Paper Moon Milano

National Labor Relations Board - Board Decisions

Aug 31, 1995

318 N.L.R.B. 962 (N.L.R.B. 1995)

962
318 NLRB No. 73
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 313 NLRB 64 (1993).
2 We find no merit in the Respondent’s contention that the judge
erred by failing to consider Federico’s cash tips in calculating his
interim earnings. We note that the Respondent has failed to meet its
burden of showing that the judge did not consider cash tips in his
analysis of Federico’s interim earnings. Furthermore, the Respond-
ent’s calculations of cash tips Federico may have earned during his
interim employment are speculative.
1 Unless indicated otherwise, all dates referred to relate to the year
1992.
Grand Mela Corp., d/b/a Paper Moon Milano and
Raffaele Federico. Case 2–CA–25616
August 31, 1995
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN GOULD AND MEMBERS COHEN,
AND TRUESDALE
On November 23, 1993, the National Labor Rela-
tions Board issued a Decision and Order in this pro-
ceeding in which it ordered the Respondent to make
Raffaele Federico whole for any loss of earnings he
suffered by reason of the Respondent’s discrimination
against him.1 A controversy having arisen over the
amount of backpay due to Federico under the Board’s
Order, the Regional Director for Region 2 issued a
compliance specification and notice of hearing on
April 29, 1994, alleging the amounts of backpay due.
Pursuant to notice, a hearing was held before Adminis-
trative Law Judge Joel P. Biblowitz on January 17 and
March 24, 1995.
On May 31, 1995, the administrative law judge
issued his Supplemental Decision and Order. The Re-
spondent filed exceptions and a supporting brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the record and the at-
tached supplemental decision in light of the exception
and brief and, has decided to affirm the judge’s rul-
ings, findings,2 and conclusions.
ORDER
The National Labor Relations Board orders that the
Respondent, Grand Mela Corp., d/b/a Paper Moon
Milano, New York, New York, its officers, agents,
successors, and assigns, shall make whole the follow-
ing claimant by paying him the amount opposite his
name, plus interest to the date of payment, less
withholdings required by Federal and state laws.
Raffaele Federico $45,346
Burt Pearlstone, Esq., for the General Counsel.
Robert V. Ferrari, Esq., for the Respondent.
Deborah Singer, Esq., for H.E.R.E., Local 100.
SUPPLEMENTAL DECISION
JOEL P. BIBLOWITZ, Administrative Law Judge. This case
was heard by me on January 17 and March 24, 1995. The
compliance specification issued on April 29, 1994, and al-
leges that Raffaele Federico, the discriminatee, is owed an
amount of $54,317.63, plus interest, from Grand Mela Corp.,
d/b/a Paper Moon Milano (Respondent). In the underlying
case, at 313 NLRB 64 (1994), the Board found, inter alia,
that Respondent discharged Federico on January 20, 1992,1
reinstated him on January 27, and discharged him again on
March 5, in violation of Section 8(a)(1) and (3) of the Act.
THE FACTS
I. THE BACKPAY PERIOD
The compliance specification alleges, and Respondent ad-
mits, that the backpay periods are from January 20 through
27, and from March 5 through December 28, 1993.
II. MEASURE OF BACKPAY
This allegation is also admitted:
During the backpay period set forth in paragraph I
above, Federico’s gross backpay would have been his
total gross earnings based upon an average of the earn-
ings and tips of similarly situated employees, with a
base rate of $2.75 an hour for forty hours, time and a
half for overtime, and the average tips earned by wait-
ers who worked a minimum of six (6) shifts per week.
The average was calculated from the Respondent’s pay-
roll and tips records of the week on which the fifteenth
of each month fell, unless such records were not avail-
able, in which case the average was calculated from the
average of the same week of the month, or the previous
month of the previous year, and/or the following year,
depending on what records were made available.
III. NET INTERIM EARNINGS
This was the disputed allegation. Respondent had two de-
fenses herein: that Federico did not make a good-faith search
for interim employment and improperly left some of these
positions, and that he understated the amount of the tips that
he received during his interim employment and is therefore
entitled to no backpay, or less backpay, during certain peri-
ods.
A. The Search for Interim Employment
Federico was terminated by Respondent for the second
time on March 5, the beginning of the major part of the
backpay period, and he found another job about 3 or 4 weeks
later at Orsinini. During this period he searched for work in
the following manner:
Well, my system was walking from one avenue to
another and from one street to another, walking inside
restaurants and simply asking if they needed . . . new
waiters, or some applications to fill out . . . .
963PAPER MOON MILANO
2 Federico was not a witness that one could describe as direct or
brief. Rather, practically every answer was longer than it should
have been and many included lengthy explanations that he had not
been asked for.
He visited French and Italian restaurants in about the areas
of 50th Street to 52nd Street in Manhattan and filled out em-
ployment applications at these restaurants. He named 10 res-
taurants, including Orsinini, that he visited in looking for
work, and testified that there were others whose names he
could not remember. He began working at Orsinini’s in
about the beginning of April and worked there for about 2
months, earning about $500 to $600 a week. While em-
ployed at Orsinini, he felt that he was not earning enough
money and began looking elsewhere. On about June 3, he
left work there and, a few days later, he began working at
San Pietro, another Italian Restaurant, where his weekly
gross pay ranged from $600 to $750. He remained at San
Pietro until about the middle of October, when he left its em-
ploy due to disagreements with the owner,2 one of which
was that the owner wanted to replace him with another em-
ployee as captain at the facility. In addition, about a month
before he left his employ at San Pietro, he told the owner
that he had to better understand his employees’ needs; that
the employees were working 12 hours a day, without a
break, and that they would perform better if they had some
breaks and if he didn’t curse them and call them names. The
owner told him, ‘‘You give me concern because you behave
like a union leader.’’ This convinced Federico that the owner
knew of his union involvement while employed by Respond-
ent.
After leaving San Pietro, he found another job about 2
weeks later, in about late October, at Oggi Domani, an
Italian Restaurant in Greenwich Village, New York. During
that 2-week period, he walked into restaurants between about
3 and 5 p.m., which he found was the best time to inquire
about jobs. He named 13 restaurants that he visited before
he found the job at Oggi Domani, through an ad in the New
York Times. The restaurant was preparing for its grand open-
ing, and the first 10 days of employment there was unpaid,
as the staff met to prepare the menu. This restaurant did
poorly and he remained there until about the beginning of
June 1993, earning about $160 to $200 a week; about a week
after he left his employ there, the restaurant went out of
business.
At about the end of June 1993, about 2 or 3 weeks after
leaving Oggi Domani, Federico began working at Primola
Restaurant. During that 2- to 3-week period he visited res-
taurants in Greenwich Village, as well as uptown restaurants,
and he named about 15 restaurants that he visited during this
period. While employed at Primola he earned between $550
to $700 a week. He testified that on about October 16, 1993,
he was laid off by Primola due to disagreements with the
owner, Djuliano Zuliana. He testified that about a week be-
fore he left his employ there, he was at the bar obtaining a
glass of wine for a customer when Zuliana pushed him aside,
causing the glass of wine to fall to the floor. Federico told
Zuliana not to harass his employees on the job and Zuliani
told him that he had to understand that he gets very nervous
when the restaurant is busy. Federico responded that he
should not be that way, that he should leave his employees
alone, and give them more respect. Zuliana, an obviously
credible witness, testified that his problem with Federico was
that they did not get along; one reason for this was that
Federico was unwilling to ‘‘close his eyes’’ to certain things.
About a month prior to the end of Federico’s employment
at Primola, Zuliana called him over and said: ‘‘We have to
talk, we have to get along, otherwise we can’t work together.
Sometimes you have to close your eyes and turn around and
everything is going to be all right at the end of the night.’’
He testified that Federico was not fired: ‘‘It was like a mu-
tual . . . thing that he left.’’
His next job was at Sistina Restaurant, where he began
working in about the beginning of December 1993. During
the 6-week period between leaving Primola and beginning
work at Sistina, he followed the same procedure he had in
the past of walking around and asking if work was available,
and he named 17 restaurants that he remembered visiting
during that period before obtaining work at Sistina. He re-
mained at Sistina through the end of the backpay period.
In backpay proceedings respondents have the burden of es-
tablishing affirmative defenses that would mitigate their li-
ability. NLRB v. Brown & Root, 311 F.2d 447, 454 (8th Cir.
1963). This includes the burden of establishing such matters
as unavailability of jobs, willful loss of earnings and interim
earnings to be deducted from backpay. NLRB v. Mooney Air-
craft, 366 F.2d 809, 812–813 (5th Cir. 1966). When there are
uncertainties or ambiguities, doubt should be resolved in
favor of the wronged party rather than the wrongdoer. United
Aircraft Corp., 204 NLRB 1068.
In the underlying case, it was found that Federico was un-
lawfully terminated on January 20. On the following day, he
was called by Respondent’s assistant manager and told to re-
port for work on January 27. As Federico was told on the
day after his discharge to report for work 6 days later, he
had no obligation to search for interim employment for this
6-day period. The issue is whether his search for interim em-
ployment from March 5 through December 1993 satisfies the
Board’s requirements. I find that it does. During the backpay
period herein, the amount of time that Federico spent be-
tween jobs ranged from a few days (between Orsinini and
San Pietro) to about 6 weeks (between Primola and Sistina).
In NLRB v. Cashman Auto Co., 223 F.2d 832, 836 (1st Cir.
1955), the court stated: ‘‘the principle of mitigation of dam-
ages does not require success; it only requires an honest
good faith effort . . . .’’ The evidence establishes that
Federico made an honest good-faith effort to find interim
employment. He walked around visiting restaurants and
looked in the newspaper for possible jobs. The fact that he
usually found a new job within about 2 to 3 weeks indicates
that he made a good-faith effort to locate interim employ-
ment, and I so find.
Federico worked at five different restaurants during the
backpay period—22 months. He left Orsinini to go to San
Pietro, a few days later, in order to earn more money, cer-
tainly a valid reason. He left San Pietro because he felt that
the owner’s statement indicated that he was aware of
Federico’s prior union difficulties and that the owner wanted
to replace him as captain, which would apparently affect his
earnings. A discriminatee who leaves his job for a justifiable
reason does not forfeit his right to further backpay, NLRB v.
Ryder System, Inc., 983 F.2d 705, 714 (6th Cir. 1993), and
there was no evidence to contradict Federico’s testimony, as
rambling and unending as it was, that he was justified in
964 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 There is no explanation for the discrepancy of $117.
leaving his employment at San Pietro. Federico was clearly
justified in leaving Oggi Domani, which was about to close,
where his earnings were about 25 percent of prior earnings.
On about October 16, 1993, Federico ended his employ at
Primola. Whether I credit Federico that he was laid off, or
Zuliana, that it was a ‘‘mutual thing,’’ he clearly was not
discharged for gross or willful misconduct, NLRB v. P*I*E
Nationwide, Inc., 923 F.2d 506, 512 (7th Cir. 1991), which
would have tolled his backpay. Zuliana’s testimony supports
Federico’s testimony that he had a valid reason for leaving
Primola, that they could not get along. I therefore find that
Federico’s backpay was not tolled at any time during the
backpay period for either the lack of a good-faith search for
work, or for improperly leaving any of his interim jobs.
B. Interim Earnings
The principal issue litigated herein was whether Federico
honestly reported his interim earnings. The compliance speci-
fication lists Federico’s interim earnings at Orsinini as $4936
for the second quarter of 1992. He testified that he worked
there for about 2 months and earned between $500 and $600
a week. The parties stipulated that his W–2 from Orsinini
states that he had tips of $4070 and wages of $2565 while
employed there. The procedure at Orsinini, and the other res-
taurants that he worked at as well, was for the waiters to
‘‘pool’’ their tips. Although there were variations in how this
worked at the different restaurants, at the end of the evening
the owner, maitre d’, or some other individual, calculated the
amount of tips charged by customers on that evening. On the
following day, the employer gave the waiters cash in the
amount of the prior day’s charged tips for distribution. Each
waiter received an equal share, while the busboys each re-
ceived half shares, and the bartender usually received a per-
centage share.
The compliance specification lists interim earnings for
Federico at San Pietro for the second, third, and fourth quar-
ter of 1992 as $4915, $7932, and $337. Federico testified
that he began working there on about June 5 or 6, and his
pay ranged from $600 to $750 a week. The parties stipulated
that his W–2 from San Pietro states that he earned tips of
$10,619 and wages of $2565. San Pietro, Primola, and
Sistina were the only restaurants involved in this proceeding,
other than Respondent, that maintained records of the actual
tips received by the waiters. Graziella Baldin, who has been
the bookkeeper at San Pietro since July, testified that during
the period in question the restaurant’s procedure was to de-
clare as income for its waiters 10 percent of the restaurant’s
gross income. Therefore, if the restaurant’s gross business on
1 day was $5000, about $500 (10 percent of the gross)
would be divided among the staff. If there were four waiters
and two busboys (who each get half shares) that day, an
amount of $100 would be declared toward each waiter’s W–
2 for that day. She also maintained records stating the total
amount of the charged tips per day, however, divided by the
number of employees who pooled these tips, showing the ac-
tual charged tips allegedly received by each of the employ-
ees. The procedure that she followed was, each morning, to
prepare a check in the amount of the charged tips, and that
check was cashed and the cash was given to the waiters for
distribution. These records also state the amount of the ‘‘De-
clared tips,’’ which as previously stated was each waiter’s
pooled share of 10 percent of the evening’s gross income.
According to these records, during Federico’s 19 weeks of
employment at San Pietro, his ‘‘effective tips’’ (meaning
what Baldin assumed was his share of the pooled tips) were
$15,389.70 and his declared tips (his share of 10 percent of
Respondent’s gross on the days that he was employed) were
$10,619, the amount she placed on his W–2 form.
The compliance specification lists his interim earnings at
Oggi Domani as $1050 in the fourth quarter of 1992, $2026
in the first quarter of 1993, and $1690 in the second quarter
of 1993. Federico testified that he earned between $160 to
$200 a week while employed there. The parties stipulated the
his W–2 for Oggi Domani states that he earned $1543 in
wages and $2174 in tips in 1993.
His next employer was Primola where, according to the
compliance specification, he had interim earnings of $6820
in the third quarter of 1993, and $1186 in the fourth quarter
of 1993. He testified that his earnings at Primola ranged
from $550 to $700 a week, and the parties stipulated that his
W–2 for Primola states that he had received wages of $1409
and tips of $6480 in 1993.3 Primola’s procedure of distribut-
ing the tips to the waiters and busboys was different from
the other restaurant’s that Federico worked at during this pe-
riod in that the employer distributed the tips to the waiters
and the employees signed for the amounts that they received.
These books state that Federico received $8910 in tips during
his employment at Primola. Federico testified that the only
documents that he had in his possession when he supplied
the Regional Office with his earning records for the backpay
period (for all the restaurants involved herein) were the W–
2 forms from his interim employers.
The compliance specification lists Federico’s interim earn-
ings at Sistina as $1280. He testified that he began working
there in early December 1993 and remained there through the
end of the backpay period, December 28, 1993. The parties
stipulated that his W–2 from Sistina states that he earned
wages of $180 and tips of $1100. Liliana Rottura, who is the
bookkeeper for Sistina Restaurant, testified that Federico
began working there during the week ending December 11,
1993, and worked through December 28, 1993. During that
period, Sistina’s policy was to declare as income for each
waiter his share of an amount equal to 10 percent of the res-
taurant’s gross business. In addition, she kept records of the
total amount of charged tips per day. In his 4 weeks of em-
ployment at Sistina during that period, he worked 4 days, 6
days, 1 day, and 1 day. Rottura’s records establish that for
these days the total charged tips received by the waiters was
$11,813. Her procedure was to write a check each morning
in the amount of the charged tips of the prior day, cash the
check, and give it to her husband who works at the res-
taurant, and he gives it to the waiters to distribute pursuant
to their pool arrangement. She does not participate in the dis-
tribution of the money and has no record of the actual
amount that Federico received during his employment at
Sistina. She credited Federico (on his W–2 form), however,
with $1100 of the $7360 ‘‘declared’’ on the days that he
worked. Assuming the same percentage was used for actual
tips would mean that he received $1772 in tips while em-
ployed at Sistina.
In American Navigation Co., 268 NLRB 426, the Board
determined that discriminatees would be denied backpay for
965PAPER MOON MILANO
4 During the hearing, counsel for General Counsel cross-examined
Baldin and Rottura about the fact that they did not actually distribute
the money to the waiters, apparently to establish that these records
were not trustworthy. In addition, however, to the fact that Baldin
and Rottura were disinterested and credible witnesses, a comparison
of the reported amount (10 percent of the gross business) with the
actual amounts, indicates that it would be approximately the usual
15-percent tip amount. I therefore credit the testimony of Rottura
and Baldin and find the figures they supplied to be accurate.
5 In his brief, counsel for the General Counsel moved to amend
the compliance specification to allege that his total interim earnings
at Primola were $10,436. I find, however, that these interim earnings
were $10,319, tips of $8910, and wages of $1409.
6 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and rec-
ommended Order shall, as provided in Sec. 102.48 of the Rules, be
adopted by the Board and all objections to them shall be deemed
waived for all purposes.
all quarters in which it is found that they intentionally con-
cealed employment or earnings from the Board. The Board
stated (Id. at 428): ‘‘This remedy will be applied, of course,
only in cases where the claimant is found to have willfully
deceived the Board, and not where the claimant, through in-
advertence, fails to report earnings.’’ In a footnote to this
statement, the Board stated that it is confident that the ad-
ministrative law judges were capable of distinguishing honest
error from deceit.
The compliance specification lists Federico’s interim earn-
ings at Orsinini as $4936; the parties stipulated that his W–
2 from Orsinini states that he earned $4070 in tips and $2565
in wages, for a total of $6635. There is no explanation for
this discrepancy, nor is there any evidence that it was the re-
sult of a willful deception by Federico. I find that he is enti-
tled to backpay for the period, but that his interim earnings
at Orsinini, for the second quarter of 1992, should be com-
puted as $6635. The amounts specified in the compliance
specification for his employment at Oggi Domani in the
fourth quarter of 1992 and the first and second quarters of
1993 are supported by his testimony and the W–2 form from
this restaurant, and there is no evidence to contradict this. I
therefore find that these reported amounts represent his in-
terim earnings at Oggi Domani during the fourth quarter of
1992 and the first and second quarters of 1993.
The situation is different at San Pietro, Primola, and
Sistina, where records were maintained of actual, or pre-
sumed, tips received by the waiters. The testimony estab-
lishes that at San Pietro and Sistina, the procedure at the
time was to declare for each waiter his share (depending on
the pool arrangements) of 10 percent of the restaurant’s gross
business for the day. That was the amount that was placed
on his W–2 form. Although the amounts listed in the compli-
ance specification, $4915, $7932, and $337, for the second,
third, and fourth quarter of 1992 correspond with the W–2
form that he received from San Pietro, it does not correspond
with the restaurant’s records of what he actually earned. The
same is true for Primola and Sistina; the amounts set forth
in the compliance specification conform with the W–2 forms
that he received from these restaurants, but not with their
records of what he actually, or presumably, earned in tips.4
The issue is whether this was an excusable error or whether
it was a willful deception resulting in the denial of backpay
during the periods in question.
The employment discussed occurred from 15 months to 3
years prior to the hearing herein, and from 4 months to 2
years prior to the issuance of the compliance specification
herein. There is no evidence that Federico had anything in
his possession from either San Pietro, Primola, or Sistina
other than the W–2 forms. Although the evidence establishes
that, while employed at Primola, Federico signed for the fact
that he received $8910 in tips, while he only reported $6480
in tips, there is no evidence that he was ever given a record
of the actual amount of tips that he earned there; rather, all
that he received from the restaurants were the W–2 forms
upon which he based his information that he supplied to the
Board. As there is no evidence of a deliberate attempt to de-
ceive the Board, I find that while the true amount of his tips
received during this period will constitute interim earnings,
he will not be deprived of backpay during any of these quar-
ters. Colorado Forge Corp., 285 NLRB 530, 543 (1987);
Brown Co., 305 NLRB 62, 67 (1991).
In summary, as Federico’s W–2 from Orsinini states that
he earned $6635, that amount shall be his interim earnings
at Orsinini for the second quarter of 1992. Further, based
upon the credited testimony of Baldin, I find that Federico’s
interim earnings at San Pietro are as follows: for the second
quarter of 1992, $5748 in tips and $949 in wages; for the
third quarter, $9264 in tips and $1539 in wages; and in the
fourth quarter, $377 in tips and $77 in wages. There is no
dispute about his interim earnings at Oggi Domani for the
fourth quarter of 1992 or the first and second quarter of
1993. I find that his interim earnings at Primola were $8773
for the third quarter of 1993 and $1546 for the fourth quarter
of 1993.5 And finally, I find that his interim earnings at
Sistina were $1772 in tips and $180 in wages, for a total of
$1952 for the fourth quarter of 1993.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended6
ORDER
The Respondent, Grand Mela Corp., d/b/a Paper Moon
Milano, New York, New York, its officers, agents, succes-
sors, and assigns, shall pay to Raffaele Federico the sum of
$45,346, plus interest, calculated as follows:
Backpay
Period Gross Backpay
Interim Earn-
ings Net Backpay
1st Q 1992 $3,847.92 None $3,848
2d Q 1992 13,515.90 $13,332 184
3d Q 1992 11,264.50 10,803 462
4th Q 1992 12,766.80 1,504 11,263
1st Q 1993 9,749.29 2,026 7,723
2d Q 1993 12,012.20 1,690 10,322
3d Q 1993 9,767.71 8,773 995
4th Q 1993 14,046.70 3,498 10,549