Tajon, Inc.

National Labor Relations Board - Board Decisions

Jan 13, 1986

277 N.L.R.B. 1639 (N.L.R.B. 1986)

TAJON, INC.
'Tajon , Inc. and Fraternal Association of Special
Haulers. Case 3-CA-10479(E)
13 January 1986
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND JOHANSEN
On 27 June 1984 Administrative Law Judge Rus-
sell M. King Jr. 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 LaborRelations 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 conclusion' and to adopt the recom-
mended Order.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the application of the Appli-
cant, Tajon, Inc., Niagara Falls, New York, for an
' In adopting the judge's denial of Applicant Talon, Inc's application
for attorney's fees, we have also considered the Applicant's contention,
not discussed by the judge, that the General Counsel's decision to litigate
the portion of the complaint alleging that on 22 May 1981 the Applicant
had unlawfully refused to execute a complete and binding collective-bar-
gaining agreement was not substantially justified In support of this con-
tention, the Applicant points out that one of the memoranda relied on by
the General Counsel as an embodiment of the alleged agreement express-
ly states that certain contract terms were still open for negotiation The
record reveals that this statement was contradicted by the sworn affidavit
of the Charging Party submitted during the investigation and by the
Appplicant's own statement in its 10 June 1981 position letter that "on
April 13, 1981, the Company and the Union . concluded negotiations
by reaching an oral agreement on terms and conditions of employment "
When the Charging Party conceded under cross-examination at the hear-
ing that certain terms of the contract had not been agreed on, the Gener-
al Counsel did not pursue the allegation that the Applicant had unlawful-
ly refused to execute the contract..
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
"substantially justified " "Substantially justified" means "more than
merely reasonable." H.R. Rep. 99-120 at 9 (1985). In view of the conflict
in the General Counsel's pretrial evidence, and the Applicant's own pre-
trial statement essentially admitting that a contract had been agreed upon,
we find that the General Counsel was substantially justified in proceeding
to trial on the refusal-to-execute allegation We also find, in accord with
the judge's decision, that the General Counsel was substantially justified
in litigating the issue of whether a reasonable time for bargaining had
elapsed. Accordingly, we conclude that the Applicant is not entitled to
an award of attorney's fees under EAJA.
1639
award under the Equal Access to Justice Act be
dismissed.
William B. Kenney, Esq., for the General Counsel.
Richard R. Riese, Esq. (Throp, Reed, & Armstrong), of
Pittsburgh, Pennsylvania, for the Employer Applicant.
SUPPLEMENTAL DECISION
(Equal Access to Justice Act)
STATEMENT OF THE CASE
RUSSELL M. KING, JR., Administrative Law Judge.
Based on a charge filed by the Fraternal Association of
Special Haulers (the Union) and subsequent investigation
by agents of the National Labor Relations Board (the
Board), on June 24, 1981, the Regional Director for
Region 3, acting on behalf of the General Counsel of the
Board,' issued a complaint against Tajon, Inc. (the Em-
ployer or Applicant) alleging the improper withdrawal
of recognition of the Union as the exclusive collective-
bargaining representative of the Employer's mechanics
on May 22, 1981, in violation of Section 8(a)(5) of the
National Labor Relations Act.2 At the itime the Employ-
er was engaged in interstate hauling at its Niagara Falls,
New York facility, the only facility involved in this case.
The Employer had a considerable number of drivers
who were represented by the Union at that time, togeth-
er with six mechanics, the unit of employees involved in
this case. I heard the case in Buffalo, New York, on
April 12, 1982, and issued my initial decision on June 30
1982, finding against the Employer. Thereafter the Em-
ployer filed exceptions to my decision and on March 22,
1984, the Board reversed my decision and dismissed the
complaint.3 On April 23, 1984, the Employer filed an ap-
plication for attorney's fees and expenses under the
Equal Access to Justice Act (EAJA),4 and Section
102.143 et seq, of the Board's Rules and Regulations.
The Board's Order referring the fee application to me
for appropriate disposition was entered on May 15, 1984.
On May 16, 1984, the General Counsel filed a motion to
dismiss the application and on May 31, 1984, the Em-
ployer filed a formal reply to the General Counsel's
motion to dismiss.5
Brief History and Factual Statement
By late February 1981,6 five of the six mechanics
working for the employer had signed union authorization
cards and on March 1 the Employer voluntarily recog-
nized the Union as the exclusive bargaining representa-
i Hereafter, the term "General Counsel" will normally refer to the at-
torney in this case, acting on behalf of the General Counsel of the Board,
through the Regional Director.
E 29 U.S.C § 151 et seq.
3 269 NLRB 327. The three-member panel consisted of Chairman
Dotson and Member Hunter with Member Zimmerman dissenting
4 Pub L 96-481, 94 Stat 2321. 5 U S.C. § 504 el seq. The application
was timely filed within the 30-day period as April 22 fell on a Sunday.
5 The General Counsel's motion to dismiss was 13 pages long It was
thorough and covered all aspects of the case and addressed all points
raised in the application
6 All dates hereafter are in 1981 unless otherwise stated.
277 NLRB No. 184
1640 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
tive of the mechanics. Thereafter, two bargaining ses-
sions were held on March 23 and April 13. At these ses-
sions both parties agreed on many significant proposals,
but failed to reach agreement on certain others. At the
end of the April 13 session, the Union requested that a
date be set for another bargaining session but the em-
ployer indicated it wanted to delay setting a definite date
due to its planned upcoming sale of approximately 50 of
the trucks on May 21. The Union consented to this
hiatus in bargaining although , as Respondent's president
conceded, as of the end of the second bargaining session
on April 13, there was tentative agreement on "a good
many" of the issues, indicating that total agreement
could possibly have been achieved with only one more
bargaining session. In late April the Employer laid off
one bargaining unit mechanic for economic reasons and
on May 8 mechanic Eakin, the one unit member who
had not signed a union authorization card, filed a decerti-
fication petition, which was dismissed by the Regional
Director on May 19. Between May 19 and May 22 the
Union's representative received letters from two more of
the remaining five mechanics renouncing the Union and
withdrawing their designation of the Union as their bar-
gaining representative. On May 22, the Employer
learned that at least those three mechanics no longer
wanted to be represented by the Union and that a decer-
tification petition had been filed with the Board. Also on
that day (May 22) the Union's representative came to the
Employer's facility and asked if its president was ready
to sign the contract. The president replied that it was
not, adding that the mechanics had "withdrawn from the
unit" and filed a petition with the Board and that the
Company would be in an "awful sticky spot to agree to
a contract or sign a contract that the men didn't want."
My Initial Decision and the Board's Decision
The sole issue in the case was whether the Employer
on May 22 lawfully withdew recognition of the Union
which it had voluntarily recognized on March 1. In de-
termining this issue, the following basic and general prin-
ciples apply. A,union which is recognized by the em-
ployer but not certified by the Board is irrebuttably pre-
sumed to have majority status for a reasonable period of
time from the date of recognition, absent special circum-
stances not present in this case. Rockwell International
Corp., 220 NLRB 1262 (1975); Keller Plastics Eastern, 157
NLRB 583 (1966). In these two cases, well-founded
doubts were raised regarding the union's majority status,
but after a 2-week period and a 3-week period the em-
ployers' nonetheless entered into collective-bargaining
agreements with the unions. The Board held that those
2- and 3-week periods from the date of recognition to
the date of the contracts were reasonable periods of time
during which the irrebuttable presumption of a majority
status attached. After a reasonable period of time has ex-
pired from the date of recognition, and no contract has
been agreed on, the union then enjoys only a rebuttable
presumption of a majority status, which can be overcome
by the employer demonstrating that the union in fact
does not have a majority representative status. Brennan's
Cadillac, 231 NLRB 225 (1977) It is undisputed in this
case that on May 22 when the Employer withdrew rec-
ognition, the Union had lost its majority status. In Bren-
nan's Cadillac, there were eight bargaining sessions over
a 3-month period before the employer withdrew recogni-
tion, and while substantial movement toward an agree-
ment had been made at those sessions, the union called a
strike to force acceptance of its outstanding demands,
rather than proceeding to a meeting which could have
led to a contract. Four days after the strike began, three
of the five unit employees returned to work and with-
drew from the union, after which the employer ceased to
recognize the union . In my initial decision, I found that
Brennan's Cadillac did not apply to the facts and circum-
stances in this case. I found that a reasonable time after
voluntary recognition during which a collective-bargain-
ing agreement could be reached had not expired, and
thus the Union still enjoyed an irrebuttable presumption
of a majority status as of May 22 when the Employer
withdrew recognition. I thus found a violation of Section
8(a)(5) of the Act. Dissenting Board Member Zimmer-
man also agreed that Brennan's Cadillac did not apply,
adding that the "bargaining relationship between the Re-
spondent and the Union was not given a reasonable time,
and thus not a fair chance, to bear fruit before the Re-
spondent withdrew its recognition of the union." How-
ever, Chairman Dotson and Member Hunter disagreed
and citing Brennan's Cadillac, dismissed the complaint. In
reaching my initial decision in this case, among other
things, I considered the following facts: the period of
time from the date of recognition to the date of with-
drawal of the same (approximately 2-1/2 months); the
fact that there had been two successful bargaining ses-
sions (March 23 and April 13); that no impasse had been
reached and there was substantial agreement on many
important issues by the end of the second bargaining ses-
sion that a full meeting of the minds possibly could have
been reached with merely one more bargaining session;
and that the bargaining delay was at the request of the
Employer. As Board Member Zimmerman indicated in
his dissent, the Union should not be penalized for the
concession it made to the Employer in delaying the set-
ting of a date for the third bargaining session.
Analysis and Conclusions
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 "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.7
Section 102.44(a) of the Board's Rules and Regulations
places the burden of proof on the General Counsel to
show that he was substantially justified in issuing the
complaint, and that its position in the proceeding was
7 S Rep 96-253, 96th Cong, 1st Sess at 6 and 14 (1979), H. Rep. 96-
418, 96th Cong., 2d Sess. at 10 (1980)
TAJON, INC.
reasonable in law and fact. The Act further provides that
the Government should not be liable where "special cir-
cumstances make an award unjust." Congress explained
the meaning of this provision as follows:
This "safety valve" helps to ensure that the govern-
ment is not deterred from advancing in good faith
the novel but credible: extensions and interpretations
of the law that often underline vigorous enforce-
ment efforts. It also gives the Court discretion to
deny awards where equitable considerations dictate
an award should not be made.8
Congress further indicated that no adverse inferences
were to be drawn from the fact that the Government did
not prevail, explaining as follows:
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.9
The Board has further field that it is immaterial that
the General Counsel may not have established a prima
facia case of a violation.' 0 But where the General Coun-
sel presnts evidence which, if credited by the factfinder,
would constitute a prima facie case of unlawful conduct,
the General Counsel's position has been deemed to be
substantially justified within the meaning of Section
102.44(a) of the Board's Rules and Regulations.I I
In determining what constitutes a reasonable period of
time, each case must rest upon its own individual facts.
What is a reasonable time does not depend on either the
passage of time or the number of calendar days on which
the parties met. Rather, the issue turns on what tran-
B S. Rep 96-253, supra at 7, H Rep 96-1418, supra at 11.
9 S Rep 96-253, supra at 7, H Rep. 96-1418, supra at 11
1°Enerhaul, Inc, 162 NLRB 890 (1982).
11 Jim's Big M, 266 NLRB 665 (1983)
1641
spired during the bargaining sessions and what was ac-
complished therein. Brennan's Cadillac, supra at 226.
Under the then existing law and authorities, the General
Counsel in this case concluded after his precomplaint in-
vestigation that a reasonable time had not elapsed. I
agreed in my initial decision, as did dissenting Member
Zimmerman after me. The two majority Board Members
disagreed, apparently on strickly a subjective and factual
basis. I find in this case that the General Counsel's con-
clusions were reasonable under the circumstances and
facts of the case. Where the General Counsel advances
in good faith a close question of law or fact, and thereaf-
ter loses, a finding that he was not substantially justified
in issuing the complaint would have a chilling effect on
the proper pursuit of the duties of the General Counsel
to enforce the Act, as the Act so mandates. Thus, I find
and conclude in this case that the General Counsel had a
reasonable basis both in law and in fact to issue the com-
plaint and pursue the litigation, and thus was substantial-
ly justified in these actions. Accordingly, I will recom-
mend that the General Counsel's motion to dismiss the
Employer's Application for fees and expenses be granted
and that the Application for an Award of Attorney's
Fees and Expenses under the Equal Access to Justice
Act be dismissed.12
On these findings of fact and conclusions of law and
on the entire record, I issue the following recommend-
ed13
ORDER
It is ordered that the General Counsel's motion to dis-
miss the Application filed and the Application itself for
attorney 's fees and expenses be dismissed.
12 In view of my findings herein, I deem it unnecessary to address the
other issues raised in the Application and the motion to dismiss
i2 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.