Rikal West, Inc.

National Labor Relations Board - Board Decisions

Mar 26, 1985

274 N.L.R.B. 1136 (N.L.R.B. 1985)

1136 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Rikal West , Inc. and Robert Kneifel . Case 20-CA-
16397
26 March 1985
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
HUNTER AND DENNIS
On 25 September 1984 Administrative Law
Judge Joan Wieder issued the attached supplemen-
tal decision.I The Respondent filed exceptions and
a supporting brief, and the General Counsel filed
an answering brief.
The Board has considered the decision and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings, and
conclusions2 and to adopt the recommended
Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent, Rikal West,
Inc., Burlingame, California, its officers, agents,
successors, and assigns, shall take the action set
forth in the Order.
i The Board's original Decision and Order is reported at 266 NLRB
551 (1983) Thereafter, the United States Court of Appeals for the First
Circuit entered its judgment enforcing the Board's Order Rikal West,
Inc v NLRB, 721 F 2d 402 (1st Or 1983)
2 The Respondent excepts to the judge's conclusion that the Respond-
ent did not make an unconditional offer of reinstatement to discriminatee
Kneifel on 9 February 1981 The Respondent contends that it made an
unconditional oral offer of reinstatement to Kneifel separate and apart
from its subsequently offered "Agreement " In the alternative, the Re-
spondent contends that the "Agreement" was a valid offer of reinstate-
ment and contained no improper conditions when read in conjunction
with the memo to "All Employees," which the judge did not mention in
her decision In this regard, the Respondent contends that although the
"Agreement" would have required that Kneifel admit that he violated
company rules, be subject to termination for future violations, and accept
a 3-week suspension without pay, the memo to "All Employees" also re-
quired the other employees to acknowledge the existence of specific com-
pany rules, the violation of which would result in discipline or dismissal
It thus argues that to the extent that the terms of the "Agreement" may
be viewed as imposing conditions on Kneifel's reinstatement, such condi-
tions merely reflected the existence of valid company work rules
We find the Respondent's contentions without merit Contrary to the
Respondent, the record does not show that an oral offer of reinstatement
was made separate and apart from the "Agreement " Furthermore, as
noted by the judge here, the discipline imposed by the "Agreement" was
based on the same purported rules violations which the Board in the un-
derlying unfair labor practice proceeding found were shams to support
Kneifel's discharge and was based on company rules which had been
found to have been disparately applied against Kneifel Accordingly, as
found by the judge here, Kneifel's reinstatement under the terms of the
"Agreement," including the admissions of guilt and the acceptance of dis-
cipline, would not have placed him in status quo ante We therefore find
that the Respondent's offer of reinstatement on or about 9 February did
not constitute a valid, unconditional offer
SUPPLEMENTAL DECISION
JOAN WIEDER, Administrative Law Judge This sup-
plemental proceeding was heard in San Francisco, Cali-
fornia, on 28 August 1984. A backpay specification and
notification was issued on 30 April 1984 predicated on a
decision and order of the National Labor Relations
Board issued in the above-captioned case at 266 NLRB
551, finding Rikal West, Inc. (Respondent or Company)
violated Section 8(a)(1) and (3) of the National Labor
Relations Act. As here pertinent, the Board's order re-
quired Respondent to reinstate employee Robert Kneifel
"to his former job or, if that job no longer exist, to a
substantially equivalent position, without prejudice to his
seniority or other rights and privileges previously en-
joyed, and make him whole for any loss of pay which he
may have incurred by reason of Respondent's discrimina-
tion against him," with interest to be computed thereon
in the manner prescribed in F. W. Woolworth Co, 90
NLRB 289 (1950), and Florida Steel Corp, 231 NLRB
651 (1977) See also Isis Plumbling Co., 138 NLRB 716
(1962).
The parties are in disagreement over the amount they
owed Kniefel. Respondent's answer, filed 8 May 1984,
asserts that Kniefel's backpay period, which began on 29
January 1981, ended about 9 February 1981, contending
that he rejected an unconditional offer of reinstatement.
Respondent argues in the alternative that Kniefel's back-
pay period ended on I May 1984 because he failed to re-
spond to a valid offer of reinstatement. While the Com-
pany does not take issue with the "concept" of the for-
mula used to compute gross backpay, it takes issue with
the assumptions made by the General Counsel regarding
such factors as whether Kniefel would have continued to
work as a senior technician during the backpay period,
whether he would have received wage increases and the
amount of the increases, and the average weekly straight
and overtime hours he worked "during any applicable
backpay specification, the Company asserts, fails to rep-
resent all Kniefel 's interim earnings , fails to take into ac-
count his deliberate and willful failure to mitigate dam-
ages, and does not reflect all the times he was unavail-
able for employment. The expenses claimed by Kniefel
for job searches are also denied by the Company.
Respondent failed to appear at the hearing, but did
submit a timely filed brief. Respondent represented to
counsel for the General Counsel that the Company
would not appear nor would it be represented by coun-
sel. The Government is not required to provide counsel
in its administrative proceedings. See Betra Mfg. Co., 233
NLRB 1126 fn. 1 (1977).
Gross Backpay and Conclusions
The General Counsel's office has the burden of estab-
lishing gross backpay by seeking to ascertain the proba-
ble earnings of a discriminatee during the backpay
period. These are earnings which would have been paid
had the employee not been unlawfully discharged See
generaly the National Labor Relations Board Casehan-
dling Manual, Part 3, section 10530 1(c). Four basic gross
backpay formulas have been utilized by the Board and
approved in the courts through the years. (Casehandling
274 NLRB No. 170
RIKAL WEST, INC
Manual, Part 3) The compliance officer is charged with
selecting the most appropriate formula to apply in a spe-
cific case. (See sec 10536 of the Casehandling Manual,
Part 3, Compliance Proceedings.) This burden of creat-
ing a method to determine what would have happened is
recognized as frequently problematic and necessarily in-
exact . Taking cognizance of these difficulties, the Board
,,is only required to employ a formula reasonably de-
signed to produce approximate awards due." NLRB v.
Pilot Freight Carriers, 604 F 2d 375, 378-379 (5th Cir.
1979), quoting Trinity Valley Iron & Steel Co. Y. NLRB,
410 F.2d 1161, 1177 fn. 28 (5th Cir. 1969). Accord:
NLRB v. Brown & Root, Inc., supra at 452.
In this proceeding, formula 2 was chosen, which is set
forth in section 10540 of Part 3 of the Casehandling
Manual, after examination of the earnings histories of
Kniefel and the employee who replaced him, Robert
Hendricks. Gross backpay was computed for the discri-
minatee under this formla using the average number of
straight time and overtime hours Kniefel worked per
week during his last 13 full weeks of employment with
Respondent, multiplied by the wage rate he would have
received, taking into account when current employees
received raises This figure was then reduced by the as-
certained interim earnings to determine net backpay Ex-
penses incurred in seeking interim employment were
then added Formula 2 was chosen to measure the pro-
jected earnings of the discriminatee as it was "most rea-
sonable designed to produce the approximate awards
due." Trinity Valley Iron & Steel Co. v. NLRB, supra at
1177.
Respondent does not urge the use of any particular
concept, but argues that the hourly wage rate and
number of hours of straight time and overtime per week
used in application of the formula fail to accurately "ful-
fill that concept." Respondent argues that Kniefel
worked only 38.35 hours straight time, did not work an
average 6 hours overtime per week, that he could have
not done so during the 13 weeks before his termination
and he would not have done so during the backpay
period. At the hearing, the General Counsel demonstrat-
ed that overtime averaged more than 6 hours per week.
Respondent also asserts that the General Counsel
failed to comply with Section 102.53(a) of the Board's
Rules and Regulations ' by not providing the "specific
i Sees 102 52 and 102 53 of the Rules and Regulations provide
Sec 102 52 Initiation of proceedings, issuance of backpay specifica-
tion, issuance of notice of hearing without backpay specification -After
the entry of a Board order directing the payment of backpay or the
entry of a court decree enforcing such a Board order, if it appears to
the regional director that a controversy exists between the Board
and a respondent concerning the amount of backpay due which
cannot be resolved without a formal proceeding, the regional direc-
tor may issue and serve on all parties a backpay specification in the
name of the Board The specification shall contain or be accompa-
nied by a notice of hearing before an administrative law judge at a
place therein fixed and at a time not less than 15 days after the serv-
ice the specification In the alternative and at his discretion , the re-
gional director may, under the circumstances specified above, issue
and serve on the parties a notice of hearing only, without the back-
pay specification, the hearing to be held before an administrative law
judge , at a place therein fixed and at a time not less than 15 days
after the service of the notice of hearing
Sec 102 53 Contents of backpay specification and of notice of hearing
without specification
1137
basis of calculation . broken down by calendar
quarters " The General Counsel did append to the notice
of hearing a backpay specification which stated gross
backpay by calendar quarter. The hourly wages, over-
time rates, hourly rates, and quarters were stated in the
notice of hearing and backpay specification. The number
of weeks included in each quarter was not provided, and
this failure, it is argued, has deprived the Respondent of
any real opportunity to evaluate the gross backpay al-
leged to be due or the real impact of any interim earn-
ings
Paragraph 5 of the notice of hearing and backpay
specification states "that the appropriate measure of the
gross backpay that the discriminatee . . . would have
earned during his gross backpay period is the total
number of hours it may be assumed Kniefel would have
worked multiplied by the hourly rate he would have re-
ceived." This is the formula used, and Respondent had
this information. How many weeks in a given quarter is
a matter subject to judicial notice This argument is
found to be without merit The number of weeks includ-
ed in each quarter is a simple arithmetical exercise and
could be readily determined from the information pro-
vided. The rules provide for a procedure that does not
include the use of a backpay specification, leaving the
Respondent more "deprived." The Company failed to
avail itself of the opportunity to participate in the hear-
ing to acquire the details of the gross backpay computa-
tions set forth in the notice of hearing and backpay spec-
ification. Thus, it has failed to show that the matters set
forth in the notice of hearing and backpay specification
were not erroneous or resulted in "deprivation," war-
ranting the issuance of a new Notice of hearing and set-
ting a new hearing date. There is no indication Respond-
ent would participate in a new hearing or that it has
been prejudiced in the hearing held 28 August 1984, and
the request for a new hearing is denied
Respondent has failed to show how it derived the
figure that Kniefel worked only 38 35 hours straight time
during the 13 weeks before his termination or explicate
its assertion that he would not have worked 40-hour
weeks during the backpay period. This lack of explana-
tion and definition renders Respondent's argument com-
pletely unreliable. The General Counsel showed the
measure was reasonable . As noted by the court in NLRB
v. Rice Lake Creamery Co., 365 F.2d 888 at 891 (1966):
This formula may not reach the exactly correct
figure, but there is no suggestion of a formula that
could, since the discriminatees did not actually
work during the period. The formula used is a rea-
sonable and legal basis for computation of gross
(a) Contents of backpay specification -Where the specification pro-
cedure is used, the specification shall specifically and in detail show,
for each employee, the backpay periods broken down by calendar
quarters, the specific figures and basis of computation as to gross
backpay and interim earnings , the expenses for each quarter , the net
backpay due , and any other pertinent information
(b) Contents of notice of hearing without specification -The notice
of hearing without specification shall contain , in addition to the time
and place of hearing before an administrative law judge , a brief state-
ment of the matters in controversy
1138 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
amounts, and has had approval in court decisions.
See Chef Nathan Sez Eat Here, Inc., supra, 201
NLRB 343; NHE/Freeway, Inc, 218 NLRB 259;
and DeLorean Cadillac, supra, 231 NLRB 329
(1977)
Based on the exigencies present in this proceeding, it is
found that the formula propounded by the General
Counsel is an accurate method of determining gross
backpay. J. S. Alberici Construction Co., 249 NLRB 751
(1980); American Mfg. Co. of Texas, 167 NLRB 520
(1967) Where there are any uncertainties , such as the
potential impact of the fluctuations in business , they will
be assessed against the wrongdoer . NLRB v. Miami
Coca - Cola Bottling Co., 360 F.2d 569 (5th Cir. 1966).
Respondent failed to set forth an alternative formula
or furnish appropriate supporting figures for computing
the amounts owed with sufficient particularity and reli-
ability as to permit any substitutions . The backpay award
is only an approximation and the Board has considerable
discretion in selecting a methodology which is reason-
ably designed to approximate the amount of backpay a
wrongfully discharged employee would have received
absent the employer 's wrongful conduct . Respondent's
proposals are unsupported speculations and assertions. It
is concluded that the General Counsel 's computations of
gross backpay more than meets the legal standards of
permissible discretion in determining approximate gross
backpay . See NLRB v. Carpenters Local 180, 433 F.2d
934 (9th Cir . 1970); Iron Workers Local 378 (Judson Steel
Corp.), 262 NLRB 421 ( 1982).
Interim Earnings
Respondent asserts Kniefel understated "his interim
earnings , he failed to seek and/or take appropriate em-
ployment," and he failed to admit all the times he was
unavailable for employment The underlying decision or-
dered that Kniefel be made whole for the loss of pay suf-
fered as a result of Respondent's unfair labor practices.
In computing the remedy, deductions are made from
gross pay "for actual [interim] earnings of the worker,
[and] also for losses which he willfully incurred" by a
"clearly unjustifiable refusal to take desirable new em-
ployment." Phelps-Dodge v. NLRB, supra 313 U.S. at
197-200. These deductions for interim earnings are per-
mitted "not so much [for] the minimization of damages
as [for] the healthy policy of promoting production and
employment." Id. at 199-200. Further, "[t]he cases are
unanimous that the defense of willful loss of earnings is
an affirmative defense, and that the burden is on the em-
ployer to prove the defense." NLRB v. Reynolds, 399
F.2d 688, 689 (6th Cir. 1968); NLRB v. Mooney Aircraft,
supra , 366 F.2d at 813.
It is the duty of the employer "to carry the burden of
proof and point out what evidence in the record sustains
. . . [its] claim , as against the presumptive proof of the
Board's finding that the employees did not sustain willful
losses." NLRB v. Reynolds, supra, 299 F.2d at 670. The
proof of the claimant's search for interim employment "is
no sense a part of the [General Counsel's] case." NLRB
v. J. G. Boswell Co, 136 F.2d 585, 597 (9th Cir. 1943).
The General Counsel did comply with the Board's non-
binding policy that, after issuance of the backpay specifi-
cation, it turned over to the Respondent all the factual
information it obtained which was relevant to the com-
putation of net backpay, including search for employ-
ment or availability for employment See NLRB Case-
handling Manual, Part 3, Compliance Proceedings, sec-
tion 10663.1-3
The basis for the employer being given the burden of
demonstrating mitigation is because "it is not practical,
and it would significantly hamper the backpay remedy if
each discriminatee were required to prove the propriety
of his efforts during the backpay period." NLRB v.
Miami Coca-Cola Bottling Co, supra, 360 F.2d 575. One
basis for mitigation is the demonstration that a discrimin-
atee "willfully incurred" loss by a "clearly unjustifiable
refusal to take a desirable new employment " Phelps-
Dodge Corp. v. NLRB, supra, 313 U S at 199-200 The
burden is on the employer to prove the necessary facts
to establish such a willful loss of earnings. NLRB v.
Mooney Aircraft, Inc., 366 F.2d at 813. To meet this
burden, the employer must affirmatively demonstrate
that the employee "neglected to make reasonable efforts
to find interim work " Id. at 576. The employer fails to
meet the burden by merely presenting evidence of lack
of employees success in obtaining interim employment or
a demonstration of low interim earnings. In determining
if a discriminatee met his burden to mitigate, "he is held
. . . only to reasonable exertions in this regard, not the
highest standard of diligence."
Respondent has not proved any facts. It did not
present any evidence.
Kniefel was admittedly unavailable for work once
during the backpay period and such time was offset
against his gross backpay. Respondent's assertion that ad-
ditional offsets be taken for unavailability for work is not
substantiated by any evidence and is not shown to be
warranted.
Kniefel was employed in every quarter of the backpay
period save two. There was no showing that the failure
to work the first and second quarters of 1982 was caused
by his failure to exercise due diligence or willful loss of
earnings. Laborers Local 1440 (Delbert A. Schultz), 243
NLRB 1169, 1172 (1979)
Reinstatement Offer
Respondent alleges there were allegedly two valid re-
instatement offers. Respondent claims it made a "valid
reinstatement offer on or about 9 February 1981." It is
undisputed that the latter offer of 19 April 1984 was
valid and tolled the backpay period as of 1 May 1984. It
is found that Respondent did not offer Kniefel uncondi-
tional reinstatement about 9 February 1981 and thus this
offer does not toll the backpay period. Respondent's
offer of reinstatement was made after a demand for rein-
statement by the International Brotherhood of Electrical
Workers, and the Union's request the parties use the
grievance arbitration provisions of their current contract.
Respondent did not accept this offer; instead it offered
reinstatement conditioned on Kniefel's signing a docu-
ment entitled "Agreement," in which he would have ad-
mitted to violating company rules; subjected him to ter-
RIKAL WEST, INC.
mination for any future violation of company rules; and
would require acceptance of a 3-week suspension for his
alleged rules violations.2 Most of these alleged rule in-
fractions which led to Kniefel's discharge were found in
the prior proceeding to be shams to justify discharging a
union activist and/or were disparate applications of com-
pany rules. The "Agreement" offered by the Company
may not have required Kniefel to give up his right to re-
dress from other sources, but by admitting wrongdoing
and agreeing to immediate discharge for violations of
rules which were breached by others without similar
consequences, he would not have been placed in the
status quo ante, and such admission could reasonably
foreclose access to redress from other sources. Signing
the agreement was a precondition to his reinstatement.
Kniefel's rejection of the conditional offer of reinstate-
ment which required, as a condition precedent, an admis-
sion of guilt and acceptance of discipline, did not effec-
tively constitute a waiver of any entitlement to backpay
for the offer was unambiguous that reinstatement was to
be on terms and conditions different from those prevail-
ing prior to his discriminatory discharge and does not
toll backpay. Kniefel's failure to accept such a condition-
al offer of reinstatement does not constitute willful loss
of earnings. Spitzer, Inc., 195 NLRB 114 (1972); Flatiron
Materials Co., 250 NLRB 554 (1980); Cooperativa de Cre-
dito y Ahorro Vegabayena, 261 NLRB 1098 (1982). See
also Lipman Bros. Inc., 163 NLRB 850, 853 (1967).
Medical Expenses
Included in the specification is a health insurance ex-
pense of $120 incurred when he suffered an injury that
would have been covered under Respondent's health in-
surance program had he not been discriminatorily dis-
charged. Such medical and hospital expenses which
would have been covered by company insurance are in-
cluded in the Board's make-whole order as compensation
for losses proximally caused by the employer's discrimi-
nation against employees. See, for example, NLRB v.
Rice Lake Creamery Co., 365 F.2d 888, 893 (D.C. Cir.
1960); Prestige Bedding Co., 212 NLRB 690, 691 (1974),
and Plymouth Industries, 177 NLRB 607 (1969), enfd. 435
F.2d 558 (6th Cir. 1970)
2 The agreement provides
Rikal, Inc (Company), International Brotherhood of Electrical
Workers ("Union") and Robert Kniefel ("Kniefel"), having discussed
the discharge of Kniefel by the Company, hereby agree to the fol-
lowing
1 The Company has just and proper cause to discipline Kniefel
based upon the following a For a period of time in late 1980, Knie-
fel improperly and without proper care, performed his functions re-
garding inventory in such a way as to discredit the Company and
cause customers to complain to the Company The reports on inven-
tory that he filed were inaccurate, and in many instances , late In ad-
dition, when questioned about the reports by H T Joyce, Kniefel
untruthfully said that everything was fine
b After numerous oral and at least one written warning in 1980
about his tardiness, since the beginning of 1981 Kneifel's tardiness
record has shown no improvement In fact, it got worse This is
acknowledged by all parties to be a matter of legitimate concern
to the Company
1139
Expenses Incurred in Job Hunting
The amended backpay specification contains clauses
for deductible expenses totaling $81 for expenses in-
curred in searching for interim employment. "[T]rans-
portation expenses incurred by discriminatees in connec-
tion with obtaining or holding interim employment,
which would not have been incurred but for the discrim-
ination and the consequent necessity of seeking employ-
ment elsewhere are deductible from interim earnings."
Aircraft Leasing, 227 NLRB at 66, enfd. 570 F.2d 351;
Hoosier Veneer Co., 21 NLRB 907, 938 fn. 26 (1940);
Crossett Lumber Co., 8 NLRB 440, 479-480 (1938). Ac-
cordingly, these expenses are properly deducted from in-
terim earnings.
Summary
In sum , I conclude that Respondent's obligation to
make Robert Kniefel whole should be fulfilled by pay-
ment to him of the total net backpay as set forth in Ap-
pendix A.
THE REMEDY
For the reasons described above, I find that Respond-
ent's obligations to the discriminatee herein will be dis-
charged by the payment to him of the amount set forth
in the Appendix A attached hereto. Such amount shall
be payable, plus interest on those sums, in the manner
provided in F. W. Woolworth Co., 90 NLRB 289 (1950),
and Florida Steel Corporation., 231 NLRB 651. See gener-
ally Isis Plumbing Co., 138 NLRB 716 (1962).
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommended
ORDER
The Respondent , Rikal West , of Burlingame , Califor-
nia, its officers , agents, successors , and assigns , shall pay
Robert Kneifel , as net backpay , $32,761. 91 together with
interest as set forth in the section of this decision entitled
"The Remedy," and continue until the amount is paid in
full, but minus tax withholding required by Federal and
state laws.3
c In January, 1981, and contrary to Company directives, known
to him, Kniefel improperly took a Company vehicle and used it on
personal business
The discipline imposed upon Kniefel by the Company because of
the matters listed above is reduced from discharge to a suspension
without pay for three (3) weeks from the date of his discharge
The Company, Union and Kniefel agree that, should he repeat any
of the above violations or break Company rules in the future, he will
be terminated
The re-Instatement of Kniefel after the completion of his suspen-
sion will require certain adjustments among other personnel of the
Company This includes the laying off of an individual recalled to
fill the spot vacated by the employee promoted to Kneifel's job, and
the return to his previous job the person promoted to Kniefel's job
The Union agrees that such actions are required by this agreement
and that it will not grieve or in any other way protest these neces-
sary actions.
a If no exceptions are filed as provided by Sec 102 46 of the Board's
Rules and Regulations , the findings, conclusions , and recommended
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 pur-
poses
1140 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
APPENDIX A
YEAR GROSSQTR.
BACKPAY
INTERIM
EARNINGS
DEDUCTIBLE
EXPENSES
NET
INTERIM
EARNINGS
NET
BACKPAY
HEALTH
INSURANCE
EXPENSES
1981
1981
1981
1981
1982
1982
1982
1982
1983
1983
1983
1983
1984
1984
I
II
III
IV
I
II
III
IV
1
II
III
IV
I
II
$3,75144
5,53990
5,541 90
5,521 32
5,832 96
5,924 10
6,01524
6,01524
5,832.96
5,924 10
6,015 24
5,924 10
5,924 10
1,913 94
3
$ 6353 50
33,148.50
4 63 321 25
43,849 59
-0-
-0-
52,396 00
52,588.52
4 53,231 11
45,694 86
46,035 68
45,826 10
44,906 96
41,71800
1
-0-
-0-
-0-
-0-
226
150
115
-0-
-0-
-0-
-0-
-0-
-0-
-0-
0
00
00
$ 353.60
3,148.50
3,321.25
3,849 59
-0-
-0-
2,38100
2,588.52
3,231.11
5,694 86
6,035.68
5,826.10
4,906.96
1,718.00
$3,397 94
2,391 40
2,220 65
1,671 73
5,832 96
5,92410
3,63424
3,426 72
2,601 85
229 24
-0-
9800
1,017 14
195 94
-0-
-0-
-0-
-0-
-0-
-0-
$12000
-0-
-0-
-0-
-0-
-0-
-0-
-0-
TOTAL NET BACKPAYAND MEDICAL EXPENSES
$32,64191 $12000
1 Mileage
2 Telephone
3 Employer- E Z. Tel, Inc.
4 Employer U C S
5 Employer Telephone Installation Services
6 Employer Cooperheat