Amicus Curiae Brief — ABF Freight System, Inc. v. NLRB

ABF FRreicut System, INc.,

Petitioner,

v.

NATIONAL LaBor RELATIONS BOARD,

Respondent.

BRIE¥ OF THE AMERICAN FEDERATION OF LABOR

AND CONGRESS OF INDUSTRIAL ORGANIZATIONS

AS AMICUS CURIAE IN SUPPORT OF RESPONDENT

MARSHA S. BERZON

177 Post Street, Suite 300

San Francisco, CA 94108

(415) 421-7161

(Counsel of Record)

815 16th Street, N.W.

Washington, D.C. 20006

es

BEST AVAILABLE COPY!

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4

TABLE OF CONTENTS

Page

BARE GH AUTEN OEED centscrcesscssscememestinmnnnss ii

SUMMARY OF ARGUMENT. .......202.....222.22...--ccccseceeeeeees 1

lll, ee Ssaaniananmiiiediiiabiidaieietigedaniniiateias 5

Gf, I crcccrertnesseennistainentcninsiinninuniiasaminasanids 6

2. STANDARDS GOVERNING THE BOARD’S

REMEDIAL AUTHORITY: SECTION 10(C),

Oe 9

Ce GR TE | cccncccencnseccinsniictaatinsibiiaianisinie 9

(b) The Reinstatement And Backpay Remedies.. 12

(c) Board Discretion Concerning Remedi2s..._.... 14

8. PETITIONER’S “FORFEITURE” RULE........ 15

(a) Vindication Of Board Processes .................. 16

(b) Preservation of Management Rights .......... 22

i. The nondiscrimination standard ............ 22

ii. The Board’s two-pronged approach........ 28

et 30

ii

TABLE OF AUTHORITIES

FEDERAL CASES Page

A.C. Frost & Co. v. Coeur D’alene Mines Corp.,

TE a 20

American Navigation Co., 268 NLRB 426 (1983). 22

American Ship Building Co. v. National Labor Re-

lations Board, 380 U.S. 300 (1965) _....... 11, 23

Associated Press v. Labor Board, 301 U.S. 108

a cscemustensumiansecemmenanns 23

Automobile Workers v. Russell, 356 U.S. 634

EE EET ESE a 13

Consolidated Edison Co. v. Labor Board, 305 U.S.

LAS 12, 19

John Cuneo, Inc., 298 NLRB 856 (1990) _ — "|

Keystone Driller Co. v. General Excavator Co., 290

LAT 19, 21

Labor Board v. Mackay Radio & Tele. Co., 304

SS EE ee 12

Labor Board v. Pennsylvania Greyhound Lines,

nc ceeupsnteaens 2,9, 10, 16

Lawler v. Gilliam, 569 F.2d 1283 (4th Cir. 1978). 20, 21

Lear Siegler Management Service Corp., 306

NLRB No. 84 (1992) ... 22

Linn v. Plant Guard Workers, 383 U.S. 53 ( 1966) . 30

Mandarin, 228 NLRB 930 (1977) ...... 28

Metropolitan Edison v. National Labor Relations

Roard, 460 U.S. 693 (1983) _. TES 11

Mitchell Bros. Film Group »v. Cinema Adult

Theater, 604 F.2d 852 (9th Cir. 1979) - 20

VLRB v. Food & Commercial Workers Local 23

(Charley Bros.), 484 U.S. 112 (1987) 21

NLRB »v. City Disposal Systems, 465 U.S. 822

(1984) _...... ses ee 5

NLRB v. Gissel Packing Co., 395 U.S. 575

aR Re 14

National Labor Relations Board v. Transportation

Management Corp., 462 U.S. 398 (1983). 4, 11, 16,

23-27, 29

National Licorice Co., 309 U.S. 350 (1939) 13

O’ Daniel Oldsmobile, 179 NLRB 398 (1969) 28

iii

TABLE OF AUTHORITIES—Continued

Page

Owens Illinois Inc., 290 NLRB 1198 (1988), en-

forced without opinion, 872 F.2d 4138 (3rd Cir.

PRESETS ERS SESREEE AS MV Rec ee, 26-29

Perma-Life Mufflers, Inc. v. International Parts

Corp., 392 U.S. 1384 (1968) 20

Phelps Dodge Corp. v. Laber Board, 313 U.S. 177

i a 10-16, 20, 29

Radio Officers’ Union v. Labor Board, 347 U.S. 17

I eile 10

Republic Steel Corp. v. Labor Board, 311 U.S. 7

ERSTE So aaa EN ae CS 16

Shepard v. Labor Board, 459 U.S. 344 (1983) icant 18, 14

Service Garage, Inc., 256 NLRB 931 (1981), en-

forcement denied on other grounds, 668 F.2d

Se 28

St. Mary’s Honor Center v. Hicks, ~~ U.S. —,

113 S. Ct. 2742 (1998) wntideiiene 17,18

Vaca v. Sipes, 386 U.S. 171 (1967) is 21

Virginia Electric & P. Co. v. Labor Board, 319

eC oinniceecececcenceseteereeeeesereeeeseeee 13, 20

Wright Line, 251 NLRB 1083 (1982) ss 24, 26, 27

FEDERAL STATUTES

29 U.S.C. § 152(8) 7

29 U.S.C. §§ 158(a) (3) and (4). passim

29 U.S.C. § 160(¢) oo spinnaiees .....passim

PR Ti ON, Gnas cece eecseeseeeeeeesepecec 16

Labor-Management Relations Act, 61 Stat. 136,

wae & SESS CESE%) ................................. 10

NLRB Rules and Regulations, Subpart A, § 102.9. 21

MISCELLANEOUS

Pomeroy, Treatise on Equity Jurisprudence (5th

Ed. 1941) 19, 21

In THE

Supreme Court of the United States

OcTOBER TERM, 1993

No. 92-1550

ABF Freicut System, INc.,

- Petitioner,

NATIONAL LABOR RELATIONS BOARD,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Tenth Circuit

BRIEF OF THE AMERICAN FEDERATION OF LABOR

AND CONGRESS OF INDUSTRIAL ORGANIZATIONS

AS AMICUS CURIAE IN SUPPORT OF RESPONDENT

The American Federation of Labor and Congress of

Industrial Organizations (“AFL-CIO”), a federation of

84 national and international unions with a total member-

ship of approximately 14,000,000 working men and

women, files this brief amicus curiae with the consent of

the parties, as provided for in the Rules of this Court.

SUMMARY OF ARGUMENT

1. The National Labor Relations Board (“NLRB”)

found that the employer in this case violated §§ 8(a)

(1), (3) & (4) of the National Labor Relations Act

(“NLRA”) by discriminatorily discharging an employee.

Manso had filed grievances and NLRB charges concerning

an earlier discharge, a finding not contested here. Section

10(c) of the NLRA provides that the Board can remedy

unfair labor practices by issuing “an order requiring [the

employer] to take such affirmative action including rein-

2

statement of employees, with or without backpay, as will

effectuate the policies of this [Act].” Petitioner contends

that because Manso was found to have testified untruth-

fully during the NLRB proceedings, albeit as to an issue

ultimately irrelevant to the outcome of the case, the

Board is precluded from ordering Manso’s reinstatement

with backpay.

2. Section 10(c) has three notable features, each per-

tinent to this Court's consideration of ABF Freight’s ab-

solutist contention in this case. First, because the statu-

tory directive is to “effectuate the policies of this [Act],”

the starting point for reviewing the Board’s exercise of its

remedial authority is delineation of the pertinent statu-

tory policies. The statute itself and this Court’s cases

establish that the “ruling purpose” (Labor Board v. Penn-

sylvania Greyhound Lines, 303 U.S. 261, 265 (1938))

of the Act is promoting labor peace by assuring em-

ployees the right of self-organization and collective action,

including collective bargaining. The prohibitions on dis-

criminatory discharges promote that fundamental purpose

by assuring employees that employers cannot interfere

with their job security because of their exercise of rights

protected by the NLRA. And, as prohibitions upon dis-

crimination, § 8(a)(3) and (4) protect both model and

less-than-perfect employees from interference with their

job rights because of collective activity or resort to the

Board's processes.

Second, reinstatement and backpay are the remedies

ordinarily appropriate to effectuate the protections ac-

corded by the discriminatory discharge prohibition. These

remedies neutralize the effect of the NLRA violation to

the degree possible, by concretely demonstrating both to

the discriminatee and to co-employees that statutory

rights can be exercised without economic loss and by

restoring employees who exercise their statutory rights to

the workplace, and also remove the incentive to employers

to engage in discriminatory discharges in the future. Be-

3

cause reinstatement and backpay, like other Board rem-

edies, are designed not to correct private injuries but to

give effect to the Act’s public policies, these overall statu-

tory considerations and not simply the interests of the dis-

criminatee are pertinent in determining whether reinstate-

ment and backpay are proper remedies in any set of

generic circumstances.

Finally, the NLRB has broad discretion in determining

when the policies of the Act would be vindicated by a

particular remedy, and court review is commensurately

narrow.

3. Against this background, the employer’s contention

that the Board is precluded from ordering reinstatement

and backpay with regard to any employee who testifies

untruthfully before a Board ALJ borders on the frivolous.

ABF Freight’s position rests, first and primarly, upon

the notion that since purposeful lying on the witness

stand is (obviously) to be discouraged, the Board is com-

pelled to impose a “forfeiture” of reinstatement and back-

pay on untruthful witnesses in order to vindicate its own

processes. But the conclusion does not follow from the

premise. The NLRB’s basic function is protection of em-

ployee self-organization and collective bargaining, not as-

surance of truthtelling. There are civil and criminal rem-

edies to further the latter purpose, so it is simply untrue

that absent forfeiture of reinstatement and backpay, dis-

criminatees have nothing to lose by lying during Board

proceedings. Moreover, the employer’s suggested forfei-

ture rule would violate the proscription against punitive

actions by the Board, and would only selectively punish

failure to testify truthfully, since witnesses for respondent

employers, also required to testify truthfully (and no less

likely, as this case shows, to fail to do so), would not

be affected. Finally, the equitable “clean hands” maxim

cannot supply a rationale for petitioner’s “forfeiture”

rule, since equitable doctrines cannot be imported whole-

sale into the statutory scheme of the NLRA, and since the

4

doctrine, in its own terms, would not apply to vindica-

tion of the Board’s interest in truthfulness.

A secondary purported basis for ABF Freight’s “bright

line” position here is the contention that employers must

be free not to employ dishonest people. While it is true

as a general matter that the NLRA does not regulate

employment decisions based upon motives not proscribed

by the Act, here there was an illegally motivated dis-

charge, and the issue is a remedial one only. This Court’s

opinion in National Labor Relations Board v. Transpor-

tation Management Corp., 462 U.S. 393 (1983), estab-

lishes that where an employer discharges an employee for

mixed legitimate and illegal reasons, the employer can

escape the usual remedy only by bearing the burden of

showing that the employer would have—not could have—

discharged the employee without regard to the illicit

motive. Here, the need for full remedy is more urgent,

since the employee has already been absent from the

workplace for some time because of a concededly illegal

discharge, with the adverse requisite impact on employee

rights of self-organization. No reason appears for impos-

ing a /ess stringent burden on the employer here than in

Transportation Management, and the employer in this

case has made no attempt to meet that burden.

While the foregoing is sufficient to resolve this case,

we note as well that the Board under the present cir-

cumstances requires that the employer bear the addi-

tional burden of demonstrating that the discriminatee is

objectively unfit for his former position because of his

post-discharge conduct—here, testifying untruthfully un-

der oath. Given the significant differences between this

Situation and that in Transportation Management, that

additional burden “effectuates the policies of this Act”

and is therefore within the Board’s remedial discretion.

— ee

5

ARGUMENT

The NLRA, as amended, makes it an unfair labor prac-

tice for an employer “by discrimination with regard to

hire or tenure of employment to encourage or discourage

membership in any labor organization” and, as well, for

an employer “to discharge or otherwise discriminate

against an employee because he has filed charges or given

testimony under this subchapter.” NLRA §&§ 8(a)(3)

& (4). 29 U.S.C. §§ 158(a)(3) & (4). The NLRA,

additionally, directs that where such unfair labor practices

occur, “the Board shall [issue] an order requiring [the

employer] to take such affirmative action including rein-

statement of employees, with or without back pay, as will

effectuate the policies of this [Act].”

ABF Freight, the employer in this case, was found to

have violated these provisions by discharging an em-

ployee because the employee had previously filed both

Board charges and grievances under a collective bargain-

ing agreement pertaining to his two earlier discharges.’

In this Court, ABF Freight does not challenge the con-

clusion of the Board and of the Court of Appeals that

the Act was indeed violated.

The question in this case, rather, is whether the Na-

tional Labor Relations Board is, on some basis, required

to deny reinstatement and backpay—otherwise the basic

remedy deemed appropriate to “effectuate the policies of

this subchapter” (NLRA § 10(c), 29 U.S.C. § 160(c))

where an employee is discharged in violation of §§ 8

1 Because the employee in this case asserted rights under a collec-

tive bargaining agreement, his actions were protected by the NLRA,

and therefore by § 8(a) (3). NLRB v. City Disposal Systems, 465

U.S. 822 (1984). The protection against retaliation contained in

§ 8(a) (4) is designed, of course, to safeguard the self-organization

rights otherwise protected by the Act. Consequently, although the

discharge in this case was not for the union organizing activity

more traditionally at issue in discriminatory discharge cases, as

such, it is subject to the same policy considerations applicable to

such activity.

6

(a)(3) & (4)—whenever the discriminatee testifies un-

truthfully on the witness stand before the NLRB Ad-

ministrative Law Judge (“ALJ”). The employer main-

tains that the NLRA mandates such a per se rule.

1. Introduction: To place this question in perspec-

tive, it is worth noting at the outset that the issue raised

by this case will arise only where the employer, as here,

has been found guilty of an unfair labor practice. In

that circumstance, it will ordinarily be the case (again as

here) that any testimony by a discriminatee that is

deemed untruthful will not concern a central merits issue

in the case; otherwise, once the employee’s testimony con-

cerning the relevant facts and circumstances surrounding

the adverse employment action against him is disbelieved,

the decision would be in favor of rather than against the

employer.”

It is possible, of course, that an employee’s untruthful

testimony on a central merits issue could be believed by

the ALJ and the NLRB and could therefore result in an

unjustified finding of an unfair labor practice with re-

instatement and backpay for the employee. But a re-

medial rule denying relief to discovered liars even where

an unfair labor practice is found is unlikely to affect

an employee who determines to lie in the hope that his

or her lie will remain undiscovered and will result in

a remedy running in his favor. A liar whose lie is mate-

* Here, for example, the ALJ concluded that the discharged em-

ployee,-Manso, did not tell his employer the truth about the reasons

for his second lateness, and determined that Manso was therefore

discharged for cause. Pet. App. B-59. The Board, however, found

that Manso was not fired for dishonesty but for lateness. Pet. App.

B-18. And, the Board went on to find that the reason for Manso’s

second lateness was simply irrelevant to the question whether his

discharge was in violation of §§8(a)(3) & (4). The Board held

that the employer’s new, strict disciplinary policy for Manso’s job

classification only, mandating a discharge for a second unexcused

lateness, could not serve as a neutral justification for the discharge,

since the policy was supposed to apply only prospectively, yet was

applied retroactively, and therefore disparately, to Manso. Pet.

App. B-20.

7

rial to the liability question always runs the risk that he

or she will be found out, and that the employer will there-

fore prevail, with the necessary result that there will be

no reinstatement and no backpay. Consequently, the only

untruthful testimony that will be discouraged by the rule

for which the employer argues is that concerning factual

matters tangential to, rather than central to, the case; em-

ployees presumably will avoid such tangential lies in

order to preserve entitlement to reinstatement and back-

pay in case the lies are discovered.

As the NLRB reports amply demonstrate, Labor Board

cases often come down to findings on points on which

there is conflicting testimony. And, as this case shows, in

such cases the finding of an unfair labor practice fre-

quently rests on adverse credibility determinations re-

garding the testimony of one or more witnesses for the

employer, who are likely to be the employer’s common

law employees (if not statutory “employees” under NLRA

§ 2(3), 29 U.S.C. 152(3)).*

*In this instance, the ALJ made findings, affirmed by the Board,

that the employee, Manso, was telling the truth when he testified

with great specificity to three incidents in which three different

supervisory employees of the employer made statements to him,

upon his reinstatement pursuant to an earlier grievance, to the

effect that the employer would fire him again. Pet. App. B-46;

Jt. App. 95-99. The three supervisory employees, however, each

testified at the hearing and specifically denied, under oath, making

such a statement. Jt. App. 56-57, 90-91, 118.

Similarly, the ALJ, with the Board’s concurrence,found credible

the testimony of a co-employee concerning an incident in which the

co-employee requested permission to dial Manso a second time to

see if Manso was available for work because he thought he had

misdialed the first time, but was forbidden to do so by yet another

supervisor, and forced to sign a form indicating that Manso was

not available. Pet. App. B-47. Again, that supervisor, under oath,

explicitly denied that the co-employee had expressed doubt about his

dialing, or requested permission to redial. Jt. App. 62-64.

Finally, the ALJ also “flatly discredit{[ed]” testimony by four

other management employees concerning the employer’s attitude

concerning the new preferential casual system that gave rise to the

8

While not all adverse credibility determinations indi-

cate that one of two disagreeing witnesses or the other is

willfully lying (as opposed to simply incorrectly recollect-

ing), in many instances it could be determined, were the

question pursued, that the misstatement of fact was pur-

poseful rather than accidental. Thus, in a substantial per-

centage of the instances in which employer unfair labor

practices are found, the witnesses for the employer will-

fully misstate the truth, and do so in a material rather

than tangential manner. —

In this light, it becomes apparent that petitioner's prof-

fered broad, prophylactic Tule favors material liars over

tangential liars; liars for wrongdoers over liars who have

not committed any unfair labor practice; and precautions

against irrelevant distortions of the truth over enforce-

ment of the statute’s explicit prohibition on interference

with collective activity generally and union organizing par-

ticularly.

As we show below, there is no basis in the NLRA

itself, or in general principles applicable to the NLRB’s

proceedings, for limiting the Board’s discretion to fashion

reticulated, fine-tuned remedial principles intended to

avoid such untoward results. As we also show, the prin-

ciples applied by the Board to govern remedial issues in

cases such as this are, if anything, more restrictive in

present dispute, and noted as well that the employer’s witnesses

“took opposite positions on [one] point in the course of a five-

minute colloquy.” Pet. App. B-38.

In sum, a total of at least eight of the employer's supervisory

and managerial employees were found by the ALJ to be misstating

the truth in their testimony under oath.

4In this instance, there was no reason for the ALJ or the Board

to make findings as to whether the discredited supervisory employees

purposely lied, or simply innocently differed in their recollections

from the General Counsel’s witnesses; there are therefore no such

findings. It seems unlikely, however, that the eight discredited

supervisory employees—all apparently still employed by the em-

ployer at the time of the hearing—had similarly poor memories.

9

granting reinstatement and backpay than the pertinent

statutory policies call for.

2. Standards Governing the Board’s Remedial Au-

thority: Section 10(c), 29 U.S.C. § 160(c)—the NLRA

section governing the Board’s remedial authority—has

three notable features:

First, the broad directive to the Board is to “effectuate

the policies of this [Act].” To apply this provision, then,

it is necessary to have firmly in mind the pertinent poli-

cies of the NLRA, both generally and with regard to

the particular unfair labor practices to be remedied.

Labor Board v. Pennsylvania Greyhound Lines, 303 U.S.

261, 265 (1938) (“upon the challenge of the affirmative

part of an order of the Board, we look to the Act itself,

read in light of its history, to ascertain its policy .. . to

see whether [it] afford[s] a basis for its judgment that the

action ordered is an appropriate means of carrying out

that policy.” )

Second, § 10(c) expressly provides for—although it

does not mandate—reinstatement and backpay as appro-

priate remedies under the Act. Those remedies, as this

Court’s cases make clear, are made available not to vin-

dicate the private interests of the discharged employees,

but to implement the Act’s public purposes, and their

appropriateness under particular circumstances is to be

judged accordingly.

Third, the NLRA’s remedial provision is phrased in

general terms, leaving to the Board broad discretion in

determining the appropriate remedy from among those

available.

Each of these aspects of § 10(c) is pertinent to this

case.

(a) Statutory Policies: As this Court noted in the

early days of the Act, Congress did not leave the Act's

general policies to inference. Rather,

Congress explicitly disclosed its purposes in de-

claring the policy which underlies the Act. Its ulti-

10

mate concern . . . was “to eliminate the causes of

certain substantial obstructions to the free flow of

commerce.” This vital national purpose was to be

accomplished “by encouraging the practice and pro-

cedure of collective bargaining and by protecting the

exercise by workers of full freedom of association.”

. . . [Phelps Dodge Corp..v. Labor Board, 313 U.S.

177, 182 (1941).]

See also Virginia Electric & P. Co. v. Labor Board, 319

U.S. 533, 539 (1943); Pennsylvania Greyhound Lines,

supra, 303 U.S. at 265-66, (the Act’s “ruling purpose” is

“to protect interstate commerce by securing to employees

the rights . . . to organize, to bargain collectively through

representatives of their own choosing, and to engage in

concerted activities for that and other purposes.”)°

Section 8(a)(3) implements that broad policy by “in-

sulat[ing] employees’ jobs from their organizational rights

. allow[ing] employees to freely exercise their right to

join unions, be good, bad, or indifferent members . . .

without imperiling their livelihood.” Radio Officers’

Union v. Labor Board, 347 U.S. 17, 40 (1954). By

5 The NLRA was, of course, amended in 1947 and 1959, with the

addition of union unfair labor practices and some concomitant

changes in the Act’s underlying policies. See, e.g., Labor-

Management Relations Act, 61 Stat. 136, c. 120, Title I, §101

(1947) (amending the “Finding and declaration of policy” provi-

sion of § 1 of the NLRA, 29 U.S.C. § 151). This case, however, and

most others in which reinstatement and backpay for discriminatees

are at stake, involve the employer unfair labor practices articu-

lated in the original, 1935 Act and left substantially unchanged in

the subsequent statutory revisions.

There was one 1947 amendment that the employer notes in pass-

ing and that is pertinent to this case: As amended, §10(c) now

provides that “No order of the Board shall require the reinstatement

of any individual as an employee who has been suspended or dis-

charged, or the payment to him of any backpay, if such individual

was suspended or discharged for cause.” As we suggest later (at

n.8, infra), however, that sentence supports rather than cuts against

the Board’s authority to order reinstatement and backpay in the

present circumstances.

11

thus “protect[ing] employee self-organization and the

process of collective bargaining from disruptive inter-

ferences by employers” (American Ship Building Co. v.

National Labor Relations Board, 380 U.S. 300, 317

(1965)), the prohibition upon discriminatory treatment

based on union or other collective activity prevents em-

ployer actions that “inevitably operate[] against the whole

idea of the legitimacy of organization [and] . . . under-

mine[] the principle which, as we have seen, is recog-

nized as basic to the attainment of industrial peace.”

Phelps-Dodge Corp., supra, 313 U.S. at 185; see also

id. at 186 (“embargo against employment of union labor

was notoriously one of the chief obstructions to collective

bargaining through self-organization. Indisputably, the

removal of such obstructions was the driving force be-

hind the enactment of the National Labor Relations

Act.”)

As a prohibition upon discrimination based on union

activity, § 8(a)(3) necessarily limits an employer’s pre-

rogative to enforce otherwise legitimate employment-

related rules, where the enforcement is intended to and

“is likely to discourage participation in union activities.”

Metropolitan Edison vy. National Labor Relations Board,

460 U.S. 693, 700 (1983). Thus, for example, “where

many have broken a shop rule, but only union leaders

have been discharged, the Board need not listen too long

to the plea that shop discipline was simply being en-

forced.” American Ship Building Co., supra, 380 US. at

312." Similarly, an employer may refuse to reinstate

* Because “a finding of violation under [§ 8(a) (3)] will normally

turn on the employer’s motivation” (American Ship Building Co.,

supra, 380 U.S. at 311), the Board and this Court has developed a

set of procedural rules for determining the motive question. Metro-

politan Edison Co., supra, 460 U.S. at 701-02; National Labor Rela-

tions Board v. Transportation Management Corp., 462 U.S. 393,

401-02 (1983). Since there is no question before the Court in this

case concerning whether the employer in fact committed the unfair

labor practice found, the precise manner in which anti-union animus

must be proved in § 8(a)(3) cases is not an issue here.

ON _—<—

s

12

striking employees in positions filled by permanent re-

placements and “might resort[] to any one of a number

of methods of determining which of its striking employees

would have to wait because five men had taken perma-

nent positions after the strike” but may not purposely

“discriminate against those most active in the union.”

Labor Board v. Mackay Radio & Tele. Co., 304 U.S. 33,

347 (1938).

In short, the policy underlying § 8(a)(3) and related

provisions is to provide assurance to employees generally

that engaging in collective activity will not endanger

their job security, so that they will feel free to engage in

such activity. This assurance is necessarily provided to

both model employees and less-than-perfect ones; other-

wise—since most individuals are less-than-perfect—

security in engaging in collective action could not be

assured, and the Act’s “ruling purpose” could not be

achieved.

(b) The reinstatement and backpay remedies: Since

the earliest days of the Act, this Court has also recog-

nized that ordinarily, “complete relief” in a § 8(a)(3)

case demands that “discrimination be neutralized by [the

discriminatees] being given their former positions and re-

imbursed for the loss due to the lack of employment con-

sequent upon the respondent’s discrimination.” Mackay

Radio & Tele. Co., supra, 304 U.S. at 348. Reinstate-

ment in particular is “the conventional correction for dis-

criminatory discharges” (Phelps Dodge Corp., supra, 313

U.S. at 187) because it “require[s] the discrimination to

cease not abstractly, but in the concrete victimizing in-

stances. Jd. at 188. As such, reinstatement (and back-

pay) are “means of removing or avoiding the conse-

quences of a violation where those consequences are of

a kind to thwart the purposes of the Act.” Consolidated

Edison Co. v. Labor Board, 305 U.S. 197, 236 (1938).

Although reinstatement and backpay, unlike many

other NLRA remedies, flow to individual employees,

13

rather than to employees as a group, this Court has em-

phasized that the central function of that remedy is not

“eorrection of private injuries” but “‘giv[ing] effect to

the declared public policy of the Act to eliminate and

prevent obstructions to interstate commerce by encourag-

ing collective bargaining.” Phelps Dodge, supra, 313

U.S. at 193, quoting National Licorice Co. v. Labor

Board, 309 U.S. 350, 362 (1940). Because “the central

purpose of the Act [is] directed .. . toward achievement

and maintenance of workers’ self-organization” (Phelps

Dodge, 313 U.S. at 193), the appropriateness of rein-

statement and backpay must be judged against that public

purpose, not against standards applicable when only

“ ‘adjudication of private rights’” is at stake. /d., quot-

ing National Licorice Co., supra, 309 U.S. at 602). See

also Shepard v. National Labor Relations Board, 459

U.S. 344, 350 (1983); Automobile Workers v. Russell,

356 U.S. 634, 642-43 (1958); Virginia Electric & P.

Co., supra, 319 U.S. at 549.

Phelps Dodge held, for example, that an employee who

has suffered no economic loss due to a discriminatory

discharge can still be eligible for reinstatement:

[T}here are factors other than loss of wages to a

particular worker to be considered . . . [T]o deny

the Board the power to wipe out the prior discrimina-

tion by ordering the employment of such workers

would sanction a most effective way of defeating the

right of self-organization. . . . Again, without such a

remedy industrial peace might be endangered because

workers would be resentful of their inability to return

to the jobs to which they may have been attached

and from which they were wrongfully discharged.

[313 U.S. at 193, 195.]

Thus, factors not directly related to making whole the

particular employee whose discharge is being remedied

are entitled to substantial weight in developing the prin-

ciples governing reinstatement and backpay remedies

under § 10(c). Those factors include: the effect denial

14

of reinstatement and backpay to one employee discharged

for union activity may have in diminishing other em-

ployees’ propensity to engage in protected activity in the

future; the impact on future union activity when an em-

ployer successfully eliminates union activists and leaders

from the workplace; and the need for a strong and con-

sistent disincentive to employer discharges of employees

for union activity, which purely prospective relief cannot

supply.

(c) Board Discretion Concerning Remedies: The final

critical feature of § 10(c) for purposes of this case is

that because the Act does not create rights for indi-

viduals which “must be vindicated according to a rigid

scheme of remedies [but] entrusts to an expert agency the

maintenance of industrial peace” (Phelps Dodge, supra,

313 U.S. at 194), “Congress has delegated to the Board

the power to determine when the policies of the Act

would be effectuated by a particular remedy.” Shepard,

supra, 459 U.S. at 349.

As a consequence of this delegation,

the relation of remedy to policy is peculiarly a matter

for administrative competence[.] [C]ourts must not

enter the allowable area of the Board’s discretion and

must guard against the danger of sliding uncon-

sciously from the narrow confines of law into the

more spacious domain of policy. [Phelps Dodge,

supra, 313 U.S. at 194, emphasis supplied. }

See also National Labor Relations Board v. Gissel Pack-

ing Co., 395 U.S. 575, 612 n.32 (emphasis supplied )

(1969) (Board’s “choice of remedy must be given special

respect by reviewing courts”); Shepard, supra, 459 US.

at 349.

The pertinent question, then, is whether there is any-

thing “in the language or structure of the Act that requires

the Board to reflexively [refuse to] order .. . ‘complete

relief” (Shepard, 459 US. at 352) for illegally dis-

charged employees because the employee does not tell

15

the truth at a Board hearing, or whether, instead, “the

Board acted within its authority in deciding that a [rein-

Statement and backpay] order in this case would . . . effec-

tuate the policies of the act.” Jd.

3. Petitioner's “Forfeiture” Rule: Tested against the

pertinent statutory policies, the public purpose of the Act's

reinstatement and backpay remedies, and the broad dis-

cretion accorded the Board in “the relation of remedy to

policy” (Phelps Dodge, supra, 313 US. at 194), ABF

Freight’s arguments (and those of its amici curiae) in

Support of the proposition that the Board can never rein-

State with backpay an employee who testified falsely at

a Board hearing border on the frivolous.’

There are two distinct strains to the argument of ABF

Freight and its amici curiae, although on occasion the two

are melded together. The first strain focuses on the

Board’s interest in its own processes, and maintains that

reinstatement and backpay must be denied in a case like

this to vindicate the interest in deterring untruthful testi-

mony before the Board. The second line of argument

focuses on the employer’s own interests, and insists that

because false testimony is a species of misconduct that

can justify discharge, an employer who has violated the

NLRA by discharging an employee for a different—and

unlawful—treason should be able to resist reinstatement

and backpay if the employee later gives false testimony

in a Board proceeding.

*The American Trucking Associations (“ATA”) argues for a

slightly less absolute rule —that the NLRB may not reinstate with

backpay an employee who “testified falsely as to a material issue.”

Brief for the American Trucking Associations as Amicus Curiae

(“ATA Br.) at (i) (emphasis supplied). ATA then goes on, how-

ever, to define a “material” issue to include questions whose answer

in fact played no role in the ultimate determination, but might

have been relevant had the Board taken a different view of the facts

than it did. ATA Br. at 9. While that definition of “materiality”

may, as ATA indicates, have some force in certain criminal con-

texts, it does not provide a basis for overturning the judgment

below.

ee, pean

16

(a) Vindication of Board Protesses: The employer's

“abuse of the Board’s processes” arguments proceed from

the truism that the Labor Board, like other administrative

agencies and courts, places an obligation on witnesses

appearing before an ALJ to testify truthfully, by admin-

istering an oath prescribed by the Federal Rules of Evi-

dence Rule 603 and otherwise. For a myriad of reasons,

however, the general policy favoring truthtelling in ad-

ministrative proceedings cannot alone supply the basis for

denying a remedy otherwise appropriate to “effectuate the

policies of [the NLRA].”

First, and most obviously, as this Court’s cases make

clear, the NLRA’s “ruling purpose” (Pennsylvania Grey-

hound Lines, supra, 303 U.S. at 265-66) and “driving

force” (Phelps Dodge Corp., supra, 313 U.S. at 186) is

assuring industrial peace through protection of employee

self-organization and collective bargaining. See Republic

Steel Corp. v. Labor Board, 311 U.S. 7, 13 (1940) (rem-

edy improper under § 10(c) where the “order is not

directed to the appropriate effectuating of the National

Labor Relations Act, but to the effectuating of a distinct

and broader policy . . . not the function of the Board.” )

And, for reasons we have already canvassed, reinstatement

and backpay have long been recognized as essential to

vindicating that true policy of the Act when an employee

has been fired for engaging in activity protected by the

statute. The fellow employees of an illegally discharged

employee, for example, are likely to be aware of the cir-

cumstances of the discharge, but not of the proceedings

before the Board: consequently, if the illegally discharged

employee never returns to the workplace because of his

actions at the hearing, the fear of discharge for union

activities among other employees is likely to persist."

* We note as well that §10(c) does expressly preclude rein-

statement and backpay in one instance—where the employee was

discharged for cause. See n.5, supra; see also Transportation Man-

agement Corp., supra, 462 U.S. at 401. Since there is no similar

barrier to reinstatement and backpay in the present circumstances,

17

Additionally, there is no reason to subordinate the Act’s

expressed policies, and to permit employers to succeed in

removing union activists and other employees who engage

in activity protected by the statute, when there are other,

more traditional ways of vindicating the Board’s interest

in the accuracy of its own processes. The NLRA “is not

a cause of action for perjury; we have other civil and

criminal remedies for that.” St. Mary’s Honor Center v.

Hicks, US. , 113 S. Ct. 2742, 2754 (1993).

The function of the oath requirement upon which the em-

ployer relies is precisely to bring the witness within the

coverage of those remedies.

Thus, it is simply untrue that unless the employer’s

absolute rule or a close variant thereof is adopted, “an

employee appears to have nothing to lose by lying during

unfair labor practice proceedings.” ATA Br. at 10. Cf.

St. Mary’s Honor Center, supra, 113 §. Ct. at 2754

(“what an extraordinary notion, that we ‘exempt [employ-

ers who give pretextual explanations of discharges] from

responsibility for their lies’ unless we enter . . . judgment

for plaintiffs!” )

Further, both witnesses for the General Counsel and

witnesses for respondent are required to testify under oath.

There is no greater or less Board or public interest in hav-

ing truthful testimony from one than from the other” As

to respondents’ witnesses (and General Counsel witnesses

who are not themselves the illegally discharged employ-

ees), possible prosecution for perjury and concomitant

where the discharge was not for cause but for reasons proscribed

by the Act, the fair inference is that the determination of the

appropriate rule for circumstances in which a post-discharge basis

for denying reinstatement is claimed is, like other aspects of the

administration of remedies under the Act, left to the Board’s sound

discretion.

* As noted (n.3, supra), in this case, the ALJ and the Board

concluded that except for his testimony concerning the reason for

his lateness, the discharged employee was telling the truth; the

ALJ and the Board, however, determined that the employer’s super-

visory and management employees were, in general, not truthful.

- ik

uu

punishment is the only deterrent against rampant lying

before the Labor Board. The employer's suggested abso-

lute rule, then, “is not even a fair and even-handed punish-

ment tor vice, when one realizes how strangely selective

it is.” St. Mary's Honor Center, supra, 113 S. Ct. at

2754."

It would be possible, of course, to devise an even-

handed rule concerning lying before the NLRB. That

would require adoption of the rule—in addition to the

employer's proffered rule—that purposeful lying by re-

spondent’s witnesses automatically leads to reinstatement

and backpay of the complaining employee, regardless

whether he or she was in fact discriminatorily discharged.

To state that possibility, however, is simply to underline

why it is that the employer's proffered rule does not “ef-

fectuate the policies of the Act.”

Obviously, it does not effectuate those purposes to grant

reinstatement and backpay—or any other remedy—to an

individual who was not in fact discriminated against in

violation of the NLRA, because of behavior by the em-

ployer’s agent that is independently illegal but not a vio-

lation of the NLRA. Cf. St. Mary’s Honor Center, supra,

at 2754-55. No reason appears why it any more effectu-

ates the Act’s policies to deny otherwise appropriate re-

lief for such a reason.

Furthermore, denial of the usual reinstatement and

backpay in order to vindicate the general public policy

There is also the fact that the Board’s processes would be

greatly burdened were it necessary to determine the truthfulness

of every statement, or even every potentially material but actually

irrelevant statement, made by a witness before the Board as a pre-

condition to determining the appropriate remedy. That is par-

ticularly so since, “there is no justification for assuming .. . that

those [witnesses] who evidence is disbelieved are perjurers and

liars.” St. Mary's Honor Center v. Hicks, Us. ——, 118

S. Ct. 2742, 2755 (1993). Consequently, there would need to be a

determination in each instance concerning whether the misstate-

ment was purposeful or not. See n.4, supra.—The result could be

a set of veritable perjury mini-trials as part of every Board

proceeding.

19

favoring telling the truth would be punitive, as the em-

ployer’s reference to the employee “forfeit[ing]” reinstate-

ment and backpay indicates. The purpose of such a “for-

feiture” would be to deter abuse of the Board’s processes,

not to remedy a violation of the Act. And, § 10(c)

does not go so far as to confer a punitive jurisdic-

tion. . . . The power to command affirmative action

is remedial, not punitive, and is to be exercised in

aid of the Board’s authority to restrain violations and

as a means of removing or avoiding the consequences

of violation where those consequences are of a kind

to thwart the purposes of the Act. [Consolidated

Edison Co., supra, 305 U.S. at 235-236. ]

The employer's references to the equitable “clean hands”

~ doctrine fares no better in supplying a rationale for the

rule the employer supports. In its traditional formulation,

the clean hands doctrine provides that:

“whenever a party who as actor, seeks to set the

judicial machinery in motion and obtain some rem-

edy, has violated conscience, or good faith or other

equitable principle in his prior conduct, then the

doors of the court will be shut against him .. . the

court will refuse to interfere on his behalf, to ac-

knowledge his right, or to award him any remedy.”

| Keystone Driller Co. v. General Excavator Co., 290

U.S. 240, 245 (1933), quoting Pomeroy, Equity

Jurisprudence (4th Ed.) § 307.]

For several reasons, this principle cannot supply the

rationale for imposing a “forfeiture” of the Act’s rein-

statement and backpay remedy in order to vindicate the

Board’s interest in the integrity of its procedures.

Initially, this Court has stated emphatically that equity

maxims are not to be imported into the NLRA by rote:

[A] back pay order does restore to the employees

in some measure what was taken from them because

of the Company’s unfair labor practices. In this lit]

somewhat resemble[s] compensation for private in-

jury, but it must constantly be remembered that [the]

. remed[y is] created by statute . . . designed to

20

aid the elimination of industrial conflict. [It] vindi-

cate[s] public, not private rights. . . . For this reason

it is . . . wrong to fetter the Board’s discretion by

compelling it to observe conventional . . . chancery

principles in fashioning such an order. [Virginia

Electric & P. Co., supra, 319 U.S. at 543 (emphasis

supplied ).]

See also Phelps Dodge Corp., supra, 313 U.S. at 188 (em-

phasis supplied) (“Attainment of a great national policy

through expert administration in collaboration with limited

judicial review must not be confined within narrow can-

nons for equitable relief deemed suitable by chancellors in

ordinary private controversies.”).". Indeed, the public

nature of the Board’s proceedings is reflected in their

structure. In an unfair labor practice proceeding, the dis-

charged employee is not the “party who as actor, seeks

to set the judicial machinery in motion and obtain some

remedy”—the General Counsel is, through the discretion-

1! More generally, this Court, and the lower federal courts follow-

ing this Court’s lead, have declined to import both common law and

equitable defenses into statutory schemes where to do so would not

advance the purposes of the statute. Thus, Perma-Life Mufflers,

Inc. v. International Parts Corp., 392 U.S. 134, 188 (1968), declined

to apply the common law in pari delicto doctrine to antitrust law,

because even if

[t}he plaintiff who reaps the reward of treble damages [is] no

less morally reprehensible than the defendant . . . the law

encourages his suit to further the overriding public policy in

favor of competition. A more fastidious regard for the relative

moral worth of the parties would only result in seriously under-

mining the usefulness of the private action as a bulwark of

antitrust enforcement. And permitting the plaintiff to recover

a windfall gain does not encourage continued violations by those

in his position since they remain fully subject to civil and crimi-

nal penalties for their own illegal conduct.

See also, A.C. Frost & Co. v. Coeur D'alene Mines Corp., 312 U.S.

38, 40 and 43-44, n.2 (1941) ; Mitchell Bros. Film Group v. Cinema

Adult Theater, 604 F.2d 852 (9th Cir. 1979); Lawler v. Gilliam,

569 F.2d 1283 (4th Cir. 1978).

For reasons already canvassed, applying a “forfeiture” rule in the

present circumstances would not advance the policies of the NLRA.

21

ary filing of a complaint.” Vaca v. Sipes, 386 U.S. 171,

182 (1967); National Labor Relations Board v. Food &

Commercial Workers Local 23 (Charley Bros.), 484 U.S.

112 (1987).

Additionally, even if the clean hands doctrine applied

here, it would not make mandatory denial of relief at a re-

spondent’s behest because of a possible adverse impact on

the Board’s processes. The clean hands doctrine is a prin-

ciple “not bound by formula or restrained by any limita-

tion that tends to trammel the free and just exercise of

discretion.” Keystone Driller, supra, 290 U.S. at 245-246.

And, the doctrine “does not make the quality of suitors the

test” or “apply . . . by way of punishment for extraneous

transgressions.” Jd. at 245. Rather, the clean hands

maxim justifies—but does not require—refusing to enter-

tain a suit where the opposing party in the suit is actually

injured by the offending party’s behavior; “[t]he wrong

must have been done to the defendant himself and not to

some third party.” Pomeroy, Treatise on Equity Jurispru-

dence (5th Ed. 1941) § 399; see also id. (“a wrong which

has been righted may not be pleaded against a party to

a suit in equity.”); Lawler, supra, 569 F.2d at 1294 n.7.

Here, the claimed injury—abuse of the Board’s processes—

is to the Board, not to the employer; and the employer

was not in fact injured even indirectly, since the lie was

found out and not relied upon in concluding that the

employer violated the statute.

In sum, recognition of an absolute, mandatory defense

to a reinstatement and backpay order for untruthful testi-

mony by the discriminatee in order to preserve the integ-

rity of the Board’s own processes is consistent with neither

NLRA § 10(c) nor any more general legal principles.”

12 While the discharged employee may file the charge that triggers

the General Counsel’s investigation and determination whether to

file a complaint, the NLRA permits such charges to be filed by any-

one—a co-employee or a union, for example. NLRA § 10(b) ; NLRB

Rules and Regulations, Subpart A, § 102.9.

13 Jn certain, narrow circumstances, the NLRB takes the view

that the traditional backpay remedy can be modified as a sanction

22

(b) Preservation of Management Rights: (i) The non-

discrimination standard: The other strain of the emnloy-

er’s argument relies upon its management interest in as-

suring the honesty of its employees. The contention is

that since dishonesty, including lying under oath, could

for gross abuse of the Board’s processes. See, e.g., American Navi-

gation Co., 268 NLRB 426, 428 (1983) (where a discriminatee con-

ceals interim employment in a backpay proceeding, the Board will

deny backpay for the entire quarter in which concealed employment

occurred but no longer, in order to “discourage claimants from

abusing the Board’s processes and . . . also deter respondents from

committing future unfair labor practices); Lear Siegler Manage-

ment Service Corp., 306 NLRB No. 84 (1992) (where a discrimi-

natee threatens a witness in a Board proceeding in order to induce

the witness to testify in a certain way, backpay will be tolled as of

the date of the threat in order to “protect[{] the integrity of the

Board’s processes ... [while] ensur[ing] that a respondent’s unlaw-

ful discrimination does not go unremedied.”’ )

The Board will not, however, deny reinstatement in order to

vindicate the Board’s interest in the integrity of its processes. /d.

(“interference with the Board’s process . . . does not alone war-

rant the denial of reinstatement,” although the same behavior that

constitutes interference could also be evidence of unfitness as an

employee and warrant denial of reinstatement for that reason).

We doubt that even the Board’s limited forfeiture of backpay rule

can be squared with § 10(c). In particular, protection of the Board’s

processes is a means, not an end, under the NLRA, and cannot

fairly be termed an “equally important” policy of the Act (Lear

Siegler, supra, slip op. at 2) with remedying unfair labor practices.

The punitive forfeiture of backpay is not necessary to protect the

integrity of the Board’s processes, since other civil and criminal

remedies are available; and forfeiture of backpay serves its pur-

ported purpose selectively and inadequately, since employers and

third-party witnesses may also seek to abuse the Board’s processes

but, because they are not eligible for backpay, cannot be punished

by its denial.

Be that as it may, because the employer is arguing only for an

absolute, bright-line rule and does not seek to come under the

Board’s standards governing denial of backpay to vindicate Board

processes, the Court can leave to another day the question whether

the Board’s current American Navigation/Lear Siegler approach is

consistent with the Act.

23

be a ground for discharge absent antiunion animus, an

employer should be free of all reinstatement and back-

pay obligations to a “lying” discriminatee. Brief for Pe-

titioner at 18-19, 30-34; ATA Br. at 12-14." The prop-

osition, as posited, cannot be squared either with the

basic discrimination standard of NLRA §§ 8(a)(3) &

(4) or with this Court’s decision in Transportation Man-

agement Corp., supra.

It is true, of course, that the NLRA “permits a dis-

charge for any reason other than union activity or agita-

tion for collective bargaining with employees [or retalia-

tion for invoking the Board’s processes].” Associated

Press v. Labor Board, 301 U.S. 103, 132 (1937). But

$$ 8(a)(3) and (4) proscribe discrimination against em-

ployees based upon union activity. This standard, as

noted previously, protects both less-than-perfect employ-

ees—viz., those who “have broken a shop rule” (Amer-

ican Ship Building Co., supra, 380 U.S. at 312)—and

those model employees who have not done so. Indeed,

the need to prohibit uneven enforcement of “shop rules”

against union adherents and activists is what § 8(a)(3)

is all about. Thus, the fact that a particular post-discharge

action by an employee could have justified discharge

under a particular employer’s “shop rules” certainly does

not indicate that the employee would actually have been

discharged for that reason had he or she still been em-

ployed, or that, if he or she was so discharged, the “shop

rule” rather than a continuation of the original antiunion

or retaliatory motive would have been the reason.

It is also to the point that, in this case, and other like

cases, it has already been determined that “[t]he employer is

a wrongdoer; he has acted out of a motive that is declared

14 This strain of petitioner’s argument would apply equally to any

species of employee conduct occurring after an illegal discharge that

an employer claims would justify discharge had it occurred while

the individual was still employed.

24

illegitimate by the statute.” Transportation Management

Corp.. supra, 462 U.S. at 403. And, as we have seen,

the “policies of the [Act]” support reinstatement and

backpay in order to neutralize the effect of the illegal

discriminatory discharge on the workplace as a whole

(as well as on the discriminatee), and to deter future em-

ployer actions intended to interfere with collective activity

or resort to the Board’s processes.

The force of this point is redoubled by the further fact

that it is the employer’s own illegal behavior that has

created a situation in which the employee was in fact

not working at the time of his or her infraction of the

employer’s rules. Under these circumstances, judgments

about whether the infraction would have led to discharge

had the employee been at work at the time, and whether

that discharge had it occurred would have been due to

union activity or the even-handed enforcement of shop

rules becomes one that is doubly hypothetical, and there-

fore doubly difficult to decide accurately.

Against this background, the question then becomes

under what circumstances the usual remedy for the em-

ployer’s illegal actions, with its salutary effect of reversing

to some degree the adverse impact of the earlier dis-

charges on employee self-organization and assertion of

rights under the Act, must yield to the employer’s proffered

management interests in enforcing “shop rules”. This

Court’s opinion in Transportation Management Corp.,

supra, and the underlying Board cases (e.g., Wright Line,

251 NLRB 1083 (1982)) provides an initial answer to

that question (although, for reasons discussed below, the

present circumstances are sufficiently different to justify

the Board’s rule that an additional evidentiary burden, not

imposed by the Wright Line cases, also be placed upon

employers resisting reinstatement and back pay).

Transportation Management involved the situation in

which the employer’s reasons for the original discharge

25

involved both antiunion animus and considerations not

proscribed by the Act. Under those circumstances, this

Court held, the Board is justified in concluding, first,

that “to establish an unfair labor practice the General

Counsel need show . . . only that a discharge is in any

way motivated by a desire to frustrate union activity”

(462 U.S. at 399), and, second, that the employer can-

not avoid remedying the illegally motivated discharge

with reinstatement and backpay unless the employer

carriers the “burden [of] . . . prov[ing] that absent the

improper motivation he would have acted in the same

manner for wholly legitimate reasons.” /d. at 401.”

No reason appears why the employer in the present

circumstances should carry any /ess burden to justify a

refusal fully to “neutralize” the impact of its illegal be-

havior. Here, the original discharge indisputably would

not have occurred absent an illegal motive, and the dis-

charged employee was therefore definitely out of the

workplace, and suffering economic losses, for a period of

time because of a violation of the Act, with the same

impact upon employee self-organization and assertion of

protected NLRA rights as if the post-discharge infraction

(if such it is) had not occurred. In a Transportation

Management situation, on the other hand, it is unclear

whether or not there would have been any impact at all

on the employee or on the workplace due to the employ-

er’s illegal motive, since the very same adverse conse-

quences may well have ensued in any case.

15 The Board rule reviewed in Transportation Management de-

clines to find any violation of the Act at all where the employer

succeeds in making out the required affirmative defense. This

Court, however, expressly noted that

the Board might have considered a showing by the employer

that the adverse action would have occurred in any event as not

obviating a violation adjudication but as going only to the

permissible remedy, in which event the burden of proof could

surely have been put on the employer. [462 U.S. at 402.]

26

Moreover, as in Transportation Management, “[i]t is

fair that [the employer] bear the risk that the influence

of legal and illegal motives cannot be separated, because

he knowingly created the risk and because the risk was

created not by innocent activity but by [its] own wrong-

doing.” 462 U.S. at 403. Indeed, the risk of uncertainty

problem is considerably more pronounced in cases like

this one than in Transportation Management: The hypo-

thetical factual issue in Transportation Management in-

volved not what the employer did and under what cir-

cumstances but why. The very concreteness of the

circumstances of an actual discharge aids in drawing

inferences concerning likely motivation. Here, in contrast,

because of the employer's illegal acts it is impossible to

establish other than entirely hypothetically whether the

employee would have beeh discharged at all at some point

after the original, illegal discharge, and whether, if so, the

hypothetical discharge would have been legally or illegally

motivated."®

16 While the Board has at times been less than precise on this

point, we read the Board’s most recent cases as applying the Trans-

portation Management approach as part, but not all, of the em-

ployer’s burden in justifying refusing reinstatement and backpay

because of employee behavior occurring after the original discharge.

See Owens Illinois Inc., 290 NLRB 1193 (1988), enforced without

opinion, 872 F.2d 413 (83rd Cir. 1989) (fact that employer did not

discharge officials who testified falsely indicates that the employer

could not meet its burden of proof because it cannot show that the

employee would not have been retained due to his false testimony).

We note, although the issue is not directly related to this case,

that the Board has not consistently applied precisely the Wright

Line approach to situations related to but different from those

before the Court, for reasons that are unclear.

For example, where an employer’s original discharge would not

have occurred but for illegal motives, yet facts turn up during the

course of the unfair labor practice adjudication that might have

justified the original discharge had the employer known of them,

the Board does place the burden of proof on the employer to estab-

lish the facts that justify denial of back pay and reinstatement.

John Cuneo, Inc., 298 NLRB 856 (1990). That burden, however,

27

Thus, the employer's assertion that it can resist re-

instatement and backpay simply because dishonesty can

justify discharge, without meeting the burden of at least

demonstrating that the employer would have discharged

Manso for his untruthful testimony without regard to his

protected activity, must fail at the threshold, as incon-

sistent with Transportation Management."

seems to be somewhat less than the one imposed in the Wright Line

cases, since the employer need not show that the employee would

have been discharged for proper reasons, but only that “the dis-

criminatee’s conduct would have provided grounds for termination

based on a preexisting lawfully applied company policy.” John

Cuneo, Inc., 298 NLRB at 857 n.7 (emphasis supplied) ; see also id.

at 856 (emphasis supplied) (sufficient that “the Respondent prob-

ably would not have retained [the employee] after it learned of his

misstatement.” )

After-acquired evidence situations involve facts that in many

instances would not have been uncovered at all by the employer but

for its illegal activity and the ensuing unfair labor practice proceed-

ings. Consequently, permitting reliance on after-acquired evidence

as a basis for denying reinstatement and backpay carries a grave

likelihood of undermining the policies of the Act. Both the dis-

charged employee and co-employees could see the ultimate exclusion

from the workplace as in some sense “caused” by the illegal activity,

leading to an unwillingness to engage in such activity in the future.

And the disincentive to committing unfair labor practices is to some

extent diluted where the employer may be able to escape the costs

of doing so by combing the employee’s record for previously undis-

covered infractions. One would think, consequently, that the em-

ployer’s burden would be greater, not less, in those cases than where,

as in Transportation Management, the employer’s legitimate motiva-

tion was known at the time of the discharge.

17 The employer’s reliance upon the “could have fired” approach

is understandable, since it entirely failed to meet any burden of

proof as to what it would have done and why. Thus, as in Owens

Illinois, the employer in this case entirely failed to present any

facts indicating that it would have discharged Manso for false testi-

mony alone, even if Manso had not invoked the Board processes in

the first place and was testifying for the employer rather than

against it. And, as in Owens Illinois, it does not appear that the

employer could have met its burden had it tried to do so, since eight

different management representatives were also determined to have

28

(ii) The Board's two-pronged approach: The NLRB

has not regarded the Transportation Management hypo-

thetical non-discrimination standard as sufficient to “ef-

fectuate the policies of the Act” where the employee was

in fact discharged for illegal reasons and was out of the

workplace as a result during the time that the asserted

new grounds for discharge occurred. Rather, the Board

has maintained consistently that

[w]hile seeking to be excused from his obligation

to reinstate or to pay backpay [for reasons] . . . not

a factor in the discriminatory action, an employer

has a heavier burden than when he is merely seeking

to justify the original discrimination. In the former

case, he has the burden of proving misconduct so

flagrant as to render the employee unfit for further

service, or a threat to efficiency in the plant. [O’Dan-

iel Oldsmobile, 179 NLRB 398, 405 (1969)].

See also, e.g., Mandarin, 228 NLRB 930, 931-32 (1977):

Owens Illinois, supra, 290 NLRB at 1193; Service Garage,

Inc., 256 NLRB 931 (1981), enforcement denied on

other grounds, 668 F.2d 247 (6th Cir. 1982). In apply-

ing this standard, the Board looks to the particular job

previously held by the employee and to other circum-

stances, and determines whether or not the nature of the

post-discharge infraction would render the employee ob-

jectively unfit for the position.

Since the employer’s position in this case with regard

to its Purported management prerogatives justification is

inconsistent with Transportation Management, and be-

cause the employer failed to meet its burden under Trans-

portation Management, the further question whether the

second, objective unfitness standard applied by the Board

is consistent with § 10(c) is not directly presented. Were

the Court nonetheless to reach that question, however, it

should uphold the Board’s two-pronged standard as within

testified falsely and “there is no indication that the Respondent took

any action against these officials.” 290 NLRB at 1194.

29

the broad discretion of the Board with regard to “the rela-

tion of remedy to policy.” Phelps Dodge, supra, 313

US. at 194.

As noted above, this species of case differs from Trans-

portation Management in several critical respects, all of

which support the “unfitness” prong of the Board's test:

First, the discriminatee has been absent from the

workplace for some period of time because of the em-

ployer’s illegal discharge, with the concomitant interfer-

ence with the assertion of protected rights by the discrim-

inatee and by co-employees. “Denial of the normal

remedy leaves the effects of the Respondent’s unlawful

conduct unremedied and thus, fails to effectuate the pol-

icies of the Act.” Owens Illinois, supra, 290 NLRB

at 1193.

Second, since the employer in the current circumstances

has already caused some of the harms against which

NLRA §§ 8(a)(3) & (4) are directed, it is sensible to

conclude that those harms should be remedied as usual

absent some overriding reason. The employer’s usual

management prerogatives, exercised through nondiscrim-

inatory application of workplace rules, applicable when

there has been no illegal activity, do not alone supply

that reason where the employer has already acted in an

unlawful manner threatening the Act’s policies.

Third, the task of proving what would have happened

but for the employer's illegal action is vastly complicated

by the fact that no actual second discharge occurred; the

employer can therefore often make representations re-

garding what would have happened that cannot be tested

against the facts of an actual occurrence. Again, requir-

ing the employer to prove the employees objectively unfit

demands that the employer make a demonstration re-

lating to present, real circumstances, and provides a use-

ful safeguard against self-serving, unverifiable testimony.

30

Fourth and finally, where, as here, the asserted infrac-

tion relates to testimony in a Board proceeding against

the employer's interests, there is the additional factor that

the mght to give such testimony is itself affirmatively pro-

tected by § 8(a)(4), so that a Board-administered check

on the employer's own standards is justified in order to

separate protected from unprotected activity as a basis

for adverse employer action, and to avoid a chill on pro-

tected activity. Cf. Linn v. Plant Guard Workers, 383

U.S. 53, 64-65 (1966).

The Board’s two-prong standard for cases concerning

asserted post-discharge infractions by discriminatees

therefore “effectuates the policies of the Act,” by assur-

ing a meaningful remedy for adjudicated unfair labor

practices except where the strongest countervailing con-

siderations are present. That the employer’s position in

this case seeks to upset that standard without justifica-

tion is yet another reason the employer cannot prevail.

CONCLUSION

For the reasons stated above, the judgment below should

be affirmed.

Respectfully submitted,

MARSHA S. BERZON

177 Post Street, Suite 300

San Francisco, CA 94108

(415) 421-7151

LAURENCE GOLD

(Counsel of Record)

815 16th Street, N.W.

Washington, D.C. 20006

(202) 637-5390