Penco, Inc.

National Labor Relations Board - Board Decisions

Mar 21, 1986

278 N.L.R.B. 1095 (N.L.R.B. 1986)

PENCO, INC.
Penco, Inc. and Shopmen 's Local No. 682 of the
International Association of Bridge, Structural
& Ornamental Ironworkers, AFL-CIO. Cases
9-CA-19064(E) and 9-RC-14154(E)
21 March 1986
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND JOHANSEN
On 28 August 1984 Administrative Law Judge
Donald R. Holley issued the attached supplemental
decision on an application for attorney 's fees and
expenses under the Equal Access to Justice Act.
The Applicant filed exceptions and a supporting
brief.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
The Board has considered the supplemental deci-
sion and the record in light . of the exceptions and
brief and has decided to affirm the judge's rulings,
findings , and conclusions ' and to adopt the recom-
mended Order.
' The judge dismissed the Applicant's application for attorney's fees
because, had he credited the General Counsel's witness, Charging Party
Carter, instead of the Applicant's witnesses, he would have concluded
that Carter was denied a raise, suspended, and discharged because of his
union activity.
The Applicant excepts on the ground that Carter's testimony, even if
credited, cannot serve as a basis for a prima facie case under Wright Line,
251 NLRB 1083 (1980), enfd. on other grounds 662 F.2d 899 (1st Cit.
1981), cert. denied 455 U.S. 989 (1982), because Carter testified that the
Applicant had no reason to believe he was engaged in protected conduct
and, as far as he knew, had no knowledge of his union activity. Accord-
ingly, the Applicant argues, it would have been impossible for the Gener-
al Counsel to make a prima facie case and therefore the General Coun-
sel's decision to proceed against the Applicant was not substantially justi-
fied. We disagree. Direct evidence is not the only means by which an
employer's knowledge of union activity may be established. It is well set-
tled that knowledge may also be inferred from all the circumstances.
Marathon LeTourneau Co., 256 NLRB 350, 363 (1981). Carter was the
Union's in-shop organizer. There were only 12 employees in the shop
during the organizing campaign. Carter's discredited testimony and other
evidence presented at the hearing shows the following: On 10 August
1982 Carter talked to other employees in the shop in order to secure
more authorization cards. On I October 1982, the same day that the Ap-
plicant interrogated Carter and other employees about the Union's recent
recognition demand, the Applicant denied Carter a promised -wage in.
crease because he was a "troublemaker." Carter had received no com-
plaints about his work prior to that date. On 17 November 1982, the day
he was suspended, Carter went around the shop reminding employees of
a union meeting scheduled for that night. Finally, Carter openly hand-
billed for the Union in the Applicant's parking lot on 2 November and 7
and 9 December 1982. He was discharged on 9 December 1982. This evi-
dence, if completely credited, would support the inference that the Ap-
plicant was aware of Carter's union involvement before his discharge.
See, e.g., E. Mishan & Sons, 242 NLRB 1344, 1345 (1979).
A party prevailing in litigation before a Government agency is entitled
under Sec. 504(a)(1) of the Equal Access to Justice Act, 5 U.S.C. § 504
(1982), as amended by Pub. L. 99-80, to an award of attorney's fees in-
curred in connection with such litigation, unless the Government can
show that its position was substantially justified. In amending the EAJA,
Congress did not change, but merely clarified, the definition of "substan-
tially justified." "Substantially justified" means "more than merely rea-
sonable." H.R. Rep. 99-120 at 9 (1985). The EAJA was not intended to
1095
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the application of the Appli-
cant , Penco, Inc., Louisville , Kentucky, for an
award under the Equal Access to Justice Act be
dismissed.
deter the Government from advancing in good faith a close question of
law or fact . She//maker. Inc., 267 NLRB 20, 21 (1983 ). Whether the Gen-
eral Counsel 's circumstantial evidence would warrant the inference that
the Applicant knew of Carter 's union activity is a close question for a
trier of fact . Accordingly, we agree with the judge that the General
Counsel was substantially justified in deciding to litigate Carter's dis-
charge and that the Applicant therefore is not entitled to an EAJA
award.
Garey Edward Linsay, Esq., for the General Counsel.
James U. Smith, III, Esq. (Smith & Smith), for the Re-
spondent.
SUPPLEMENTAL DECISION
Equal Access to Justice Act
DONALD R. HOLLEY, Administrative Law Judge. On
March 14, 1984, I issued a decision in the above-cap-
tioned cases finding that Penco, Inc., the Respondent,
had engaged in specified violations of Section 8(a)(1) of
the Act, but had not violated Section 8(a)(3) of the Act
by reneging on a promise to give its employee George
Carter a raise on October 1, 1982, by suspending Carter
on November 17, 1982 , or by terminating Carter on De-
cember 9, 1982. No exceptions were filed to the decision
and on April 16, 1984 , the Board issued an Order adopt-
ing my findings and conclusions as contained in the deci-
sion.
On May 15, 1984 , Penco, Inc. (Applicant), filed an ap-
plication for attorneys fees and expenses pursuant to the
Equal Access to Justice Act' together with a motion to
withhold confidential financial information from public
disclosure.2
By Order dated May 16, 1984, the Board referred Ap-
plicant's application to me for "appropriate action."
On May 22, 1984 , the General Counsel filed a motion
to dismiss the application contending that evidence was
offered at the hearing which , if credited, would have
proven the 8(a)(3) violations alleged . The Applicant ,
argues in its application , and in its response to thae
motion to dismiss , that the position of the General CcJun-
sel throughout the case was not reasonable in law Cr fact
and the issuance of the complaint against the Company
alleging discriminatory action against Carter was unrea-
sonable and unwarranted.
Applicant filed a brief in support of its at`,76lication and
a reply brief to the General Counsel 's motion to dismiss
the application and the General Couns°.;l filed a brief in
support of the motion to dismiss the application. The
briefs have been considered in reachi°ng my decision.
' P.L. 96-481, 94 Stat 2325 , and see Sec. 102.43 of the Board 's Rules
and Regulations.
' Such motion , which was not opposec 1, is granted.
278 NLRB No. 158
1096 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Section 504(a)(1) of EAJA provides that an award
shall be made to a prevailing party unless "the position
of the agency as a party to the proceeding was substan-
tially justified ." Congress described the "substantially
justified" as follows:
The test of whether or not a government action is
substantially justified is essentially one of reason-
ableness. Where the government can show that its
case had a reasonable basis both in law and in fact,
no award will be made.3
Congress further indicated that no adverse inferences
were to be drawn from the fact that the Government did
not prevail:
The standard, however, should not be read to raise
a presumption that the government position was not
substantially justified, simply because it lost the
case. Nor, in fact, does the standard require the
government to establish that its decision to litigate
was based on a substantial probability of prevail-
ing.4
Section 102.144(a) of the Board's Rules and Regulations
likewise places the burden of proof on the General
Counsel to show that the General Counsel was substan-
tially justified in issuing the complaint, and that its posi-
tion in the proceeding was reasonable in law and fact.
The Board has further held that it is immaterial that the
General Counsel may not have established a prima facie
case of a violation.5 However, for the General Counsel's
position to be substantially justified within the meaning
of Section 102.144(a), the General Counsel must present
evidence which, if credited by the factfinder, would con-
stitute a prima facie case of unlawful conduct.6
During the trial of this case the alleged discriminatee,
George Carter, testified that on September 27, 1982, his
immediate supervisor, Edward -Wilder, told him he was
satisfied with his work and he would give him a raise ef-
fective October 1. He further testified that on September
29, when he and other employees of the Company at-
tended a union meeting, he urged employees to sign a
union card by telling the Edwin Penna III and Edwin
Penna IV, company officers, were getting wealthy by
taking money that belonged to them. Carter claimed that
the following day, October 1, Wilder was called to
Penna IV's office at approximately 7:30 a.m., and that,
when he returned to the work area about 20 minutes
later, he jumped all over him calling him a troublemaker
and a "screw-off' and that at that time Wilder told him
he was not going to receive a raise. Shortly thereafter,
Carter misfabricated 400 sink brackets. During his testi-
mony, he claimed the brackets were misfabricated be-
cause, inter alia, he had used a faulty diagram prepared
by an employee who had fabricated such brackets on a
prior occasion. Carter was suspended when the error
was discovered and was subsequently terminated for
what was admittedly his first misfabrication error.
If I had credited Carter rather than the Applicant's
witnesses, the General Counsel would have prevailed in
the contention that Carter was denied a wage increase,
was suspended, and was terminated because he had en-
gaged in union activities.
In sum, I conclude that the position of the General
Counsel was reasonable in law and fact and was thus
"substantially justified" within the meaning of the EAJA.
Accordingly, the General Counsel's motion to dismiss
the application is granted.
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed7
ORDER
It is ordered that the application is dismissed.
3 S. Rep 96-253, 96th Cong. 1st Sess et seq, H Rep 96-1418, 96th 7 If no exceptions are filed as provided by Sec 10246 of the Board's
Cong. 2d Sess at 10 Rules and Regulations , the findings , conclusions , and recommended
' S Rep 96-253, supra at 7, H. Rep 96-1418, supra at I I Order shall, as provided in Sec 102 48 of the Rules, be adopted by the
5 Enerhaul, Inc, 263 NLRB 890 (1982) Board and all objections to them shall be deemed waived for all pur-
l Jim's Big M, 266 NLRB 665 (1983). poses.