Wright-Bernet, Inc.

National Labor Relations Board - Board Decisions

Apr 27, 1984

270 N.L.R.B. 55 (N.L.R.B. 1984)

WRIGHT-BERNET, INC.
Wright-Bernet, Inc. and Coopers' International
Union of North America, Local 41, AFL-CIO.
Case 9-CA-15203(E)
27 April 1984
SUPPLEMENTAL DECISION AND
ORDER
BY MEMBERS ZIMMERMAN, HUNTER, AND
DENNIS
On 29 April 1983 Administrative Law Judge
David S. Davidson issued the attached supplemen-
tal decision. The Respondent 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.
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Respondent's application
is denied.
1 In view of our decision to affirm the judge's denial of the Respond-
ent's application for award of fees and expenses under the Equal Access
to Justice Act, we find it unnecessary in this case to pas on the retroac-
tivity of that Act.
SUPPLEMENTAL DECISION
[Equal Access to Justice Act]
STATEMENT OF THE CASE
DAVID S. DAVIDSON, Administrative Law Judge. On
October 19, 1981, Administrative Law Judge Charles M.
Williamson issued his decision in this proceeding recom-
mending dismissal of the complaint in its entirety. No ex-
ceptions were filed, and on November 25, 1981, the
Board entered its order dismissing the complaint. On De-
cember 22, 1981, Respondent filed an "Application for
Award of Fees and Expenses" under the Equal Access
to Justice Act (EAJA). Thereafter, counsel for the Gen-
eral Counsel filed a motion to dismiss the application,
and Respondent filed a reply thereto. Respondent also
filed a motion to withhold "Confidential Financial Infor-
mation" from public disclosure under Section 102.147 of
the Board's Rules and Regulations. By order of April 2,
1982, the motion to dismiss was denied and the motion to
withhold "Confidential Financial Information" from
public disclosure was granted. Thereafter, counsel for
the General Counsel filed an answer to application for an
award of fees and expenses under the Equal Access to
270 NLRB No. 14
Justice Act and a memorandum in support thereof. Re-
spondent filed a reply memorandum thereto.
In deciding this case I have reviewed the transcripts
and exhibits and various briefs and pleadings filed by the
parties since the issuance of the complaint. The applica-
tion and the answer raise three disputed issues.
I. Whether Respondent's net worth statement is suffi-
cient to establish that its net worth was less than $5 mil-
lion as of May 30, 1980, the date of issuance of the com-
plaint in this case.
2. Whether the General Counsel was substantially jus-
tified in issuing the complaint and not deferring to an ar-
bitrator's award that later issued on January 9, 1981.
3. Whether fees and expenses incurred by Respondent
before October 1, 1981, the effective date of EAJA, are
recoverable.
FINDINGS AND CONCLUSIONS
I. THE ELIGIBILITY OF RESPONDENT
Respondent's application alleges that Respondent is a
privately held Ohio corporation engaged in the manufac-
ture and sale of industrial brushes, that it has no affiliates,
that it has 85 employees, that its work force has never
exceeded 100, and that its net worth at no time has
reached S5 million.
These facts would establish Respondent's financial eli-
gibility for reimbursement for attorney's fees under
EAJA. The General Counsel contends, however, that
the financial statements furnished by Respondent to sup-
port its application fail to establish that its net worth was
less than $5 million on May 30, 1980, when the com-
plaint issued' because it furnished statements only for the
calendar years 1979 and 1980 and no statement of its fi-
nancial status as of May 30, 1980. The General Counsel
further contends that depreciation shown on the financial
statements should not be considered in determining Re-
spondent's net worth, that without deduction of depre-
ciation, Respondent's net worth exceeded $4.1 million at
the end of 1980, and that its net worth was sufficiently
close to S5 million to require greater proof than interpo-
lation to establish its net worth on the critical date. The
General Counsel contends that Respondent should be re-
quired under Section 102.147(f) of the Board's Rules and
Regulations to furnish a May 30, 1980 net worth state-
ment or in the alternative other evidence demonstrating
that there was no significant change in Respondent's net
worth between January I and May 30, 1980.
Respondent contends that the depreciation should be
considered under accepted accounting principles but that
in any event, even if it were disallowed, the sworn affi-
davit of David Evans that Respondent's December 31,
1980 net worth was higher than its May 30, 1980 net
worth is sufficient on which to base a finding that Re-
spondent's net worth did not exceed SS5 million on May
30, 1980. Respondent has appended to its reply memo-
randum a further statement from its accountants stating
that in the accountants' opinion the 1979 and 1980 state-
' See Sec. 102.143(d) of the Board's Rules and Regulations.
55
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ments fairly present Respondent's financial position as of
the end of each of those years.
In its memorandum, counsel for the General Counsel
concedes that where end of year net worth statements
before and after issuance of the complaint both show net
worth "substantially below $5 million," it may be reason-
able to infer that net worth during the interim remained
below $5 million, but that this is not such a case. While I
am inclined to agree, as Judge Taplitz held in Malcolm
Boring Co., Case 31-CB-3586(E), that depreciation
should not be subtracted from acquisition cost in deter-
mining value of assets,' I cannot agree that the resultant
$4,118,000 net worth as of December 31, 1980, is not
also substantially below $5 million. Respondent's net
worth as of May 30, 1980, would have reached $5 mil-
lion only if net assets over liabilities increased by almost
$1.3 million during the first 5 months of the year and
then decreased by almost $900,000 during the last 7
months of the year. In my view, such dramatic fluctua-
tion is very unlikely, and I find that the application,
Evans' affidavit, and the balance sheets are sufficient to
show Respondent's financial eligibility.
II. SUBSTANTIAL JUSTIFICATION
A. The Issues
The complaint in this case issued on May 30, 1980, al-
leging that Respondent violated Section 8(aX1) and (3)
of the Act by discharging John Martin on April 11,
1980, because of his union activities and/or because he
engaged in protected concerted activities, specifically
giving testimony at an arbitration hearing known as the
Glenn-Jackson arbitration. The complaint also alleges
that Respondent independently violated Section 8(a)(1)
on April 18, 1980, when Respondent Chairman Frank
Bernet threatened Martin that his fellow employees
would be discharged if they gave testimony concerning
matters raised by Martin at the Glenn-Jackson arbitration
hearing. A hearing was initially set for January 15, 1981.
Martin had also filed a grievance over his discharge,
which Respondent had denied. When the Union failed to
seek arbitration of his grievance, Respondent sued to
compel arbitration of the grievance, and an order was
entered pursuant to which an arbitration hearing was
held on November 20, 1980. On January 9, 1981, the ar-
bitrator issued his award denying the grievance, and on
January 13, 1981, the Regional Director postponed the
hearing in this case in order to consider what effect, if
any, to give the arbitrator's award.
Thereafter, the Region notified Respondent that it in-
tended to proceed, and on March 13, 1981, Respondent
filed a Motion for Summary Judgment with the Board in
which it contended that the Board should defer to the
arbitrator's award and dismiss the allegation that Martin
was unlawfully discharged. On April 2, 1981, the Board
denied the Motion for Summary Judgment without prej-
udice to its renewal before the administrative law judge
assigned to hear the case. At the hearing, which began
on April 3, 1981, Respondent renewed the Motion for
I JD-SF-80-82. See also Sentle Trucking Corp., 6-CA-12501(E), JD-
54-83.
Summary Judgment. The administrative law judge re-
served decision and took evidence.
In his written decision the administrative law judge
found that the Board should defer to the arbitrator's de-
cision under the policy established in Spielberg Mfg. Co.,
112 NLRB 1080 (1955). He found further that Martin
had willfully given false testimony at the Glenn-Jackson
arbitration hearing and that he thereby lost the protec-
tion of the Act he would otherwise have enjoyed in
giving testimony at an arbitration proceeding. In addi-
tion, he discredited Martin's testimony that Bernet
threatened potential witnesses with discharge and cred-
ited Bernet's denial that he made such threats. Finally,
he found no probative evidence to sustain the General
Counsel's contention that the stated cause for Martin's
discharge was a pretext designed to conceal the fact that
Martin's union activities were the true cause of the dis-
charge. Thus, he concluded that Respondent had not
violated the Act.
In its application Respondent has alleged that the Gen-
eral Counsel had no substantial justification (1) for pro-
ceeding to trial in this case after an arbitrator had deter-
mined that Respondent had just cause to discharge
Martin; (2) for alleging that Bernet threatened reprisals
against any witness who supported Martin's version of
the incident described by him at the Glenn-Jackson arbi-
tration; (3) for alleging that the reason given for Martin's
discharge was a pretext; and (4) for alleging that Martin
was engaged in protected concerted activity when he
testified in the Glenn-Jackson arbitration.
EAJA provides that the burden of establishing sub-
stantial justification rests with the Government. As the
Board stated in Enerhaul, Inc., 263 NLRB 890 (1982):
The legislative history of EAJA characterized "sub-
stantially justified" as a test of reasonableness, and
further clarified that, "[w]here the Government can
show that its case had a reasonable basis both in law
and fact, no award will be made."
B. The Reasonableness of the General Counsel's
Issuance of the Complaint
The first question to be determined in this case is
whether the General Counsel was substantially justified
in issuing the complaint on May 30, 1980. At that time
arbitration of Martin's discharge had not yet occurred or
been sought. Martin had concededly been discharged be-
cause of testimony he had given in the Glenn-Jackson ar-
bitration proceeding. While the arbitrator was later to
conclude otherwise, there was clear precedent for find-
ing that Martin had engaged in concerted activity within
the meaning of Section 7 when he testified in the Glenn-
Jackson arbitration proceeding. 3 There was also a sub-
stantial question under Big Three Industrial Gas Co., 212
NLRB 800 (1974), as to whether or not that activity had
lost its protection because Martin had lied in his testimo-
ny.
Big Three concerned the discharge of an employee for
the stated reason that he gave false testimony at a repre-
s Ebasco Services, 181 NLRB 768 (1970).
56
WRIGHT-BERNET, INC.
sentation proceeding. The Board concluded that the em-
ployer's charges that the employee testified falsely were
not made in good faith and were used as a pretext to dis-
charge him because of his union activities. In his decision
discussing the principles to apply in such cases, the ad-
ministrative law judge, whose findings and conclusions
were affirmed by the Board, rejected the contention that
an employer may never discharge an employee for
giving testimony in a Board proceeding. However, he
cautioned that the burden was "on the employer to show
affirmatively not only that the testimony was false, but
also that it was willingly and knowingly false, that it was
uttered with intent to deceive, and that it related to a
substantial issue."4 As he found that the individual at
issue in that case had not knowingly and willfully given
false testimony, it was not necessary for him to decide at
what point the line between protected and unprotected
testimony would have been crossed, or for the Board to
consider that question. The issue has not come before the
Board since Big Three.5
Whether Martin's testimony was false in whole or in
part and, if false, was willfully and knowingly false pre-
sented clear credibility issues appropriate for resolution
after hearing before an administrative law judge. Bernet's
alleged threat to Martin shortly after Martin's discharge
similarly raised a credibility issue. Thus, I have little dif-
ficulty concluding that as of May 30, 1980, when the
complaint issued, the General Counsel had a reasonable
basis both in law and in fact for issuing the complaint
and therefore was substantially justified in doing so.
C. The Effect of the Arbitrator's Award
1. Spielberg
A closer question is whether the General Counsel re-
mained substantially justified in continuing to prosecute
the complaint following the issuance of the arbitrator's
award on January 9, 1981, denying the grievance over
Martin's discharge, and Respondent's request that the
General Counsel defer to the award under Spielberg Mfg.
Co., supra.
The General Counsel contends that he reasonably con-
cluded that the arbitrator's award was repugnant to the
purposes and policies of the Act and that it therefore
should not be deferred to (1) because the arbitrator
wrongly held that when Martin testified in the arbitra-
tion proceedings, he was not engaged in concerted activ-
ity; (2) because the arbitrator failed to apply the correct
standard in finding that Martin's testimony in the Glenn-
Jackson arbitration was "deliberately false" and therefore
unprotected; and (3) because the arbitrator did not rule
on the pretext issue raised by the complaint.
The arbitrator's finding that Martin's testimony was
not concerted activity, while incorrect, was not material
if he properly found that it was unprotected; and it
would not have been reasonable to pursue the complaint
on this basis alone. As for the second ground advanced
4 212 NLRB at 804.
s While Big Three concerned a discharge for testimony given at a rep-
resentation hearing, the protection afforded participation in grievance
proceedings to vindicate employees' contractual rights appears to be the
same. Ebasco Services, 181 NLRB 768.
by the General Counsel, a full reading of the arbitrator's
decision does not support the General Counsel's conten-
tion that the arbitrator's finding that Martin's testimony
was "deliberately false," was "confined to a finding that
Martin deliberately exaggerated as to some aspects of his
testimony." Rather, it appears that he was aware of the
Big Three standard and concluded that, from his vantage
point, Martin's testimony had lost its protection under
that standard.
However, as set forth above, the Board had not previ-
ously determined at what point the line between protect-
ed and unprotected testimony is crossed. Therefore, it
was reasonable for the General Counsel to contend that
the arbitrator's application of Big Three was repugnant to
the policies of the Act and that the Board should find
Martin's testimony protected, particularly in light of the
fact that Martin was a union officer engaged in the
grievance process when he testified.6
In any event, there is no question that the arbitrator's
decision did not deal with the "pretext" issue raised in
the unfair labor practice proceeding. Although the arbi-
trator expressed the view in his decision that it was his
duty to dispose of all circumstances relating to Martin's
discharge including the unfair labor practice allegations
of the complaint, the Union took the position that it did
not intend to produce any evidence relating to the alle-
gations of the complaint. All the evidence supporting the
pretext allegation was not presented to the arbitrator,
and the arbitrator made no findings as to whether Mar-
tin's union activities were the cause or a cause of his dis-
charge. Under prevailing Board policy at the time this
case was pending, the fact that the arbitrator did not
have such evidence before him and made no such find-
ings gave the General Counsel a reasonable basis to take
the position that Spielberg was inapplicable and that the
Board should therefore not defer to the arbitrator's deci-
sion. 7
2. The effect of the arbitration record on the
reasonableness of the decision to proceed
A further question to be decided is whether apart from
Spielberg, as a result of what developed at the arbitration
hearing, it became unreasonable for the General Counsel
to continue to prosecute his complaint.
In the Glenn-Jackson arbitration, Martin had testified
as to two incidents in which misconduct had occurred
and for which no discipline had been imposed. His testi-
mony was in support of grievances of Glenn and Jackson
who had been discharged for fighting. One of the inci-
dents occupied most of Martin's testimony. The second
incident was described by Martin toward the end of his
testimony. He was asked if he had seen any other push-
ing and shoving by anyone and replied that he had once
seen Betty Williams grab Foreman Isaacs by "the pri-
vates . . . and had him in her grasp and was giving him
hell over something or other. And she led him around
the shop by grabbing him by his balls." He continued to
I See Clara Barton Convoalescent Center, 225 NLRB 1028, 1029 (1976).
1 Caterpillar Tractor Co., 257 NLRB 392, 397-398 (1981); Consolidated
Freightways Corp. of Delaware, 257 NLRB 1281, 1287 (1981). United
Parcel Service, 252 NLRB 1015 (1980).
57
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
state that Isaacs did not reprimand her or write her up,
and testified further, "And she was determined to hurt
him if he didn't go along with what she had to say. And
she had him literally in a squeeze and had him in a posi-
tion that he couldn't say too much." On cross-examina-
tion when asked for details, Martin testified that the inci-
dent happened about a year and a half or 2 years earlier,
that they were arguing as they were walking from the
old building into the new building and that Williams
grabbed Isaacs when they were directly in front of
Martin. He testified that several people saw it and that,
when other employees heard what was happening, ev-
eryone was curious. He identified Patty Johnson, Pauline
Deisbach, and Geneva Fields as having been in the pack-
ing department, near where the incident occurred, but
testified that he was not certain about that. He estimated
that 20 to 30 employees saw it. He testified that while
Williams had Isaacs in her grasp she led him out on the
production floor and that she could take him anywhere
she wanted, that it went on probably for about 10 min-
utes, and that Isaacs did not do very much to try to
escape other than to ask Williams to calm down and talk
about their complaint. He testified that Williams moved
him around from place to place and had him "here one
minute and here one minute," and that Martin followed
and watched for from 5 to 10 minutes, "his best esti-
mate." Isaacs denied that any such incident took place. It
was this testimony for which Martin was discharged.
At the arbitration hearing on Martin's discharge, Re-
spondent called its vice president David Evans to testify
as to Respondent's investigation and decision to dis-
charge Martin and called three supervisors responsible
for the areas of the plant in which the incident had alleg-
edly taken place to testify that they had neither seen nor
heard of such an incident before Martin testified at the
Glenn-Jackson arbitration. Respondent also called Isaacs,
Geneva Fields, Vivian Owens, and Patricia Johnson as
witnesses.
Isaacs denied that there was any truth to Martin's tes-
timony at the Glenn-Jackson arbitration. Owens, with
whom Williams had been arguing at the time of the inci-
dent,8 testified that she saw no contact between Williams
and Isaacs but that immediately after her argument with
Williams she heard rumors that Williams had grabbed
Isaacs and that everyone was laughing and joking about
it. Deisbach testified that she did not see Williams grab
Isaacs, but that she heard about the incident at lunch on
the day it happened and that there was giggling and
snickering about it. Johnson similarly testified that she
did not see the incident but also heard about it and that
it was the talk of the plant. Geneva Fields testified that
she witnessed the incident and saw Williams reach
around and pinch Isaacs on the leg a few times midway
up from the knee. She testified that she was not sure if it
was his leg that Williams pinched but that, as far as she
saw, it was.
The Union called Lucy Fields, Carol Wooten, Edna
Massey, Betty Williams, and Martin in support of its po-
a During Respondent's investigation, Martin stated that Williams had
been arguing with Owens when Isaacs interceded and tried to induce
Williams to return to her work station precipitating the incident.
sition that Martin had been wrongfully discharged.
Fields testified that she observed Williams reach toward
Isaacs, that Isaacs backed up and yelled, that someone
told her that Williams had grabbed Isaacs by the testi-
cles, but that she did not see it. She testified that there
was a lot of talk about it right after that. Carol Wooten
testified that she heard Isaacs yell and make a loud noise
but that she did not see much. According to Wooten, it
was the talk of the plant that Williams had grabbed
Isaacs by the testicles. Edna Massey testified that she
saw Williams reach out and she heard Isaacs holler. She
testified that she believed that Williams had grabbed
Isaacs by the testicles and that after the incident every-
one laughed and talked about it. Betty Williams testified
that she had grabbed Isaacs between the legs, that he
hollered, and that she let go. She testified that there was
a lot of talk about it in the plant that day. After Martin's
discharge she went to her lawyer and he prepared an af-
fidavit for her in which she stated that she "pinched him
between the legs." She testified in explanation that she
told her lawyer what had happened but was embarrassed
about it and that he suggested the wording used in her
affidavit.
All these witnesses placed the time of the incident
about 2 years earlier than Martin had at the Glenn-Jack-
son arbitration, and Martin testified that his original testi-
mony was wrong in that respect. He testified that he saw
Williams grab Isaacs by the testicles, that Isaacs started
jumping around and carrying on, that she held on to
Isaacs who tried to get away, and that she finally let go
and returned to her machine. In his testimony at the arbi-
tration hearing on his discharge he stated that it was 5 to
10 minutes from the time he first saw Williams and
Owens arguing until he saw Williams return to her ma-
chine. He also testified that while Williams was holding
on to Isaacs she could do what she wanted with him. He
stated that he testified about this incident in the Glenn-
Jackson arbitration proceeding because he wanted to
show that people had done things in the past and had
gotten by with them without being disciplined. He
denied that he testified about the incident out of malice
or that he had ever admitted that any of his testimony in
the Glenn-Jackson arbitration was untrue. He reaffirmed
that all of it was true to the best of his recollection and
belief.
On cross-examination Martin conceded that he might
have exaggerated in his testimony about Williams leading
Isaacs around the plant but that Williams did in fact have
Isaacs in her grasp, did take steps with him while pulling
on him, and could do what she wanted with him. He tes-
tified Isaacs was jumping up and down and was trying to
talk to her and get away. He testified that he could not
see them at all times when he was following them
around.
In addition to the testimony, the arbitration record
contained a transcript of an interview of Martin by Re-
spondent's attorney and other officials before Martin's
discharge. In that interview Martin maintained that Wil-
liams had grabbed Isaacs by the testicles but did not
answer directly questions about details he had described
in his Glenn-Jackson testimony, particularly as to Wil-
58
WRIGHT-BERNET, INC.
liams' leading Isaacs around the plant. At one point,
when being pressed for answers he replied that Isaacs
had "lied ... too," although he otherwise denied a
number of times that he had lied about the incident. He
conceded that he could not tell how long the incident
had lasted. The arbitration record also showed that Wil-
liams had refused to answer questions about the incident
during Respondent's investigation which led to Martin's
discharge.
Along with the witnesses who had testified at the
Martin discharge arbitration, the General Counsel had
two additional witnesses available to testify in this pro-
ceeding. One was a former employee, Ann Rose, and the
other was the attorney who had prepared Williams' affi-
davit after Martin's discharge which had been used to
impeach Williams' testimony at the arbitration hearing.
At the unfair labor practice proceeding, Rose testified
that she saw Williams grab Isaacs in the genital area, that
he doubled over, turned in circles, and hopped around
the packing department. She testified that, after he
turned in circles a couple of times, Williams let go of
him. She testified that Williams could not have held on
to him very long, perhaps a minute or so, but that she
had a good grab on him between the legs. She also testi-
fied that the whole incident lasted 5 to 10 minutes. She
testified that Isaacs made a joke of it and there was a lot
of laughter about it. Williams' lawyer testified that he
drew up the affidavit at Williams' request. He testified
that Williams told him she had grabbed Isaacs "in the
crotch" or words to that effect which made it very clear
what she had done. He testified that he used the words
"pinched him between the legs" because he did not think
it was necessary to use more graphic language to convey
what had happened.
Based on the arbitration record alone, and certainly
with the additional testimony available to corroborate
Martin and Williams, I find that the General Counsel had
a reasonable basis for taking the position that Williams
had grabbed Isaacs by the testicles and to that extent that
Martin had testified truthfully at the Glenn-Jackson arbi-
tration and Isaacs had not. As for Martin's testimony as
to when the incident occurred, who else witnessed it,
and how long it lasted, while considerable doubt was
cast on the accuracy of his Glenn-Jackson testimony, I
find further that the General Counsel had a reasonable
basis for the position that Martin's testimony was not the
product of willful and knowing falsification, but rather
the product of the typical errors of observation, percep-
tion, recollection, and articulation that so often impair
credibility of testimony, particularly in proceedings of a
less formal nature like arbitration.
However, in the light of the arbitration record, and
indeed Martin's own testimony, there was little basis left
for the position that he had truthfully testified that Wil-
liams led Isaacs around the shop, that she took him out
on the production floor, and that she could take him
anywhere she wanted. The General Counsel did not take
the position that Martin had testified truthfully in these
respects but argued that, to the extent that his testimony
departed from the truth, it was not deliberate or willful
exaggeration of any material fact which would cause his
testimony to lose its protection under Big Three, supra.9
I find that it was not reasonable to take the position
that these aspects of Martin's testimony were not materi-
al to the proceeding in which he testified. The miscon-
duct for which Jackson and Glenn were disciplined was
serious. Martin stated that he testified about the incident
in the Glenn-Jackson arbitration because he wanted to
show that people had done things in the past and had
gotten by with them. It is apparent that the more aggra-
vated the things people had gotten away with, the more
weight they would have in persuading an arbitrator to
mitigate the discipline for the misconduct at issue before
him.
I find further, however, that whether or not Martin
willfully and deliberately added the details concerning
Williams' leading of Isaacs around the plant presented
close questions in fact and in law, and that the General
Counsel continued to have a reasonable basis for his po-
sition in prosecuting the allegation that Martin's testimo-
ny was protected. As set forth above the Board had not
been required since Big Three to decide at what point the
line between protected and unprotected testimony was
crossed, and it is Board policy to give special protection
to employees' access to the grievance and arbitration
process. In the light of the latter policy and the lack of
any sequel to Big Three, it was reasonable for the Gener-
al Counsel to test the meaning of the dicta of Big Three
and its application to this case. In the light of the avail-
ability of corroboration of Williams' testimony concern-
ing her affidavit which had been damaging in the arbitra-
tion proceeding as well as Rose's additional testimony
available to corroborate Martin, it was reasonable for the
General Counsel to take the position that Williams and
Martin would be given greater credit in the unfair labor
practice proceeding than in the arbitration of Martin's
discharge and that to the extent that Martin was found to
have been untruthful in his Glenn-Jackson testimony his
untruths were not willful and knowing, but rather the
product of a mixture of faulty recollection and the exag-
geration of a partisan who persuades himself after the
passage of time that this was the way it really happened.
I find therefore that the General Counsel continued to
have a reasonable basis in law and in fact after receipt of
the arbitrator's award and the arbitration transcript for
continuing to pursue his position that Martin had been
discharged for engaging in protected concerted activity.
Finally, I find that in any event the arbitrator's award
and the arbitration transcript had no effect on the reason-
ableness of the General Counsel's position with respect
to the allegations of the complaint that Bernet threatened
employees with reprisal and that Martin's discharge was
caused by his union activities. The former was not dealt
with at all in the arbitration proceeding. The issue raised
by the allegation was primarily one of credibility, and
9 In his brief on the merits to the administrative law judge, counsel for
the General Counsel contended that Martin's total direct testimony at the
Glenn-Jackson hearing was limited to the statement that Williams
grabbed Isaacs by the testicles and that all other details were supplied on
cross-examination. As the facts set forth above show, the record does not
support that contention.
59
DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Martin's testimony at the arbitration of his discharge was
not so discredited as to make it unreasonable for the
General Counsel to place the credibility issue over Ber-
net's threat before an administrative law judge for resolu-
tion. With respect to the pretext allegation of the com-
plaint, again much of the evidence relied on by the Gen-
eral Counsel was not presented to the arbitrator, and
credibility was, of course, central to the pretext conten-
tion as well as to the contention that Martin's testimony
was protected. While it would have been unreasonable,
following the arbitration, to expect any trier of the facts
to find that Martin's testimony in the Glenn-Jackson ar-
bitration was completely credible, in one important re-
spect the arbitration proceeding if anything strengthened
the reasonableness of the General Counsel's position that,
with respect to their testimony as to whether or not Wil-
liams had ever grabbed Isaacs, Martin was more truthful
than Isaacs. The arbitration proceeding gave support to
the General Counsel's argument that in its investigation
before Martin's discharge Respondent ignored leads
which might have led to contradiction of Isaacs and at
least partial corroboration of Martin and that Respondent
demonstrated a determination to find a reason for Mar-
tin's discharge while ignoring possible grounds to disci-
pline Isaacs. While the administrative law judge dis-
counted this evidence and concluded that there was no
evidence that Isaacs willfully gave false testimony, just
as the arbitration proceeding left a close question as to
whether Martin had crossed the line in his testimony, so
also did it leave a close question as to whether Isaacs in
denying that the incident occurred at the arbitration pro-
ceeding and at the investigating interview before Mar-
tin's discharge willfully and falsely denied the incident.
In sum, I find that there was a reasonable basis both in
fact and in law for the position of the General Counsel
in this case and therefore that the action of the General
Counsel in proceeding to trial on Martin's discharge was
substantially justified.
111. RETROACTIVITY
Having found that the actions of the General Counsel
were substantially justified, I will recommend that the
application for fees be denied in its entirety. However,
should the Board disagree with that conclusion, the issue
of retroactivity would then have to be decided. As the
itemized description of services rendered shows, all but
1-1/4 of the total of 68-3/4 hours of services rendered by
Respondent's attorneys in this case fell in the period
before October 1, 1981, the effective date of EAJA. The
General Counsel contends that all fees and expenses in-
curred before the effective date of EAJA are not recov-
erable. Respondent contends that such fees and expenses
are recoverable and further that in view of my order de-
nying the General Counsel's motion to dismiss it is the
law of this case that such fees are recoverable.
There is one significant difference between the argu-
ment now being made by the General Counsel and that
made in its motion to dismiss. Thus, here the General
Counsel argues that EAJA is a waiver of sovereign im-
munity which must be unequivocally expressed and that
no explicit waiver appears from the statute or its history.
The sovereign immunity argument was not advanced in
the General Counsel's motion to dismiss.
The issue has been raised in a number of other cases
arising in a number of forums. Most recently the United
States Court of Appeals for the Fourth Circuit in Tyler
Business Services v. NLRB, 680 F.2d 338 (1982), rejected
this contention with respect to a fee application under
EAJA for fees before the court. The same result was
reached in Nunes-Correia v. Haig, 543 F.Supp. 812
(D.D.C. 1982), in what may be the most comprehensive
analysis of the issue to appear in an opinion to date.
While there are decisions to the contrary,'° the prevail-
ing view is that expressed in Tyler and Nunes-Correia.
Although not free from doubt, I find the reasoning ex-
pressed in Nunes-Correia most persuasive and therefore
would adhere to the position taken in my Order denying
the General Counsel's motion to dismiss and find that
fees and expenses itemized by Respondent incurred
before October 1, 1981, do not fall outside the coverage
of the Act.
As I have found above that the General Counsel had
substantial justification for issuing the complaint in this
case and for prosecuting it through the hearing stage, I
issue the following recommended"
ORDER
The application for award of fees and expenses under
the Equal Access to Justice Act of Respondent Wright-
Bernet, Inc. is denied.
10 E.g., Allen v. United States, 547 F.Supp. 357 (N.D. Ill.) (1982); Com-
modities Futures Trading Commission v. Rosenthal, 537 F.Supp. 1094
(N.D. 111. 1982).
" 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.
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