Appendix — Rainbow Tours, Inc. v. National Labor Relations Board
Supreme Court brief1988
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NO.
IN THE SUPREME COURT
OF THE UNITED STATES
OCTOBER TERM, 1987
RAINBOW TOURS, INC. D/B/A
RAINBOW COACHES,
PETITIONER,
VS.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT.
APPENDIX FOR
PETITION FOR A WRIT
OF CERTIORARI TO THE
UNITED STATES COURT OF
APPEALS FOR THE NINTH CIRCUIT
TORKILDSON, KATZ,
JOSSEM, FONSECA
& MOORE
Attorneys at Law
_JARED H. JOSSEM *
PERRY W. CONFALONE
700 Bishop Street
15th Floor
Honolulu, HI 96813
(808) 521-1051
Attorneys for
Petitioner RAINBOW
TOURS, INC. D/B/A
RAINBOW COACHES
* Counsel of Record
APPENDIX TABLE OF CONTENTS
Rainbow Tours, Inc. d/b/a/
Rainbow Coaches (9th Cir.
BO. BG<7626, 1966) ci csvecess 1
Rainbow Coaches, 266 NLRB
ee. MEROS S406 44X 69 RHb OE ORES 23
NLRB Order Denying Special
Appeal of Subpoena
a | Pr eer 33a
Rainbow Tours, Inc., 280 NLRB
is BP CROOOD 4 dies ee eee 044 6s 34
Rainbow Tours, Inc., 241 NLRB
See LEED fae ee ek 6 OR eo 364
NLRB v. Rainbow Tours, Inc.,
628 F.2d 1357 (9th Cir.
See: 5 04a ee oe be eee 6 4 oe oO 455
UE Wise 8 oe So Ok ee ee ee 456
Order Denying Petition For
Rehearing And Suggestion
For Rehearing En Banc ....... 479
Respondents Exhibits, C-4, F-4 .. 481
U.S. Constitution Amendment V ... 505
U.S. Constitution Article 6,
a eee a6 ek ae ee ke 8 ee 505
National Labor Relations Act
29 U.8.C. POF ES) een ee
29 C.F.R. §102.66(C) ............
Haw. Rev. Stat. H.R.S. §383-95
Haw. Rev. Stat. H.R.S. §383-30
Haw. Adm. Rule 12-5-55 ..........
=
NOT FOR PUBLICATION
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
RAINBOW TOURS, INC.
d/b/a
RAINBOW COACHES,
No. 86-7630
"NLRB# 37-CA-1341
Petitioner,
MEMORANDUM—~
)
)
)
)
)
)
vs. )
) Filed Dec. 4,
)
)
)
)
)
)
NATIONAL LABOR 1987
RELATIONS BOARD Cathy A.
Catterson,
Respondent. Clerk
U.S. Court of
Appeals
Petition for Review and Cross-
Application for Enforcement of an Order
of The National Labor Relations Board
Argued and Submitted November 5, 1987
- Honolulu, Hawaii Before: BROWNING,
Chief Judge, WRIGHT and LEAVY, Circuit
Judges.
We review an order of the National
Labor Relations Board awarding backpay
Z
_*/ This disposition is not
appropriate for publication and may
not be cited to or by the courts of
this circuit except as provided by
Ninth Circuit Rule 36-3.
App. l
to 10 former employees of Rainbow
Tours. In a prior decision, the Board
found that Rainbow Tours violated the
National Labor Relations Act by
discharging the employees in 1977
because they refused to cross a lawful
picket line. Rainbow Tours, soe, , 261
NLRB 589 41979), enforced, NLRB v.
Rainbow Tours, Inc., 628 F.2d 1357
(9th Cir. 1980).
In September 1982, the NLRB
general counsel issued a backpay
Specification which alleged that ten
of the discriminatees were entitled to
backpay totaling approximately
$148,000 plus interest. Rainbow
denied most of the allegations and
raised several affirmative defenses.
Administrative Law Judge Wieder
held hearings regarding the disputed
App. 2
gross backpay and interim earnings of
the discriminatees. During the
hearings, the ALJ granted petitions
submitted by governmental agencies and
banks to revoke subpoenas, and denied
Rainbow's request for prehearing
discovery. The ALJ recommended that
Rainbow be ordered to pay the
discriminatees specified amounts
totaling approximately $98,000 plus
interest.
In a supplemental decision and
order the Board adopted the
recommended order. The Board's order
did not contain specific findings of
fact or reasoning for the decision.
Rainbow seeks review of the NLRB’s
order, asserting that (1) the Board's
failure to make specific findings of
fact and articulate a rationale for
App. 3
its decision is an abuse of
discretion, arbitrary, and capricious;
(2) Rainbow was denied due process
during the backpay proceeding because
it was denied prehearing discovery and
its subpoenas were revoked: and (3)
there is a lack of substantial
evidence to support the award of
backpay.
We deny the Petition for Review
and enforce the Order subject to the
modification indicated.
Discussion
I. Board's Adoption of the
Recommended Decision
Rainbow challenges the Board's
adoption of the ALJ's recommended
Supplemental decision in lieu of
specific written findings of fact and
reasons for decision as an abuse of
discretion, arbitrary, and capricious.
App. 4
Section 10(c) of the NLRA requires
the Board to make findings of fact,
but does not require explicitly that
it state its reasons for acting. NLRB
v. Pacific Southwest Airlines, 550
F.2d 1148, 1152 (9th Cir. 1977); 29
U.S.C. §160(c) (1982). We have upheld
previously a Board order which adopted
an ALJ's recommended decision because
the recommendation contained a clear
and detailed explanation of reasons
for the decision. NLRB v. Davis, 642
F.2d 350, 355 (9th Cir. 1981). Davis
is in line with other circuits that
permit the Board to adopt a
sufficiently detailed decision of an
ALJ without restating the findings and
reasoning. See ARTRA Group, Inc. v.
NLRB, 730 F.2d 586, 590 (10th Cir.
1984); NLRB v. Permanent Label Corp.,
App. 5
657 F.2€ $12, 519 (30 Circ. 1981),
cert. denied, 455 U.S. 940 (1982).
Here, the Board adopted completely
the ALJ's recommendation which
contains the factual specificity and
rationale required of Board orders.
The recommended decision contains a
detailed analysis of Rainbow's
exceptions and reasons for the ALJ's
recommendations. The basis for the
factual findings and conclusions are
expressed adequately for us to
determine the propriety of the Board's
action. The Board did not abuse its
discretion.
Il. Due Process
During the backpay hearings,
Rainbow's request for prehearing
discovery was denied, and subpoenas it
App. 6
issued were revoked. Rainbow contends
that it was denied due process.
A. Prehearing Discovery
Parties to a quasi-judicial
proceeding are not entitled to
discovery as a matter of
constitutional right. See NLRB v.
Valley Mold Co., 530 F. 2d 693, 695
(6th Cir.), cert. denied, 429 U.S. 824
(1976); NLRB v. Interboro Contractors,
432 F.2d 854, 857-58 (2d Cir. 1970),
cert. denied, 402 U.S. 915 (1971).
Denial of an application to take
depositions does not constitute a
denial of due process, absent an abuse
of discretion. See Electromec Design
& Dev. Co., Inc. v. NLRB, 409 F.2d
631, 635 (9th Cir. 1969). A reviewing
court will find an abuse of discretion
only when the appealing party
App. 7
demonstrates that it has been clearly
prejudiced by the ALJ's ruling. See
id. at 635.
The availability of prehearing
discovery at a backpay proceeding is
governed by the Board's own tutes
Since there is no specific provision
in the NLRA for discovery. See id.
Board proceedings conducted before an
ALJ are governed by 29 C.F.R.
§102.30(a) (1986), which provides that
testimony may be taken by deposition
at the discretion of the ALJ upon a
showing of good cause.
Rainbow has failed to specify the
information it sought through
discovery or the prejudicial effect of
being denied discovery. The Board did
not abuse its discretion in denying
App. 8
discovery where, as here, there was no
showing of good cause.
B. Subpoenas
Board decisions denying
enforcement of a subpoena are
discretionary, see NLRB v. Adrian Belt
Co., 578 F.2d 1304, 1310 (9th Cir.
1978), and are reviewed for an abuse
of discretion. Board regulations
provide that a subpoena may be revoked
if for a “reason sufficient in law the
subpoena is otherwise invalid.” 29
C.F.R. §102.31(b) (1986). In
exercising its discretion, the Board
must comply as far as practical with
the Federal Rules of Evidence.
General Eng‘g, Inc. v. NLRB, 341 F.2d
367, 374 (9th Cir. 1965); 29 U.S.C.
§160(b) (1982). Revocations may be
based upon a valid evidentiary
App. 9
—
objection to the material sought under
the subpoena. NLRB v. Seine & Line
Fishermen's Union, 374 F.2d 974, 980
(9th Cir.), cert. denied, 389 U.S. 913
C2967).
Rainbow subpoenaed the Hawaii
Department of Labor and Industrial
Relations (DLIR) for reports of weekly
job search efforts filed by the
discriminatees. Hawaii's petition for
revocation was granted on the basis of
a statutory privilege covering
information reported to the DLIR.
A claim of statutory privilege is
a valid basis for the Board to revoke
a subpoena. NLRB v. Adrian Belt Co.,
578 F.2d 1304, i310 (9th Cir. 1978).
Here, the ALJ did not abuse her
discretion in light of the finding
that the intent of the Hawaii
App. 10
legislature was to keep employment
records confidential to encourage
truthful reporting. We are not
dissuaded from our conclusion by
Rainbow's unsubstantiated assertion
that revocation of the subpoenas was
prejudicial.
Rainbow also subpoenaed two banks
for records of the discriminatees'
accounts to look for signs of interim
employment. The ALJ refused initially
to order the banks to comply, but
offered to reconsider if Rainbow could
show relevance and materiality. The
ALJ found that Rainbow never
established relevancy under Rule 401
of the Federal Rules of Evidence
because there was no description of
the accounts Or a showing as to the
nature of them. Rainbow's failure to
App. ll
establish relevancy is sufficient
justification for revocation of the
subpoenas. See General Eng'g, 341
F.2d at 372-73.
Rainbow alleges that access to the
bank records was crucial because
several claimants, for whom they had
no records, fraudulently concealed
interim earnings. Rainbow has not
demonstrated that it could not obtain
records of the discriminatees' bank
accounts by other means, such as
enforcing subpoenas which were served
on the discriminatees and called for
production of their bank records.
Without showing that it could not
obtain those records by other means,
Rainbow has not established that it
was denied due process. See NLRB v.
Heath Tec Division/San Francisco, 566
App. 12
F.2d 1367, 1372 (9th Cir.), cert.
denied, 439 U.S. 832 (1978).
The Board did not abuse its
discretion in refusing to enforce the
subpoenas. Rainbow's argument based
upon a violation of 29 C.F.R.
§102.31(b) is without merit.
III. Board's Backpay Order
The heart of Rainbow's petition 15s
a challenge to the Board's backpay
order. Rainbow contests the formula
selected to calculate gross backpay,
as well as the computation of interim
earnings.
To the extent that a Board
decision rests of findings of fact,
reviewing courts must defer to the
decision if it is supported by
substantial evidence on the record as
a whole. NLRB v. Mercy Peninsula
App. 13
Ambulance Serv., Inc., 589 F.2d 1014,
1018 (9th Cir. 1979); 29 U.S.C. 160(e)
(1982); see Universal Camera (ore. v.
NLRB, 340 U.S. 474, 488 (1951).
A. Gross Backpay Formula
To achieve the goal of making
discriminatees whole, see NLRB v.
Dodson's Market, Inc., 553 F. 24 Sit.
620 (9th Cir. 1977), gross backpay
Should reflect the probable earnings
of a discriminatee during the backpay
period. Here, the Board adopted
Formula 2, NLRB Case Handling Manual,
pt. 3, §10540, as proposed by the
general counsel.
Rainbow argues that this formula
fails to account for the seasonal
nature of its business, and that the
representative period is
unreasonable. The ALJ recognized that
App. 14
this formula might not be appropriate
for seasonal businesses, but concluded
that Rainbow had not established its
business's seasonality. Furthermore,
the formula's 12-week base period was
not shown to be aberrational.
The ALJ concluded that general
counsel had shown that his formula was
reasonable, and that Rainbow had
failed to “set forth an alternative
formula or furnish appropriate
supporting figures for computing the
amounts owed with sufficient
particularity and reliability” to
justify its use.
The formula adopted by the Board
is supported by the record. Although
the formula may not produce the exact
figure that the discriminatees would
have earned, the Board “is only
App. 15
required to employ a formula
reasonablv designed to produce
approximate awards due." Trinity
Valley Iron & Steel Co. v. NLRB, 410
P.24G: 2161, 1177 a.26 (Sth Cir. 1969).
Uncertainties, such as the impact of
fluctuations in Rainbow's business and
the impact of the discriminatees'
seniority, should properly be assessed
against Rainbow as the wrongdoer. See
NLRB v. Miami Coca-Cola Bottling Co.,
360 F.2d 569, 572-73 (Sth Cir. 1966).
B. Interim Earnings and
Mitigation of Losses
Rainbow challenges also the
findinas of the interim earnings
Charged to each discriminatee, the
reasonableness of the discriminatees'
efforts to mitigate losses, and a lack
of intentional concealment of interim
earnings.
App. 16
Once general counsel has met his
burden to establish the gross amount
of backpay, the employer must prove
circumstances which would limit its
liability. NLRB v. United Bhd. of
Carpenters, 531 F.2d 424, 426 (9th
Cir. 1976). Employers may reduce
backpay liability by proving the
discriminatees' interim earnings, see
Phelps Dodge Corp. v. NLRB, 313 U.S.
177, 198 (1941), an unjustified
refusal to take a substantially
equivalent position, see Mercy
Peninsula Ambulance, 589 F.2d at 1017,
or neglect in making reasonable
efforts to find comparable employment,
see M Restaurants v. NLRB, 621 F.2d
336, 337 (9th Cir. 1980).
Rainbow presented a patchwork of
allegations intended apparently to
App. 17
Show a lack of substantial evidence to
Support the Board's findings. We are
not persuaded. For the most part,
Rainbow's challenges are to the
Credibility of the discriminatees'
testimony. We defer to the Board's
Credibility findings unless they are ”*
inherently incredible or patently
unreasonable," see NLRB v. Anthony
Co., 557 F.2d 692, 695 (9th Cir.
1977), and conclude that the findings
here are reasonable and Supported by
Substantial evidence.
Rainbow argues that the
discriminatees' backpay must be tolled
by its offer of employment with
reduced seniority since the offer
constitutes substantially equivalent
employment. We do not reach this
argument. There is no finding that
App. 18
Rainbow offered to reinstate the
discriminatees to substantially
equivalent positions, notwithstanding
the question of reduced seniority.
The Board stated that the nature and
extent of any offer of reinstatement
was “ambiguous at best,” and found
tnat all but two of the discriminatees
had never been recalled. 241 NLRB
589, 595 (1979). Discriminatees
Fonseca and Louis were reinstated
subsequently. However, the ALJ
indicated that their positions were
not substantially equivalent on
account of factors other than reduced
seniority.
Rainbow contends that the
discriminatees‘' searches for interim
employment were unreasonable as a
matter of law. It relies on Mercy
App. 19
Peninsula, 589 F.2d 1014 (9th Cir.
1979), in which the court fund that an
average of three attempts per month to
secure employment was not reasonably
diligent. Id. at 1018-19. Rainbow
argues that in light of Mercy
Peninsula, the discriminatees were not
reasonably diligent because they did
not attempt to secure employment on an
average of three times per month.
We do not read Mercy Peninsula as
adopting a fixed standard that is
applied mechanically to determine if a
job search was reasonably diligent.
The Mercy Peninsula court noted:
"{G]iven the quantity and quality of
Castle's efforts and the fact that
they were executed with such
disinterest, we believe that neither
the ALJ nor the Board correctly
App. 20
applied the standard of
‘reasonableness. . : _"*—-Fa. at LOis
n.6. The court's decision was
influenced by the guantity and quality
of the job search, as well as the
sincerity of the discriminatee in
seeking employment. We reject
Rainbow's assertion that mere failure
to seek employment three times per
month constitutes unreasonable
diligence. See Alfred M. Lewis, Inc.
v. NLRB, 681 F.2d 1154, 1156 (9th Cir.
1982).
Rainbow contends that the backpay
claims are barred because the
discriminatees willfully concealed
interim earnings. The Board may deny
backpay for periods during which a
discriminatee had interim employment
Or earnings which were intentionally
App. 21
concealed. See NLRB v. Flite Chief,
Inc., 640 F.2d 989, 992-93 (9th Cir.
1981). _Intentional concealment does
not include inadvertent failure to
report earnings because of poor record
keeping or faulty memory. See Hickory
Bests, inc., 267 NLRB i274, i276
(1983). The ALJ's finding that there
was no showing of willful deceit is
adequately supported. Rainbow's
remaining arguments are without merit.
We observe that the Board concedes
that its backpay order should be
modified to award discriminatee Ralph
Kaul total net backpay of $15,906.08.
The Petition for Review is DENIED,
the Order is MODIFIED as to Ralph Kaui
who is to be awarded total net backpay
of $15,906.08 plus interest, and the
Order is ENFORCED AS MODIFIED.
App. 22
266 NLRB No. 103
RAINBOW COACHES
Rainbow Tours, Inc., d/b/a Rainbow
Coaches and Hawaii Teamsters and
Allied Workers, Local 996,
International Brotherhood of
Teamsters, Chauffeurs, Warehousemen
and Helpers of America and Ronald Sai,
and Garret Wong. Cases 37-CA-1341,
37-CA-1342, and 37-CA-1387
March 28, 1983
SUPPLEMENTAL DECISION AND ORDER
BY MEMBERS JENKINS, ZIMMERMAN, AND
HUNTER
On March 29, 1979, the Board
issued a Decision and Order’ against
the Respondent in which the Board
ordered the Respondent, inter alia, to
make whole certain of its employees
for any losses resulting form the
Respondent's unfair labor practices.
On October 29, 1980, the United States
Court of Appeals for the Ninth Circuit
entered its judgment enforcing in full
App. 23
the Board's Order. A controversy
having arisen over the backpay owed
discriminatees Simeon (Jay) Agao,
Michael Akamine, Miles Fonseca, Yukio
(Ross) Iho, G. Lane Kaaiai, Eric Kama,
Ralph Kaul, James Louis, Ronald Sai,
and Henry Sanford, the Regional
Director for Region 20, on September
30, 1982, issued and caused to be
served on the parties a backpay
specification and notice of hearing
alleging the amount of backpay due the
individual discriminatees.
Subsequently, on October 14, 1982, the
Respondent filed an answer generally
denying each allegation of the
specification, asserting that the
General Counsel failed to take into
account the seasonal nature of the
business and setting forth certain
App. 24
affirmative defenses that relate in
part to alleged interim earnings.
On December 1, 1982, the General
Counsel filed with the Board a Motion
for Partial Summary Judgment.
Thereafter, on December 14, 1982, the
Board issued an order transferring the
proceeding to the Board and a Notice
To Show Cause why the General
Counsel's motion should not be
)
granted. On January 10, 1983, the
c
Respondent filed a response to the
Notice To Show Cause and an amended
answer. Subsequently, the General
Counsel filed a “Motion to Strike
Respondent's First Amended Answer and
To Find Backpay Specification True and
Motion for Partial Summary Judgment.”
Pursuant to the provisions of
Section 3(b) of the National Labor
App. 25
Relations Act, as amended, the
National Labor Relations Board has
delegated its authority in this
proceeding to a three-member Panel.
Upon the entire record in this
proceeding, the Board makes the
following:
Ruling on the Motion for Summary
Judgment
Section 102.54(b) of the Board's
Rules and Regulations, Series 8, as
amended, provides as follows:
(b) Contents of the answer
to specification.--The answer to
the specification shall be in
writing, the original being Signed
and sworn to by the respondent or
by a duly authorized agent with
appropriate power of attorney
affixed, and shall contain the
post office address of the
respondent. The respondent shall
Specifically admit, deny, or
explain each and every allegation
of specification, unless the
respondent is without knowledge,
in which case the respondent shall
So state, such statement Operating
App. 26
as a denial. Denials shall fairly
meet the substance of the
allegations of the specification
denied. When a respondent intends
to deny only a part of an
allegation, the respondent shall
specify so much of it as is true
and shall deny only the
remainder. As to all matters
within the knowledge of the
respondent, including but not
limited to the various factors
entering into the computation of
gross backpay, 4 general denial
shall not suffice. As to such
matters, if the respondent
disputes either the accuracy of
the figures in the specification
or the premises on which they are
based, he shall specifically state
the basis for his disagreement,
setting forth in detail his
position as to the applicable
premises and furnishing the
appropriate supporting figures.
In the original answer to the
backpay specification, the Respondent
offered a general denial to each of
the allegations of the backpay
specification. In his Motion for
Partial Summary Judgment, the General
Counsel asserts that the Respondent's
App. 27
answer constituted a general denial
that the method and elements involved
in the Regional Director's gross
backpay computations are correct, that
the Respondent's answer failed to set
forth any alternative formula or
figures for any of the gross backpay
computations or elements involved
therein as required by Section
102.54(b) of the Board's Rules and
Regulations, and that such elements
are specifically within the knowledge
of the Respondent. The General
Counsel therefore contends that the
allegations in the backpay
specification, except as to interim
earnings, should be deemed admitted as
true and that summary judgment should
be granted as to the computation of
gross backpay.
App. 28
In its response to the Notice To
Show Cause and in its amended answer,
the Respondent repeated its denial of
the allegations of the backpay
specification. The Respondent,
however, also set forth specific
alternative gross backpay figures with
respect to discriminatees Agao,
Fonseca, Iho, Kama, Louis, and Sail.
Although the amended answer filed with
the Board was not sworn to by the
Respondent or by a duly authorized
agent of the Respondent, copies of the
Same amended answer filed on February
7, 1983, bore the necessary oaths.’
The Board has held that, even in
the absence of an amended backpay
Specification, a respondent may amend
itS answer prior to a hearing in the
matter.° The Respondent's amended
App. 29
answer generally denies the
allegations of the specification with
respect to discriminatees Akamine,
Kaaiai, Kaui, and Sanford without
setting forth the alternative formulas
or figures required by Section
102.54(b). The Respondent did provide
alternative gross backpay figures as
to discriminatees Agao, Fonseca, Tho,
Kama, Louis, and Sai. We find that
the Respondent's amended answer with
respect to the amount of gross backpay
owed these six discriminatees is
sufficient to raise an issue of fact
which can best be resolved in a
hearing. Accordingly, we shall grant
the General Counsel's motion for
Partial Summary Judgment only with
respect to the specification's
allegations as to the amount of gross
App. 30
backpay due discriminatees Akamine,
Kaaliai, Kaui, and Sanford. We further
find that Respondent's general denial
is sufficient to place interim
earnings into issue for all
discriminatees because that
information is generally not within
the knowledge of the Respondent. *
ORDER
It is hereby ordered that the
General Counsel's Motion for Partial
Summary Judgment as to gross backpay
computations is hereby granted only
with respect to gross backpay
computations for Michael Akamine,
G. Lane Kaaiai, Ralph Kaui, and Henry
Sanford.”
IT IS FURTHER ORDERED that this
proceeding be, and it hereby is,
remanded to the Regional Director for
App. 3l
Region 20, for the purpose, if
necessary, of arranging and giving
notice of a hearing before an
administrative law judge, at which
hearing the issues shall be limited to
determining the gross backpay due
discriminatees Simeon (Jay) Aqao,
Miles Fonseca, Yukio (Ross) Iho, Eric
Kama, James Louis, and Ronald Sai, and
the interim earnings of all of the
discriminatees.
App. 32
241 NLRB No. 103.
Accordingly, we deny as lacking in
merit the General Counsel‘s motion to
strike Respondent's first amended
answer.
E. A. Fuller Bentleys, Inc. d/b/a
Bentleys Lounge, et al., 265 NLRB 632
1982); and Standard Materials, Inc.,
252 NLRB 679 (1980).
Dews Construction Corp., 4
subsidiary of The Aspin Group, Inc.,
246 NLRB 945 (1979).
We deny also as without merit the
Respondent's request for factual
information and its application for
leave to take depositions.
J ¥
©
oO
W
WW
NLRB - ORDER SECTION
5/27/83
JEM/np
Jonn L. Knorek, Esq.
i5th Floor, Amfac
Building
700 Bishop Street
Honolulu, Hawaii
96813
David Rosenfeld, Esq.
Van Bourg, Ailen,
Weinberg & Roger
875 Battery Street
San Francisco,
California 94111
Ronald Sai
45-434 Akiamala
Kaneohe, Hawaii 96744
NLRB - Subregion 37
Attn: Officer-in-
Charge
300 Ala Moana Blvd.,
Rm. 7318
P.O. Box 50208
Honolulu,
RE: RAINBOW TOURS,
Hawaii 96850
INC.
- 4:00 p.m.
49325 oe
Garret Wond
47-715 Kaaumoana
Place
Waimanalo,
96795
Hawaii
NLRB - Region 20
Attn: Regional
Director
Federal Building,
Room 13018
450 Golden Gate
Ave., Box 36047
San Francisco,
California 94102
NLRB - Division
of Judges
Attn: Judge Joan
Weider
12th Floor,
Federal Office
Bldg. .
450 Golden Gate
Ave., Box 36006
San Francisco,
California 94102
, G/b/a RAINBOW
COACHES, CASES 37-CA-1341, ET AL.
App.
33a
RESPONDENT'S REQUEST FOR SPECIAL
PERMISSION TO APPEAL AND STAY OF
PROCEEDINGS IS DENIED WITHOUT
PREJUDICE TO RESPONDENT'S RIGHT TO
RENEW ITS CONTENTIONS THROUGH THE
FILING OF AN APPROPRIATE EXCEPTION.
BY DIRECTION OF THE BOARD: DATED,
MAY 27, 1983.
Joseph E. Moore
Associate Executive
Secretary
App. 33b
280 NLRB No. 17
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR
RELATIONS BOARD
RAINBOW TOURS, INC., Case
d/b/a RAINBOW COACHES 37-CA-1341
and
HAWAII TEAMSTERS AND
ALLIED WORKERS, LOCAL
996, INTERNATIONAL
BROTHERHOOD OF TEAMSTERS,
CHAUFFEURS, WAREHOUSEMEN
AND HELPERS OF AMERICA
RONALD SAI, an Individual Case
37-CA-1342
GARRETT WONG, an Individual Case
37-CA-1387
SUPPLEMENTAL DECISION AND ORDER
On 12 April 1984 Administrative
Law Judge Joan Wieder issued the
attached decision. The Respondent
filed exceptions and a supporting
brief, and the General Counsel filed
an answering brief.
App. 34
The National Labor Relations Board
has delegated its authority in this
proceeding to a three-member panel.
The Board has considered the
decision and the record in light of.
the exceptions and briefs’ and has
decided tc affirm the judge's rulings,
findings,~ and conclusions and to
adopt the recommended Order.
ORDER
The National Labor Relations Board
adopts the recommended Order of the
administrative law judge and orders
that the Respondent, Rainbow Tours,
Inc., d/b/a Rainbow Coaches, Honolulu,
Hawaii, its officers, agents,
successors, and assigns, shall pay
Simeon Agao, Jr., Michael Akamine,
Miles Fonseca, Yukio Iho, Lane
Kaaiai, Eric Kana, Ralph Kaui, James
App. 35
Louis, Ronald Sai, and Henry Sanford
the sums set out in the recommended
order.
DATED, Washington, D.C. 30 May
1986.
Donald L. Dotson, Chairman
Wilford W. Johansen, Member
Marshall B. Babson, Member
(SEAL) NATIONAL LABOR RELATIONS BOARD
App. 36
FOOTNOTES
We deny, as lacking in merit, the
Respondent's motion to strike the
General Counsel's brief in response to
the Respondent’s exceptions, and the
General Counsel's motion to strike the
Respondent's motion. We-also deny the
Respondent's motion for .
reconsideration inasmuch as it does
not contain any newly discovered
evidence or evidence not previously
considered by the Board.
The Respondent has excepted to
some of the judge's credibility
findings. The Board's established
policy is not to overrule an
administrative law judge's credibility
resolutions unless the clear
preponderance of all the relevant
evidence convinces us that they are
incorrect. Standard Dry Wall
Products, 91 NLRB 544 (1950), enfd.
188 F.2d 362 (3d Cir. 1951). We have
carefully examined the record and find
no basis for reversing the findings.
Chairman Dotson agrees with the
conclusions reached by the judge
regarding the discriminatees' duty to
mitigate the Respondent's backpay
liability. In reaching these
conclusions, however, the Chairman
relies on the analysis set forth in
Brady v. Thurston Motor Lines, No.
83-1765 (4th Cir. Feb. 6, 1985).
App. 37
TABLE OF CONTENTS
Ls TRGUGE 646 4S Se Oe 2
Il. Pin@inese Gf FOG .4 csaccuwens 3
A. Preliminary MOStece® .. ices 3
1. Motion to Correct
TEBRSCEAME. 2.6 os id as 3
2. Due Processes
AS QURNED 5456 ASE 4
rae’. sow rere ot
b. Lack of Discovery 6
C. KOGCROS ssccssvus 7
d. Modifications to
the Backpay
Specifications .. 7
3. FMEISGACELOS 5a kx <s 9
4. The Issues Involving
SUBPOGHAS 66k sew do ee 10
a .
D..
State Subpoenas 10
Subpoenas Issued
to the City and
County of Honolulu
reer rt eee ig
Bank Subpoenas . 14
App. 38
B. Gross Backpay
Appendix
Appendix
Appendix
Appendix
Appendix
ha
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Background
Position of the
Parties
Representative
Employees
Seasonality .........
Utilization of a
12-Week Period ......
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App.
17
17
UNITED STATES OF AMERICA
BEFORE THE NATIONAL
LABOR RELATIONS BOARD
DIVISION OF JUDGES
BRANCH OFFICE
SAN FRANCISCO, CALIFORNIA
RAINBOW TOURS, INC. d/b/a
RAINBOW COACHES
and Cases 37--CA--1341
HAWAII TEAMSTERS AND ALLIED WORKERS
LOCAL 996, INTERNATIONAL BROTHERHOOD
OF TEAMSTERS, CHAUFFEURS, WAREHOUSEMEN
AND HELPERS OF AMERICA
and 37--CA--1342
RONALD SAI, An Individual
and 37--CA--1387
GARRETT WONG, An Individual
Thomas W. Cestare, Esq., of Honolulu,
HI, Counsel for the General Counsel.
Jared Jossem and John Knorek, Esqs.,
Torkildson, Katz, Jossem & Loden, of
Honolulu HI, for the Respondent.
John R. Desha, Esq., of Honolulu, HI,
for the Charging Party-Hawaii
Teamsters.
Charlotte Duarte, Esq., of Honolulu,
HI, for the City and County of
Honolulu.
Wayne Matsuura, Esq., Deputy Attorney
General, of Honolulu, HI, for the
State Department of Labor.
App. 40
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
JOAN WIEDER, ADMINISTRATIVE LAW
JUDGE: This supplemental proceeding
was heard at Honolulu, Hawaii on
various dates in May, June, July, and
August 1983. A backpay specification
and notification was issued on
September 30, 1982, predicated on a
decision and order of the Board dated
March 29, 1979, 241 NLRB 589, which
found that Respondent discriminatorily
discharged 12 employees and granted
Super-seniority to non-strikers in
violation of Section 8(a)(3) and (1)
of the Act, and provided that they be
reinstated and reimbursed for all
wages and other benefits lost between
the date of the discharge and their
reinstatement, with interest to be
App. 41
computed thereon in the manner
prescribed in F.W. Woolworth Company,
90 NLRB 289 (1950), and Florida Steel
Corporation, 231 NLRB 651 (1977). See
also Isis Plumbing & Heating Co., 138
NLRB 716 (1962). The United States
Court of Appeals for the Ninth Circuit
entered its judgment enforcing in full
the Board's order. RS F Ar
Rainbow Tours, Inc., 628 F.2d 1357
(1980).
The parties’ disagreement over the
backpay owed discriminatees Simon
(Jay) Agao, Michael Akamine, Miles
Fonseca, Yukio (Ross) Iho, G. Lane
Kaaiai, Eric Kama, Ralph Kaui, James
Louis, Ronald Sai, and Henry Sanford,
led to the issuance of the backpay
specification. Respondent's answer,
filed October 14, 1982, generally
App. 42
denied each allegation of the
specification. The General Counsel,
on December 1, 1982, filed a motion
for partial summary judgment. On
December 14, 1982 an order was issued
transferring the proceeding to the
Board directing the parties to show
cause why General Counsel's motion
Should not be granted. Respondent
replied on January 10, 1983 and filed
an amended answer. General Counsel
filed a motion to strike Respondent's
first amended answer; moved to find
the backpay specification true; and,
further, moved for partial summary
judgment. The Board found, in a
supplemental decision and order, 266
NLRB No. 103, March 28, 1983, that
Respondent's amended answer failed to
deny with the requisite specificity
App. 43
the allegations with respect to
discriminatees Akamine, Kaaiai, Kaui
and Sanford. Therefore, gross backpay
is an issue only as to discriminatees
Agao, Fonseca, Iho, Kama, Louis, and
Sai. Interim earnings is in issue for
all discriminatees.
I. Issues
Respondent raised both procedural
and substantive issues. These issues
include assertions that: the formula
utilized by the Regional Director to
determine gross backpay was the
improper basis for such computation;
the interim earning calculations for
the discriminatees were erroneous;
discriminatees willfully failed to
mitigate damages; discriminatees
Fonseca and Louis were reinstated and
then voluntarily quit; the failure to
App. 44
lll
permit discovery so denied Respondent
the rights guaranteed it under the
Fifth and Sixth Amendments of the
United States Constitution affording
due process of law and jury triai as
to preclude the presentation of a
defense; the Board should find that
certain claimants withheld relevant
information from the Board prior to
hearing, which should relieve
Respondent of all interest assessments
regarding those claimants; some
discriminatees concealed interim
earnings and failed to respond in a
timely manner to Board requests for
information; and, the failure of
certain claimants to keep or furnish
the Board with accurate records of job
search constitutes a bar to their
Claim for backpay, for the failures
App. 45
were sufficiently flagrant as to
constitute willful concealment of
interim earnings. Also, certain
issues arose at hearing regarding
petitions to revoke several of
Respondent's subpoenas.
Upon the entire record, and from
my observation of the witnesses, I
make the following:
II. Findings of Fact
A. Preliminary Matters
1. Motion to Correct Transcript
On October 5, 1983, Respondent
filed a motion to correct the
transcript. In particular, it
requests that a substantial number of
exhibits be acknowledged. To
appreciate the need for the request,
it must be noted that the reporting
service failed to submit a complete,
App. 46
understandable record. It submitted
an incomplete set of exhibits in a
form that ignored any sense of order.
Repeated requests to the reporting
service failed to produce the missing
exhibits and joint requests to the
parties for copies was the only method
available to ensure completion of the
record. Also, in some instances the
transcript was unclear as to the
disposition of several exhibits. In
other instances the record clearly
reflects dispositions which Respondent
claims are inaccurate. This confusion
may be ascribed in part to the failure
of the reporting service to present a
complete set of exhibits in usable
form. This failure occurred after
repeated requests during the trial to
the reporting service to take measures
App. 47
ensuring retention of a complete set
of exhibits in a rational order. To
accomplish this end, counsel for
Respondent, Knorek, remained every
evening to review the exhibits with
the reporter to ensure that the
reporting service had complete sets of
exhibits in order. These efforts were
expended to no avail.
Also the reporting service,
contrary to request, did not maintain
a rejected exhibit file. Therefore
any use of exhibits must be done with
great care since there was no way to
ascertain from the files which
exhibits were rejected and which were
admitted. Resort must be made to the
transcript.
Counsel for General Counsel
opposes the motion to correct the
App. 48
transcript with regard to Exhibits
C-26, C-27 and C-28, which Respondent
contends were moved and received in
evidence. The transcript reflects
that at the time the exhibits were
initially moved they were not admitted
for lack of authentication and, at the
time authentication was attempted, the
exhibits were shown to be either
irrelevant or Respondent failed to
provide the requisite authentication.
They were not admitted into evidence.
With respect to Respondent's Exhibits
E-19(1), and E-19(2), these
applications of Kaaiai were never
moved into evidence. The motion as to
these exhibits is denied. E-23 has
been admitted and the mis-marking
noted in the motion will be, and is
hereby, corrected. The motion to
App. 49
correct the transcript, to reflect
that Respondent's Exhibits H-20, H-2l,
H-24 through H-33, and H-37 have been
admitted, is granted. The motion to
correct the transcript to reflect that
Respondent's Exhibit I-5 is admitted,
is granted. The motion to correct the
transcript to reflect that
Respondent's Exhibit J-2 was admitted
is granted.
The motion to correct the
transcript so it indicates that
Exhibits A-13, C-46 and C-47, E-20
through E-22, and H-17 were identified
is granted and the appropriate indices
should be so modified. Also omitted
from the indices are the proper
notifications that Respondent's
Exhibits C-31, C-32, C-48; E-26, E-30,
E-32; G-14; H-19, H-19(1), H-38, H-45;
App. 50
I-19; J-18; M; and R-2 were rejected.
The indices should be amended to
properly indicate these dispositions.
The motion to correct the
transcript to indicate that
Respondent's Exhibits C-24, C-25,
C-28, C-33, C-35 and C-36; E-28; H-42;
and J-l were withdrawn, is granted.
2. Assertion that Board Processes
in Backpay Proceedings,
as Applied in this Case,
Denied Respondent Due Process
a. Delay
Respondent claims that is has been
denied due process for several
reasons. One reason is the amount of
time it took the Board agents to
obtain information from the claimants,
delays which were unexplained. These
delays, it is argued, when cojoined
with denial of discovery, and my
rulings on subpoenas, resulted in the
App. 5l
creation of irrebuttable presumptions
which Respondent was denied the
opportunity to test. For example, it
asserts lack of opportunity to
determine whether claimants took
reasonably sufficient steps to
mitigate backpay.
Respondent cites two cases to
demonstrate that it has been denied
due process. The first is Rainbow
Valley Citrus Corp. v. Federal Crop
Insurance Corp., 506 F.2d 467, 469
(9th Cir. 1974), which provides:
The due process clause, in its
procedural as opposed to its
substantive aspects, guarantees
plaintiffs that their liberty and
property interests will not be
invaded by the government except
insofar as they are given an
opportunity to challenge the
Purported justification (legal,
factual, or both) of the
invasion. Thus, to make out a
prima facie claim that they have
been denied due process,
plaintiffs must establish two
App. 52
elements: (1) that their liberty
Or property interests have been
invaded by the government without
an opportunity to challenge that
invasion, and (2) that the
purported justification for the
invasion is at least plausibly
disputable (otherwise an
opportunity to challenge that
justification would be an empty
formality).
The record demonstrates that
Respondent was afforded every
opportunity to challenge the claim of
violation made in the underlying
unfair labor practice case, which was
tested in exceptions filed with the
Board, and in its resort to the Ninth
Circuit Court of Appeals. Having been
adjudicated a violator of the Act
responsible for reinstatement of
employees, Respondent waited several
years before engaging in any self-help
remedies by making a good faith offer
of reinstatement to most, if not all,
App. 53
of the employees found to be
discriminatees. This delay occurred
despite the fact that it was ordered
to reinstate these employees and
failed to do so until around the time
of the Ninth Circuit's decision in
this matter. Respondent undisputedly
had the right to assume this risk of
litigation, but has no right to be
saved from its consequences.
Respondent also failed to show ~
that the asserted justification for
the “invasion is at least plausibly
disputable." Id. Respondent has the
clear burden of proof, as the
wrongdoer, to show that the
discriminatees improperly failed to
mitigate damages. It is undisputed
that the Board agents, well before
trial, gave counsel for Respondent
App. 54
complete access to all material in
their possession relevant to interim
earnings and computation of backpay.
General Counsel made all
discriminatees available at trial for
examination by the Respondent. At
Respondent's behest, the entire
General Counsel's file was inspected
in camera to ensure that all evidence
that could be construed as facts had
been made available to Respondent.
That General Counsel accumulates
information does not indicate any
assumption of an obligation to show
whether the discriminatees took
reasonable and sufficient steps to
mitigate backpay. The employer has
the burden of proving the affirmative
defense of failure to mitigate. See
N.L.R.B. v. Mooney Aircraft, Inc., 366
App. 55
F.2d 809, 813 (Sth Cir. 1966);
Florence Printing Co. v. N.L.R.B., 376
F.26 216,223 (4th Cir. 1967), cert.
den. 389 U.S. 840; Alamo Express,
Inc., 217 NLRB 402 (1975) at 403,
Citing Brown & Root, Inc., etc., 132
NLRB 486, 501, 540-543 (1961), enf€.
311 F.2d 447 (C.A. 8, 1963); and I.
Posner, Inc., etc., 154 NLRB 202, 204
(1965).
As Judge Learned Hand reasoned by
analogy, “[{i]t rest{s] upon the
tort-feasor to disentangle the
consequences for which it was
chargeable from those from which it
was immune.” N.L.R.B. v. Remington
Rand, Inc., 94 F.2d 862, 872 (2nd Cir.
1938). "“{T]he most elementary
conceptions of justice and public
policy require that the wrongdoer
App. 56
shall bear the risk of the uncertainty
which his own wrong has created."
Midwest Hanger Co., 221 NLRB 91l, 917
(1975), enf. in relevant part, 550
F.2d 1101 (8th Cir. 1977), citing
Bigelow v. RKO Radio Pictures, Inc.,
327 U.S. 253, 265 (1946) . That
Respondent chose to risk the potential
infusion of vagaries caused by the
passage of time occasioned by awaiting
the results of its appeals before
offering the claimants reinstatement,
does not alter its burden of proof or
serve to shift the burden to General
Counsel.
Respondent also asserts that the
amount of time it took from the
Original decision adjudicating the
issue of discrimination in March 1979
until the start of this hearing in May
App. 57
1983, was so great as to render the
accumulation of information sufficient
to sustain the burden of proving
mitigation an impossibility. The
Supreme Court, in N.L.R.B. v.
Rutter-Rex Mfq. Co., 296 U.S. 458
placed the cost of any delay upon the
employer, stating:
“"Wronged employees are at least as
much injured by the Board's delay
in collecting their backpay as the
wrongdoing employer.” In view of
the “economic hardship caused by
many years of undeservedly
substandard earnings,” lengthy
delays “must render the backpay
award a wholly inadequate and
unsatisfactory remedy” to the
employees for the company's
refusal to reinstate them.
N.L.R.B. v. Mastro Plastics Corp.,
354 F.2d 170, 180 (2nd Cir.
1965). This court has held before
that the Board is not required to
place the consequences of its own
delay, even if inordinate, upon
wronged employees to the benefit
of wrongdoing employers
[Citations omitted. ]
[T]he Board could
properly conclude backpay is not
App. 58
only punishment for an unfair
labor practice, but is also a
remedy designed to restore, so far
as possible, the status quo that
would have obtained but for the
wrongful act. Cf. Phelps Dodge
Corp. v. N.L.R.B., 313 U.S. 177,
194 (1941).
As an aside, Respondent did not
aver inability to pay and therefore
this issue is not under
consideration. See Schnadig Corp.,
265 NLRB No. 20 (1981).
The National Labor Relations Act
requires the wrongdoer “to bear the
risks of uncertainty, as to the extent
of the consequences ascribable to
their own actions.” International
Union of Electrical, Radio and Machine
Workers, AFL-CIO v. N.L.R.B., 426 F.2d
1243, 1251-1252 (D.C. Cir. 1979),
cert. den. 400 U.S. 950. As the Court
noted, in Bigelow v. RKO Radio
Pictures, Inc., supra, 327 U.S. at
App. 59
265, “The most elementary conceptions
of justice and public policy require
the wrongdoer shall bear the risk of
the uncertainty which his own wrong
has created.” See further N.L.R.B. Vv.
[ace eof: 21... 3269 UsBs" rae bt. 766,
fn.16 and citations contained therein.
Thus, although unconditional
offers of reinstatement went out to
all employees on October 6, 1980, the
undisputed failure of the Board to
collect information regarding the
efforts of the discriminatees to
mitigate backpay until the spring of
1982 does not eliminate or otherwise
alter Respondent's burden of proof.
This defense is found to be without
merit.
App. 60
b. Lack of Discovery
Respondent asserts that lack of
pre-trial discovery is a denial of due
process. It is well settled that the
Fifth Amendment. does not require that
parties to Board proceedings be
permitted pre-hearing discovery.
N.L.R.B. v. Valley Mold Co., 530 F.2d
693, 695 (C.A. 6, 1976), cert. den.
429 U.S. 824; N.L.R.B. v. Interboro
Contractors, Inc., 432 F-2d 854,
857-858 (C.A. 2, 1970), cert. den. 402
U.S. 915 (1971). It is further held
that the National Labor Relations Act
does not require or even specifically
authorize the Board to adopt discovery
procedures. Electromec Design and
Development Co. v. N.L.R.B., 402 F.2d
631, 635 (C.A. 9, 1969); N.L.R.B. v.
Leprino Cheese Co., 424 F.2d 184, 187
App. 61
(C.A. 10, 1970), cert. den. 400 U.S.
915; N.L.R.B. v. Interboro
Contractors, Inc., supra at 858. See
further J.H. Rutter-Rex Mfg. Co., 194
NLRB 19 (1971), 396 U.S. 258 (1969).
See further Flite Chief, Inc., 246
NLRB 407 (1979); Medicine Bow Coal
Company, 217 NLRB 931 at 932-937
(1975); and Magic Pan Inc., 242 NLRB
840 (1979). This defense is found to
be without merit.
c. Laches
Respondent, in its first amended
answer and also as part of its denial
of due process argument, raises laches
as a defense. This defense is related
to its allegation that it has been
prejudiced by the system employed by
the Board to conduct backpay
proceedings, particularly in the
App. 62
allocation of burden of proof and
development of evidence. As noted by
Counsel for General Counsel, the
doctrine of laches is not a defense
applicable to backpay proceedings nor
does it toll the backpay obligation.
Citing Southeastern Envelope Co., 246
NLRB 423, 427 (1979); N.L.R.B. v. J.-H.
Rutter-Rex Mfg. Co., Inc., supra 296
U.S. 458 (1969); International
Association of Bridge, Structural and
Reinforced Iron Workers Union, Local
378, AFL-CIO (Judson Steel Corp.), 213
NLRB 457, 460 (1971); N.L.R.B. v.
Ozark Hardware Co., 282 F.2d l, 6
(C.A. 8, 1960). This defense is found
to be without merit.
d. Modifications to the
Backpay Specifications
The backpay specifications were
modified at least four times. The
App. 63
initial modification occurred the
first day of trial before testimony
was taken. This amendment was
generated by Board's compliance
officer Pamela Talkin's discovery of
additional income by the immediately
before the commencement of the hearing
during interviews with the
discriminatees. Another modification
was occasioned by the discovery of a
minor computational error by the
compliance officer. Respondent
contends that these amendments created
confusion and it did not have an
Opportunity to verify the additional
earnings. Respondent did not describe
with specificity any difficulty
occasioned by these amendments, and
the almost two-month hiatus in the
trial between June 3 and July 26
App. 64
afforded more than ample opportunity
to test the accuracy of these
amendments.
In analyzing this as well as
Respondent's other allegations,
consideration must be given to the
standard that where an employer has
discharged an employee unlawfully,
backpay is “the normal remedy”.
Golden Day Schools, Inc. v. N.L.R.B.,
644 F.2d 834, 840 (9th Cir. 1981).
The finding of discriminatory
discharge “is presumptive proof that
some backpay is owed by the violating
employer”. N.L.R.B. v. Madison
Courier, Inc., 472 F.2d 1307, 1316
tes. Ce. A972). AccoraG: R.L.8.8. v.
Mastro Plastics Corp., 354 F.2d 170,
178 (2nd Cir. 1965), cert. den. 384
U.S. 972. The purpose of backpay is
App. 65
"to vindicate the public policy of the
[Act] by making the employee whole for
losses suffered on account of an
unfair labor practice.” N.L.R.B. v.
Dodson's Market, Inc., 553 F.2d 617,
620 (9th Cir. 1977), quoting Nathanson
¥. B.b.8.8., 344 U.&: 235, 27 (i972).
The purpose of this proceeding is to
restore “the economic stat’: quo that
would have obtained but for the
company's wrongful refusal to
reinstate. ..." Golden State
Bottling Co. v. N.L.R.B., 414 U.S.
168, 188 (1973), quoting N.L.R.B. v.
J.H. Rutter-Rex Mfg. Co., Inc., supra
236 U.85. e€¢ 263. aAccorce: Kallman v.
N.L.R.B., 640 F.2@ 1103.
The employer must bear the burden
of uncertainty in these situations.
See Care Ambulance, Inc., 255 NLRB 417
App. 66
(1981). As noted in Marlene
Industries Corp. v. N.L.R.B., 440 F.2d
673, 674 (6th Cir. 1971), the General
Counsel’s burden in a backpay
proceeding is limited to showing the
gross backpay--what the employees
would have earned if the employer had
not contravened the Act. The employer
then bears the burden of establishing
deductions from the gross backpay; for
example, interim earnings from
alternative employment or willful
failure to seek such employment. Id.
See also N.L.R.B. v. Cambria Clay
Products, 215 F.2d 48, 56 (6th Cir.
1954). See further, S.E. Nichols of
Ohio, Inc., 258 NLRB 1 (1981).
Pursuant to the Board's Rules and
Regulations, Series 8 (259 CFR Section
10253), the General Counsel is
App. 67
required to present only “gross
amounts of backpay.” The General
Counsel also includes in the backpay
specification deductions for those
amounts in mitigation which the
General Counsel discovers through
personal interviews, social security
records, etc. The General Counsel
performs this service in the public
interest to provide futl information
to the employer and to limit the
backpay demands, only where aware of
sums in mitigation. As noted above,
the General Counsel does not thereby
sseune "the burden of establishing the
truth of all the information supplied
or of negativing matters of satin Or
mitigation.” N.L.R.B. v. Brown and
Root, Inc., 3il F.2d 447, 454 (8th
Cir. 1963).
App. 68
The initial modifications of the
specifications prior to the
commencement of hearing were merely
General Counsel's revelations of
additional discoveries of
information. As such, they cannot be
held to have assumed any role that is
to be carried by counsel for
Respondent who has the burden of
establishing mitigation. That some of
the information was voluntarily
supplied, albeit at the eleventh hour,
does not preclude its use. See Flite
Chief Inc., et al, supra 246 NLRB at
407, enf. den. in part 640 F.2d 989
(9th Cir. 1981). The allegations
involving individual discriminatees,
wherein Respondent contends they
willfully concealed interim employment
with any fraudulent intent to increase
App. 69
backpay specifications, will be
discussed below.
The claimants were discharged at
the end of January 1977. The Board,
contrary to recommended but not
required practice, failed to solicit
information from the discriminatees
until 1982. This delay understandably
made it difficult for the individual
discriminatees to list with
specificity and accuracy the details
of their job search and led to last
minute disclosures and recollections
after face to face interviews and
discussions.
Although Respondent object to each
amendment on the grounds it had no
prior notice of such amendment, many
of the amendments were occasioned by
testimony and evidence adduced by
App. 70
Respondent and Respondent clearly
heard and had access to the same
testimony as General Counsel who, as a
courtesy to all, recalculated the
specifications to ensure the clarity
of the record. This practice is found
to have assisted all, including
Respondent.
Further, Respondent has failed to
demonstrate specifically any injury
from those modifications. It has
merely made a bare assertion of
prejudice. Respondent failed to state
either at hearing or in its brief any
instance where the scheduling of this
proceeding or the granting of an
amendment created a circumstance that
would require the granting of a
continuance. There was not one
specific allegation that a witness was
App. 71
unavailable, that time was inadequate
to investigate a particular fact, that
further delay would help clarify
matters, or that any other argument
would support the claim of prejudice
occasioned by these amendments.
The assertion that the Office of
the General Counsel was attempting to
take actions designed to confuse
matters is without merit. At no time
prior to the close of this trial did
Respondent develop any evidence that
indicated the issues were more complex
Or required greater preparation than
was apparent from its inception, or
when the trial resumed at the end of
July 1983. During the course of the
hearing, the presentation of evidence
proceeded without the slightest
suggestion that the defense was in any
App. 72
eee
sense handicapped by a lack of
preparation and, indeed, no specific
details to the contrary were set forth
by Respondent. A review of the record
requires the conclusion that
Respondent has still failed to show
good cause for denying any of the
amendments.
In sum, it is found that the
modification to the specification
either occurred prior to the
commencement of hearing or merely
reflects evidence adduced by
Respondent. The modifications are
consonant with established law. They
have not been shown to be a willful
concealment of interim employment from
the Board's compliance officer with a
fraudulent intent to increase the
App. 73
issuance of backpay specifications or
a denial of due process.
3. Jurisdiction
Respondent, in its October 14,
1982 answer to the backpay
specification, asserted as its second
defense that the Board lacks
Jurisdiction over Respondent. The
raising of the issue at this juncture
is clearly improper. As noted by the
Administrative Law Judge in the
underlying unfair labor practice
proceeding, Respondent admitted, in
its answer to the complaint, that at
all pertinent times the company was an
employer engaged in commerce and in 2a
business affecting commerce. There is
no indication that Respondent raised
the issue of jurisdiction when it
filed exceptions to the Administrative
App. 74
a
Law Judge's finding of jurisdiction
nor is there any indication that the
issue was raised on appeal before the
Ninth Circuit. Respondent's general
denial of jurisdiction is found to be
without merit and untimely. There is
no showing that this issue was raised
based on newly discovered evidence,
previously unavailable evidence, or
special entitlement to relitigate the
issue. Pittsburgh Glass Co. v.
N.L.R.B., 313 U.S. 146, 162 (1941).
4. The Issues Involving Subpoenas
a. State Subpoenas
Respondent argues that it has been
denied a reasonable opportunity to
meet its burden of proof because the
State of Hawaii's petition to revoke a
Subpoena requesting the custodian of
the records of the Unemployment
App. 75
Insurance Office, Unemployment Service
Division, Department of Labor and
Industrial Relations to produce
certain records regarding the
sieniteeeeen was granted.
The State filed its petition to
revoke at the commencement of trial on
the basis of a statutory privilege.’
The State argued that the
legislative history from the Standing
Committee Report 206, Senate Committee
on Labor, Hawaii Senate Journal 1969,
p. 962, Standing Committee Report 159,
House Committee on Labor and
Employment Problems, Hawaii House
Journal 1969, p. 668, and other
records: and archives clearly indicate
that the only matters encompassed
under the Federal Civil Rights Act of
1964 and state and local law
App. 76
ee
encompassing the same discrimination
areas are exempted from this
privilege. Copies of the senate
journals were provided by the State's
counsel. These reports make reference
to state employment security agencies
cooperating and assisting the fair
employment practice agencies.
Additionally, a letter from the
Director of the Department of Labor
referencing this legislation
specifically refers to the
anti-discrimination requirements of
the Civil Rights Act of 1964.
Respondent has not adduced any
evidence nor made any argument
indicating that the legislative
history requires an interpretation
different from that propounded by the
State in its petition to revoke. The
App. 77
State of Hawaii has a policy of
keeping the employment records
confidential to encourage truthful
reporting. Respondent asserts that
the revocation of the subpoena
deprived it of relevant evidence,
records that would be probative of
reasonable job search, and material
useful for impeaching credibility and
refreshing recollection.
As stated in John J. Canova, d/b/a
Canova Moving and Storage Co. v.
N.L.R.B., 708 F.2d 1498, 1502 (1983);
Canova sought to use the
records as evidence of lack of
diligence in seeking interim
employment. As the Board
determined,* however, those
records would only show what
efforts the employees actually
reported to the Employment
Development Department and not
necessarily what was actually
done. This evidence would have
had its most significant value in
impeaching the employment. Canova
had in its possession Board
App. 78
compliance documents and
statements made by the employees
concerning the job searches that
contained evidence analogous to
the Employment Development
Department reports. Given
Canova's opportunity to
cross-examine [the discriminatee]
; on the basis of these
materials, Canova’ was not
prejudiced by the revocation.
In this case, Respondent similarly
sought the records for impeachment
purposes. All records of the Board
were turned over to the employer well
before the commencement of hearing and
the Board made all discriminatees
available for examination by
Respondent. Counsel for Respondent
was aware of the Canova decision since
it was cited to him the first day of
trial. Counsel did not ask all the
individual discriminatees if they
filed any reports with the State which
Clearly and truly reflected their
App. 79
efforts in procuring interim
employment. Respondent did not ask
any of the discriminatees what they
filed, if they kept records or copies
of these filings and if not, whether
they would be willing to get copies
from the State. Respondent has failed
to state with specificity any reason
that the State's claim of
confidentiality and privilege should
not be honored under the circumstances
of this case. See N.L.R.B. v. Adrian
Belt Company, 578 F.2d 1304, 1310
(1978). See generally, General
Engineering, Inc. v. N.L.R.B., 341
F.26 367, 372-3 (9th Circ. 1965),
Herman Brothers Pet Supply, Inc. v.
N.L.2.8., 360 F.26 176 (6th-Cir.
1966). See, further, Marine Welding |
App. 80
and Repair Work, Inc. v. N.L.R.B., 492
F.2d 526 (5th Cir. 1974).
Respondent requests reopening of
the record on the basis of the
revocation of this subpoena as well as
the revocation of subpoenas served on
several banks. —_ This motion is
denied. The subpoenas to the banks
were conditionally revoked. As
discussed more fully below, the
subpoenas to the banks were not shown
to be relevant. Respondent filed a
special appeal to the Board concerning
these rulings. The Board denied the
appeal without prejudice.
Respondent's request to consider the
constitutionality of the state
provision was also denied.
App. 8l
b. The Subpoenas Duces Tecum Issued
to the City and County of Honolulu
Respondent's brief did not
specifically address the issues it
raised on the record regarding these
subpoenas. This failure cannot be
construed as a waiver of its
objections. The City and County of
Honolulu sought revocation of the
Subpoenas duces tecum issued to the
custodian of records of the Department
of Civil Service, Department of Public
Workers, Department of Finance, and
the Honolulu Fire Department. Unlike
the State statute, it was found that
the applicable statutes did not afford
the City and County of Honolulu
similar protection against
production. °
The petition to revoke was only
granted in part. It was granted as to
App. 82
those portions of the subpoena
referring to individuals for which
there are no records. The remaining
records of the City were reviewed in
camera to determine if they should be
released in toto since all records
were requested. That portion of the
subpoena regarding the performance and
evaluation reports of the
~ discriminatees who were parttime
employees of Respondent and fulltime
employees of the City and County of
Honolulu Fire Department was not shown
to be relevant. Respondent failed to
show how the performance evaluation
reports of the Fire Department were
relevant to the issues of mitigation
and gross backpay. The Fire
Department leave records were found to
be pertinent for they may indicate
App. 83
|
when employees may have been
unavailable for work or free to search
for a job. The petition to revoke was
denied as to those items. The
petition was granted as to performance
and evaluation reports of the parttime
employee of Respondent who was a
fulltime employee of the City and
County of Honolulu's Refuse
Department. Respondent failed to
indicate that by granting the petition
to revoke in part, it was deprived of
documents which were relevant,
material or otherwise properly
sought. Respondent did not ask any of
the discriminatees, who were the
subject matter of the material sought
in the subpoenas that were revoked, if
they had copies of the material or any
questions relating to that material
App. 84
which might have demonstrated their
relevance and materiality.
c. Bank Subpoenas
Respondent also subpoenaed several
banks for their records of accounts in
the names of some or all of the
discriminatees. Some of the banks had
representatives present in the
courtroom but they declined to produce
these documents for fear of violating
state law. Some banks apparently did
produce records although Respondent
did not state which banks complied and
which did not. An example of
compliance is Respondent's Exhibit
I-19, containing Sai’s mortgage
payments, which was not admitted into
evidence for its relevance had not
been established. There were also
indications that Respondent had
App. 85
received other bank records. Also,
Fonseca’s credit union statements were
produced and were the subject of
testimony by an employee of the Fire
Department's credit union.
Counsel for Respondent represented
that one of the banks subpoenaed was
willing to comply with the subpoena
providing that a certificate of
compliance, pursuant to a federal
statute, 12 U.S.C. Sec. 3308, was
provided. The statute provides that a
bank should not release the material
until the government authority seeking
such records certifies in writing that
it has complied with the applicable
provisions of the chapter. Compliance
with the statute requires that
individuals, whose bank records are
subpoenaed, must be served with a copy
App. 86
of the subpoena which is served upon
the bank. Counsel for the General
Counsel refused to sign the
certificate of compliance, as provided
in the financial privacy section of
Chapter 12 and asserted that there was
no reasonable cause to believe the
records were sought for law
enforcement purposes or that the
notice provision of the statute had
been satisfied. Counsel for
Respondent admitted that the
discriminatees whose records were
sought were not served with copies of
the subpoenas.
I find that these were private
subpoenas; thus, according to the
cited statute, it was not necessary to
serve a copy on the discriminatees.
App. 87
The banks requested during the
trial that the officer issuing the
subpoenas sign a document. I
explained that I was not the issuing
officer, but that I had no objection
to ordering compliance if the
relevance ond materiality of the
subpoenaed records were established.
For example, Respondent was requested
to establish whether the bank accounts
were joint accounts or were in any way
potentially probative of the issues
involved in this proceeding.
Respondent was permitted to repeatedly
seek such information from the
discriminatees to demonstrate probable
relevance or materiality.
Inexplicably, Respondent frequently
failed to determine the nature of the
accounts, such as whether they were
App. 88
mortgage accounts, car loans, or
accounts where the discriminatees were
merely co-signers. Respondent, near
the close of hearing, sought
production of Kaaiai'‘s bank records,
yet admitted that Kaaiai was not
subpoenaed, they knew he was residing
on another island, the island of
Hawaii. Thus even if the request were
granted, there was no mechanism by
which to test the relevance and
materiality of the subpoenaed
documents in Kaaiai'’s absence.
Nothing occurred during the closing
stages of this proceeding which would
have accounted for Respondent's
tek keen to subpoena Kaaiai at the time
it moved for production of his bank
records.
App. 89
It 1S noted that the Fonseca
credit union records, which were
subpoenaed and were the subject of
examination, were not offered as
evidence. Also, on the last day of
hearing, Respondent requested
production of the bank records of
Fonseca. Fonseca had testified that
day and nad been excused after giving
rebuttal evidence. This request was
not shown to have been justified by
the finding of new material. Again,
the untimely nature of the request was
not explained. Respondent never
clearly established that the banks
which wished to have certificates of
compliance were the same banks where
Kaaiai, Fonseca or other specified
Claimants kept accounts.
The initial ruling refusing to
order the banks to comply with the
subpoenas was made early in the
proceeding and was made subject to
renewal by Respondents upon a showing
of relevance and materiality. *
As noted in General Engineering,
Inc. v, B.L.8.8,., 341 7.26 367 at
372-73 (9th Cir. 1975):
The NLRB‘'s own regulation
authorizing revocation states:
The Administrative Law Judge
or the [NLRB], as the case
may be, shall revoke the
subpoena if, in its opinion,
the evidence whose production
is required does not relate
to any matter under
investigation or in question
in the proceedings or the
Subpoena does not describe
with sufficient particularity
the evidence whose production
is required, or if for any
other reason sufficient in
law the subpoena is otherwise
invalid. [Emphasis
Original. ] 29 CFR S
102.31(b) (1979).
mo
2)
App. 9l
ical eee
Respondent, though repeatedly
informed that it should find out the
nature of the accounts and other
matters to permit a determination of
whiten: thie evidence related to the
matters under consideration or in
question in this proceeding, failed to
elicit this testimony. The basis for
sit failure is unexplained, either on
the record or on brief. Without this
requested information, it could not be
determined if the facts in dispute
were more or less probable than they
would be without access to the
evidence. See Rule 401 of the Federal
Rules of Evidence. For example, if a
bank account reflected mortgage
payments on 4a house owned by a spouse,
where there is a separation or divorce
with a discriminatee who does not have
App. 92
any obligation to make payments, it
would not tend to render a
consequential fact more probable or
less probable than it would without
such -vidence. Yet counsel repeatedly
failed to ascertain the nature of the
accounts subpoenaed or to describe
such accounts so that the assessment
of their relevance could be rationally
made. Similarly, if there is a joint
account with a spouse and the spouse
makes all the deposits and
withdrawals, or the account is
maintained merely as a part of an
estate plan, this would again be a
Situation where the existence of the
account would not make a fact more or
less likely than if there were no such
evidence. No bank officials were
called as witnesses.
App. 93
EE
Respondent still seeks access to
these accounts, even though the record
demonstrates that some banks had
complied with these subpoenas, as
detailed further in discussing the
individual claimants' cases.
Respondent has not indicated which
banks had supplied such records and
has not removed their names from the
request. In sum, the Respondent
failed to describe with specificity
those accounts in banks which failed
to comply with the subpoena in a
manner which would permit a finding of
potential relevance. Lack of
relevance is a valid ground for
quashing subpoenas or granting
petitions to revoke. See Howard
Johnson Company, 250 NLRB 1412, fn.2
(1980), citing Madeira Nursing Center,
App. 94
inc. V. B.u.R.8., 615 F.2G 728 (6th
Cir. 19680). It is concluded that
Respondent has failed to demonstrate
the need to reopen the record to
permit examination of the subpoenaed
materials. Its brief fails to reveai
any new or otherwise unconsidered
basis for altering the rulings in the
case. The motion to reopen is denied.
B. Gross Backpay and Conclusions
1. Background
In the underlying decision, supra
241 NLRB 589, the Board found, inter
alia, that Rainbow Tours, Inc., by
part-owner and principal operating
officer Kolt, threatened the company's
bus drivers if they sought union
representations with the loss ".
of [his] services, the accounts [he]
brought in, any possibility of
App. 95
additional new accounts, profits, the
new buses, any possibility of wage
increases and a question of whether
the potential of loss the Company and
their jobs would continue. ...," in
violation of Section 8(a)(1) of the
Act. It was also found that Rainbow
violated Section 8(a)(1) of the Act of
January 3l, 1977 by discharging
employees Sanford, Kaui, Iho, Akamine,
Agao, Fonseca, Uwata, Kaaiai, Kama,
Louis, Sai, and Garrett Wong in
retaliation for their support of the
Union. Several of these
discriminatees were fulltime
employees. Sanford, Kaui, Akamine and
Agao were listed as holding seniority
numbers between 1 through 5 on the
fulltime seniority roster. The
remaining discriminatees were parttime
App. 96
employees, many of whom had other
fulltime employment. These parttime
employees also were senior employees.
It was also found that:
. Sanford, Kaui, Iho, Akamine,
Agao, Fonseca, Iwata, Kaaiai,
Kama, Louis and Sai
unconditionally offered to return
to work on February 2, 1977, and
G. Wong would have done so but for
receiving a report that Kolt had
refused to reinstate any of the ll
just named to their former
positions and status. Id.
The decision also noted that Kolt
offered Sanford, Kaui, Iho, Akamine
and Agao reinstatement as new hires,
resulting in a loss of seniority.
These actions were not deemed valid
offers of reinstatement and Respondent
was ordered to reinstate the
discriminatees "to their former jobs
or, if those jobs no longer exist, to
substantially equivalent jobs with
App. 97
Ell ll
full restoration of their seniority
and other rights and privileges."
2. Position of the Parties
Based on the Board's supplemental
decision and order issued herein on
March 28, 1983, gross backpay is an
issue only as to the following
discriminatees: Agao, Fonseca, Iho,
Kama, Louis and Sai. Partial summary
judgment was granted as to the gross
backpay computations for Akamine,
Kaaiai, Kaui and Sanford. No gross
backpay was computed for Paul Uwata,
who returned to work shortly after he
was discriminatorily discharged.
However, as the records were not clear
as to whether he was entitled to a day
or two of backpay, a compliance
officer gave the benefit of the doubt
to Respondent. Uwata did not appear
App. 98
and testify in the backpay
proceeding. It is found that Uwata is
not entitled to any backpay based on
the lack of evidence of an entitlement.
The General isuneni“a office has
the burden of establishing gross
backpay by seeking to ascertain the
probable earnings of a discriminatee
during the backpay period. These are
earnings which would have been paid
had the employee not been unlawfully
discharged. See, generally, the
National Labor Relations Board Case
Handling Manual, Part 3, Section
10530.1(c). Four basic gross backpay
formulas have been utilized by the
Board and approved in the courts
through the years. Case Handling
Manual, Part 3. The compliance
officer is charged with selecting the
App. 99
most appropriate formula to apply in a
specific case. See Section 10536 of
the Case Handling Manual, Part 3,
Compliance Proceedings. This burden
of creating a method to determine what
would have happened is recognized as
frequently problematic and necessarily
inexact. Taking cognizance of these
difficulties, the Board ". .. is only
required to employ a formula
reasonably designed to produce
approximate awards due.” N.L.R.B v.
Pilot Freight Carriers, Inc., 604 F.2d
375, 378-79 (C.A. 5, 1979), quoting
Trinity Valley Iron & Steel Co. v.
N.L.R.B., 410 F.2d 1161, 1177, n.28
(C.A. 5, 1969). Accord: N.L.R.B. v.
Brown & Root, Inc., supra at 452.
In this proceeding, Formula 2 was
chosen, which is set forth in Section
App. 100
10540 of Part 3 of Case Handling
Manual. Gross backpay was computed
for the discriminatees under this
formula using the average number of
straight time and overtime hours each
discriminatee worked per week during
his last 12 full weeks of employment
with Respondent, multiplied by the
wage rate each individual would have
received, taking into account when
current employees received raises,
plus an average amount of tips each
received on a weekly basis prior to
unlawful discharge. This figure was
then reduced by the ascertained
interim earnings to determine net
backpay. One week during this 12-week
period was not used since Respondent
yard was shut down, which was deemed
an umusual or uncharacteristic time
App. 101
—————————77~e
period which should not be included in
the computations. See Issac & Vinson
Security Services, Inc., 208 NLRB 47
(1973). Respondent did not claim this
week should be included in the backpay
calculations. Respondent does not
take issue with General Counsel's
including increases in the gross
backpay computations received by
replacement employees over the backpay
period.
Formula 2 was chosen to measure
the projected earnings of the
discriminatees as it was “most
reasonably designed to produce the
approximate awards due [Citations
omitted]." Trinity Valley Iron and
Steel Co. v. N.L.R.B., supra at 1177.
The compliance officer relied on
several factors in reaching this
App. 102
ee
decision: the length of the backpay
period involved, several years; the
need to tihis into account wage
increases over such a long period,
which the use of an average of the
earnings of comparable employees
Similarly situated fails to do; the
inability to find representative
replacement employees~similarly or
comparably situated with the same
skills or preferences, since
Respondent honors individual
preference for particular tours,
particularly among the most senior
employees, such as the discriminatees.
The Company's records reflected
that the wages and hours worked by its
employees fluctuated from week to week
and from employee to employee, making
it extremely difficult, if not
App. 103
Denil
impossible, to determine which of
Respondent's Current employees were
representative of particular
discriminatees or all discriminatees.
Also considered was the fact that the
business operated 7 days a week and
each employee had unique working
conditions with regard to
avallability, seniority, skills and
Personal preferences. Thus, it was
decided that the best measure of
future hours was their Part hours.
Respondent takes issue with
General Counsel's choice of Formula 2
and the use of a 12-week period
immediately prior to their discharge
as the basis for determining
€arnings. Respondent contends that
the General Counsel is seeking to
accomplish a non-Statutory objective.
App. 104
Specifically, Respondent contends that
General Counsel has chosen a time
period and formula “to achieve ends
other than those which can fairly be
said to effectuate the policies of the
Act." See further, N.L.R.B. V.
Seven-Up Bottling Company of Miami,
Inc., 344 U.&. 344, 347 (1953).
Respondent argues that the use of
Formula 2 fails to account for the
seasonality of the business and the
use of the 12-week period unfairly
increases the amount of backpay the
employees would have earned if they
had not been discriminatorily
discharged. It urges that two
different formulas be utilized, one
for Agao and another for the remaining
dJiscriminatees. Also, Respondent
contends that the 1l2-week period
App. 105
utilized by Genera] Counsel was
atypical for it occurred when the
business was beginning to prosper, yet
the Company had few drivers which
resulted in a unique increase in
available straight and Overtime work.
The Company also claims this was a
Seasonally active period. The Case
Handling Manual, at Section
10540.2(c), states that the chosen
formula should be used when “the
business of the... employer is not
seasonal."°®
3. Representative Employees
Respondent urges the use of
Formula 4 for computing gross backpay
for Agao. Formula 4 in the Board's
Case Handling Manual is found in
section 10544. Formula 4 uses the
earnings of replacement employees or
App. 106
average earnings of replacement
employees per pay period. This
particular method of computation was
urged because Agao was the only
fulltime employee whose gross backpay
was still in issue. Respondent would
use the five most senior fulltime
drivers’ average quarterly earnings
throughout the backpay period to
determine Agao's gross backpay. For
Fonseca and Sai, who were firemen and
parttime employees of the company
prior to their discriminatory
discharge, Respondent urges using
Formula 3, which is explained in
detail in Section 10542 of the Case
Handling Manual. This formula uses
the average earnings or hours of a
representative employee or employees
who worked in a job similar to the
App. 107
discriminatees before the unfair labor
practice and during the backpay
period. The use of this formula
requires the selection of employees
whose ae, before the unfair labor
practice and during the backpay
period, is similar to that work
performed by the discriminatee. The
use of these formulas requires the
ability to accurately identify
representative employees.
In support of its argument urging
use of Formula 4 for Agao, Respondent,
on page 20 of its brief, refers to
Respondent's Exhibit V-1 as
demonstrating that fulltime drivers
working for Rainbow during the backpay
period would not have worked the hours
alleged in the backpay specification
nor earned the amount of gross
App. 108
' -
backpay. Respondent's Exhibit V-1 has
not been shown to be reliable. Its
computations are based on partial
data. The methodology utilized to
prepare the exhibit was not shown to
be reliable or probative, was not
snown to have a reasonable standard
error, and was calculated from check
stubs, 50 percent of which were
missing. There is no basis on which
to find these figures representative.
The exhibit was accepted to permit
Respondent to argue that General
Counsel was seeking to accomplish a
non-statutory sbiective with their
calculations. The Company was invited
to demonstrate that its methodology
should be entitled to some weight but
has failed to do so. In fact, it
appears some of the statistics on the
App. 109
exhibit probably commingled figures
for fulltime and parttime employees.
It used material developed in an
exhibit marked for identification as
oe ere Exhibit V-2, which was
not admitted because it was shown to
be completely unreliable. The
individual who prepared the records
for Respondent could not recall the
methods he used in its preparation,
could not recall how he reached the
figures, and could not recall the
meaning of references in the exhibit.
Since V-l uses some material from V-2,
which was not admitted, it is found to
be entirely unreliable.*® The
methods used to compile both
Respondent's Exhibits V-2 and V-3 did
not permit the drawing of the
inferences or conclusions necessary to
App. 110
support the Company's assertions.
Respondent's Exhibit V-3 is the
same as the average pay exhibit,
Respondent's Exhibit V-1, except that
it contains footnotes. The witness
who prepared the exhibit did not add
the footnotes, he did not know who did
and, thus, the document was not
admitted. It is concluded that
Respondent's exhibits and other
evidence fail to demonstrate any
intent by General Counsel to achieve
ends other than those which can fairly
be said to effectuate the policies of
the Act. On the contrary, Kolt's
testimony and the Company's apparent
inability to develop a reliable
statistical analysis indicating the
existence of comparable replacement
employees confirms the suitability of
App. ili
the formula selected by General
Counsel.
Respondent has failed to
demonstrate that the formula chosen by
the compliance officer and General
Counsel's office is particularly
Oppressive and is not calculated to
effectuate the policies of the Act.
While Formula 2 is said to be
appropriate when the backpay period is
short, it does not indicate any
inappropriateness where there is a
long backpay period. No formula is
perfect or could unquestionably
project actual earnings. Formula 3
was rejected as the fairest measure
because replacement employees were
paid more than claimants and, as is
the case with both Formula 3 and
Formula 4, Compliance Officer Talkin-
App. 112
could not identify individuals who
could fairly be considered replacement
employees. No individuals were
identified by any party as having
worked comparable hours and
demonstrated similar work preferences,
such as choice of runs or buses.
Further, these two formulas fail to
take into account the fact, as
determined by the Administrative Law
Judge in the underlying unfair labor
practice decision, that the
discriminatees were the most senior
employees in both the fulltime and
parttime categories.
Respondent's own witnesses
indicated that although the business
was subject to wide fluctuations, they
were weekly or daily, not
jpmiigas. TC <EROREh TAOCees 84) SECESe
Apo. iis
fluctuations, are not the only
attributable to the nature of the
DSusiness but include individual
Preferences. Respondent's witness
Kolt, the managing director of
Rainbow, most Clearly presented the
uniqueness of each driver's work
schedule. Admittedly, seniority
affected the drivers’ scheduling and
runs, which were dependent upon
individual Preference. The Company
used the seniority system to give the
individuals their choice which varied
with their different wants. These
accommodations were unique to each
employee. Some individuals had
Japanese language skills and liked to
take Japanese tours. Kolt testified
as follows:
Seniority system in Our
company gives the individual
App. 114
choice. Het /sic/ gets choices of
what he wants. Depending on the
individual, different guys want
Gifferent things.
Some guys want to take Haole
tours, meaning tours that are
narrated in English. They like
the tips. They like the rapport
with the people. They fancy
themselves as entertainers, which
I personally think they are. It’s
part of the job.
Some guys like -- some guys
prefer the foreign site-seeing
because they don't have to talk,
Or they don't feel like talking
and also, the tips were a factor
with the foreign tours. Tips were
included. With the
English-speaking tours, you had to
kind of work for them.
Some guys preferred -- they
would want to stay with a certain
piece of equipment. Generally,
the better ones, depending on --
you know, the senior guys got
their choice of equipment, okay,
but the equipment did not aiways
go to the same place every day.
We had to spread it out to keep
all the customers happy.
These options remained the same after
the strike.
App. 115
Such individual selections can
greatly impact on income. Some tours
are four or more times longer than
others. Some of the parttime
employees would prefer to work more
days or more hours than Others. As
will be noted in detail later, the
firemen in particular worked several
24-hour days and then had Several days
off. They could individually elect
how many days they wanted to work for
Respondent on their days off from the
Fire Department. Since the choice of
tours was based on seniority,
considering the options avallable and
the record evidence, it is found that
each employee's potential earnings, as
compared to employees with the same or
Similar seniority, would not
necessarily be representative Or
App. 116
otherwise analogous for computation of
backpay. Respondent has failed to
indicate how the formulas it urges
overcome this difficulty or meet this
exigency. The Company failed to show
any replacement employee or employees
were representative of a claimant.
The Company also failed to show that
its records do not correctly reflect
its employees’ wages prior to their
unlawful discharges. Pat Izzi
Trucking Co., 162 NLRB 242 (1966).
4. Seasonality
The testimony fails to demonstrate
that the tourist industry is highly
seasonal. The record clearly shows
that the business is highly sensitive
to market changes. Respondent’s chief
managing officer Kolt indicated that
business changes on a daily basis,
App. 117
affected by such factors as airline
rates, holidays on the mainland, and
weather on the mainland. Business
increases with the severity of the
winter on the mainland and decreases
if the winter weather is good on the
mainiand. There was also testimony
that the Christmas holiday season 1s a
very active tourist time; but this
factor is counterbalanced by the
inclusion in the 12-week computation
period of Thanksgiving and the period
shortly thereafter, which is a very
slow business period for the tour bus
industry. The fluctuations that
occurred during the 12-week period
selected by Counsel for General
Counsel were not shown to be
aberrational or otherwise
App. 118
——
unrepresentative of any other 1l2-week
period.
In support of its position as to
seasonality, Respondent produced a
- late-filed exhibit after the close of
hearing, Appendix A, based on the
plethora of material, particularly
payroll records, introduced without
objection into the record. Late-filed
exhibits were permitted to avoid
Surprise occasioned by recalculation
Or utilization of portions of the
voluminous payroll records in the
Simultaneously filed briefs. To
afford comment on any such
calculation, both parties were given
the opportunity to file exhibits which
detailed the exact calculations prior
to the brief date. Respcndent's
App. 119
iAsRiREEI ee,
Appendix A was based on its voluminous
payroll records.
Respondent merely stated that
Appendix A was taken from Respondent's
Exhibit V-6 and V-7, which are 1976,
1978 and 1979 payroll records. Why
1977 payroll records were not used is
unexplained. These computer read-outs
total thousands of pages. Respondent
failed to state in its filing how the
exhibits were compiled and its method
of extrapolation. It is therefore
found that this exhibit is unreliable
and not probative.
However, even if Appendix A were
found to be reliable, it demonstrates
the lack of seasonality. As noted by
both the compliance officer and Kolt,
the amount of the Company's business
varies greatly from week to week and
App. 120
REE RIS 8
from day to day. For example, in
1980, the amount of business during
the first and second weeks of the year
was quite low, and yet in the third
and fourth weeks there was an
extremely high volume of business.
Conversely, in the 1978, it appears
that business declined during the
second and third weeks of the year.
Similarly, in 1980, there appears to
be a decline in business around
Thanksgiving and yet, in 1978, there
appears to be an increase in business
around that time. Therefore, it is
found that Respondent's own exhibit
demonstrates that there is no cyclical
fluctuation in the business based on
seasons and nese, there is no showing
of seasonality. See Section
10540.2(c) of the Case Handling Manual.
App. l2l
5. Utilization of a 12-Week Period
Respondent's attack on the use of
a 12-week period is not persuasive.
The period was not shown to be
insufficient in length to be truly
reflective of actual earnings.
According to Respondent's own
questionable exhibits, there was no
such thing as a representative week;
each week and day are different and
subject to caprices that are not
seasonal, such as the booking of
conventions and the weather in other
parts of the world. A 12-week period
was selected because some of the
discriminatees only worked for
Respondent during that period of time.
As noted by Administrative Law
Judge Charles W. Schneider, in
DeLorean Cadillac, Inc., 231 NLRB 329
App. 122
$i
at 332, “The actual earnings of
employees in a representative period
prior to their discharge is a
foundational formula traditionally
used by the Board in determining the
amount of backpay due
discriminatees.”" As Administrative
Law Judge Knapp said, in Chef Nathan
Sez Eat Here, Inc., 201 NLRB 343, 345
@k yy 3 &-
Actual earnings is "/t/he most
fair, suitable and equitable
formula to employ, and should not
be departed from in the absence of
special circumstances ss
The formula proposed here by the
General Counsel substantially fits
those requirements. It covers a
period of employment broad enough
to be representative, and recent
enough to be typical of relevant
performance. That being so, the
burden is on the respondent to
establish special circumstances
requiring deviation from it, and
to propose a more satisfactory
formula. /Citation omitted./
App. 123
As was the case in DeLorean Cadillac,
Id., the Respondent failed to meet
either of those burdens.
Respondent also failed to
demonstrate that the 12-week period
used by General Counsel was not
representative of average earnings.
In Erliech's 8614, iIne..-241 Biee Liss
(1979), it was found that earnings
during a representative 10-week period
preceding discharge, projected by
calendar quarters over the backpay
period, was a satisfactory method of
determining gross backpay and was not
arbitrary or unreasonable. In East
Belden Corporation, 267 NLRB No. 46
(1982), slip op. p.5, the Board
rejected Respondent's contention that -
the 8-week period chosen by General
Counsel was inappropriate when it did
App. 124
not provide a more appropriate
period. As noted in N.L.R.B. v. Pilot
Freight Carriers, Inc., 604 F.2d 375,
379 (Sth Circ. i979):
The use of Johnston's average
weekly earnings for the 7 weeks
preceding his discharge as the
basis for computing backpay was 4
reasonable formula because the
strike was caused by the company's
illegal action, any diminution in
work opportunities during the
strike period is no reason for
reducing Johnston's award.
Respondent argues that its
business increased since the unlawful
discharges; that it had just commenced
a building period during that time;
that it had difficulty with equipment,
which was subsequently replaced; that
it has added customers; and thus, tlhe
use of actual hours may not reflect
the time replacement employees, if
such could be found, would have worked
Since there appears to be a greater
App. 125
Subsequent demand on employees.
Compliance Officer Talkin testified
that the 12-week computation period
was selected not only because it was
considered representative, but because
Administrative Law Judge Christensen
indicated in the underlying decision
that Respondent added several buses
and new accounts during this quarter.
She thus determined that the period
prior to the discharges was more
indicative of future earnings.
Respondent also avers that is has
increased its fulltime staff, thereby
eliminating the need for as many hours
from parttime employees. Such an
argument is mere surmise. It 1s
unknown whether Respondent would have
increased its fulltime staff in the
Same manner save for the unlawful
App. 126
discharges, for there would not have
been a dearth of experienced drivers.
There was no showing such increases in
fulltime drivers would have impacted
on the income of the discriminatees,
the most senior employees. Such
Surmise is insufficient to warrant a
finding of the establishment of
special circumstances requiring
deviation from the proposed formula.
While an operational change more
fulltime employees might have resulted
in a change in earnings for the
discriminatees, it is equally
reasonable in assume that if the
discriminatees were not discharged and
were afforded the opportunity to
continue working under the same
system, which Respondent stated still
obtains, their wages would have been
App. 127
a
comparable to those of the backpay
period selected by General Counsel,
heretofore found appropriate. See
East Texas Steel Castings Co., Inc.,
116 NLRB 1336, 1337 (1956), ent. 255
F.2d 284 (Sth Cir. 1957). Also,
Respondent failed to reconcile this
merely speculative contention with its
admission that business has shown an
overall increase which may have
resulted in increased work for
parttime employees.
In sum, Respondent has failed to
indicate why any employee or group of
employees‘ incomes were more
representative than the
discriminatees’* earnings for the
12-week period used by General Counsel
in computing backpay. Respondent has
not met its burden of showing the
App. 128
ee
basis for computing gross backpay is
". . . @ patent attempt to achieve
ends other than those which can fairly
be said to effectuate the policies of
the Act.” Virginia Electric & Power
Co. v. N.L.R.B., 319 U.S. 540 (1943).
It is clear that General Counsel
has met its requirement to select “a
formula reasonably designed to produce
the approximate awards due [Citations
omitted.].“ Trinity Valley Iron &
Steel Co. v. N.L.R.B., supra, 410 F.2d
at 1177, n.28. The utilization of a
period immediately prior to the
unlawful discharges has been found to
be appropriate for use in formulating
the earnings percentage or multiplier
in the formulation of gross backpay.
N.L.R.B. v. Pilot Freight Carriers,
Inc., supra 604 F.2d at 375.
App. 129
aaa
6. Conclusions
It is thus concluded that since
Respondent has failed to show that
employees it selected during the
backpay period performed work during
that period, which is representative
of the work done by the class of
discriminatees as a whole or for
sub-groups within that class, its
alternative proposals for computing
gross backpay are rejected. Those
groups of employees or employees
selected as representative were not
shown to have the same skills, work
exigencies, or preferences.
Respondent has singularly failed to
show that there was a readily
determinable individual or group of
individuals who made the same choices
of routes, buses, days off and other
App. 130
SS ee SS.
income-producing factors as the
discriminatees. Many of Respondent's
alternatives are based on data that
are not clearly defined or were
derived in manners rendering them
completely unreliable. The General
Counsel affirmatively showed that its
measure was reasonable, and the timely
raised alternatives proposed by
Respondent using replacement employees
were not shown to have been
representative of the discriminatees.
General Counsel's premises for the use
of the Formula 3 for gross backpay are
found to be appropriate. As noted by
the court in N.L.R.B. v. Rice Lake
Creamery Co., 365 F.2d 888 at 891
(1966):
This formula may not reach
the exactly correct figure, but
there is no suggestion of a
formula that could, since the
App. 131
re mes eee re Me Un ea ee en on Ee]
een
=
Giscriminatees did not actually
work during the period. The
formula used is a reasonable and
legal basis for computation of
gross amounts, and has had
approval in court decisions. See
Chef Nathan Sez Eat Here, Inc.,
Supra, 201 NLRB 343; NHE/Freeway,
Inc., 218 NLRB 259; and DeLorean
Cadillac, supra 231 NLRB 329
tives? «
Based on the exigencies present in
this proceeding, and considering the
conflicting backpay formula arguments,
it is found that the formula
propounded by General Counsel is the
most accurate method of determining
gross backpay. J.S. Alberici
Construction Co., Inc., 249 NLRB 751
(1980); American Manufacturing Company
of Texas, 167 NLRB 520 (1967). Where
there are any uncertainties, such as
the potential impact of the
fluctuations in business and
Respondent's employment of a greater
App. 132
number of fulltime drivers after the
strike and after the discharge of the
discriminatees, they will be assessed
against the wrongdoer. N.L.R.B. v.
Miami Coca-Cola Bottling Company, 360
F.24 569 (Sth Cir. 1966).
Respondent failed to set forth an
alternative formula or furnish
appropriate supporting figures for
computing the amounts owed with
sufficient particularity and
reliability as to permit the sought
substitutions. The backpay award is
only an approximation and the Board
has considerable discretion in
selecting a methodology which is
reasonably designed to approximate the
amount of backpay a wrongfully
discharged employee would have
received absent the employer's
App. 133
wrongful conduct. Respondent has
failed to show a representative
employee or a backpay period that was
demonstrated to be more representative
than that chosen by General Counsel.
Respondent's proposals are replete
with numerous unsupported speculations
and assertions. It is concluded that
General Counsel's computations of
gross backpay more than meets the
legal standards of permissible
discretion in determining approximate
gross backpay. See N.L.R.B. v.
Carpenters Union, Local 180, 433 F.2d
934 (9th Cir. 1970); International
Association of Bridge, Structural and
Reinforced Iron Workers Union, Local
378, AFL-CIO (Judson Steel
Corporation), 262 NLRB 421 (1982).*
App. 134
Gs Woolworth Formula
Respondent, based on its
previously discussed claim of
seasonality, requests relief from
application of the Woolworth formula.
Citing N.L.R.B. v. Seven-Up Bottling
Co. of Miami, Inc., supra, 344 U.S. at
350 (1953). The court, Id. at 345,
cited F.W. Woolworth Company, supra 90
NLRB at 292-293, stating:
The public interest in
discouraging obstacles to
industrial peace requires that we
seek to bring about, in unfair
labor practice cases, “a
restoration of the situation, as
nearly as possible, to that which
would have obtained but for the
illegal discrimination.” In order
that this end may be effectively
accomplished through the medium of
reinstatement coupled with
backpay, we shall order, in the
case before us and in future
cases, that the loss of pay be
computed on the basis of each
separate calendar quarter or
portion thereof during the period
from the respondent's
discriminatory action to the date
App. 135
of a proper offer of
reinstatement. The quarterly
periods, hereinafter called
“quarters”, Shall begin with the
first day of January, April, July,
and October. Loss of pay shall be
determined by deducting from a sum
equal to that which [the employee]
would normally have earned for
each such quarter or portion
thereof, [his] net earnings, if
any, and any other employment
during that period. Earnings in
one particular quarter shall have
no effect upon the backpay
liability for any other quarter.
The court further provides, Id. at
as follows:
This is not to say that the Board
may apply a remedy it has worked
out on the basis of its
experience, without regarding to
Circumstances which may make its
application to a particular
Situation oppressive and,
therefore, not calculated to
effectuate a policy of the Act.
The company in this case maintains
that it operates a seasonal
business, that employees may earn
three times as much in the first
and fourth quarters of a year as
in the second and third, and that
a quarterly calculation of backpay
would, in this context, be
Obviously unjust.
App. 136
i
Respondent states that the use of
the Woolworth formula is oppressive in
the instant proceeding because it
operates a seasonal business. As
noted above, there was no showing of
seasonality. Rather, there were great
fluctuations in the business and in
income among the individual drivers
week to week, day to day, with no
showing that such fluctuations were
attributable to seasonal factors.
Further, there was no showing that
these fluctations occurred within the
backpay period in such a pattern or
under any other special circumstances
that would create an injustice if the
Woolworth formula were applied.
There was no showing that any
employee sufficiently representative
of any of the discriminatees received
App. 137
i
less money than a discriminatee would
have received during the same period;
nor was there any showing that
applying the Woolworth formula in the
computation of interim earnings would
result in awindfall. As the Board
noted in Robert E. Cashdollar, Sr.
d/b/a Nelson Metal Fabricating, 259
NLRB 1023, 1024 (1982), Respondent's
contention that computation of backpay
On a quarterly basis was inequitable
without foundation in law or reason is
unpersuaSive, for while application of
Woolworth was never intended to be
rigid or inflexible, there was no
showing that the application of the
formula produced a punitive remedy
inasmuch as the employer rightfully
exercised its right to assume the risk
to resist reinstatement and backpay
App. 138
until after court enforcement of the
Board's order, risking the potential
that the discriminatees would seek
more gainful employment for a greater
part of the backpay period. It took
the risk and lost. This assumption of
knowledgeable risk does not constitute
an inequity or special circumstance of
the genre discussed in Seven-Up
Bottling. supra 344 U.S. at 350, or
warrant application of the
pre-Woolworth rule. The Woolworth
formula will be used in the
computation of interim earnings where
such earnings are found to properly
obtain.
D. Other Affirmative Relief
i Fraudulent Concealment and
Poor Record Keeping
During the trial, Respondent was
permitted to amend its reply to
App. 139
include as an affirmative defense the
assertion that claimants who were
found to have withheld relevant
information from the Board prior to
the hearing be found to have
fraudulently concealed interim
earnings. The Company was also
permitted to argue that any employee
who failed to respond in a timely
fashion to the Board's request for
information should not profit from
these acts by permitting Respondent to
be relieved of all interest payments.
It also urges that all claims for
backpay be barred when claimants
failed to keep records or refused to
furnish the NLRB with reasonably
accurate records of their job search,
‘because such failure constitutes a
App. 140
willful nondisclosure of material
evidence.
The Board, in American Navigation
Co., 268 NLRB NO. 62 (1983), recently
found that entitlement to backpay is
dependent upon the determination that
such an award is necessary to
effectuate the policies of the Act,
citing Phelps-Dodge Corp. v. N.L.R.B.,
Supra, 313 U.S. at 198, which is
quoted as follows:
[W]e must avoid the rigidities of
an either-or rule. The remedy of
backpay, it must be remembered, is
entrusted to the Board's
discretion; it is not mechanically
compelled by the Act. In applying
its authority over backpay orders,
the Board has not used stereotyped
formulas but has availed itself of
the freedom given it by Congress
to obtain just results in diverse,
complicated situations. [Footnote
omitted. ]
In analyzing the situation where
there was a willful concealment of
App. 141
——s
earnings, the Board determined that
backpay will be denied for the
guarters involving such concealment.
The Board further found, however, with
regard to the backpay for other
quarters:
On the other hand, to deny backpay
in an amount that exceeds that
which is necessary to deter
deception is to provide a
respondent with an unjustified
windfall and to permit it to avoid
the consequences of its unlawful
conduct for no useful purpose. We
find that a remedy which denies
backpay for the quarters in which
concealed employment occurred will
discourage claimants from abusing
the Board's processes for their
personal gain and also deter
respondents from committing future
unfair labor practices. This
remedy will be applied, of course,
only in cases where the claimant |
is found to have willfully
deceived the Board, and not where
the claimant, through
inadvertence, fails to report
earnings. [Footnotes omitted.
American Navigation Co., supra 268
NLRB No. 62 (1983), slip op. pp.
7-8.)
App. 142
The testimony has been be evaluated
and the facts analyzed to determine if
there was a failure to report earnings
and if such failure resulted from a
deceitful intent or honest error.
There was no showing of willful
deceit. The failure of claimants to
accurately recall facts over the long
period of time involved in this case,
is insufficient to deny the claimants
a make-whole remedy, including
interest. Respondent must show that
the claimants’ conduct was
sufficiently egregious to warrant
forfeiture of a remedy designed to
effectuate the purposes of the Act.
It has failed to meet this burden of
proof. See Iowa Beef Packers, Inc.,
144 NLRB 615, 622 (1963); and D.V.
App. 143
Copying and Printing, Inc., 240 NLRB
1275, fn.2 (1979).
The Board addressed the issue of
poor recall and record-keeping in
Arduini Mfg. Corp., 162 NLRB 972, 975
(1967), holding as follows:
While claimants may have some
difficulty in recalling past
events and were guilty of poor
record-keeping, the fact that they
testified openly and fully to the
best of their recollection and
disclosed all interim earnings,
withholding nothing, does not
present facts barring recovery.
The burden still remains on the
Respondent to show failure to
mitigate or otherwise reduce or
eliminate entitlement to backpay.”
Discriminatees were not sent
backpay claim forms until 1982. When
asked, their testimony varied as to
their reasons for submitting
incomplete forms. Claimants are not
disqualified from receiving backpay
solely because of poor record keeping
App. 144
or uncertain memories. See Patrick F.
Izzi, G/b/a/ Izzi Trucking Company,
162 NLRB 242, 245; Hickory's Best,
Inc., 267 NLRB No. 199 (1983), slip
op. p. 10. All the claimants were
made available repeatedly for
examination by Respondent. There was
no showing that any of the claimants
engaged in falsehoods, padding of
expenses Or claiming expenses that
were unreisonably large. Respondent
was also afforded every opportunity to
call and examine representatives of
all companies named by the claimants.
That these companies by and large
failed to keep records more than a
year is not a circumstance that should
redound to the detriment of the
claimants. The holding of _ this
backpay hearing, well after valid
App. 145
offers of reinstatement were made to
the claimants, was not by their choice.
Under these circumstances, the
claimants’ poor record keeping and
reporting practices are not sufficient
to abrogate their entitlement to
backpay. Poor record keeping may have
relevance only as it may impugn the
reliability of the claimants'
testimony. In general, the claimants
impressed me as honest witnesses who
received large packets of forms from
the General Counsel's office long
after the events in question. Many
claimants delegated the completion of
the forms to spouses or other
relatives. Poor record keepliig was
not shown to be intended to deceive or
mislead. The failure was more the
failure of Board personnel to follow
App. 146
usual practices of clearly informing
alleged discriminatees around the time
a complaint is issued of the necessity
to maintain and retain records of ~—
their job searches and interim
earnings as well as expenses incurred
in such activities. This failure by
the Board should not and does not
redound to the detriment of the
claimants. Respondent's own election
to defer its offers of reinstatement
until resolution of the underlying
unfair labor practice proceeding by
the Ninth Circuit Court of Appeals was
also a cause of delay. This
self-infiicted burden does not alter
the outstanding case law as to the
Claimants' obligation to maintain and
retain records. Accordingly,
Respondent's assertions that this
App. 147
failure denied the Company due process
Or abolishes its backpay obligations
are without merit.
E. Interim Earnings
1. In General
Respondent asserts that each
claimant's net backpay should be
reduced since there was individually
failure to mitigate damages.
The underlying decision ordered
that the employees be made whole for
the loss of pay suffered as a result
of Respondent's unfair labor
practices. In computing the remedy,
deductions are made from gross pay
“for actual [interim] earnings of the
worker, [and] also for losses which he
willfully incurred” by a “clearly
unjustifiable refusal to take
desirable new employment.”
App. 148
Pheips-Dodge v. N.L.R.B., supra 313
U.S. at 197-200. These deductions for
interim earnings are permitted “not so
much [for] the minimization of damages
as [for] the healthy policy of
promoting production and employment.”
Id. at 199-200. Further, “({t]he cases
are unanimous that the defense of
willful loss of earnings is an
affirmative defense, and that the
burden is on the employer to prove the
defense.” N.L.R.B. v. Reynolds, 399
F.2d 668, 689 (6th Cir. 1968);
N.L.R.B. v. Mooney Aircraft, Inc.,
Supra 366 F.2d at 813.
It is the duty of the employer "to
Carry the burden of proof and point
out what evidence in the record
Sustains .. . [its] claim, as against
the presumptive proof of the board's
App. 149
finding that the employees did not
sustain willful losses." N.L.R.B. ¥.
Reynolds, supra 299 F.2d at 670. The
proof of the claimant's search for
interim employment "is in no sense a
part of the [General Counsel's]
case.* 8.4.8.8: v.23. Soeeeit ce:
136 F.2€ $85, $97 (Sth Cir. 1943). As
noted above, in this particular case
the General Counsel did comply with
the Board's non-binding policy that,
after issuance of the backpay
specification, it turned over to the |
Respondent all the factual information
it obtained which was relevant to the
computation of net backpay, including
search for employment or availability
for employment. See NLRB Case
Handling Manual, Part 3, Compliance
Proceedings, Section 10663.1-.3.
App. 150
The basis for the employer being
given the burden of demonstrating
mitigation is because “it is not
practical, and it would significantly
hamper the backpay remedy, if each
discriminatee were required to prove
the propriety of his efforts during
the backpay period." N.L.R.B. v.
Miami Coca-Cola Bottling Co., supra
360 F.2d 575. One basis for
mitigation is the demonstration that a
discriminatee “willfully incurred"
loss by a “clearly unjustifiable
refusal to take a desirable new
employment." Phelps-Dodge Corporation
¥Y, B.L.8.8., Su0ta 3213 0.8. at
199-200. The burden is upon the
employer to prove the necessary facts
to establish such a willful loss of
earnings. N.L.R.B. v. Mooney
App. 151
Aircratt, inc., 366 F.268 8 ies «FO
meet this burden, the employer must
affirmatively demonstrate that the
employee “neglected to make reasonable
efforts to find interim work.” Id. at
576. The employer fails to meet the
burden by merely presenting evidence
of lack of employee success in
obtaining interim employment or a
demonstration of low interim
earnings. In determining if a
discriminatee met his burden to
mitigate, “he is held .. . only to
reasonable exertions in this regard,
not the highest standard of
diligence."* N.L.R.B. v. Arduini
Mfg. Co., supra 395 F.2d at 422-423.
The basis for this determination is
that success is not a measure of
sufficiency of search for interim
App. 152
ee
employment for the law “only requires
an honest good faith effort.”
N.L.R.B. v. Cashman Auto Company, 223
P.2G@ 632, 836 (C.A. 1, 1955). Aliso
considered in determining the
reasonableness of efforts are the
employee's skills and qualifications,
his age and the labor conditions in
the area. Mastro Plastics Corp., 136
NLRB 1342, 1359 (1962).
In determining diligence, activity
during the entire backpay period is
considered as well as the entire
record. Saginaw Aggregates, Inc.,
Supra; Nickey Chevrolet Sales, Inc.,
Supra. Any uncertainty in the
evidence is to be resolved against the
company as the wrongdoer. N.L.R.B. v.
Miami Coca-Cola Bottling Company,
Supra; Southern Household Products-
App. 153
Company, Inc., supra. See generally
Aircraft and Helicopter Leasing and
Sales, Inc., supra; Westin Hotels
Corporation, 267 NLRB No. 58 (1983).
As Judge William J. Pannier noted
in International Brotherhood of
Electrical Workers, Local 401 (Stone &
Webster Engineering Corp.), 266 NLRB
158 (1983) at slip op. p. 12:
[I]t is a fundamental proposition
of backpay doctrine that “there is
no requirement that an employee
wrongfully terminated must
instantly seek new work ‘
Keller Aluminum Chairs Southern,
171 NLRB 1252 at 1257 (1968).
Accord: Saginaw Aggregates, Inc.,
198 NLRB 598 (1972). For example,
in Keller an employee who did not
seek work during the two-week
period immediately following the
discrimination against him was
held not to have failed to
exercise due diligence where
thereafter he sought the
obligation imposed by the
mitigation doctrine, i.e., sought
interim employment. Similarly, an
employee who quit one interim job
to take another at a higher rate
of pay was held not to have
App. 154
ree.
incurred a willful loss of
earnings, as a result of having
quit the first employer, when he
was laid off by the second
employer, absent “evidence that
the employment with [the first
interim employer] was ‘permanent’
while that with [the second
interim employer] was specified to
be ‘temporary.'"” Construction and
General Laborers Local No. 1440
(Delbert A. Schultz and William R.
Erdman and Southern Wisconsin
Contractors Association;
Martindale Builders, Inc., parties
in interest), 243 NLRB 1169, 1172
(1979).
These general principles will be
considered in determining the backpay
entitlements of the individual
claimants.
2. Economic Defenses
Respondent asserts that the
economic situation was such that the
claimants should have found interim
employment readily throughout the
entire backpay period. In support of
this claim, Respondent introduced
App. 155
evidence through H. Laurence Miller,
Jr., a professor of economics at the
University of Hawaii. Dr. Miller was
found to be an expert as defined in
the Federal Rules of Practice. He
based his testimony on material
provided to him almost, if not
entirely, by Respondent. Dr. Miller's
testimony is found not to be probative
of job availability inasmuch as he
admittedly could not attest to the
truth and accuracy of the materials he
reviewed. These materials did not
adequately describe how they were
compiled, the source of their
statistics, the methodology employed
to arrive at those statistics or the
derivation of estimates for particular
occupations or industries.
App. 156
Certain of Dr. Miller's testimony
was not placed into a useable
context. For example, he stated there
was a general increase in tourism but
there was no evidence as to whether
there was a concomitant increase in
the tour bus business derivative from
that general increase in tourism.
There is evidence of record from the
witnesses that the nature of tourism
had changed, that many tourists are
now traveling independently and not
using tour buses. Thus there is no
basis in the record to analogize an
increase in tourism with an increase
in job availability as a tour bus
driver. Dr. Miller could not opine
whether the individuals involved in
this particular proceeding, based on
the information he had, had made a
App. 157
good faith job search consonant with
the term as used in the field of
economics, particularly those used in,
Respondent's Exhibits S-2 and S-3,
which are articles by two economists
entitled “The Economics of Job
Search: A Survey,” reprints from a
magazine entitled “Economic Inquiry,”
Volume XIV, June 1976, which describe
optimum job search utilizing a
compendium of sociological,
psychological and economic factors.
This definition of “job search” was
not shown to be analogous to the
applicable legal definition.
Application of these studies,
whose accuracy and predicates he did
not know and could not commend, led
him to the general conclusion that
some claimants were successful in
App. 158
finding interim employment by chance,
regardless of the fact that they were
fulltime or parttime workers. He
suspected, without any factual basis,
that individual need for income might
have had an impact on the intensity of
job search, but he really did not
know. Individual idiosyncracies or
unique attributes, such as the ability
to speak a foreign language, had some
bearing on success. The individuals’
personal attitudes, whether they were
depressed or had a positive perception
of self-worth, could affect intensity
of job search. All these are factors
that cculd increase chances for
success. Thus, based on his
testimony, mere chance could have been
the primary attribute that led to
success or lack thereof in finding
App. 159
inant
———
interim employment. In sum, there was
no economic evidence given by Dr.
Miller that would support a finding of
failure to mitigate by any of the
claimants.
3. Testimony of the Bus Companies
In further support of its
position, Respondent elicited
testimony from approximately seven bus
companies about job availability. As
noted in Respondent's brief, the bus
companies did not retain job
applications for a period of time
sufficient to permit a determination
that any of the claimants, who were
not hired by these companies, did not
apply for employment. These companies
only retained job applications of
individuals they hired. Where there
was testimony that names of claimants
App. 160
were unfamiliar or there was no recall
of their applying for jobs, there was
no reliable context in which to
evaluate this information. For
example, the mere passage of time
would impair memory; a claimant could
have telephoned and been told there
were no jobs available, which could be
construed by the bus company
representative as failure to apply for
a job; and the individual testifying
might not have been the individual who
waS approached, either telephonically
Or in person with an inquiry from a
claimant about a job.'°
These bus company witnesses
testified as to the number of drivers
they hired during the backpay period.
This testimony is not probative in
determining job availability for in
App. 1l16l
a
almost all instances there was no
Showing of a direct correlation
between the number of drivers hired
per year and the number of
applicants. There was no showing of
the attributes the employer was
seeking in drivers, such as foreign
language skills or any other special
factors. For example, Cheryl
Kasamoto, of Robert's Hawaii, Inc.,
testified that in 1979 Robert's hired
nine individuals who were both new
employees and rehires. She does not
know how many of the nine were
rehires; they could have given
preference to individuals who had
previously worked for them. It was
not ascertained if rehires are given
preference as an industry or company
practice. The figures proffered by
App. 162
the different bus companies indicating
the number of people hired were not
placed in a context which would
indicate job availability of a nature
that is indicative of job availability
or a willful failure to mitigate by
any claimant.
In the instant proceeding, not one
employer testified that any of the
claimants refused an offer of
employment nor did they represent that
if any particular claimant had applied
for work with them they would have
been hired. There was no explanation
as to why some of the claimants, who
testified that they filed for
employment with certain companies,
were not hired. As Administrative Law
Judge Schneider found in Firestone
Synthetic Fibers and Textile Company,
App. 163
aaa
Division of the Firestone Tire and
Rubber Company, 207 NLRB 810 (1973):
In this context, their
testimony to the effect that they
hired "X" number of employees
during the backpay period is thus
of no effect whatever with respect. |
to the issue of whether
[claimants] would have secured
employment had [they] applied.
See further, Midwest Hanger Co., supra
221 NLRB at Q91ll.
4. Analyses of Individual Claims
a. Simeon Aqgao, Jr.
The gross backpay listed in the
backpay specification for this
employee totals $60,813.09, covering a-
period from the day after his unlawful
discharge on January 3l, 1977 to
October 21, 1980, which is
approximately 2 weeks after a valid
offer of reinstatement was sent to
him, albeit not to his current
address. Respondent does not question
App. 164
the use of October 21, 1980 as the
date for the cessation of Agao's
backpay period. The backpay
specification indicates that this
claimant had net interim earnings
including unquestioned expenses of $15
for mileage and telephone calls, for a
total net backpay of $7,321.18.
Respondent avers that Agao did not
sufficiently mitigate because he
accepted, on March 5, 1977, a lower
paying position as a fulltime driver
with Robert's Hawaii Tours. At one
time, the job ies parttime due to
renovations to Robert's facilities.
Although he worked 8 hours a day as a
parttime employee, he received
substantially lower wages and
benefits. Respondent asserts that
Since the job at Robert's was a
App. 165
a
lower-paying position, Agao did not
make an adequate job search for an
equivalent position. Citing McCann
Steel Co., 239 NLRB 1302 (1979),
implementing the decision in McCann
Steel v. N.L.R.B., 570 F.2d 652 (6th
Cir. 1978); N.L.R.B. v. Madison
Courier, int., Sen Fie oes eee eos
1974). In McCann, Id. at 1302, it was
found:
In its decision [McCann Steel
Company, Inc. v. N.L.R.B.], the
Court stated (570 F.2d at 655):
We believe that substantially
equivalent employment refers
to the hours worked at the
interim employer as well as
the nature of the work
there. Thus, Hinsley refused
to accept “substantially
equivalent employment” when
he refused to work the same
numbers of hours at his
interim employer as he worked
at McCann. This was a
willful loss of earnings.
The NLRB should calculate a
constructive interim earnings
figure based on the amount of
App. 166
pay Hinsley would have
received at his interim
employer had he always worked
the same number of hours,
including overtime, he
averaged at McCann to the
extent those hours were
available at the interim
employer. The NLRB should
then deduct the new —
constructive interim earnings
figure from the amount
Hinsley would have earned at
McCann in calculating the
backpay period.
The instant case is clearly
distinguishable. Agao testified
credibly''’ and without controversion
that he worked all the time available
at Robert's, seeking all possible
overtime, but that overtime was not
compensated in the manner that it was
at Rainbow. Respondent, apparently
cognizant of the veracity of this
testimony, next argues that Agao
should have continued his job search
after accepting the position at
App. 167
—
Robert's since the terms and
conditions of his employment at
Robert's were not as favorable as they
were at Rainbow and, therefore, he
should have searched for more Suitable
work. Respondent, however, failed to
demonstrate that the position at
Robert's was significantly
lower-paying or was so dangerous,
distasteful or essentially different
from his employment at Rainbow as to
incur an obligation to seek other
employment. <Agao, a few days bexore
accepting the Robert's position, was
working VSP Tours and the earnings he
made at VSP Tours were deducted as
interim earnings. That VSP Tours was
not listed on the forms he submitted
to the Board detailing the nature and
extent of his job search, does not
App. 168
discredit him. Agao did, prior to
commencement of this proceeding,
report these earnings.
Respondent also argues that Agao
did not make a diligent search between
his discharge and his employment with
VSP Tours and Robert's. Agao
testified that in February 1977 he-
looked for work at the following bus
companies: Hawaiian Discovery,
Hawaiian Scenic, MTL--which is also
called the Bus and is the public
transportation company for the
area--the Kauai Electric Company and
Barking Sands Missile Base.
Respondent asserts these claimed
employment inquiries are not truthful,
arguing that Agao denied in his
testimony making application to
Barking Sands Missile Base. in tact,
App. 169
Agao stated he did not make a written
application at Barking Sands Missile
Base, not that he did not apply in
some other form such as by telephone
Or personal visit. Respondent
produced a witness, the former
operations manager for Greyhound, who
did not recall Agao Applying for
employment. This is not probative of
failure to make a diligent job
search. The hiatus in time alone
could cause the failure of memory by
either the Greyhound witness or Agao.
Also, the Greyhound employee could
have been on vacation or otherwise
unavailable during February 1977. As
noted above, any uncertainty is to be
resolved against the Respondent as the
wrongdoer; and since it has not been
clearly shown that Agao failed to make
App. 170
applications or inquire about job
availability at the places he stated,
it is found that, considering the
record as a whole, he diligently
sought other employment during the
backpay period, being successful
approximately one month after his
discharge. Saginaw Aggregates, Inc.,
Supra at 598; Nickey Chevrolet Sales,
Inc., supra at 398; N.L.R.B. v. Miami
Coca-Cola Bottling Co., supra at 569;
Southern Household Products Company,
Inc., supra at 88l.
Respondent notes that Agao, as
well as most of the other claimants,
failed to complete their backpay forms
submitted to the Board in a manner
consistent with their testimony.
Their testimony indicated their job
searches were more extensive than the
App. 171
forms indicated. As noted previously,
the forms were sent to the claimants
generally in April 1982. The
extensive period of time between the
actual events and the request to
record them understandably resulted in
an inability to recall when and where
they made each job application.
Agao's failure to list initial VSP
Tours on a form he supplied to the
Board does not render him not
credibile nor does in constitute a
willful failure to provide
information. This information was
provided by Agao fully and freely from
the inception of the trial. Poor
record-keeping, as indicated above, is
not a basis for denial of a claim in a
backpay proceeding. This does not
disqualify or toll the backpay
App. 172
obligation. Employees are not
disqualified from backpay merely
because of poor record-keeping or
uncertainty of memory. See Patrick F.
Izzi, d/b/a Izzi Trucking Company,
Supra at 245.
Although Agao's interim earnings
were less than he would have earned if
he had not been wrongfully discharged,
this is not probative of a failure to
take suitable interim employment.
Agao was the third in seniority at
Respondent. He was unable for the
period of time he worked for Robert's
to attain comparable seniority. There
was no showing by Respondent that
there were job opportunities extant as
a fulltime bus driver or other
Suitable interim employment where Agao
could attain sufficient seniority to
App. 173
fully mitigate Respondent's backpay
liability. There is no showing in
fact or in law that requires a
discriminatee to fully mitigage a
backpay obligation once a reasonably
comparable job has been found. There
1s no showing that a more comparable
job was availalbe given all the
Circumstances, including seniority.
Further, there was no showing that the
acceptance of a job at Robert's was
the acceptance of significantly
lower-paying work too soon after the
discriminatory discharge, warranting a
reduction in backpay on the grounds of
a Willfully incurred loss by accepting
"an unsuitably” lower-paying
position. N.L.R.B. v. Madison
Courier, Inc., supra 572 F.2d at
1321. Agao accepted a fulltime
App. 174
q
position at Robert's approximately one
month after unsuccessfully searching
for work, which became parttime at one
point during the backpay period with
the same number of hours assigned but
at lower pay. The Robert's position
was a Similarly skilled position that
compared favorably with Respondent's.
It was not shown that Respondent did
not pay higher than the prevailing
wages and benefits. As noted in
Aircraft and Helicopter Leasing and
Sales, Inc., supra, 227 NLRB at 646
(1976):
The employer does not meet that
burden by presenting evidence of
lack of employee success in
obtaining interim employment or
low interim earnings; rather, the
employer must affirmatively
demonstrate that the employee
"neglected to make reasonable
efforts to find interim work.”
[Citation omitted. ]
App. 175
In the case of Agao, his interim
earnings were not shown to be
Significantly less than that which he
earned at Respondent nor that which he
could have earned at any other bus
company considering the loss of
seniority. Accordingly, this
assertion by Respondent is found to be
without merit.
Respondent's argument would place
the claimants in the extremely
difficult position of having to seek
employment that is exactly equivalent,
if not better in pay and working
conditions, than that which they lost
without a clear showing that there was
an availability of such working
Situations in the Honolulu area. This
argument overlooks the requirement
that the claimant only seek
App. 176
substantially equivalent positions.
In fact, if one were to adopt
Respondent's position, the
discriminatee would not have to accept
the Robert's job because it had more
onerous terms and conditions of
employment with less total
remuneration. See Waukegan-North
Chicago Transit Company et al., 235
NLRB 802 (1978), fn.4, citing the
Richard W. Kaase Company, 162 NLRB
1320 (1967). Such a construction
would result in much higher backpay
awards and is contraindicated by
established case law.
Respondent also claims that the
backpay computations were in error
because there was one notation on a
social security form indicating that
Agao earned approximately $28,823 in
App. 177
1978 rather than the $14,411.63
indicated in the specification.
Respondent never raised this issue at
trial to clarity this conflict. The
records of Robert's were available to
Respondent, and were not used to
controvert the accuracy of the
Specification. This failure to raise
the issue at a time when explanation
or clarification was possible cannot
now support an attack on the
specification. As previously stated,
all doubts must be resolved against
Respondent.
Agao did lose 2 or 3 days work
Guring the bakcpay period because of a
sky-diving injury. Also, after his
first year of employment Agao took
vacations, and did not look for
additional employment during these
App. 178
vacations. Since Agao was a fulltime
employee of Respondent, he was
entitled to vacation and health
benefits. Respondent did not allege
in its answer or amended answer to the
specification that vacation pay was
improperly added nor did it seek to
amend its answer or otherwise raise
the issue during the hearing. The
same obtains for the 2 to 3 days when
Agao was absent due to illness caused
by the sky-diving accident.
Respondent had full Knowledge at the
hearing yet made no timely request to
amend and correct the specification.
Additionally, there was no showing
that these benefits during the interim
period would not obtain if he had
retained his employment with
Respondent. See Florida Steel
App. 179
Corporation and United Steelworkers of
America, AFL-CIO, 234 NLRB 1089 (1978).
The term “backpay"™ encompasses not
only wages but any accompanying
pension, health, welfare or other
fringe benefit payments or
contributions which are integral parts
of an employer's Overall wage
structure. See N.L.R.B. v. Strong,
393 U.S. 358-360, n. 4; N.L.R.B. Vv.
Rice Lake Creamery Co., supra 365 F.2d
at 892; Inland Steel Co., 77 NLRB l,
4-5, n.13 (1948), and cases cited
therein, enf. sub. nom. Inland Steel
Co. v. N.L.R.B., 170 F.2G 247 € Fee
Cir. 1948), cert. den. 336 U.S. 960.
Since the backpay award is intended to
make employees whole, it properly
includes any fringe benefit payments
or contributions that would normally
App. 180
be afforded the affected employees
along with their wages, including
health and welfare payments and
vacations. Under Respondent's benefit
plan, Agao would have been paid for
the days he was out ill or on
vacation. It was not shown that Agao
took vacations or sick leave that
exceeded the reimbursable benefits’’*
he would have received from Respondent
save for his unlawful discharge. In
fact, it is just such losses of time
without pay that would have been
covered save for the illegal
discrimination that the Board provides
for in its remedy. See, for example,
N.L.R.B. v. Rice Lake Creamery Co.,
Supra 365 F.2d at 888.
In sum, it is found that Agao made
an honest and good faith successful
App. 181
effort to find substantially
equivalent employment. Accordingly, I
conclude that Agao is entitled to net
backpay in the amount of $7,321.18,
exclusive of interest.
b. Michael Akamine
The backpay period for this
claimant extends from the first
quarter of 1977 through the third
quarter of 1977 and General Counsel
claims total net backpay of
$1,663.18. From the fourth quarter of
1977 through 1980, Akamine had greater
interim earnings than gross backpay.
In the report forms Akamine filed
with the Board, he indicated that he
applied for interim work at Hawaiian
Scenic, Grey Line--also known as
Hawaii Transportation, Pan American
Airlines, Continental Airlines,
App. 182
Polynesian Hospitality, Charley's, and
Robert's Tours. During his testimony,
Akamine confirmed these applications
and further indicated that in February
1977 he applied to MTL. After
approximately 5 weeks of searching for
a job, Akamine commenced working for
Robert's on or about March 2, 1977.
Respondent, in its brief, admits that
Akamine diligently searched for work;
and in fact claims that he should be
the standard against which all
claimants are measured. Considering
the facts and Respondent's admission,
it is concluded that Akamine is
entitled to net backpay in the amount
of $1,663.18, exclusive of interest.
c. Miles Fonseca
Fonseca was employed by Respondent
as a parttime driver. During this
App. 183
employment, as well as currently, he
worked fulltime as a fireman for the
City and County of Honolulu. Net
backpay is claimed for him from
February 1, 1977 to October 14, 1980
in the amount of $18,421.76, which
includes an additional $40 claimed for
union dues expended to retain an
interim job.
Respondent asserts that Fonseca
should not receive any backpay and, if
there is some entitlement, it should
total $414.33 due to willful loss of
earnings occasioned by his quitting
after being rehired by Respondent in
February 1977. Respondent also claims
that Fonseca failed to search
diligently for interim employment and
willfully concealed earnings from
various construction jobs and certain
App. 184
tips. Further, Respondent claims that
there were several periods of
unavailability for work which are
offsets.
It is undisputed that after his
unlawful discharge, Fonseca returned
to work, starting at the bottom of the
parttime seniority list for, as a
prerequisite to such reinstatement, he
had to relinquish seniority. The
question of whether this was
reinstatement to a substantially
equivalent job was not decided in the
underlying unfair labor practice
proceeding. However, the underlying
proceeding did find Fonseca and the
other discriminatees unconditionally
offered to return to work February 2,
1977, and would have returned if Kolt
had not told them they “would go to
App. 185
ecieenaieeiiee
the bottom of the seniority roster,
i.e., the first full-time returnee
would be No. 8 on the full-time
seniority roster and the first
part-time returnee would also be No. 8
on the part-time roster.” Rainbow
Tours, Inc., 241 NLRB 589 at 594. The
underlying decision ordered Respondent
to make all the employees whole “for
any loss of earnings they may have
suffered as a result of their
discharges” and to offer them
immediate and full reinstatement to
their former jobs or, if those jobs no
longer exist, to substantially
equivalent jobs, without prejudice to
their seniority and other rights and
privileges.” Id. at 598. Respondent
clearly failed to comply with this
order gby rehiring Fonseca, and
App. 186
placing him at the bottom of the
seniority list. There was no showing
that during the term of Fonseca's
reinstatement this shortcoming has
been rectified. As noted in Sumco
Mfg. Co., Inc. (Summit Grinding
Company), 267 NLRB No. 62, slip op.
p.ll (1983):
: an offer of reinstatement to
a job which is not substantially
equivalent to that held prior to
the discrimination does not toll
backpay even when, as here, the
employee accepts the offer, if the
employee subsequently quits
because of dissatisfaction with
the inadequate reinstatement. J/B
Industries, Inc., 245 NLRB 538
(1979) (employee worked 2 months
at a non-equivalent job before
quitting); Marlene Industries
Corp., et al., 234 NLRB 285 (1978)
(employee worked 2 or 3 weeks at
the non-equivalent position);
Glass Guard Industries, Inc., 227
NLRB 1140 (1977). Moreover, as
the Board noted in Marlene
Industries, supra at 291, the
reinstatement of an employee
without according her the
seniority she had acquired prior
to the discriminatory discharge
App. 187
does not satisfy Respondent's
Obligation to reinstate an
employee to a substantially
equivalent position.
There was no evidence that
Respondent reinstated Fonseca to a
substantially equivalent position; on
the contrary, it admittedly required |
that he go to the bottom of the _ |
seniority list which clearly had an
adverse impact on his choice of tour
bus runs.
The above-quoted case does infer
that the loss of seniority must have a
Casual nexus in the decision to quit.
Respondent argues that Fonseca quit
for other reasons. Fonseca applied
for reemployment on February 2, 1977.
It is uncontroverted that prior to
such reinstatement, Fonseca was one of
the five most senior parttime
employees. Around early April 1977,
App. 188
he resigned from Rainbow and started
working for Charley's, another tour
bus company.
Respondent argues that Fonseca
quit because he was having problems
with some drivers at Rainbow. The
basis of this contention is that
Gaylord Kolt, the stepson of Steve
Kolt, chief operating officer of
Respondent, went to a bar with Fonseca
after work on a few occasions and,
during one of these occasions, an
individual who did not participate in
the strike made a remark about
Fonseca. Fonseca stated he wanted to
kick the person's posterior but that
the individual was too short.
Respondent also notes that a comment
made in 1982 on a form provided by the
Board, wherein Fonseca stated he did
App. 189
not want to work for Rainbow anymore,
because it would create internal
problems, indicates he quit because of
such internal problems. Another
statement on the form, that he was not
interested in working for someone who
wrongly fired him, was not addressed
by Respondent. As further proof that
Fonseca's reasons for quitting were
other than reduction in seniority,
Respondent argues that he never
commented to Gaylord that he was
dissatisfied with the dispatches he
was -reeeiving even though Gaylord was
a dispatcher. Gaylord's initial
description of himself as a dispatcher
was, On cross-examination, clarified
as being a dispatcher trainee who did
not work those hours when the drivers
were actually dispatched. The
App. 190
dispatcher who actually handed out the
jobs was not called to testify.
Therefore, the requested inference has
no basis.
Fonseca’s testimony that he
received less hours of work than other
parttime drivers was based on his
discussion with these other drivers,
and the fact that the nature of the
runs he received was different from
those he received prior to his
unlawful discharge. Prior to his
discharge, he had longer runs, mostly
tours; after reinstatement with the
loss of seniority, he was not given
“money runs.” He considered "money
runs” and foreign tourist pick-ups,
which also have tours connected to
them, as “money runs.” Upon his
return, he would be give 2-hours
App. 191
transfers of tourists and baggage,
which are not “money runs.” Since he
lived quite a distance from work, he
informed an unnamed individual at the
Company that if this was all that was
available, it did not pay for his
commuting from the north shore.
Pamela Talkin, the compliance
officer who reviewed the figures,
stated that although during one week
after his reinstatement Fonseca did
earn a substantial amount of money, in
general he earned less after his
reinstatement than he had been earning
prior to his unlawful discharge.
Talkin also noted, without refutation,
that Fonseca had an unusually low
number of hours in December, before
his discharge, compared to the rest of
his pre-discharge work history. A
App. 192
review of the exhibits indicates that
he generally earned substantially less
after his reinstatement for those
weeks reported although there were
some fluctuations. There was no
explanation as to why he had only one
week of substantial earnings or why it
was different from the other weeks.
Respondent, who has the records, did
not present an analysis of Fonseca's
working record for a meaningful period
prior to his discharge, and did not
refute Fonseca's testimony that he
received mostly transfers, or scrub
runs, not regular money runs as he had
in the past. Respondent's failure to
explain its failure to extrapolate
from its payroll records evidence
substantiating their contention
supports drawing an adverse
App. 193
inference. The Company did not refute
Fonseca’s claim that he complained
about his runs, just that he did not
complain to Gaylord or his
stepfather. There was no evidence
indicating when the incident in the
bar occurred in relation to his
decision to quit. There is no basis
for drawing an inference that this
incident was the casual nexus for his
resignation. Fonseca explained that
his statement on the form was an
analysis, reached in 1982 in response
to the Company's 1980 offer of
reinstatement, indicating his feeling
of dissatisfaction over the Company's
past treatment of him. He denied that
the reason he left was because there
were hard feelings regarding other
employees or internal problems.
App. 194
Fonseca's testimony is credited based
on demeanor, inherent probabilities,
and his demonstrated candor.
Respondent also argues that since
Fonseca was simultaneously employed by
Charley's Tours and Transportation at
the time he left Rainbow, he actually
quit to go to another job.'°*
Fonseca denies that was the reason for
his leaving. Chariey's did not offer
him much work at that time. In fact,
when he was working at Charley's in
the second quarter of 1978, he was
also working for Greyhound. It is
undisputed that the tour business at
Charley's was very slow. Respondent
did not introduce any evidence that
indicated Fonseca was working so many
hours at Charley's Tours that it
Operated as an inducement to him to
App. 195
leave Rainbow or precluded him from
working for both companies. Again
Respondent has failed to present, as
is its burden herein, evidence to
Support its claim that Fonseca quit
for reasons not connected with his
discriminatory reinstatement.
Respondent's request that Fonseca's
backpay specification be computed to
reflect this quit and the amount he
would have earned had he not quit, is
found to be without merit.
As Respondent notes in its brief,
quoting from N.L.R.B. v. Aycock, 277
F.20 686i at G7 (3th Cir. 1967):
Where a discriminatee takes an
interim job with the
discriminator, his quitting for
reasons unconnected with the
discrimination tolls the
discriminator's backpay obligation
to the extent of the interim wage;
this is the same result as if the
discriminatee had unjustifiedly
quit a similar job with a third
App. 196
party. In neither case does the
employee have the unlimited option
to leave an interim job without
inCurring a willful loss.
Assuming arguendo that this vas
comparable to any other interim
employment, a claimant does not
willfully incur a loss of earnings
merely by voluntarily quitting interim
employment, unless he does so without
good reason. See N.L.R.B. v. Thomas
~
J. Aycock Jr. d/b/a Vita Foods, ibid.
at 87; N.L.R.B. v. Mastro Plastics
Corp., supra 354 F.2d at i174, n.3}
N.L.R.B. v. Madison Courier Inc.,
supra 472 F.2d at 1307. Respondent
alleges that harassment by other
employees was the basis for his
leaving Respondent after his
reinstatement. If this is true, the
burden of proof is on the employer.
See Marlene Industries Corp. v.
App. 197
N.L.R.B., supra 440 F.2d at 674. The
Respondent has failed in this burden.
A discriminatee need not seek, accept
Or retain interim employment which is
essentially different from his regular
job, which is unsuitable to someone of
his background, skill and experience,
or which involves substantially more
onerous conditions. Lozano
Enterprises, 152 NLRB 258, 260 (1965),
enf. 356 F.2d 483 (9th Cir. 1966).
As noted in Richard W. Kaase
Company, supra 162 NLRB at 1320:
A discriminatee does not have to
accept a job with more onerous
terms and conditions of
employment. His obligation is to
mitigate an employer's backpay
liability only to the extent that
the claimant accepts substantially
equivalent employment.
Setting aside the loss of seniority,
which in itself removes the job as
being substantially equivalent, the
App. 198
claimant is not required to subject
himself to threats and more onerous
working condition occasioned by
harassment from co-workers.
Respondent argues in its brief that
“Fonseca did, however, tell Kolt he
was having problems with some of the
drivers at Rainbow.” There is no
indication that Respondent tried to
alleviate these difficulties or
otherwise abate the known onerous
nature of the employment. See Midwest
Hanger Co., supra 221 NLRB at 920.
Respondent infers that Fonseca had
formed the intention not to accept
reinstatement if offered by Respondent
because of the difficulties he had
with his co-workers and, thus,
Respondent's backpay liability should
be tolled. It 1s not unexpected or
App. i99
unusual that Fonseca would have
concern about untoward comments made
to him by co-workers after a strike or
would have ambiguous feelings toward
an employer who unlawfully discharged
him and reinstated him with a loss of
seniority resulting in the lost
facility to choose the runs he
considered more desirable Fonseca's
equivocal remarks do not demonstrate
he irrevocably decided to decline a
good faith offer of reinstatement.
Respondent had within its power the
right to test the propriety of this
remedy by reinstating Fonseca with
appropriate Seniority. Respondent's
election not to do so until October
1980 will not support a curtailment of
Respondent's backpay liability to
Fonseca based solely on his ambiguous
App. 200
remarks. Accordingly, it is concluded
that Fonseca's backpay continued to
run after he left Respondent and that
his quitting did not toll such
entitlement for he did not receive a
valid offer of reinstatement to
substantially equivalent employment.
There was no showing that any claimant
exhibited unwillingness to return to
work for Respondent prior to receiving
a valid, good faith, unconditional
offer of reinstatement.
There is an absence of any
evidence of a cavalier proclivity by
Fonseca while employed with Respondent
or elsewhere to change jobs or to
engage in disputes with co-workers or
supervisors. If Respondent's
contentions are true, then it requires
a finding that Fonseca was goaded into
App. 201
such conduct by the situation imposed
on his resumed employment and, thus,
the backpay is not tolled. See United
Aircraft Corporation et al., 204 NLRB
1068 at 1078 (1973). Again,
Respondent has failed to show that
Fonseca willfully incurred a loss of
earnings by quitting his employment
with it in early April 1977 under the
circumstances described in this
proceeding and admitted by Respondent.
Finally, as noted above, where, as
here, there is a question as to the
motive, all questions must be resolved
against the wrongdoer, Respondent.
Consequently, even if one rejects the
above finding that Fonseca quit
because of a loss of seniority
resulting in loss of earnings and loss
remunerative assignment of runs, a
App. 202
finding which Respondent's evidence
failed to clearly refute, the fact
that Respondent knew that Fonseca was
being harassed by strike replacements
or other coworkers who were given
greater seniority than he and did
nothing to mitigate it, is a
substantially more onerous working ©
condition than that existent in his
previous position. He is not required
to work under those conditions. See
N.L.R.B. v. Miami Coca-Cola Bottling
Company, supra 360 F.2d at 569. See
further East Wind Enterprises, 268
NLRB No. 89, slip Op. p.4 (1984).
Respondent also argues that
Fonseca's backpay should be tolled
because he revealed interim earnings
with Greyhound and from construction
jobs only the week before the trail.
App. 203
Recognizing that Board law finds
revelation of information prior to
commencement of trial not an
indication of willful concealment,
albeit shortly before such event,
Respondent claims that since Fonseca
was under subpoena at the time, it was
not voluntarily submitted
information. The “perfidious" nature
of such late revelation, according to
Respondent, is demonstrated by the
fact that Fonseca described the
Greyhound earnings as being off the
books cash payments when in fact he
received paychecks and tips. It is
undisputed that Fonseca volunteered
that he worked for Greyhound and
Respondent was able to find documents
indicating actual payments although
there were no deductions from those
App. 204
— —
checks for pension, health and welfare
payments, social security and
otherwise.
Fonseca mischaracterized the
nature of the payments and had no
recollection of receiving paychecks,
construing payments without
deductions, normally required by law,
to be off the books. This
mischaracterization does not warrant a
finding that he intentionally
concealed employment or income from
the Board and Respondent. There was
no showing of perfidy or deception of
a nature to be deterred by the tolling
of backpay during those quarters in
which such concealments occurred.
American Navigation Co., supra 268
NLRB No. 62. Respondent had notice
the week before commencement of
App. 205
hearing that Fonseca had interim
earnings from employment in casual
construction and working for
Greyhound. After initially examining
Fonseca about these, as well as his
other jobs and job-seeking efforts,
Respondent had a 6-week hiatus in the
trial to test the accuracy of these
revelations. The Board has
consistently recognized that
individual claimants have difficulty
in keeping accurate accounts of
interim employment which they often
hold for a short term, particularly
where, as here, there was a lengthy
backpay period. Despite these
factors, the claimant did not fail to
report the earnings. His estimates
were, in the case of Greyhound,
inaccurate. The estimates of his
App. 206
earnings from the construction jobs
used in the specification, was higher
by $500 than Fonseca's eetinsts.
There is no showing that Fonseca's
failure to put into the documents
filed with the Board all the
information he subsequently revealed
‘to the Board agent at their first
meeting was an attempt at guile.
Fonseca did reveal the sources of
income to the General Counsel and
thence to the Respondent “before the
weekend prior to the hearing, of both
the income and of the failure to
report it for tax and unemployment
benefit purposes.” There was no
showing of deliberate concealment of
earnings or any other improprieties
that would hamper Respondent in the
presentation of its case. There was
App. 207
no motion for a continuance beyond the
6-week recess in the trial. Thus,
there is no basis to disqualify
Fonseca from recovering backpay due to
his failure to complete the forms sent
to him by the Board well after his
unlawful discharge and well after the
adjudication that such discharge was
discriminatory. See Cumberland Farms
Dairy of New York, Inc., 266 NLRB No.
166 (1983).
That Fonseca erred in his
estimates as to how much he earned at
Greyhound does not support a
contention that there was a fraudulent
withholding of information. It has
long been recognized that such
statements of interim earnings in
circumstances such as these are only
estimates and that errors in estimates
App. 208
may tilt in either direction. The
amount of backpay awarded requires
only that it be based on reasonable
conclusions. Again, Respondent has
failed to show that there was an
intentional concealment or fraudulent
concealment of employment. See
American Navigation Co., supra. This
finding is buttressed by the
undisputed evidence that Fonseca
believed there were no records of
these Greyhound earnings, and there
were no records of his income from
Casual construction work and he could
have concealed these earnings. Yet
such income was revealed before the
Erie. See West Texas Utilities
Company, Inc., 109 NLRB 936; Deena
Artware, Inc., 112 NLRB 371, 375,
enforcing 228 F.2d 871 (C.A. 6).
App. 209
Fonseca's admission that he did
not report some of the interim
earnings he received on his tax
returns is reprehensible; however, it
lis not the type of concealment that
would toll backpay. There was no
claim or contention by Respondent that
Fonseca's failure to reveal income
from the construction job on his taxes
was a factor that would bar him from
reinstatement. The candor in which he
revealed such actions, cojoined with
the observation of his demeanor and
all the other relevant testimony
convinces me that Fonseca was
testifying truthfully to the best of
his ability to recall the
Circumstances of his job search and
the jobs he held during the backpay
period. Fonseca was cognizant of his
App. 210
family responsibilities which would
also mitigate the gross backpay due
him. See N.L.R.B. v. Southern Silk
Milis,. iIne.,. 2424 F.20 697 (Ch. 6,
1957), cert. den. 355 U.S. 821; United
Aircraft Corporation and Local Lodge
1746, et al., supra 204 NLRB at 1068.
As was noted in Insta-Roto Inc.,
267 NLRB No. 167 (1983), slip Op. pp.
4-5:
Improper as this man's conduct may
have been with respect to his
statutory duty to pay his taxes
like everybody else, I do not
think his behavior in this respect
sufficient reason to deprive him
now of the make-whole remedy to
which he is entitled under the
Board's order .. . . There was no
real deception against the
Respondent, for the picture it was
faced with at the hearing was
correct in all respects. I do not
mean t@ condone anybody's
wrongdoing where payment of taxes
is concerned, or even where
honesty in their dealings with
this administrative agency is
concerned. But I think it is a
relevant factor, all things
App. 211
considered, that (he) did, of his
own volition, play it straight in
the end.
Respondent argues that Fonseca
failed to make “reasonable efforts to
mitigate .. . loss of income.”
N.L.R.B. v. Arduini Mfaq. Corp., supra
394 F.2d at 422. Again, this is an
affirmative defense; the burden is on
the employer to prove the necessary
facts. N.L.R.B. v. Mooney Aircraft,
Inc., supra 366 F.2d at 813; N
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