccessful in obtaining any employment until September 1949, when he earned
about $17.50 chopping cotton. About November he signed up for the GI on-the-
farm training program. In order to qualify for this program Accord leased 25 acres
of land, purchased a team of mules, a cow, a hog, chickens, and necessary farming
equipment. Accord stated this was a full-time program for a 1-year period and he
farmed under the direct supervision of a Government agent and "was supposed
to meet the requirements that the Government wanted you to have." Accord was
paid $78 per month by the Government, was required to attend school 1 day a
week, and was not permitted to engage in any other employment. During the time
he was under the program Accord made 1 crop of soybeans which he sold for $400,
of which $100 went to the lessor and about $50 represented expenditures for seed
and fertilizer. About March 1951, Accord abandoned the program because he
could not make the requirements fixed by the Government; for instance, he could
not meet the demand that he have 15 cows. About 1 week later he went to work
as a tractor driver on the farm of Elmo Thompson and remained on this job through
the second quarter of 1951. He then secured a similar job with Jewell Stevens
and/or J. M. Stevens which lasted through the first quarter of 1954. In the meantime,
about July or September 1951, Accord enrolled in a part-time GI training course
and attended school 2 nights a week in an effort to correct his illiteracy. Accord
received $30 per month and continued the course until sometime in 1953. Accord
was permitted to work, and did work, under this program; in fact he said his employer
on at least one occasion was required to sign a form for the officer in charge of the
training program.
Morrow registered with the State Employment Security Division about 1 week after
his discharge and although he reported every 2 weeks he was not referred to any jobs.
Between May 19 and November 1949, Morrow unsuccessfully sought employment
with Galloway Lumber Company, Randolph Ford, building contractor, and various
farmers. In November 1949, Morrow signed up for the full-time GI training pro-
gram, having leased land and purchased the necessary equipment. Morrow remained
on the program until April 1952, when he gave it up because of the drought. Dur-
ing this time he made only I crop of soybeans, in 1951, which he sold for $598, of
which 25 percent went to the lessor and $300 for expenses incurred in 1950 and 1951.
Thereafter, Morrow again attempted to obtain employment at Galloway's, the
Priebe plant, and Ford. He then went to see the union business agent at Fort Smith
and as a result secured a job with a subcontractor on a building project in Clarks-
ville and later obtained employment with the principal contractor of the job. This
employment commenced sometime in the second quarter of 1952 and continued until
the following November. About 1 week later Morrow went to Kansas City and
worked for Swift and Company until December 19, when he was laid off. Counsel
stipulated that between December 20, 1952, and January 20, 1953, Morrow took care
of his father and he was not entitled to back pay for that interval. In February,
Morrow went to Fort Smith and 1 week later secured a job through the Union with
Lock Joint Pine Company in the vicinity of Fort Smith. About 3 weeks later Morrow
moved his family to the area. When the job ended in July 1953, Morrow and his
family returned to the Clarksville area where he again looked for work, registered
with the State Employment Security Division, and finally obtained about 6 weeks'
employment picking cotton for which he was paid $150. Morrow was unemployed
from August 1953 to January 1954. In this interval he registered with the State
Employment Service and looked for work at plants in Clarksville and with farmers.
In January 1954, he obtained farmwork with a Mr. Thompson and was still working
for him at the time of the hearing.
Curtis registered with the State Employment Security Division a day or so after
his discharge. At the same time he applied for work at a local grocery store, a furni-
ture store, a lumber mill, and a gasoline station. He also drove to Paris, Arkansas, a
OZARK HARDWOOD COMPANY 1169
distance of about 50 miles, where he talked to his father , a miner, about a job in the
mines but be was informed there were no vacancies . After 3 or 4 weeks Curtis
secured a job with Utilities Clearing Service, which was clearing a right-of-way,
which paid 65 cents per hour and lasted 4 or 5 weeks. Curtis then immediately went
to work for Brinks Magnolia Service Station in Clarksville , on the GI job -training
plan. Under this program Curtis was initially paid $15 per week by the employer
and received $90 per month from the Government. As his program progressed his
wages increased while the Government allowance decreased in proportion thereto.
Curtis was thus employed for approximately 1 year, when Brinks sold the station,
and he worked for the purchaser for about 4 weeks on straight salary. About a week
later, during the fourth quarter of 1950, Curtis was employed by Evans Construction
Company, building roads, and worked until sometime in December, when the job was
completed. After a week's vacation, Curtis registered with the State Employment
Security Division on January 25, 1951, and looked for employment, without success,
at stores, gas stations, and Pierce Lumber Company and also applied for work at the
Respondent's plant. About April 12, 1951, Curtis obtained a job on a section gang
of the Missouri-Pacific Railroad and apparently worked the entire second quarter of
that year. When he was laid off he immediately went to work for Galloway Lumber
Company and since then he has been steadily employed.
Tae "trial Examiner finds no merit in the Respondent's contentions. It is true, of
course, that these Claimants voluntarily signed up for the programs but, in view of
their efforts to obtain work, it is obvious that they did so in order to gain some kind
of employment. Thus, the Claimants did not accept any GI benefits until after their
efforts to obtain any type of work had been practically fruitless and it is idle to say
that in accepting these benefits they thereby assumed the status of individuals serving
in the Armed Forces or as full-time students. The allowances paid by the Govern-
ment to the Claimants pursuant to the "Institutional on-farm training" program and
job-training program were for productive labor satisfactorily performed by each of
them according to requirements fixed by the Government.24 Surely, it cannot be
said that simply because Accord and Morrow were required to attend school 1 day
a week that fact changed a vocational program into a full-time educational program.
The Trial Examiner concludes and finds that since the allowances received by the
Claimants were for services actually performed the amounts thereof must be con-
sidered as interim earnings and deductible from gross back pay. (Taylor Manufac-
turing Company, Incorporated, 83 NLRB 142, 143-145, enfd. memorandum opinion
27 LRRM 2085 (C. A. 6).
The benefits which Accord received from the part-time training program to correct
his illiteracy were not granted for services rendered but were in the nature of sub-
sistence for educational purposes and are not deductible as interim earnings. (Deena
Artware, Inc., 112 NLRB 371, 373, footnote 7, enfd. 228 F. 2d 871 (C. A. 6) ).
For the foregoing reasons the Trial Examiner accepts the General Counsel's for-
mula and computation of back pay for Accord, Morrow, and Curtis.
The Respondent in its brief, or as indicated at the hearing, interposed certain ob-
jections of a specific nature to the General Counsel's computation of net back pay.for
the employees discussed below.
Harold Boren
Boren registered with the State Employment Security Division the week after his
discharge and regularly reported to the office for a period of 6 to 8 weeks. Boren
applied for work at Ozark Creamery Company as well as with several farmers but
was unable to secure any employment until July 1949, when, through relatives, he
went to work picking peaches and earned approximately $40. Thereafter, Boren,
being unable to find any work, went to Pixley, California, in February 1950, where
he had relatives, and constantly sought farm or other employment, without success,
until July 1950, when he worked 1 week at a service station in Fresno. His next
employment was in September when, through his uncle, he obtained a job at Schenley
Industries which lasted about 3 months. Boren returned to Clarksville and in January
1951 went to work for Jeffers Garage at Ozark, Arkansas, and remained there until
about November 1951. Between that date and sometime in January 1952, Boren
worked for various employers at Wichita, Kansas, Fort Smith, and Ozark. In
January 1952, he again went to the West Coast and was rather steadily employed
until about November 1952, when he was laid off and came back to Clarksville.
24 38 USCA Ch 12 A Vet Reg. No. 1 (a), part VIII, pars. (4), (5), (6), (11) (c)
sections 941, 942, 962.
476321-58-vol. 119-75
1170 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Later that month he went to Kansas City and secured employment with General
Motors Corporation where he has been regularly employed, earning about $85 per
week.
Billy Skidgell
Skidgell registered with the State Employment Service and applied for work at the
lumber companies , the coal mines, and the brick plant. During July he worked 1
week stemming peaches, for which he received $25, and the next month obtained a
job with Arkansas Western Gas Company, laying gasline, and was paid about $25.
Upon termination of the latter job, Skidgell again contacted employers in the area
and toward the end of July or early August went to Oklahoma City, where his wife
had relatives . There he secured work at a service station which lasted about 5
weeks and about September or October he returned to Clarksville where, after 3 or
4 weeks, he obtained a job in a mine and remained there until July 1950. In the
following month Skidgell again made the rounds of employers and then went to
Superior, Wyoming, where he found a mine job which ran from around August to
November 1950. Skidgell was forced to give up this work on advice of his doctor
so he came back to Clarksville and sought employment without success. In January
1951 he went back to his job in Superior, but because of his health he returned to
Clarksville the following month. Skidgell registered for work, contacted various
employers, and about April 9 finally obtained a job, through his father, with the
Missouri -Pacific Railroad laying steel, Some 2 or 3 days later, Skidgell was hos-
pitalized for about 15 days, after which he returned to work and remained on the
job until its completion in July. The General Counsel has excepted the period of
illness, April 13 to 27, from the back-pay computation. Again, he sought employment
in Clarksville, without success, so about a week later he went to California where
he found work. The General Counsel makes no claim for back pay beyond the third
period of 1951 , for the reason that Skidgell 's interim earnings have exceeded his
gross back pay. However, the General Counsel did not waive any rights concerning
reinstatement or back pay that might accrue beyond the date of the hearing.
Leonard William Duke
Duke registered with the State Employment Service and looked for work at Gallo-
way Lumber Company, the brick plant, and a local contractor, and made a trip to
Russellville or Ozark when he heard a dam was being constructed in that area.
However, he found no work until November or December 1949, when he obtained a
job with Utah Construction Company, at Ozark, laying a spur railroad line, which
job was completed sometime in December 1949. Duke then registered with the
employment service, sought work from two local contractors , applied at the brick
plant and at a furniture factory near Fort Smith . Duke was unemployed until
September 1950, when he was hired by Hardin-Home Bakery, in Clarksville, as a
baker's helper, and worked for about 2 years, or until about October 15, 1952, when
he was laid off. Duke then registered with the State Employment Agency about
October 16, reported regularly, looked for work at Galloway's, the brick plant, a
storage yard, and a contractor, but did not find a job until March 18, 1953. On the
above date he was employed by King Motor and Equipment Company of Clarksville
and worked, intermittently, until May 23, during which time he earned $380, accord-
ing to the social security reports. Following that employment , and during the
second quarter of 1953, Duke worked for the city of Clarksville, pouring concrete
for sidewalks, for about 2 weeks, earning about $60 and was then employed by
Randolph Ford and James Ford, receiving $60 and $19.20, respectively. In the latter
part of June 1953, Duke obtained a job at the Priebe Processing Plant, and was so
employed at the date of the hearing. Duke further testified that during the time
he was working for King Motors, he was also employed pruning peaches for a Mr.
Yarbrough, for which he was paid $72. This amount has not been deducted as
interim earnings by the General Counsel, so the Trial Examiner will allow that sum
for the second quarter of 1953. Accordingly, net back pay for that period is reduced
from $93.05 to $21.05, and net back pay to March 31, 1954, is likewise reduced
from $2,506.80 to $2,488.80.
William B. Rinke
Rinke registered for State employment immediately after his discharge and
reported regularly for a period of about 16 weeks. From May 16, 1949, to
October 25, 1950, when he entered the Armed Forces, Rinke was able to obtain
only three jobs, each of a short duration, and as follows: Picking peaches in July
1949, for which he received $ 10; chopping wheat in March 1950 , earning $6; and in
OZARK HARDWOOD COMPANY 1171
the second quarter of 1950, grading cucumbers for which he received $130. In the
above interval he lived near Clarksville and testified he asked his friends and neigh-
bors to help him find work, spoke to farmers about employment, went to Galloway
and Pierce lumber companies 3 or 4 times, and applied several times at a box factory
and a feed mill or warehouse. In addition he went to Fort Smith on 3 or 4 occasions
and applied for work at the union hall, the State Employment Service, and a furni-
ture factory, and filed an application for a civil service position at Camp Chaffee.
Rinke was discharged from the service on October 21, 19D2, and came home shortly
thereafter and attempted to find work through his friends and farmers , without suc-
cess. In March 1953, he registered with the State Employment Service, contacted
the office 2 or 3 times, but failed to obtain employment. (GC 20.) Around the same
time Rinke wrote a friend, who was employed in Kansas City, about a job and as a
result secured a position at General Motors, which he has held since that date.
Rinke has been steadily employed at $2.25 per hour while he received 60 cents per
hour working for the Respondent.
Kenneth Davis
Davis registered for State employment , looked for farmwork , and in July obtained
a job with Nelson Wine and Distillery Company at Springdale , Arkansas, which
lasted until August 1949 . Davis again sought farmwork , but being unable to find
a job went to Oakland, California, around October or November 1949, where he
secured, through his brother -in-law, a temporary job as a mail clerk with the Southern
Pacific Railroad Company from November 21 to December 28. While in Oakland
he applied for work at various factories and finally secured a job with Payne and
Mahoney, a manufacturer of enamels , in January 1950, and was steadily employed
until about September 15, 1950. Davis left his employment because he received a
notice from his draft board to report to Clarksville for a physical examination.
Davis reported as ordered and was inducted into the Armed Forces on November 28,
1950, and discharged November 24, 1952. The Respondent contends Davis was
on vacation between the date of the receipt of his draft notice and the date of his
induction , therefore , he is ineligible for back pay. As might be expected Davis did
not look for employment in that interval and it is difficult to believe that he could
have secured any worthwhile employment in view of his status . The Trial Examiner
is convinced that Davis did nothing more than follow the usual course in matters of
this kind . The Respondent 's contention is accordingly rejected . Davis returned
to the Clarksville area after his discharge from the service and when Payne and
Mahoney sent him an offer of reinstatement to his old job he accepted the same
and has been steadily employed since February 1953. He testified he did not apply
for reinstatement with that company because he did not know where he "stood"
since he had been drafted from Arkansas instead of California . During the interval
from his discharge to reinstatement Davis did not register for employment , but did
seek farmwork . In view of these circumstances and the fact that the Respondent
makes no mention of this point in its brief , the Trial Examiner finds Davis did not
willfully incur losses in this period.
John L. Barnes
Barnes obtained a job , through his brother-in-law , in Tolbert 's (or Talbert's)
peach orchard pruning peaches, between June 27 and August 5, 1949 , at 60 cents
per hour, 10 hours per day, 6 or 7 days per week, earning a total of $260. Prior to
obtaining this job Barnes registered for employment and asked for work at Galloway
and Pierce lumber companies and of his friends . Following the completion of the
Tolbert job , he again sought work in the same manner, and in addition wrote his
brother and sister in Missouri asking their assistance in helping him find work.
Barnes was unemployed until April 1950 when be obtained a job, through his
brother, at a service station at Pine Bluff, Arkansas , where he was regularly
employed until around the first of November 1950. About the latter date Barnes
was notified by the Army that he had passed his physical examination and to
report to Clarksville for induction within 10 days. Barnes reported as ordered
but was not inducted until January 16, 1951. In that interval he registered with
the State Employment Service and talked to his brother-in-law about farmwork,
without success. Barnes was discharged from the Army on June 7, 1952, at
which time he went to Oklahoma to be married, returned to Clarksville, and then
went back to Oklahoma. In July he went to California and, after temporary
jobs picking fruit, obtained employment through the laborers' union hiring hall
and since then has been steadily employed. The Respondent, as in the case of
Kenneth Davis , contends that the period from the date of Barnes ' notice to report
1172 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
for induction to the actual date of induction should be eliminated from the back-pay
determination . The undisputed evidence shows that Barnes attempted to find
work in this brief period but, even if he had not done so, the result would be
the same; the Trial Examiner for the reasons stated in connection with the Davis
matter would, and does, reject the Respondent 's contention in this regard.
The Remaining Claimants
The Respondent has uniformly directed objections against the other Claimants
(except James Payne, L. G. Bartlett , and Marvin Nichols, discussed below) to the
effect that they are not entitled to back pay during the period of picketing (December
2, 1949, to July 7, 1950 ), or when they were not registered with the State Employ-
ment Security Division and there was no showing of reasonable and diligent efforts
to obtain work, or while serving in the Armed Forces. The Trial Examiner has
already found that the period when picketing occurred is not deductible . It might
.also be noted that some of the Claimants were actually working elsewhere during
that interval . The General Counsel concedes that periods when the Claimants
: served in the Armed Forces, or were idle because of sickness , must be omitted
from the back -pay computation . Under the circumstances , the review of each and
every remaining Claimant would amount to no more than a repetitious account
of registration , a search for work among employers in and about Clarksville, and
trips outside the State seeking employment . In no instance has the Trial Examiner
been able to find that any of the Claimants ever refused employment or voluntarily
gave up employment . Again, every Claimant awarded back pay, excluding Martin
and L . G. Bartlett , testified at this hearing and, as previously stated, the Trial
Examiner , from observation of these Claimants , is fully satisfied that circumstances
compelled them to seek interim work and that, apart from Hill, the Claimants did
all that might be reasonably expected of them to find employment . Accordingly, the
Trial Examiner will simply recite the saga of three Claimants as illustrative of the
efforts of the remaining Claimants to obtain work following their discriminatory
discharge and the ultimate results of their efforts.
Herman Owens
Owens registered within a week of his discharge , looked for work at Galloway's,
and various stores, and in June obtained a job with Kemp and Mills , working on a
pipeline, which job lasted for about 4 or 5 weeks. About August 15 , he went to
work for Arkansas Western Gas Company for about 2 weeks , and on September 2,
secured a job with Clarksville Coal Company where he remained until about July
1953, when he was laid off because of lack of work. Owens was not steadily
employed by this company and sustained layoffs during the slack seasons which
ran from April through part of July. At such times he registered for employment
and also obtained work of a temporary nature in 1951 laying a pipeline, and in
1953 by going to Superior , Wyoming, and working in the mines until about
December or January 1954, when he was laid off. He then returned to Clarksville
where he registered between that date and March 31, 1954, and while he looked
for work, he could find only part-time employment at a grocery store working 2
days a week for $4 per day.
James H. Wade
Wade sought employment at Clarksville at service stations and was employed
harvesting wheat in Kansas from June 5 to July 3, 1949 . 25 He then returned to
his home in Harrison , Arkansas , where he drove a cab from July 10 to August 22.
(GC 28.) From that date to February 15, 1950, he was unemployed. In that period
he applied for work in Clarksville at service stations, Pierce Lumber Company, the
brick plant , a canning factory , cab stands , and contractors , and registered for em-
ployment. (GC 29.) In addition, he went to Fort Smith and Little Rock and ap-
plied for jobs with bus companies. In January 1950, he went to Fort Worth, Texas,
where he registered with the Texas Employment Commission on January 17, made
application for work at service stations and aircraft plants , and secured a job as a
gas station attendant about February 15. Wade held this job for some 5 years when
he quit to go into the carpentry contracting business with his brother in Kansas City.
w The official reporter erroneously numbered the pages of the transcript for the hearing
on October 25. When the hearing was resumed on November 17, the error was discussed
and counsel agreed that the transcript should be changed to read from pages 1053 to 1121,
to 1253 to 1321 , respectively . The Trial Examiner has physically made these changes in
the original record.
OZARK HARDWOOD COMPANY 1173
John W. Bartlett
Bartlett registered for employment within 2 weeks after his discharge and
unsuccessfully looked for work at wholesale grocery companies and machine shops
at Fort Smith. Bartlett saw a notice at the local post office that harvest workers
were needed in Kansas, so he rode his motorcycle to Harper, Kansas, where he ob-
tained a job with a Canadian syndicate as a truck and combine driver about June 27,
and worked until August 10. On this date the harvesting season ended in the United
States and while the company offered him a job in Canada, he decided to return to
him home at Coal Hill, near Clarksville. About September 1, Bartlett went to work
for Galloway Lumber Company and stayed with them until the latter part of De-
cember, when he lost his job because he was sick for about 10 or 15 days. The
General Counsel has made allowance for this illness. Bartlett quickly registered
for employment and sought jobs with Utah Construction Company, a canning factory
in Ozark, farmwork, and reemployment with Galloway. Being unable to find work,
Bartlett left Clarksville in March 1950, and went to Kansas City, where he was
employed by General Motors on March 30 at $1.98 per hour. He worked steadily
at this job until August 10, 1950, when he quit to enlist in the United States Marine
Corps, and was discharged July 1, 1952. At the time of his discharge he was not
reinstated to his job since the plant was shut down because of the steel strike, and
he was not reemployed until August 18. Meantime, he looked around for construc-
tion jobs. Bartlett left General Motors in September 1953 to go with the Ford
Motor Company, and subsequently left that company for a position with the
Kansas City Police Department, which position he held at the time of the hearing.
James Payne, L. G. Bartlett, and Marvin Nichols
Payne: The General Counsel stated that Payne's interim earnings exceed his
gross back pay and therefore he was waiving all rights to reinstatement and back pay.
Bartlett: The back-pay period for this Claimant runs from May 16 to July 25, 1949,
the date of his reinstatement, and the parties stipulated that he had no interim earn-
ings in this period. Under the General Counsel's computation back pay amounts to
$188.70, while the Respondent computes the amount at $172.50. Since the Trial
Examiner has generally accepted the General Counsel's formula and computation,
it will be accepted in this instance.
Nichols: This individual was reinstated about November 20, 1949. The Respond-
ent admits it owes Nichols $458.67. However, the General Counsel makes no claim
for any back pay. The Trial Examiner adopts the General Counsel's position and
finds Nichols is not entitled to any back pay.
Expenses
In many instances, though not uniformly or consistently, the General Counsel has
deducted from gross interim earnings expenses incurred by the Claimants while
seeking employment, or while actually working, outside the Clarksville area, such
as travel and living costs, or expenditures incident to employment. In each case the
Claimant (except Martin) testified in regard to his expenses and the circumstances
under which they were incurred. The Respondent does not touch upon this topic
in its brief. The Trial Examiner finds that the evidence justifies the allowance of
expenses to the Claimants designated by the General Counsel and since the
amounts thereof seem to be reasonable, the Trial Examiner accepts the General
Counsel's computations in these respects.
The Accuracy of the General Counsel's Computations
Neither the Respondent nor Manufacturing Company contest the General Counsel's
computations insofar as inaccuracies or errors are concerned. For this reason, plus
the fact that Brickman prepared the computation and testified at the hearing, the Trial
Examiner has not attempted to conduct an audit of the accuracy and correctness of the
figures contained therein.
CONCLUSIONS AND RECOMMENDATIONS
Upon the foregoing findings and computations the Trial Examiner concludes that
the Claimants are entitled to net back pay as set forth in Appendix A, attached
hereto.
It is recommended that the Board adopt the foregoing findings and conclusions.
1174 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX A
NET BACK PAY FROM MAY 16, 1949, TO MARCH 31, 1954
Claimant Amount Claimant Amount
Dewey Accord ----------- $4, 616.97 Marvin Knuckles ------ --- $4, 285.46
John L. Barnes----------- 1,284.81 Robert L. Martin -------- 8, 282. 80
John Bartlett------------ 454.08 Lewis Merritt------------ 4,618.47
L. G. Bartlett ____________ 188. 70 Earl Morrow____________ 2,928.67
Harold Boren------------ 3, 847. 15 Marvin Nichols ---------- None
Loyd H. Carter ---------- 3, 596.42 Herman Owens ---------- 2, 691.75
Homer Currier----------- 3,585.91 James Payne_____________ None
Garland Curtis ----------- 885.04 W. B. Rinke------------ 2, 664.44
Jack Daniels------------- 3,951.36 Billy Skidgell------------ 1,771.65
Kenneth Davis----------- 921. 54 Troy Turner_____________ 1,513.43
Leonard William Duke____ 2,388.80 Marvin Warren ---------- 2,207.08
Lum Fisher______________ 7, 179. 80 James Wade_____________ 553. 02
Bill Friend______________ 1,200.27 Ira Wolfe_______________ 3 , 302.00
Filo Hill_________ _______ 264. 40
Mardril , Inc. and Sailors Union of the Pacific, Wilmington
Branch and Off-Shore Petroleum Workers Association and
Off-Shore Petroleum Workers Local Union , District 50, United
Mine Workers of America
Marex, Inc . and Sailors Union of the Pacific, Wilmington Branch
and Off-Shore Petroleum Workers Association and Off-Shore
Petroleum Workers Local Union , District 50, United Mine
Workers of America
Rexmar, Inc. and Sailors Union of the Pacific, Wilmington
Branch and Off-Shore Petroleum Workers Association and Off-
Shore Petroleum Workers Local Union , District 50, United Mine
Workers of America
Submar, Inc. and Sailors Union of the Pacific, Wilmington
Branch and Off-Shore Petroleum Workers Association and
Off-Shore Petroleum Workers Local Union, District 50, United
Mine Workers of America
Submarex Corp . and Sailors Union of the Pacific, Wilmington
Branch and Off-Shore Petroleum Workers Association and
Off-Shore Petroleum Workers Local Union , District 50, United
Mine Workers of America. Cases Nos. 921-CA-92562, p21-CA-
2563, 921-CA-2564, 21-CA-2565, and ?21-CA-2566. December 24,
1957
DECISION AND ORDER
On April 30, 1957, Trial Examiner Howard Myers issued his Inter-
mediate Report in the above-entitled proceedings, finding that the
Respondents had engaged in and were engaging in certain unfair
labor practices, and recommending that they cease and desist there-
119 NLRB No. 138.