# Petition for Writ of Certiorari — Consolidated Freightways v. National Labor Relations Board

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1990
- **Citation:** 498 U.S. 817

## Text

89-1839 FILES
JUN 4 1999

N Baten SPANIOL, J

oO.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

CONSOLIDATED FREIGHTWAYS,
Petitioner,
v.

NATIONAL LABOR RELATIONS BOARD,
Respondent.

PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

JEFFREY LEE MADOFF
MATKOV, SALZMAN, MADOFF &
GUNN
100 West Monroe Street
Suite 1500
Chicago, Illinois 60603-1906
(312) 332-0777

Counsel of Record

June 4, 1990

i
QUESTION PRESENTED

1. In determining whether an employer’s backpay liability is
reduced by losses wilfully incurred by a discharged employee,
may the Board abandon any inquiry into the validity of the
employee’s reasons for rejecting a reinstatement offer, solely
because the offer contained a condition unknown to the employee
when he refused it and unrelated to the refusal.

PARTIES TO THE PROCEEDINGS

In addition to the parties identified in the caption, Charles
Hennessey, the charging party, appeared below in the initial pro-
ceedings before the Board and the court of appeals.

The corporate identities and relationships of petitioner, its par-
ent, and the non-wholly-owned subsidiaries thereof are listed in
the Appendix (App., infra, 79a-80a).

il

TABLE OF CONTENTS

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TABLE OF AUTHORITIES

PAGE
CASES
Consolidated Edison v. NLRB, 305 U.S. 197 (1938) 7
Eastern Die Co., 142 N.L.R.B. 601 (1963),
; enforced, 340 F.2d 607 (1st Cir. (1965), cert.
denied, 381 U.S. 951 (1965) .............. 4
. Ekco Products Co., 117 N.L.R.B. 137 (1957) .... 4
Ford Motor Co. v. EEOC, 458 U.S. 219 (1982) ... 7
Hribar Trucking, Inc., 166 N.L.R.B. 745 (1967),
enforced in part, 406 F.2d 854 (7th Cir. 1969) . 4
Leroy W. Craw, d/b/a Craw & Son, 244 N.L.R.B.
241 (1979), enforced, 622 F.2d 579 (3d Cir.
I I 5, 9
NLRB v. Financial Institution Employees, 475
eee eeeee 6
; NLRB v. Gullett Gin Co., 340 U.S. 361 (1951) ... 7

Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941) 6,7, 8, 9, 10
Research Designing Service, Inc., 141 N.L.R.B.

, CO 4
4

d L. Ronney & Sons Furniture Ma:vufacturing Co.,
97 N.L.R.B. 891 (1951), enforced as modified,
206 F.2d 730 (9th Cir. 1953), cert. denied, 346
i kk pee ee teeter teens 4
Sure-Tan, Inc. v. NLRB, 467 U.S. 883 (1984) .... 8
Statute:
National Labor Relations Act, 29 U.S.C. 151 et
seq.:
IE MPD, SONG) 2 0 ee eee ee 2
Miscellaneous:
Elkouri & Elkouri, How Arbitration Works
(Fourth Edition, 1985 and 1985-87 Supp.) ... 7

C. McCormick, Handbook on the Law of Damages
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IN THE

Supreme Court of the United States

OCTOBER TERM, 1989

No.
CONSOLIDATED FREIGHTWAYS,
Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.

PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Consolidated Freightways petitions for a writ of certiorari to
review the judgment and opinion of the United States Court of
Appeals for the District of Columbia Circuit in this case.

OPINIONS BELOW

The most recent opinion of the court of appeals (App., infra,
la-15a) is reported at 892 F.2d 1052. The supplemental decision
and order of the National Labor Relations Board (NLRB or
Board) (App., infra, 16a-26a), on earlier remand from the court of
appeals, are reported at 290 N.L.R.B. No. 85. The original opin-
ion of the court of appeals remanding the case to the Board (App.,
infra, 27a-42a) is reported at 669 F.2d 790. The original decision
and order of the Board (App., infra, 43a-47a) are reported at 253
N.L.R.B. 988. The decision of the administrative law judge
(App., infra, 48a-74a) is also reported at 253 N.L.R.B. 988.

2
JURISDICTION

The opinion of the court of appeals (App., infra, la) was
entered on December 29, 1989,! and a timely petition for rehear-
ing with suggestion for rehearing en banc was denied by the court
of appeals on March 5, 1990. (App., infra, 75a-76a). The jurisdic-
tion of this Court is invoked under 28 U.S.C. 1254(1).

STATUTORY PROVISIONS INVOLVED

Section 10(c) of the National Labor Relations Act (NLRA), 29
U.S.C. 160(e) (App., infra, 77a-78a), concerning the remedial
power of the National Labor Relations Board.

STATEMENT

The petitioner (employer) discharged a union-represented
employee. Pursuant to the exact terms of a final and binding
arbitration award resolving the employee’s grievance, the
employer offered the employee reinstatement to his prior posi-
tion, with full seniority and health and welfare benefits, but
without backpay and with a “final warning letter.” The dis-
charged employee, who was admittedly unaware of the warning
letter term of the award when he responded to the employer’s
offer, flatly refused the apparently unconditional offer of rein-
statement, expressly stating that he would not return to work
unless he received backpay—a condition which the employee
could not lawfully place on his reinstatement under this Court’s
decisions.

The employee subsequently filed an unfair labor practice
charge with the Board and, after a hearing, an administrative
law judge ordered full reinstatement, without the warning letter
and with backpay, finding that the employer’s previous reinstate-
ment offer, rejected by the employee, did not toll backpay or a
second reinstatement offer, since it was rendered conditional by

1 Judgment was entered on the same date for mandate purposes only.

ae: a at it ane,

9.

the absence of back pay and by the warning letter requirement of
the award. The employer appealed to the Board, which held that
the offer had not tolled backpay or reinstatement, solely because
of the warning letter term, found by the Board to be an invalid
condition on the offer.

The employer petitioned for review of the Board’s order, citing
long-standing precedent that conflicted with the Board’s deci-
sion. The court of appeals denied enforcement, remanding the
case to the Board for explanation and clarification of the rule it
was applying to the case. On remand, the Board overruled its
long-standing rule, relied upon by the employer, that an
employer’s backpay liability is tolled when an employee rejects
an offer of reinstatement without knowledge of, and regardless
of, the conditionality of the offer. The Board held that, in assess-
ing the tolling claim, it will no longer make any inquiry into an
employee’s reasons for refusing tu accept an apparently valid
reinstatement offer, if the offer is subsequently found not to be
“facially valid.” Thus, if the offer is subsequently found to be
conditional and therefore invalid, then no examination of the
employee’s reasons for rejecting the offer will be conducted, even
if the employee was not aware of the condition at the time of his
refusal, and even if the employee’s reason was unlawful and
unrelated to the condition.

Upon review, the court of appeals enforced the Board’s order.
The petitioner seeks review of this decision, which is in conflict
with this Court’s decisions and which it believes presents an
important and recurring question.

1. The petitioner is engaged in the intrastate and interstate
transportation of freight by truck. On March 22, 1979, the
employment of driver Charles Hennessey (employee or Hennes-
sey) was terminated as the result of a dispute regarding the
safety of a truck. Hennessey filed a grievance under the applica-
ble collective bargaining agreement and, on May 1, 1979, peti-
tioner was ordered by an arbitration panel to reinstate Hennessey
with full seniority and health and welfare benefits, but without

4

backpay and with a “final warning letter.” Petitioner immedi-
ately complied with the award and offered Hennessey reinstate-
ment, but Hennessey, who testified he was completely unaware of
the warning letter term of the award, App., infra, 3a, 17a-18a,
39a-41a, flatly rejected the apparently unconditional reinstate-
ment offer, expressly stating that he would not accept any rein-
statement offer that did not include backpay. App., infra, 2a-3a,
28a-29a, 38a-39a, 68a.

2. Ten (10) weeks later, Hennessey filed an unfair labor prac-
tice charge alleging a violation of the NLRA. On July 30, 1980,
an administrative law judge ruled that Hennessey’s discharge
violated the NLRA and that the reinstatement offer, made pur-
suant to the arbitration award, did not toll the petitioner’s
backpay or reinstatement liability. App., infra, 3a-4a, 28a-30a.
The administrative law judge did not consider Hennessey’s state
of mind and invalid reason for rejecting the offer, since he found
petitioner’s offer to be conditional due to the lack of backpay and
the warning letter term, citing no authority for his decision.
App., infra, 68a-69a.

3. The petitioner appealed to the Board, but on January 5,
1981, the Board upheld the administrative law judge. The Board
found, however, that the prior reinstatement offer had been ren-
dered conditional solely by the warning letter required under the
arbitration award, and not by the lack of backpay. App., infra,
44a. The Board ordered petitioner to offer reinstatement with full
backpay to Hennessey once again.

4. The employer petitioned for review of the Board’s order on
the question whether the previous reinstatement offer tolled any
backpay or reinstatement liability, relying on Research Designing
Service, Inc., 141 N.L.R.B. 211 (1963); L. Ronney & Sons Furniture
Manufacturing Co., 97 N.L.R.B. 891 (1951), enforced as modified, 206
F.2d 730 (9th Cir. 1953), cert. denied, 346 U.S. 937 (1954); Hribar
Trucking, Inc., 166 N.L.R.B. 745 (1967), enforced in part, 406 F.2d
854 (7th Cir. 1969); Eastern Die Co., 142 N.L.R.B. 601 (1963),
enforced, 340 F.2d 607 (1st Cir. 1965), cert. denied, 381 U.S. 951
(1965); and Ekco Products Co., 117 N.L.R.B. 137 (1957). These

5

cases all required an examination of the employee’s state of mind
and reasons for rejecting an apparently unconditional, pre-adju-
dication reinstatement offer, in order to determine whether the
employee would have turned down the offer of reinstatement even
if it had not contained an invalid condition, and applied tolling
when the employee rejected an offer of reinstatement without
knowledge of the conditionality of the offer. App., infra, 36a-37a.

5. On December 11, 1981, the court of appeals denied enforce-
ment of the Board’s order, and remanded the case to the Board
because of the Board’s “failure to reconcile its decision in this
case with its precedent, and its failure to explain its reason for
abandoning any inquiry into the reason why a conditional offer is
refused.” App., infra, 41a. The court of appeals instructed the
Board to “explicate the circumstances, if any, under which an
inquiry into whether an employee would have rejected a valid
offer of reinstatement is proper.” App., infra, 41a.

6. On July 29, 1988, the Board issued its supplemental deci-
sion on remand. App., infra, 16a. The Board discussed its long
line of pre-adjudication decisions, sought to distinguish some,
overruled others and, on the basis of its decision in Leroy W.
Craw, d/b/a Craw & Son, 244 N.L.R.B. 241 (1979), enforced, 622
F.2d 579 (8d Cir. 1980), announced that it would no longer
examine an employee’s reasons for refusing a reinstatement offer
if the offer is subsequently found to be conditional. App., infra,
18a-21a.

7. The court of appeals treated the Board’s order as the
promulgation of a “new rule,” and enforced it, after expressly
finding the Board’s treatment of its own precedent, in which the
employee’s perception of the reinstatement offer had always been
examined, to be “unpersuasive,” App., infra, 7a, and the Board’s
new rule to be a “substantial departure” from existing law. App.,
infra, 12a-13a.? The court of appeals denied a petition for rehear-
ing with a suggestion for rehearing en banc. App., infra, 75a-76a.

2 The court of appeals approved the retroactive application of the
new rule in this case to the date of the administrative law judge’s

6

REASONS FOR GRANTING THE PETITION

The question presented in this case is whether, in determining
if an employer’s backpay liability is reduced by losses wilfully
incurred by a discharged employee, the Board may abandon any
inquiry into the validity of the employee’s reasons for rejecting a
reinstatement offer, solely because the offer contained a condition
unknown to the employee when he refused it and unrelated to the
refusal.

The Board’s new rule abandons any inquiry into an employee’s
state of mind or reasons for refusing a reinstatement offer, even if
the inquiry is to determine whether the employee even had
knowledge of the conditionality of the offer when he rejected it,
or to determine whether the employee rejected the offer solely for
an invalid reason (here, the absence of backpay) wholly unrelated
to any condition in the offer, or to the employee’s knowledge of
such condition. (In this case, Hennessey rejected any: offer of
reinstatement that did not include backpay, in ignorance of and
regardless of its conditionality). This new rule is plainly irra-
tional and inequitable in application, and is not entitled to defer-
ence from the courts, because it conflicts directly with this
Court’s decision in Phelps Dodge Corp. v. NLRB, 313 U.S. 177

(1941), holding that an employer is not obligated to provide

backpay for any period when a discharged employee wilfully
incurs losses in compensation. NLRB v. Financial Institution
Employees, 475 U.S. 192, 202 (1986). The court of appeals decision
grants excessive deference to the Board’s new rule, which
broadly excuses the employee from mitigating his damages

(footnote continued from preceding page)

decision, even though (1) that decision neither examined existing prece-
dents nor suggested a new rule; (2) the Board did not suggest a new rvle
or even cite the Craw case in its first decision; and (3) the court of
appeals remanded the case to the Board precisely because it could not
ascertain what the Board was trying to do in its 1981 decision. The new
rule was not even arguably articulated until the Board’s supplemental
decision in 1988.

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7

before any dispute has even been presented to the Board, and
which ignores the undisputed fact in this case that the proximate
cause of the employee’s lack of work after May 1, 1979 was his
wilful refusal of any reinstatement offer devoid of backpay, a
condition he could not legally place on accepting re-employment.
The Board’s new rule is punitive and exceeds the Board’s reme-
dial authority, since the wilful loss doctrine of Phelps Dodge
compels an examination of the employee’s state of mind and
reasons for declining the reinstatement offer when it was made.®
This is an important issue which is likely to recur in all work-
places, including unionized settings, where compromise arbitra-
tion awards, requiring some form of corrective discipline along
with reinstatement, are in fact commonplace, and many employ-
ers will face the same dilemma as petitioner if the Board’s new
rule excusing pre-adjudication mitigation by employees is
enforced. See Elkouri & Elkouri, How Arbitration Works, 688-707
(Fourth Edition, 1985) and 134, 139-45 (1985-87 Supp.). Further
review of the court of appeals decision is therefore warranted.

1. a. It is the touchstone of this case that the Board’s
authority is remedial, and not punitive. Consolidated Edison
v. NLRB, 305 U.S. 197 (1938); NLRB v. Gullett Gin Co., 340
U.S. 361 (1951). It is also axiomatic that wrongfully dis-
charged employees are required to accept interim reinstate-
ment offers without backpay to satisfy their affirmative
obligation to mitigate their losses, pending resolution of the
labor dispute. See Phelps Dodge, 313 U.S. at 199-200. Cf. Ford
Motor Co. v. EEOC, 458 U.S. 219, 231 (1982) (Title VII claim-
ants are subject to the statutory duty to mitigate damages,

3 Furthermore, the condition found in the reinstatement offer in this
case resulted from good faith adherence to a final and binding arbitra-
tion award, and, when viewed in context, was a de minimis burden on the
employee’s terms of reinstatement Cf. Ford Motor Co. v. EEOC, 458 U.S.
219 (1982) (reinstatement offer lacking retroactive seniority not encum-
bered by condition in Title VII context). If the Board’s rule must stand,
such good faith and circumstances should be an exception to the penal-
izing result of the application of the Board’s new rule. App., infra, 12a.

8

which is rooted in an ancient principle of law), quoting from
C. McCormick, Handbook on the Law of Damages, 127-158
(1935). See also, Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 901
(1984) (the Board is required to give due consideration to the
employee’s responsibility to mitigate damages in fashioning
an equitable backpay award).

In Phelps Dodge, this Court held that losses wilfully
incurred by employees must be deducted from amounts
owed them. 313 U.S. at 197-98. Wilfulness, by definition,
requires an analysis of an employee’s state of mind, the
reasons and motivation for action. The Board’s new rule
directly conflicts with Phelps Dodge, which compels an anal-
ysis of the employee’s reasons for refusing reinstatement.
The Board’s new rule is not a reasonable or permissible
interpretation of its remedial authority under the NLRA
because it utterly disregards the employee’s reasons for
refusing the offer, the very basis for any examination of
wilfulness.

b. The bizarre and punitive effect of the Board’s jet-
tisoning of any inquiry into the employee’s reasons for
rejecting an apparently unconditional offer of reinstatement
could not be clearer than in the present case. Here, the
arbitration award-mandated condition on the employee’s
reinstatement—the warning letter unknown to Hennessey
when he rejected the offer, and only subsequently found by
the Board to be an invalid condition on the offer—had
nothing whatsoever to do with the employee’s refusal to
return to work. Hennessey wilfully refused to work solely
because the offer lacked backpay, a condition he could not
lawfully place on his working. The employee’s own, wilful,
improper action was the proximate cause of his unemploy-
ment after May 1, 1979, since, even if the reinstatement offer
had not “facially” included a warning letter, he would not
have returned to work. The Board’s new rule blindly ignores
this real reason for the employee’s continuing “losses,”
thereby conflicting head-on with the wilful loss doctrine of

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9

Phelps Dodge and punishing the petitioner for the
employee’s unequivocal imr osition of an impermissible con-
dition on his return to work. In sharp contrast to the new
rule, in all of the Board cases relied on below by petitioner
the decision to toll backpay turned precisely on the
employee’s individual awareness of the terms of the rein-
statement offer, and it was considered essential by the Board
to focus on the terms of the offer as perceived by the
employee, because it is precisely the employee’s willingness
to fulfill his duty to mitigate that must be examined under
Phelps Dodge.

ce. The Board bases its new rule, and the “facial valid-
ity” test therein, on its decision in Leroy W. Craw, d/b/a
Craw & Son, supra, whose facts and rationale are totally
inapposite to a pre-adjudication context. The conditional
offer of reinstatement in Craw violated an express, post-
adjudication order of the Board, issued pursuant to a find-
ing, after evidentiary hearing, of illegal conduct by the
employer. In contrast, pre-adjudication offers are made so
that the parties can resume their relationship, mitigate
their damages and maintain industrial peace and stability
pending resolution of any continuing labor dispute. The
Craw rule applies the premise that employers already adju-
dicated by the Board to be in violation of the Act ought not
be allowed to take advantage of conditional reinstatement
offers in order to toll their liability for their proven unfair
labor practices, thereby effectively defying the Board’s
processes. In sharp contrast, at the time the petitioner
offered Hennessey reinstatement pursuant to the terms of
the arbitration award, it had not been adjudged a violator of
the Act (a charge was only filed ten weeks after the award),
was merely complying in good faith with the award, and
was offering the discharged employee an opportunity to
mitigate his damages. An employee’s express refusal to
work now and mitigate his damages pending resolution of
any dispute he subsequently may raise to the Board should
not be condoned.

10

d. The Board’s refusal to examine an e:mployee’s wilful-
ness, 1.¢., State of mind, for refusing an apparently uncondi-
tional reinstatement offer, because of the invalid condition
subsequently found in the offer, is punitive, not remedial.
By arbitrarily raising the “facially valid” hoop, the Board
approves the conduct of employees who would not mitigate
their damages and returned to work, even if the offer was
not conditional. To require the employer to make such
employees whole is indeed punitive, not remedial.

2. The Board’s new rule in the present case is unreasonable
and not entitled to deference from the courts. The court of
appeals decision deferring to the Board is mistaken in two
respects.

a. First, it does not reconcile the Board’s new rule with
this Court’s decision in Phelps Dodge. Under the new rule, no
examination of the employee’s wilfulness in rejecting the
offer is undertaken by the Board. An employee can refuse
an offer he perceives to be unconditional for an unlawful
reason unrelated to any condition actually in the offer, but
still be rewarded with full backpay. In this respect, the rule
is punitive, not remedial.

‘b. Second, the Board’s new rule does not distinguish ~
between pre-adjudication and post-adjudication contexts.
The adoption of the rule disrupts the notion of industrial
peace wherein the parties should mitigate their damages
and abide by arbitration awards pending the resolution of
any dispute before the Board. The new rule rewards employ-
ees who refuse to accept reinstatement offers for unlawful
reasons unrelated to any apparent or subsequently deter-
mined condition in them. The Board’s new rule is not a well-
reasoned policy and should be rejected. Further review by
this Court is warranted.

11
CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

JEFFREY L. MADOFF

Counsel for Petitioner
CONSOLIDATED FREIGHTWAYS

MATKOV, SALZMAN, MADOFF & GUNN
100 West Monroe Street
Suite 1500
Chicago, Illinois 60603-1906
(312) 332-0777

June 4, 1990

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APPENDIX A

Notice: This opinion is subject to formal revision before publication in
the Federal Reporter or U.S.App.D.C. Reports. Users are requested to
notify the Clerk of any formal errors in order that corrections may be
made before the bound volumes go to press.

UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 25, 1989 Decided December 29, 1989
No. 88-1630
CONSOLIDATED FREIGHTWAYS, Petitioner,

Lan

NATIONAL LABOR RELATIONS BOARD, Respondent.

PETITION FOR REVIEW OF AN ORDER
OF THE NATIONAL LABOR RELATIONS BOARD

Jeffrey L. Madoff, with whom James D. Shepherd and Fred S.
Sommer were on the brief, for petitioner.

Charles Donnelly, Attorney, National Labor Relations Board
(“NLRB”), of the Bar of the Supreme Court of Texas, pro hac vice,
by special leave of court, with whom Aileen A. Armstrong, Deputy
Associate General Counsel, NLRB, and William M. Bernstein,
Attorney, NLRB, were on the brief, for respondent. Peter D.
Winkler, Attorney, NLRB, also entered an appearance for
respondent.

Before WALD, Chief Judge, and BUCKLEY and SENTELLE, Cir-
cutt Judges.

Bills of costs must be filed within 14 days after entry of judgment. The court looks with disfavor upon
motions to file bills of costs out of time.

2a

Opinion for the court filed by Circuit Judge BUCKLEY.

BUCKLEY, Circuit Judge: Consolidated Freightways petitions
for review of a supplemental decision of the National Labor
Relations Board affirming an earlier Board decision that ordered
Consolidated to reinstate a former employee with full backpay
because its previous reinstatement offer had been conditional and
therefore invalid. On review of the original decision, we noted the
Board’s failure to reconcile its decision with its own precedeni
and remanded with instructions that the Board explain the cir-
cumstances, if any, that would permit an inquiry into an
employee’s reasons for refusing a reinstatement offer. Consoli-
dated Freightways v. NLRB, 669 F.2d 790 (D.C. Cir. 1981).

Consolidated contends that the Board has failed to comply
with our remand instructions. Although we find the Board’s
treatment of its precedent unconvincing, we hold that the Board
has complied with our remand by announcing a new rule: An
employer’s reinstatement offer must be unconditional on its face
in order to terminate the accrual of backpay liability, regardless
of the employee’s reasons for declining the offer. We also hold
that, as a matter of equity, Consolidated is liable to its former
employee for backpay only from the date the Administrative
Law Judge articulated the new rule.

I. BACKGROUND
A. Factual Background and the Board’s First Decision

Consolidated Freightways is engaged in the business of intra-
state and interstate transportation of goods and materials by
truck. Charles Hennessey was hired by Consolidated as a truck
driver in 1977. Two years later, on March 22, 1979, Consolidated
discharged Hennessey after he refused to drive a tractor that he
believed to be unsafe. Hennessey filed a grievance challenging his
discharge and requesting reinstatement with full backpay and
health and welfare benefits. On May 1, 1979, the grievance was
heard before the Joint State Committee, an arbitration panel
established under the collective bargaining agreement between

3a

Consolidated and Hennessey’s union. Consolidated Freightways,
253 N.L.R.B. 988, 990-94 (1981). The parties later stipulated that
Hennessey’s grievance was covered by the collective bargaining
agreement; that Consolidated, the union, and Hennessey had
agreed to be bound by the Committee’s decision; and that the
entire grievance and arbitration procedure was fair ana regular
in all respects. Id. at 994.

After hearing the arguments of the parties, the Committee
ordered that Hennessey be reinstated to his former job with full
seniority and benefits, but without backpay, and that a “final
warning letter” be placed in Hennessey’s file. Jd. Under the terms
of the collective bargaining agreement, Consolidated may not
suspend or discharge an employee until at least one warning
notice of the particular complaint at issue has been given (except
for drug and alcohol use and certain other causes for discharge).
Warning letters remain in effect for a maximum of nine months.
Thus if he had accepted the offer, Hennessey would have been
subject, for a limited period, to immediate discharge if he again
engaged in the conduct for which he was first dismissed. Hennes-
sey did not learn about the warning letter until well after he had
refused an offer of reinstatement from Consolidated, explaining
that he would not return without backpay.

On July 11, 1979, Hennessey filed an unfair labor practice
charge with the NLRB. After a hearing, an Administrative Law
Judge (“ALJ”) found that Consolidated had discharged Hennes-
sey for engaging in protected activity in violation of sec-
tion 8(a)(1) of the National Labor Relations Act (“Act”),
29 U.S.C. § 158(aX1) (1982). 253 N.L.R.B. at 995. The ALJ
declined to defer to the arbitration award because by putting
Hennessey “under the gun of a ‘warning letter,’” the award “fails
to remedy the alleged unfair labor practices.” Jd. at 994. The
ALJ then determined that Consolidated’s obligation to reinstate
Hennessey “continues until a proper offer of reinstatement is
made.” Jd. Asserting that the accrual of backpay liability is not
terminated until a valid, unconditional reinstatement offer is

4a

made, the ALJ ordered that Hennessey be offered unconditional
reinstatement with full backpay. Jd. at 995.

Consolidated filed exceptions to the ALJ’s conclusion that its
reinstatement offer was conditional, but not to his finding that
Consolidated had engaged in an unfair labor practice or his
refusal to defer to the arbitration award. Jd. at 988 n.l. In a
Decision and Order dated January 5, 1981, the Board agreed that
the warning letter had rendered Consolidated’s reinstatement
offer conditional, and therefore invalid, and affirmed the AL,J’s
decision. Jd. at 988.

B. This Court’s First Decision

Consolidated petitioned this court for review, arguing that its
reinstatement offer was unconditional and thus terminated the
accrual of backpay liability. Furthermore, Consolidated claimed
that as Hennessey had refused the offer for an admittedly invalid
reason (the denial of backpay), he was not entitled to either a
second reinstatement offer or accrued backpay. The Board coun-
tered that as the offer was conditioned on the issuance of the
warning letter, it was invalid; and as it was a nullity, Hennes-
sey’s invalid reason for refusing the offer did not toll the accrual
of backpay liability.

On December 11, 1981, we remanded the case for reconsidera-
tion. Consolidated Freightways, 669 F.2d at 798. In our decision, we
found that the Board had “failed to take account of Board prece-
dent that emphasizes the actual reasons why an employee refuses
an offer of reinstatement even when the validity of the offer itself
is challenged.” Id. at 795-96. We also cited Research Designing
Service, Inc., 141 N.L.R.B. 211 (1963), L. Ronney & Sons Furni-
ture Mfg. Co., 97 N.L.R.B. 891 (1951), enforced as modified, 206 F.2d
730 (9th Cir. 1953), cert. denied, 346 U.S. 987 (1954), and other
cases in which the Board had held “that an employer’s backpay
liability is tolled when an employee rejects an offer of reinstate-
ment without knowledge of the conditionality of the offer.” 669
F.2d at 796.

5a

We acknowledged, however, that the Board might have been
relying on a more recent case, Leroy W. Craw, 244 N.L.R.B. 241
(1979), enforced, 622 F.2d 579 (3d Cir. 1980), which held that an
invalid conditional offer of reinstatement did not toll the
employer’s backpay liability even though the employees had
rejected the offer for reasons other than the invalid conditions.
669 F.2d at 796 & n.12. Faced with potentially conflicting prece-
dent, we observed that Leroy W. Craw could either “signal a
change of Board policy abandoning any inquiry into the reasons
why a conditional offer is refused” or be “reconcilable with ear-
lier Board precedent.” Jd. at 797. We therefore remanded the case
to allow the Board “to explicate the circumstances, if any, under
which an inquiry into whether an employee would have rejected
a valid offer of reinstatement is proper.” Jd. at 798. We did not
reach two other questions that had been presented; namely,
whether the offer to Hennessey was in fact conditional and
whether Consolidated’s good faith reliance on the arbitration
award would be sufficient in itself to toll backpay liability. Jd. at
792 n.4, 798 n.15.

C. The Board’s Supplemental Decision and Order

Six years ‘ater, in July 1988, the Board issued a Supplemental
Decision and Order affirming its prior decision. 290 N.L.R.B.
No. 85 (July 29, 1988) (“Supplemental Decision”). The Board
stated that because Consolidated was requived to file the warning
letter, its offer “would not have returned {Hennessey] to the posi-
tion he occupied before the discrimination against him.” Accord-
ingly, it was “clearly conditional on its face” and therefore
invalid. Jd. at 4. Under the circumstances, Hennessey was under
no obligation to respond. The Board concluded that where an
offer is invalid on its face, an employee’s reasons for refusing it
are irrelevant. Jd, at 5.

The Board distinguished Research Designing and other cases
cited by this court on the ground that in each instance the
reinstatement offer was facially valid while in the present case

6a

“reinstatement was expressly premised on the terms of the arbi-
tration award, which contains the invalid condition.” Jd.
Addressing L. Ronney, the Board said it could not determine
whether the reinstatement offer was valid on its face. But to the
extent that the case suggests that the NLRB will examine a
wrongfully discharged employee’s reasons for declining a
facially invalid reinstatement offer, the Board overruled L. Ron-
ney and any other similar case, stating that it adhered to its
holding in Leroy W. Craw Id. at 6.

Finally, the Board reaffirmed its conclusion that the arbitra-
tion award, which it found to be “repugnant to the Act,” was void
and did not warrant deferral. Therefore, Consolidated’s offer was
judged by the Board’s normal standards. As Hennessey had not
received “a facially valid offer of reinstatement,” the Board con-
cluded that he was entitled to full backpay. Jd. at 8-9.

II. DISCUSSION

This case concerns the Board’s authority under section 10(c) of
the Act “to take such affirmative action including reinstatement
of employees with or without back pay, as will effectuate the
policies of [the Act],” in the event the Board finds that an
employer has engaged in an unfair labor practice. 29
U.S.C. § 160(c) (1982). The Board’s remedial authority under this
section is extremely broad. Accordingly, its actions are entitled to
a high degree of deference by this court, and a remedial order
must stand “unless it can be shown that [it] is a patent attempt to
achieve ends other than those which can fairly be said to effectu-
ate the policies of the Act.” St. Francis Fed’n of Nurses & Health
Professionals v. NLRB, 729 F.2d 844, 849 (D.C. Cir. 1984) (quoting
Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533, 540 (1943)); see
also Fibreboard Corp. v. NLRB, 379 U.S. 203, 216 (1964) (describing
remedial power of Board as “a broad discretionary one, subject to
limited judicial review”’).

7a

A. Did the Board Act Arbitrarily and Capriciously and
Fail to Comply with this Court’s Remand Instructions?

Consolidated’s chief complaint is that the Board acted arbi-
trarily and capriciously (and failed to comply with this court’s
instructions on remand) because when it held that Consolidated’s
offer did not toll the accrual of backpay liability, the Board did
not provide a convincing explanation for abandoning the rule
established in Research Designing and its progeny. Consolidated
argues that the Board’s attempt to distinguish its precedent was
disingenuous at best and that it failed to explain its rationale for
abandoning any inquiry into the reasons why an employee has
refused a reinstatement offer.

We agree that the Board’s attempts to reconcile and distin-
guish its precedents are unpersuasive. The Board claims that
Research Designing and the other cases cited by us are distinguish-
able from the one before us because the offers in those cases
appeared to be unconditional and thus were facially valid. Sup-
plemental Decision at 5. Unfortunately, that distinction -is
nowhere discussed in either Research Designing or any of the other
cases cited; in fact, in each instance the Board explicitly refers to
the employee’s perception of the reinstatement offer in determin-
ing whether the offer tolled the company’s backpay liability. See
Hribar Trucking, Inc., 166 N.L.R.B. 745, 756 n.19 (1967), enforced
in part, 406 F.2d 854 (7th Cir. 1969); Eastern Die Co., 142 N.L.R.B.
601, 604 (1963), enforced, 340 F.2d 607 (1st Cir.), cert. denied, 381
U.S. 951 (1965); Ekco Prods. Co., 117 N.L.R.B. 137, 150, 152 (1957).

Moreover, the Board made no attempt to reconcile its decision
in L. Ronney. Faced with a case that could not readily be distin-
guished from the one before us, the Board simply overruled
L. Ronney and similar cases to the extent that they support an
inquiry into an employee’s reasons for declining a facially condi-
tional offer. The Board explained only that it would follow its
previous decision in Leroy W. Craw. Supplemental Decision at 6.

While we reject the Board’s attempts at reconciliation, we
conclude that in reality it has simply enunciated a new rule

8a

based on its earlier decision in Leroy W. Craw—which (as Consoli-
dated conceded at oral argument) the Board has the authority to
do. See NLRB v. Bell Aerospace Co., 416 U.S. 267, 294 (1974) (Board
has “informed discretion” to “announcfe} new principles in an
adjudicative proceeding.”). Accordingly, we now assess the ade-
quacy of the reasons given by the Board in support of its new

policy.

As the Board has explained, reinstatement is “a public right
granted to vindicate the law against one who has broken it.”
Lipman Bros., Inc., 164 N.L.R.B. 850, 853 (1967). Its purpose is to
restore a wrongfully discharged employee to the same situation
he would have been in had he not been discharged. /d.; see also
NLRB v. Rutter-Rex Mfg. Co., 396 U.S. 258, 264-65 (1969). To that
end, the Board has long ijeld that an offer of reinstatement must
be “firm, clear, and unconditional. Only when a proper offer is
made and unequivocally rejected by the employee is the empioyer
relieved of his statutory duty to reinstate.” Lipman Bros., Inc.,
164 N.L.R.B. at 853.

In reaffirming its earlier order, the Board reasoned that a
conditional reinstatement offer may not be recognized for any
purpose because to do so would allow the employer to continue to
discipline the wronged employee for having engaged in a pro-
tected activity. As the equities lie with the wrongfully dis-
charged employee, the Board concluded that it is

incumbent on the Respondent to extend to the injured
employee a facially valid offer of reinstatement before the
burden shifts to the injured employee to accept or reject the
offer. Anything short of this is inconsistent with the statu-
tory policy that a transgressor should bear the burder. of the
consequences stemming from its illegal acts.

Supplemental Decision at 6-7.

In challenging the Board’s position, Consolidated cites the
undisputed rule that discharged employees must accept rein-
statement offers without backpay in order to preserve the
employer’s right to litigate the lawfulness of the discharge and

9a

argues that it should be applied in this case. See National Screen
Prods. Co., 147 N.L.R.B. 746, 748 (1964). That rule recognizes that
if an employer were required to offer an employee reinstatement
with backpay prior to an adjudication on the merits of the dis-
charge, as a practical matter the employer might not be able to
recover the backpay in the event of a favorable decision. See id. An
employee, on the other hand, would lose little by returning to
work without the receipt of accrued backpay, for he would be
entitled to recoup it if he ultimately were to prevail on the merits.
The rule, however, is predicated on a valid offer of reinstatement
because restoring the employee to his status quo ante is, in essence,
the price the employer is required to pay in exchange for the
employee’s agreement to return to work before the question of
backpay liability is finally settled. As Consolidated’s offer would
not return Hennessey to the position he occupied before his
wrongful discharge, Consolidated has failed to meet its end of the
implicit bargain and, therefore, has no claim to its benefits.

In sum, we find that the Board acted well within its authority
in enunciating the new rule and that it adequately explained how
the rule advances the policies of the Act. Accordingly, we reject
Consolidated’s contention that the Board acted arbitrarily and
capriciously in finding that its backpay liability had not been
tolled.

B. Was Consolidated’s Offer Conditional and Therefore
Invalid?

Consolidated also contends that even assuming the propriety
of the new rule, its offer to reinstate Hennessey was uncondi-
tional, regardless of the warning letter. Consolidated asserts that
had Hennessey accepted the offer, he would have been placed in
exactly the same position he had held prior to his discharge,
including full seniority rights and benefits, because the warning
letter would have had no discernible impact upon his post-rein-
statement employment status. More specifically, Consolidated
maintains that Hennessey would have continued to have recourse

10a

to the grievance and arbitration procedures in the event of dis-
charge and that, in any event, warning letters are common in the
industry. Consolidated then argues that as any adverse effect of
the letter is purely speculative, Hennessey should not be excused
from his general obligation to mitigate damages by accepting the
offer of reinstatement.

_ Consolidated’s suggestion that its offer would have restored
the status quo ante borders on the frivolous. The filing of the
warning letter subjected Hennessey to the risk of summary dis-
charge during a nine-month period, and it is irrelevant that he
would have had recourse to grievance and arbitration procedures.
Even if one were to concede that the requirement thai the letter
be filed did not impose an onerous condition, the treatment of the
offer as unconditional would be contrary to the Supreme Court’s
recognition that “[mjaking [employees] whole for losses suffered
on account of an unfair labor practice is part of the vindication of
the public policy which the Board enforces.” Phelps Dodge Corp. v.
N.L.R.B., 313 U.S. 177, 197 (1941). “Whole” means whole.

C. Did Consolidated’s Offer Toll its Backpay Liability
Because Made in Good Faith Reliance on a Binding
Arbitration Award?

Consolidated next argues that its good faith reliance on and
compliance with a final and binding arbitration award should
provide a separate basis for tolling its backpay liability. As Con-
solidated points out, in our opinion remanding the case we did not
reach that argument but nevertheless observed that “resolution
of this question depends on whether the Board could properly
further the strong national policy in favor of private settlement
of labor disputes without abdicating its responsibility to remedy
violations of national labor law.” Consolidated Freightways, 669
F.2d at 798 n.15 We noted that the Board’s determination of
whether Consolidated’s reliance on the arbitration award should
toll its backpay liability could turn on the nature of the arbitra-
tion committee’s decision and the specific circumstances follow-
ing its issuance, including the facts that ‘“(1) the arbitrator

lla

ordered reinstatement with a warning letter, (2) Consolidated
conformed its offer to the terms of the decree and (3) Hennessey
waited two and a half months after the decree before filing his
charge with the Board.” Jd.

We conclude that the Board acted within its discretion in
declining to toll the liability. See Supplemental Decision at 7-9.
Although the Board may defer to an arbitration award to
encourage voluntary settlement of labor disputes and promote
collective bargaining, it need not do so where the award is
“clearly repugnant to the purposes and policies of the Act.” E.g.,
Hribar Trucking, Inc., 166 N.L.R.B. at 754 (citations omitted). As
the Board noted, it had found (in agreement with the ALJ) that
the arbitration award was repugnant to the Act and accordingly
not entitled to deference. The question of deference, of course, is
not before us as Consolidated did not take exception to the ALJ’s
refusal to defer to the arbitration award. See Consolidated Freight-
ways, 669 F.2d at 793 n.6; 29 U.S.C. § 160(e) (1982). Yet, as the
Board pointed out, for it to toll Consolidated’s backpay obligation
becau:e of its compliance with a repugnant award would be
tantaraount to deference. See Supplemental Decision at 8. Consoli-
dated contends that “the strong national policy in favor of private
settlement of labor disputes” alone justifies terminating its
accrual of backpay liability. The Board, however, could reasona-
bly take the ‘position—even in light of the particular circum-
stances surrounding the arbitration award—that if it allowed an
employee to be penalized for engaging in protected conduct, it
would be “abdicating its responsibility to remedy violations of
national labor law.” See 669 F.2d at 798 n.15.

D. Did the Board Permissibly Apply its Rule Retroactively?

Having concluded that the Board acted within its discretion in
enunciating the new rule, that Consolidated’s offer was condi-
tional and thus invalid, and that its good faith compliance with
the arbitration order did not excuse it from its obligations under
the Act, we must next decide whether the Board’s retroactive
application of the rule was permissible. As a general principle,

12a

new rules announced in agency adjudications may be applied
retroactively absent any “manifest injustice.” E.g., Clark-Cowlitz
Joint Operating Agency v. FERC, 826 F.2d 1074, 1081 (D.C. Cir.
1987). In considering the equities, courts generally balance the
interests of the parties, taking into account such factors as the
degree of hardship they will experience, their justifiable reliance
on past practices, and the statutory interest in a retroactive appli-
cation of the new rule. See, eg., id.; Tennessee Gas Pipeline Co. v.
FERC, 606 F.2d 1094, 1115, 1116 n.77 (D.C. Cir. 1979), cert. denied,
445 U.S. 920 (1980); Laidlaw Corp. v. N.L.R.B., 414 F.2d 99, 107
(7th Cir. 1969), cert. denied, 397 U.S. 920 (1970).

~

We conclude that the equities in this case support retroactive
application of the rule, but only from the date of the ALJ’s
decision. We find retroactive enforcement of the Board’s order
warranted because payment of accrued backpay is “a remedy
designed to restore, so far as possible, the status quo that would
have obtained but for the wrongful act.” Rutter-Rex Mfg. Co., 396
U.S. at 265. Here, it is undisputed that Hennessey was disci-
plined for engaging in protected conduct. Thus there is a strong
statutory interest in awarding him full backpay as a remedy for
his wrongful discharge. To hold that a conditional reinstatement
offer tolled Consolidated’s backpay liability would both penalize
Hennessey and allow Consolidated to escape the consequences of
its own violation of the Act. In such circumstances, it is “not
arbitrary and capricious for the Board to conclude that complete
vindication of employee rights should take precedence over the
employer’s reliance on prior Board law.” Laidlaw Corp. v.
N.L.R.B., 414 F.2d at 107.

On the other hand, we acknowledge that the new rule repre-
sents a substantial departure from long-established practice.
Under the prior rule, Consolidated’s offer would clearly have
tolled its backpay liability because it is beyond question that
Hennessey rejected it without knowledge of its conditionality.
Moreover, the offer was made in good faith reliance on an arbitra-
tion award that Consolidated was contractually obligated to obey
and that had been issued in a proceeding that the parties agreed

$

13a

was fair and regular in all respects. Therefore, until the ALJ
issued his decision, Consolidated had no reason to question the
propriety of its actions. Thereafter, however, Consolidated was on
notice that the Board might affirm the new rule, and it could have
tolled the accrual of backpay at any time simply by making
Hennessey a new, unconditional offer of reinstatement.

E. Did the Board’s Delay in Deciding this Case on Remand
Violate the APA and Consolidated’s Due Process Rights?

Finally, Consolidated argues that the Board’s supplemental
order should be denied enforcement because of the excessive
amount of time (more than six years) that elapsed between our
remand and the issuance of the order. According to Consolidated,
this “egregious” delay violates section 555(b) of the Administra-
tive Procedure Act, which requires an agency to proceed to con-
clude a matter presented to it “within a reasonable time.” 5
U.S.C. § 555(b) (1982).

In a case involving a lapse of nine years, the Supreme Court
held that even a “deplorable” delay does not justify interference
with the Board’s broad remedial powers, as the “Board is not
required to place the consequences of its own delay, even if inordi-
nate, upon wronged employees to the benefit of wrongdoing
employers.” Rutter-Rex Mfg. Co., 396 U.S. at 265. By refusing to
toll Consolidated’s backpay liability, the Board reasonably
“shifted the cost of the delay” from the employee to the
employer. Cf id. at 266. While we do not condone the Board’s
extraordinary delay, we conclude that enforcement of its order is
appropriate because the remedy fashioned by the Board was well
within its discretion, and our failure to enforce it would return
the burden to the wrong shoulders.

III. CONCLUSION

We hold that the Board acted within its remedial discretion in
announcing a new rule designed to require employers who com-
mit unfair labor practices to restore discharge employees to the

l4a

status quo ante. In evaluating the equities of applying this princi-
ple retroactively, we conclude that Consolidated’s backpay liabil-
ity should accrue only from the date of the AL.J’s decision.
Accordingly, the petition for review is granted for the sole pur-
pose of modifying the Board’s order in accordance with this
opinion, and as so modified, the order is enforced.

It ts so ordered.

15a

PRINTED FOR
ADMINISTRATIVE OFFICE — U.S. COURTS
BY ELECTROGRAPHIC CORP. — SAN FRANCISCO

16a

APPENDIX B

SJB
290 NLRB No. 85 D—6099
Peru, IL

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD

CONSOLIDATED FREIGHTWAYS
and Case 33—CA—4364
CHARLES HENNESSEY, an Individual

SUPPLEMENTAL DECISION AND ORDER

On January 5, 1981, the Board issued a Decision and Order!
finding that the Respondent has discharged Charles Hennessey
in violation of Section 8(aX1) of the National Labor Relations
Act. Thereafter, the Respondent filed a petition for review and
the Board filed a cross-application for enforcement with the
United States Court of Appeals for the District of Columbia.

On December 11, 1981, the court remanded the case to the
Board to reconsider requiring the Respondent to reinstate Hen-
nessey with backpay.? The court held that the Board has failed
to consider the significance of Hennessey’s motives for refusing
reinstatement.

On March 23, 1982, the Board notified the parties that it had
decided to accept the court’s remand and that they could file a
statement of position. Statements have been filed by the General
Counsel and the Respondent.

1 253 NLRB 988 (1982).
2 669 F.2d 790 (1981).

17a
D—6099

The National Labor Relations Board has delegated its author-
ity in this proceeding to a three-member panel.

The Board has considered the decision of the court in light of
the statements of position and makes the following findings:

The background facts, as more fully set out in the judge’s
decision, may be briefly summarized. The Respondent discharged
employee Hennessey for his refusal to drive a tractor-trailer.
Based on credited testimony, the judge concluded that Hennessey
refused to operate the tractor because it was dangerous and was
in violation of safety statutes. Further, the judge found that
under the collective-bargaining agreement, Hennessey’s refusal
constituted protected concerted activity for the purposes of
mutual aid and protection and his termination was in violation
of Section 8(a\1).

Approximately 3 weeks after his discharge, Hennessey filed a
grievance which was arbitrated pursuant to the collective-bar-
gaining agreement. The arbitrator awarded Hennessey his for-
mer job back with full seniority and paid up health and welfare
and benefits but no backpay. The award also ordered that a final
warning letter be placed in Hennessey’s personnel file. The day
the arbitration award was announced, the Respondent offered
Hennessey reinstatement on its terms. Hennessey rejected the
offer.

The judge found that the Repsondent’s offer of reinstatement
made in accordance with the arbitration award was not valid
because the award required that a warning letter be placed in
Hennessey’s file. The judge, therefore, ordered the Respondent to
offer Hennessey reinstatement with backpay.

The Respondent excepted, contending that its offer of rein-
statement was adequate because neither the warning letter nor
the lack of backpay made the offer conditional. In adopting the
judge’s decision, the Board, in order to clarify any ambiguity,

18a
D—6099

stated that the refusal to include accrued backpay in the other-
wise valid offer of reinstatement does not render the offer invalid.

In support of its argument that the warning letter did not
make the offer invalid, the Repsondent submits that at the time
the Respondent’s offer was made, Hennessey was not aware that
the offer was conditioned on a warning letter being placed in his
file. Rather, according to Hennessey’s undisputed testimony, his
rejection was based on the failure of the reinstatement offer to
include backpay. The Respondent contends that because Hennes-
sey did not view the warning letter as an impediment to his
return to work, the presence of the warning letter should not void
an otherwise valid offer of reinstatement.

The Board agreed with the judge that the Respondent’s offer
of reinstatement was invalid because placing the warning letter
in Hennessey’s personnel file as a prerequisite to his reinstate-
ment rendered the offer conditional and therefore inadequate.

On remand, the court has instructed us to explain our ratio-
nale for not inquiring into the reasons why Hennessey rejected
the Respondent’s offer and to reconcile our position with Research
Designing Service, 141 NLRB 211 (1963); L. Ronney & Sons Furni-
ture Myy. Co., 97 NLRB 891 (1951), enfd. as modified 206 F.2d 730
(9th Cir. 1953), cert. denied 346 U.S. 937 (1954), and the line of
eases holding that the Board will look to the reason why the
discriminatee rejects an offer of reinstatement to determine if the
offer is valid.

Initially, it is clear that the reinstatement obligation is satis-
fied only by a valid offer of reinstatement. As stated in Lipman
Bros., 164 NLRB 850 (1967), “An employer’s offer of reinstate-
ment must be firm, clear, and unconditional.” Until such time as
a valid offer of reinstatement has been made the discriminatee

3 We note that Hennessey was present during the arbitral proceed-
ings. However, Hennessey testified that he had no recollection of being
told about the condition.

ee

19a
D—6099

does not have to make a choice. Lyman Steel Co., 246 NLRB 712
(1979); Heinrich Motors, 166 NLRB 783 (1967), enfd. 403 F.2d 145
(2d Cir. 1968); Leeding Sales Co., 155 NLRB 755 (1965).

As stated in Craw & Sons, 244 NLRB 241 (1979):

However, where the offer of reinstatement has been condi-
tional and has not satisfied the Board’s and the court’s order
of reinstatement, the discriminatees are under no obligation
to reply to or to accept such conditional offer of
reinstatement.

See also W. C. McQuaide, Inc., 239 NLRB 671 (1978), enfd. 617 ©
F.2d 349 (3d Cir. 1980); Murray Products, 228 NLRB 268 (1977),
enfd. 584 F.2d 934 (9th Cir. 1978).

In the instant case, the offer made by the Respondent was
clearly conditional on its face. Hennessey was offered reinstate-
ment pursuant to the arbitrator’s award which required that a
warning letter be placed in his file. This clearly renders the offer
invalid because “a Board order for reinstatement of a dis-
criminatee is designed to place that individual in the same posi-
tion the individual would have been in had there not been
discrimination against him.” Craw & Son, supra at 242. The
placement of the warning letter in Hennessey’s personnel file
would not have returned him to the position he occupied before
the discrimination against him. Instead, he could return to work
only under the threat of the letter of warning. This condition
made the offer of reinstatement by the Respondent invalid.‘ Hen-
nessey was under no obligation to respond to the offer and we will

4 In finding the offer was invalid on its face, it is appropriate to focus
on the terms of the offer as required by the arbitration award. Thus, it is
not relevant that Hennessey could not recall being informed of the
condition at the time the arbitration award was announced.

As explained below, in our discussion of the issue whether the arbi-

trator’s award could properly be deferred to, the letter of warning itself
constitutes an interference with Sec. 7 rights. This is so because it

20a
D—6099

not look into his motivation or reasons for his refusal. We will not
allow a discriminatee’s response to an offer invalid on its face to
“retroactively validate [an offer] which [was] deficient when
made.” Murray Products, 584 F.2d at 942. If, and only if, an offer
of reinstateraent is fully valid on its face, then an examination of
a discriminatee’s reasons for declining the offer must be
undertaken.

Those cases cited by the court, i.e., Research Designing Service
and L. Ronney, supra, are distinguishable from the instant case.
In Research Designing, the judge found that certain offers of rein-
statement were invalid because it became apparent after several
employees accepted the employer’s offers and began working that
the offers were in effect conditioned on their working as new
employees insofar as seniority and vacation pay were concerned.
Because these proved invalid, the judge not only gave a remedy to
the employees who had accepted reinstatement, but also declined
to cut off the backpay of two other employees who had refused
reinstatement offers at the outset for reasons unrelated to the
invalid conditions. 141 NLRB at 230. The Board reversed as to
the two employees, holding that their refusal of reinstatement
for reasons other than the invalid conditions warranted terminat-
ing the respondent’s liability for reinstatement and backpay
when the offers were refused. Id. at 216-217. Although the Board
spoke in terms of the two employee’s lack of awareness of the
invalid conditions, the reinstatement offer, when made, appar-
ently had no invalid conditions attached—unlike the circum-
stance in the present case where reinstatement was expressly

(footnote continued from preceding page)

operates as a penalty for the exercise of the right to invoke the protec-
tions of a collective-bargaining agreement. See NLRB v. City Disposal
Systems, 465 U.S. 822 (1984). It can hardly be contended that a reinstate-
ment offer that includes what amounts to an independent violation of
the Act is valid offer.

2la
D—6099

premised on the terms of the arbitration award, which contains
the invalid condition.5

In regard to L. Ronney, we cannot determine, from the Board’s
decision, whether the offer of reinstatement (to employee Clinton)
- was valid on its face. The decision speaks of a letter sent to
Clinton but does not reveal whether it contained the invalid
condition (a requirement that the reinstated employee join an
illegally assisted union). 97 NLRB at 892. In any event, assum-
ing arguendo that L. Ronney indicates that the Board will
examine a discriminatee’s reasons for declining a reinstatement
offer even when the only offer made is invalid on its face, we
overrule it and other similar cases® and adhere to the rule of
Craw & Son, supra, that a reinstatement offer invalid on its face
obviates the obligations on the part of a discriminatee to respond
and that a discriminatee’s refusal of the offer, on whatever

5 Hribar Trucking, 166 NLRB 745, 756 fn. 19 (1967), modified on
other grounds 406 F.2d 854 (7th Cir. 1969); Eastern Die Co., 142 NLRB
601 (1963), enfd. 340 F.2d 607 (1st Cir. 1965), cert. denied 381 U.S. 951
(1965); and Ekco Products Co., 117 NLRB 137 (1957), cited by the court in
remanding this case, follow the analysis of Research Designing. In our
view, critical to all four cases is the fact that the respondents made
facially valid offers of reinstatement. The Board looked to the dis-
criminatees’ reasons for rejecting those offers to distinguish employees
who never learned that illegal conditions were attached to the offer
upon implementation from employees who tested the facially valid
offers only to discover that they were not, in fact, valid. The Board
tolled backpay for the former, who never uncovered the unlawful condi-
tions, but not the latter.

6 See, e.g., Atlantic Maintenance Co., 134 NLRB 1328, 1329 (1961),
enfd. 305 F.2d 604 (3d Cir. 1962), in which the Board found an unlaw-
fully conditioned offer of reinstatement did not toll backpay, but noted,
in dictum, that it had not been clearly established that the dis-
criminatees would have rejected a valid offer of employment.

22a
D—6099

ground, will not relieve the respondent employer of its obligation
to make a valid offer in order to toll the running of backpay.

Our requirement that an employer must first extend a facially
valid offer of reinstatement before we examine a discriminatee’s
reasons for declining the offer is fully consistent with the pur-
poses and policies of the Act. The reason is clear: it is the Respon-
dent who acted unlawfully in discharging Hennessey. The
equities of the situation fall with Hennessey, the wrongfully
discharged employee. It is thus incumbent on the Respondent to
extend to the injured employee a facially valid offer of reinstate-
ment before the burden shifts to the injured employee to accept or
reject the offer. Anything short of this is inconsistent with the
statutory policy that a transgressor should bear the burden of the
consequences stemming from its illegal acts. See Sheet Metal Work-
ers Local 355 (Zinsco Electrical Products), 254 NLRB 773 (1981),
enfd. in part, remanded in part 716 F.2d 1249 (9th Cir. 1982).’
Because, as noted above, we would require that a discriminatee
respond to a facially valid offer and, in those circumstances,
would place on him the burden of showing that any refusal of the
offer was based on invalid conditions that came to his attention,

7In urging that an unlawfully discharge employee’s motive for
rejecting an offer of reinstatement should be examined, the Respondent
argues that the Board has done so in the past. In support of this
petition, the Respondent, in its brief, relies on Alcan Cable West, 214
NLRB 236 (1974). While it is correct that the judge, in his decision in
Alcan, examined the unlawfully discharged employee’s reason for
rejecting the employer’s offer of reinstatement, the Board did not rely
on that finding. Rather, the Board found that the employee in question
was never offered substantially equivalent employment. Thus, contrary
to what the Respondent portrays as the Board’s holding in Alcan, the
Board clearly did not rely on the judge’s examination of the discharged
employee’s reason for rejecting the offer of reinstatement. Alcan, 214
NLRB at 237 fn. 3.

23a
D—6099

we believe that our overall policy respecting responses to rein-
statement offers establishes a proper balance between the vindi-
cation of Section 7 rights and a discriminatee’s duty to mitigate
damages.

In footnote 15 of its decision, the court indicated that it need
not reach the issue whether the Respondent’s good-faith reliance
on the arbitrator’s award was sufficient, in itself, to toll its
backpay liability. The court noted that resolution of this issue
depends on whether the Board could properly further the strong
national policy in favor of private settlement of labor disputes
without abdicating its responsibility to remedy violations of
national labor law. The Board has established under Spielberg
Mfg. Co., 112 NLRB 1080 (1955), Olin Corp., 268 NLRB 573 (1984),
and their progeny, a policy of deferring to a decision of an
arbitrator when (1) the unfair labor practice was presented and
considered by the arbitrator, (2) the arbitral proceedings were
fair and regular, (3) all parties agreed to be bound, and (4) the
decision is not repugnant to the purposes and policies of the Act.
The judge in his decision found that the award “fails to remedy
the alleged unfair labor practices so as to warrant the Board’s
deference to such award.” No exception was taken to this finding
and it was adopted by the Board.

Thus, the Board found here that the arbitrator’s award was
repugnant to the Act and deferral was not appropriate. If we
nonetheless find that the Respondent’s backpay obligation was
tolled because it complied with the repugnant award, we would,
in substantial effect, be deferring to the award.

Certainly, there may be circumstances in which the Board
will defer to an arbitrator’s award that does not include the same
remedy as the Board would require to remedy an unfair labor

24a
D—6099

practice.’ However, to defer here to the arbitrator’s remedy would
permit the Respondent to discipline an employee for activity
found by us and the arbitrator to be protected; clearly not an
“interpretation consistent with Board policy.”

In any event, in this case we have an arbitrator’s award that
did not warrant deferral. Accordingly, to determine whether the
Respondent in these circumstances has tolled its backpay obliga-
tion, it is proper to judge the Respondent’s offer by the standard
the Board normally uses. An award to which deferral was not
warranted is completely void.

Here, again, the offer was conditional on its face and thus was
not a valid offer to reinstatement. Therefore, the burden of the
loss must fall on the Respondent rather than the unlawfully
discharged employee. See Safeway Trails, Inc., 233 NLRB 1078
(1977), enfd. 641 F.2d 930 (D.C. Cir. 1979), cert. denied 103
LRRM 2668 (1980). Therefore, as Hennessey did not receive, as
we require, a facially valid offer of reinstatement, he is entitled to

8 See, e.g., Combustion Engineering, 272 NLRB 215 (1984). There the
Board noted, “The arbitrator’s remedy, though perhaps different from
what the Board would have ordered de novo, is reasonably based and is

susceptible to an interpretation consistent with Board policy.” Id. at
217.

9 Hypothetically, suppose an arbitrator awarded an employee rein-
statement on the condition that the employee not engage in any pro-
tected concerted activities? The award would clearly be repugnant to
the Act. Surely, an employer’s reliance on an offer of reinstatement
mace pursuant to such an award could not serve to toll an employer’s
backpay obligation.

D—6099

full backpay as set forth in the remedy section of our original
decision.!°

10 In fn. 16 of its remand, the court noted the Board’s willingness in
Abilities & Goodwill, Inc., 241 NLRB 327 fn. 5 (1979), and Marlene
Industries Corp., 255 NLRB 1446, 1449, fn. 12 (1981), to consider
whether an employee would have rejected a valid offer even in the
absence of such an offer. Both cases treat the backpay and reinstatement
rights of discharged strikers. Abilities & Goodwill, overruling precedent,
determined that discriminatorily discharged strikers should be treated
as other dischargees, running the backpay period from the date of the
discharge to the date of the respondent’s valid offer of reinstatement
without requiring the strikers to request reinstatement. In recognition
of their status as strikers prior to their discharge, the Board expressly
observed that the respondent could reduce or avoid its backpay liability
by establishing that the discriminatee would not have accepted the offer
if made, or by any other evidence demonstrating a willful loss of
earnings. While participation in an unfair labor practice strike does not
automatically defeat the right to backpay, it can affect the amount
recoverable if the employer can sustain the burden of showing willful
loss in that the strike hampered the efforts of the discriminatee to
mitigate damages by seeking new employment. Bon Hennings Logging
Co., 132 NLRB 97, 99 (1961), enfd. 308 F.2d 548, 558 (9th Cir. 1962); Ra-
Rich Mfg. Corp., 120 NLRB 503, 505 (1958), enfd. 276 F.2d 451 (2d Cir.
1960). The willful loss of earning doctrine, available in all backpay
determinations, ensures that only actual losses are compensated. Phelps
Dodge Corp. v. NLRB, 313 U.S. 177, 197 (1941). To the extent these cases
also allow an inquiry into a discharged striker’s desire for reinstate-
ment prior to receipt of a valid offer, the Board, we think, may properly
differentiate in its treatment of backpay between discriminatees whose
rights were violated while they were on the job and discriminatees who
were withholding their services at the time of their discriminatory
discharge.

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D—6099
ORDER

The National Labor Relations Board affirms iis Decision and
Order at 243 NLRB 988 and orders that the Respondent, Consoli-
dated Freightways, Peru, Illinois, its officers, agents, successors,
and assigns, shall take the action set forth therein.

Dated, Washington, D.C. July 29, 1988

James M. Stephens, Chairman

Wilford W. Johansen, Member

Marshall B. Babson, Member
(SEAL} NATIONAL LABOR RELATIONS

BOARD

27a

APPENDIX C

Notice: This opinion is subject to formal revision before publication in
the Federal Reporter or U.S. App.D.C. Reports. Users are requested to
notify the Clerk of any formal errors in order that corrections may be
made before the bound volumes go to press.

UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 81-1132

CONSOLIDATED FREIGHTWAYS, Petitioner
v.
NATIONAL LABOR RELATIONS BOARD, Respondent
CHARLES HENNESSEY, Intervenor

Petition for Review and Cross-Application for
Enforcement of an Order of the
National Labor Relations Board

Argued October 20, 1981
Decided December 11, 1981

Sandra P. Zemm with whom Zachary D. Fasman was on the
brief for petitioner.

Michael Stein, Attorney, National Labor Relations Board, of
the bar of the Supreme Court of Texas pro hac vice by special leave
of the Court, with whom Elliott Moore, Deputy Associate General
Counsel, and Peter Winkler, Attorney, National Labor Relations
Board, were on the brief for respondent.

Arthur L. Fox, II entered an appearance for intervenor.

Before: BAZELON, Sentor Circuit Judge, and WILKEY and
WALD, Circuit Judges.

Bills of costs must be filed within 14 days after entry of judgment. The court looks with disfavor upon
motions to file bills of costs out of time.

28a

Opinion for the Court filed by Circuit Judge WALD.

WALD, Circuit Judge: Petitioner, Consolidated Freightways
(“Consolidated”), seeks review of a decision of the National Labor
Relations Board (“NLRB” or “Board”’), 253 N.L.R.B. No. 137
(1981), ordering it to reinstate a former employee, Charles Hen-
nessey, with full backpay. Because we find that the Board failed
to address petitioner’s argument that Hennessey’s refusal of a
prior reinstatement offer tolled petitioner’s backpay liability, we
remand for further proceedings.

I. Factual Background

Consolidated discharged Hennessey on March 22, 1979, after
Hennessey refused to drive a tractor with faulty lights. Hennes-
sey filed a grievance challenging his discharge. His case was
brought before the Joint State Committee (“Committee’’), an arbi-
trati6n committee composed of three members of the union and
three representatives of the trucking industry.! On May 1, 1979,
the Committee ordered that Hennessey be reinstated with full
seniority and health and welfare benefits, but with a final warn-
ing letter and no backpay. Consolidated proceeded to put Hennes-
sey back on “the board” for work. Joint Appendix (“J.A.”’) 15.
Hennessey, however, did not return to work, explaining to a
supervisor that he would not return without backpay, Record
(“R.”) 61.2

! The parties to this action stipulated that the “entire grievance and
arbitration procedure was fair and regular in all respects.” Joint
Appendix (J.A.) 15.

? This explanation came several days after Hennessey was told that
he had his job back. According to the ALJ’s findings, the union steward
spoke to Hennessey immediately after the arbitrator rendered its deci-
sion, explaining that he could probably resume work that same night.
J.A. 15; see Record (R.) at 187. Hennessey’s testimony, however, indi-
cates that he was somewhat confused about when he could return to
work. Although he received two phone calls to return to work between
May 1, 1979, the date of the arbitrator’s award, and May 4, 1979,
Hennessey testified that he expected to receive “something in writing
stating [that he] had been reinstated.” R. 61. When the Operations

29a

On July 11, 1979, Hennessey filed a charge with the NLRB
asserting that he had been discnarged for protected concerted
activities in violation of section 8(aX1) of the National Labor
Relations Act, 29 U.S.C. § 158(aX1). The Administrative Law
Judge (ALJ) refused to defer to the Committee’s award,’ noting
that the award “required Hennessey to be reinstated but in effect
to be under the gun of a warning letter.” J.A. 15. Although the
ALJ made no specific findings regarding the effect of a warning
letter, his conclusion appears to be based on the terms of the labor
agreement between Consolidated and Local Union No. 710 of the
International Brotherhood of Teamsters, Chauffeurs, Ware-
housemen and Helpers of America. That agreement provides that
no employee may be discharged or suspended before receiving at
least one warning notice regarding the particular complaint
against him. See Exhibit 6C-5 at 79-80. The ALJ concluded that a
reinstatement offer conditioned on receipt of such a letter failed

(footnote continued from preceding page)

Manager, Charles Schmalz, phoned Hennessey on May 4 to ask him if
he was planning to return to work, this confusion was cleared up. But
when asked whether he would resume work, Hennessey stated that he
would not, explaining that “under the conditions that I didn’t get the
money that I deserved .. . I didn’t see that I could come back to
work.” R. 61. Hennessey testified that he then agreed to send in a letter
of resignation, but never did so. R. 61. Consolidated subsequently sent
Hennessey a letter acknowledging his resignation, to which Hennessey
did not respond. R. 262.

3The Board’s policy of deference to arbitration awards was
announced in Spielberg Mfg. Co., 112 N.L.R.B. 1080 (1955). Under
Spielberg, deference to arbitration awards is justified if three criteria are
satisfied: (1) fair and regular arbitral proceedings; (2) the parties agree
to be bound by the arbitral award; and (3) the award is not clearly
repugnant to the National Labor Relations Act. We have added a fourth
requirement: that the statutory issue be congruent with the contractual
issue, so that a resolution of one is a resolution of both. See Banyard v.
N.L.R.B., 505 F.2d 342, 348 (D.C. Cir. 1974).

30a

to remedy the alleged unfair labor practice and that, conse-
quently, the Board need not defer to the arbitrator’s award.‘

On the substantive merits on Hennessey’s charge, the ALJ
found that Hennessey’s refusal to drive the tractor was based on a
reasonable belief that to do otherwise would be unsafe under
legislatively approved safety standards. Despite the fact that
Hennessey was acting alone, the ALJ concluded that absent any
evidence that other employees disavowed Hennessey’s actions,
Hennessey’s conduct constituted protected concerted activity,°
J.A. 13, and his discharge was therefore a violation of § 8(a)(1) of
the National Labor Relations Act, 29 U.S.C. § 158(aX(1). J.A. 16.
As a remedy, the ALJ ordered that Hennessey be reinstated with
full backpay up to the date of a valid offer of reinstatement.
J.A. 13. Consolidated appealed to the Board, arguing that its
offer of reinstatement following the arbitrators award tolled its
backpay liability and discharged its obligation to offer Hennes-
sey reinstatement. The Board sustained the ALJ’s order.®

4 The ALJ suggested that his decision not to defer to the arbitrator’s
award was based, in part, on its failure to include backpay. J.A. 15. On
appeal, the Board agreed that the warning letter placed an invalid
condition on reinstatement, but reaffirmed its previous holding that an
offer of reinstatement is valid even if it fails to include backpay. J.A. 21.
Since we find that the Board should have considered Hennessey’s rea-
sons for rejecting Consolidated’s offer, we do not reach the question
whether the offer was in fact conditional.

5 Consolidated suggests that our recent decision in Kohls v.
N.L.R.B., 629 F.2d 173 (D.C. Cir. 1980), cert. denied, 450 U.S. 931 (1981),
draws into question the ALJ’s determination that Hennessey was
engaged in protected concerted activity. Since Consolidated did not take
exception to this determination in its appeal to the Board, this question
is not before us. See 29 U.S.C. § 160(e).

6 The Board noted that Consolidated did not take exception to the
ALJ’s refusal to defer to the arbitrator’s award or to his ruling that
Consolidated had committed an unfair labor practice by discharging
Hennessey for engaging in protected concerted activity. J.A. 20.

3la
II. Analysis

Consolidated does not challenge the Board’s finding that it
violated § 8(a)1) by discharging Hennessey, Brief for Petitioner
25; nor does it challenge the Board’s refusal to defer to the
arbitrator’s award. Jd. Instead, Consolidated argues that by offer-
ing Hennessey reinstatement in accordance with the terms of the
arbitrator’s decision it discharged its legal obligation and
stopped the accumulation of backpay liability. In addition, Con-
solidated argues that since Hennessey refused reinstatement for
an admittedly invalid reason (the denial of backpay), Hennessey
is entitled to neither a second offer of reinstatement nor backpay
which might otherwise have accrued after that refusal. In
response, the Board argues that Consolidated’s offer of reinstate-
ment was invalid because it was conditioned on accepting a final
warning letter. Such a letter, it contends, would have subjected
Hennessey to continued discrimination for exercising protected
rights. Since this offer was invalid, the Board further argues that
there is no need to inquire into Hennessey’s reasons for refusing
to accept it. Finally, the Board contends that the question
whether Hennessey refused reinstatement for invalid reasons
was not raised before the Board and therefore cannot be raised on
appeal.

A. The Issues Before the Board

As an initial matter, we must consider whether Consolidated’s
argument that Hennessey improperly refused reinstatement is
barred by section 10(e) of the National Labor Relations Act, 29
U.S.C. § 160(e). Section 10(e) provides that:

No objection that has not been urged before the Board, its
member, agent, or agency, shall be considered by the court,
unless the failure or neglect to urge such objection shall be
excused because of extraordinary circumstances.

29 U.S.C. § 160(e). This section furthers “the salutary policy .. .
of affording the Board opportunity to consider on the merits

32a

questions to be urged on review of its order.” Marshall Field &
Co. v. N.L.R.B., 318 U.S. 253, 256 (1943). Cases interpreting section
10(e) look to whether a party’s exceptions are sufficiently specific
to apprise the Board that an issue might be pursued on appeal.
Thus, a generalized objection to “ ‘each and every recommenda-
tion’ ” of an ALJ lacks the particularity needed to preserve
objections to the Board’s decisions. Jd. at 255; see also N.L.R.B. v.
Seven Up Bottling Co., 344 U.S. 344, 350 (1953) (objection to trial
examiner’s recommendation as unsupported by evidence and con-
trary to law does not provide adequate notice). Similarly, a party
who has limited his objections before the Board to one issue will
not be allowed to raise a different issue on appeal. See Dallas
General Drivers v. N.L.R.B., 389 F.2d 553, 555 (D.C. Cir. 1968)
(union could not attack standard by which trial examiner deter-
mined whether to order reinstatement when objections before the
Board were limited to issue of whether employees had been dis-
charged discriminatorily). But when the issues implicated by an
imprecisely drafted objection are made evident by the context in
which it is raised, section 10(e) does not shield the Board’s resolu-
tion of those issues from review. See May Department Stores Co. v.
N.L.R.B., 326 U.S. 376, 386 n.5 (1945) (vague exception to para-
graph including ceare and desist order as “not supported or
justified by the record” sufficient to preserve issue of the proper
scope of that order); N.L.R.B. v. Blake Construction Co., No. 80-1922
(D.C. Cir. August 17, 1981) (objections regarding scope of com-
plaint, substantiality of proof and ALJ’s conduct of proceeding
adequate to preserve due process objections); Florence Printing
Co. v. N.L.R.B., 376 F.2d 216, 222 (4th Cir. 1967), cert. denied, 389
U.S. 840 (1967) (objection to sufficiency of proof preserved objec-
tion to placement of the burden of proof). In each case, the
critical inquiry is whether the objections made before the Board
were adequate to put the Board on notice that the issue might be
pursued on appeal.’

7 The close factual inquiry required by this standard is illustrated
by our decision in Burinskas v. N.L.R.B., 357 F.2d 822 (D.C. Cir. 1966).
The Board, following remand from this court, had set aside an earlier
order and adopted the trial examiner’s original recommendations.

f
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*
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‘4

33a

In this case, we find that Consolidated’s objections before the
Board were sufficient to permit it to argue on appeal that Hennes-
sey’s improper grounds for refusing reinstatement relieved Con-
solidated of any obligation to make a subsequent reinstatement
offer and, correlatively, tolled Consolidated’s backpay liability.
In its exceptions to the ALJ’s recommendations, Consolidated
specifically objected to his failure to find “(t]hat the Charging
Party refused the May 1 1979 offer of reinstatement because it did
not include an offer of backpay. . . . ” Respondent’s Exceptions
to the Decision and Recommended Order of Administrative Law
Judge Dated July 30, 1980 3 (emphasis added). In addition,
Consolidated discussed Hennessey’s grounds for refusing the
reinstatement offer in its brief to the Board. It argued that “the
fact that the warning letter did not enter into Hennessey’s mind
when he rejected [Consolidated’s] unconditional offer of reinstate-
ment” was “of great significance,” and that it was “anomalous”
for the ALJ to “void an otherwise valid offer of reinstatement
because of what he perceived as a ‘condition’ to reinstatement

(footnote continued from preceding page)

These recommendations included ordering the employer to reinstate
discharged employees with full backpay. The employer then appealed
to this court, arguing that its backpay liability should be tolled for the
time between the Board’s two decisions. The Board countered by argu-
ing, inter alia, that the employer had failed to make such a tolling
argument before the Board, and was therefore barred from so arguing
on appeal. In rejecting the Board’s argument, this court first noted that
the employer had objected to “the remedy” proposed by the trial exam-
iner in its original objections to the Board. We then turned to the setting
in which the Board approved that remedy and cbserved that there were
a number of then recent Board decisions regarding the propriety of
tolling backpay liability between inconsistent Board decisions. Finally,
we concluded that it was “more likely than not that the Board, with its
expert sensitivities alerted by some considerable past familiarity with
the tolling issue in this context of a change in litigating fortunes took
[the] more limited [backpay] objection to be comprehended within the
broader exception.” Jd. at 825. We also noted that the Board’s compli-
ance officer had addressed the tolling question in a letter to the
employer following the Board’s second decision. Jd. at 825-26.

34a

when that alleged ‘condition’ (the letter) never entered the mind
of the Charging Party when he rejected-the offer.” See Respon-
dent’s Brief in Support of its Exceptions to the Decision and
Recommended Order of the Administrative Law Judge dated
July 30, 1980 16-17.

The Board argues that this discussion was insufficient to sat-
isfy section 10(e) because it appeared as part of Consolidated’s
argument that its offer was unconditional and was not accompa-
nied by citations to any of the authorities that Consolidated is
relying on in this appeal. Brief for Respondent 23. The General
Counsel’s own brief, however, set the issue of Hennessey’s
grounds for refusal in the proper context. The General Counsel
argued that “the fact that Hennessey declined the offer [should
not] relieve [Consolidated] of its obligation to tender a valid offer
of reinstatement.” Answering Brief in Response to Respondent’s
Exceptions to the Decision and Recommended Order of Adminis-
trative Law Judge Dated July 30, 1980 6-7. He then proceeded to
quote a recent Board opinion in which the Board ruled that an
employer who had been ordered to reinstate certain employees
was not excused from that order by letters from these employees
“ “to the effect that they did not wish to return to [his] employ.’ ”
Id. at 7 (quoting Leroy W. Craw, 224 N.L.R.B. 241, 242 (1979), enf'd,
622 F.2d 579 (3d Cir. 1980)). In addition, the question whether
Hennessey’s grounds for refusing Consolidated’s offer have any
independent legal significance was addressed by the ALJ who
Stated that:

Having discharged Hennessey for unlawful reasons, it was
and is Respondent’s responsibility to remedy the unfair
labor practices. The facts indicate that Hennessey made
statements indicating that his reason for not going back to
work was the lack of backpay in the award. Respondent’s
liability to reinstate Hennessey, however, continues until a
proper offer of reinstatement is made.

J.A. 16. In the light of both Consolidated’s emphasis on the
significance of Hennessey’s grounds for refusing Consolidated’s
offer, and the AL.J and General Counsel’s arguments that those

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35a

grounds were of no importance to the disposition of this case, we
find that the Board had adequate notice of the issue raised here
on appeal.

B. Hennessey’s Refusal of Consolidated’s Offer

Although the question whether Hennessey improperly
refused an offer of reinstatement was before the Board, the Board
did not address that question in its opinion, relying instead on
the findings and conclusions of the AL.J.8 The ALJ, however, had
simply assumed that Hennessey’s reasons for refusing Consoli-
dated’s offer were irrelevant to the determination of Consoli-
dated’s backpay liability. Consolidated argues that this
assumption is not in keeping with Board precedent and that by
failing to distinguish or overrule cases that require an inquiry
into an employee’s grounds for refusing reinstatement, the Board
has acted arbitrarily. Because we find that the Board’s policy as
to unjustified refusals of reinstatement offers remains unex-
plained, we remand this issue to the Board to reconsider its
opinion.

In stating that Hennessey’s reasons for not going back to work
were of no importance, the ALJ failed to take account of Board
precedent that emphasizes the actual reasons why an employee
refuses‘an offer of reinstatement even when the validity of the
offer itself is challenged. In Research Designing Service, Inc., 141
N.L.R.B. 211 (1963), for example, an employee who had been
unlawfully discharged refused an offer of reinstatement because
of the possibility of being laid off once again. Jd. at 224. The trial
examiner nonetheless ordered that the employee be reinstated
with full backpay since, had he accepted the offer of reinstate-
ment, he would not have been returned to his former status but
would rather have been treated as a new employee for seniority
and vacation pay purposes. Jd. at 230. In reversing this ruling,
the Board stressed that the employee “refused the offer of rein-
statement for other reasons.” Id. at 216 (emphasis in original). The

8 See p. 9 supra.

36a

Board therefore ruled that the employer’s liability for backpay
was tolled by the discharged employee’s refusal of an offer of
reinstatement.’ Similarly, in L. Ronney & Sons Furniture Manufac-
turing Co., 97 N.L.R.B. 891 (1951), enf’d as modified, 206 F.2d 730
(9th Cir. 1953), cert. denied, 346 U.S. 937 (1954, the Board tolled an
employer’s backpay liability for a discharged employee who
refused reinstatement because she was working at another job.!°
The Board noted that the reinstatement offer was invalid because
it was subject to an illegal union-security provision. It nonethe-
less tolled the employer’s backpay liability because it “appear{ed]
that [the discharged employee] would not have accepted [the
employer’s] offer, even had it been unconditional.” Jd. at 892.
Other cases pursue this same inquiry into the reasons why a
discharged employee rejected an offer of employment, holding
that an employer’s backpay liability is tolled when an employee
rejecis an offer of reinstatement without knowledge of the condi-
tionalit’ of the offer. See, e.g., Hribar Trucking, Inc., 166 N.L.R.B.
745, 756 n.19 (1967), modified on other grounds, 406 F.2d 854 (7th
Cir. 1969); Eastern Die Co., 142 N.L.R.B. 601, 604 (1963), enf’d, 340

9 The Board also reversed the trial examiner’s order with regard to
another employee who had refused reinstatement because “he was
working longer hours and making more money at his current job.”
Research Designing Service, Inc., 141 N.L.R.B. at 210. The trial exam-
iner had not made any specific findings regarding the latter employee’s
reasons for refusing reinstatement.

19 With regard to another employee, the Board in L. Ronney found
that there was sufficient evidence that he would have accepted the
employer’s offer had it not been conditional. L. Ronney & Sons Furni-
ture Mfg. Co., 97 N.L.R.B. at 893. In support of this ruling, the Board
emphasized the employee’s “express awareness of the conditional nature
of the . . . reinstatement offer.” On appeal, the Ninth Circuit found
that this portion of the Board’s order was not supported by substantial
evidence. N.L.R.B. v. L. Ronney & Sons Furniture Mfg. Co., 206 F.2d
730, 737-38 (9th Cir. 1958), cert. denied, 346 U.S. 937 (1954). Concluding
that the “evidence as a whole is inconsistent with the conclusion that
[the employee] refused employment on account of the implicit condition
in the offer,” the court ruled that the employee was only entitled to
backpay up until the offer of reinstatement. Jd. at 738.

37a

F.2d 607 (1st Cir. 1965), cert. denied, 381 U.S. 951 (1965); Ekco
Products Co., 117 N.L.R.B. 137, 150 (1957).! In each ease, the issue
is whether the evidence clearly establishes that the employee
would have turned down the offer of reinstatement even if it had
not contained the invalid condition. See, eg., Atlantic Maintenance
Co., 184 N.L.R.B. 1328, 1329 (1961), enf’d, 305 F.2d 604 (3d Cir.
1962); id. at 18329 n.1 (Member Rodgers, dissenting).

In ignoring the issue of Hennessey’s reasons for declining
Consolidated’s offer, the Board may have relied on a recent case
cited in the General Counsel’s brief. Brief to the National Labor
Relations Board In Answer To Respondent’s Exceptions Thereto
7. The question in Leroy M. Craw, 244 N.L.R.B. 241 (1979), enf'd,
622 F.2d 579 (3d Cir. 1980) was whether a conditional reinstate-
ment offer should be deemed to comply with an order of the
Board! to reinstate employees who had engaged in an unfair
labor practice strike when the employees either failed to respond
to the offer or refused it for other reasons. The employer had sent

11 Cases involving time conditions also support an inquiry into the
employee’s reasons for rejecting an offer of reinstatement. Time condi-
tions on acceptance are somewhat different from conditions that go to
the nature of an employee’s work because they do not prevent the
employee, if he accepts in a timely manner, from being made whole.
Time conditions are therefore not really conditions on the offer, but
rather limitations on the time for acceptance. As such, they must
comport with the employee’s “fundamental right to a reasonable time to
consider whether to return.” Penco Enterprises, Inc., 216 NLRB 734,
734-35 (1975). Accord, Murray Products, Inc. 228 NLRB 268, 268 (1977),
enf'd, 584 F.2d 934 (9th Cir. 1978). Nonetheless, the inquiry in such cases
is similar to that with invalid conditions on employment—that is,
courts look to the reasons why an employee failed to accept the offer of
reinstatement within the time imposed by the employer before inquir-
ing into whether that time condition is unreasonable. See, N.L.R.B. v.
Betts Baking Co., 428 F.2d 156, 158-59 (10th Cir. 1970); N.L.R.B. v.
Harrah’s Club, 403 F.2d 865, 871 (9th Cir. 1968).

12In Leroy W. Craw, 227 N.L.R.B. 601 (1976), modified on other
grounds, 565 F.2d 1267 (3d Cir. 1977), the Board had held that a com-
pany had engaged in an unfair labor practice by not reinstating unfair

38a

out letters offering striking employees reinstatement, but indicat-
ing that returning employees would be subject to physical exami-
nations and would only be paid at a substantially equivalent rate
to the one they had originally earned. The Board found that both
of these conditions were invalid—the physical examinations
because they treated returning employees as new employees; and
the rate of pay because it failed to include increases in wages that
the employees would have received had the employer accepted
their offers to return to work at the end of the strike. Jd. at 242.
After determining that the employer’s offers of reinstatement
were inadequate, the ALJ proceeded to consider whether the
employer’s backup liability should be tolled in the case of
employees who rejected those offers. He concluded that backpay
was not tolled, stating that: “(the discharged employees’] replies
to the effect that they did not wish to return to Respondent’s
employ do not obviate the need for Respondent to extend to them
an unconditional offer of reinstatement, nor do their replies ter-
minate their backpay periods.”

Although Leroy W. Craw could signal a change of Board policy
abandoning any inquiry into the reasons why a conditional offer
is refused, the case might also be reconcilable with earlier Board
precedent. The offer in Leroy W. Craw plainly stated its invalid
conditions and employees who rejected that offer because they
had procured “better jobs” might well have gone back to the
company if faced with a valid offer. Thus, the ALJ’s conclusion
may be seen as consistent with an inquiry into whether an
employee rejected an offer of reinstatement fcr reasons other
than its invalid conditions.

(footnote continued from preceding page)

labor practice strikers when they unconditionally applied for reinstate-
ment. Jd. at 609. The Board had therefore ordered the company to offer
those employees immediate reinstatement.

13 On appeal, the Board adopted the findings and conclusions of the
Administrative Law Judge. See Leroy W. Craw, 244 N.L.R.B. at 241.

;
:
i

1 RS RO IES MESO LEW EN LAEGER”

39a

In contrast, Hennessey’s refusal of Consolidated’s offer would
seem an appropriate case for applying the rule of Research Design-
ing and L. Ronney. The testimony regarding Hennessey’s reason
for refusing Consolidated’s offer was uncontradicted; he would
not return without backpay. R. 61. That reason was not valid
under Board precedent, because it violated Hennessey’s duty to
mitigate his damages. See National Screen Products Co., 147
N.L.R.B. 746, 748 (1964). On the other hand, while Hennessey
was present when the presumably invalid condition on his rein-
statement—the final warning letter—was announced, R. 99, 184,
Hennessey testified that he had no recollection of being told
about that condition, R. 100, and did not learn about it until five
weeks later.'4Id. There is therefore no reason to believe that the

_14 This testimony was given during questioning by the ALJ:

Judge Stone: ... As best you can [,] tell me exactly what [the
Joint State Committee] told you the results of the grievance hear-
ing were?

Hennessey: Well, sir, they told me that the discharge had been
overturned. That the pay claim had been denied. The company
was responsible to pick up my pension and health and welfare
benefits with full seniority rights.
Judge Stone: Now, was there anything else said to you at all?
‘Hennessey: No, sir, not that I remember.
Judge Stone: Did they give you anything in writing?
Hennessey: No, sir. I picked up a copy of the results of the
grievance about five weeks later. And it was at that time when I
finally realized there had also been a thing where the discharge
had been reduced to a final warning letter.
Judge Stone: .. . Now, did you know at the time the grievance
hearing was over, when you were orally told, did you know at that
time there was anything about a warning?
Hennessey: No sir, I did not.

R. 99-100.

The ALJ did not make any findings regarding Hennessey’s aware-
ness of the final warning letter, presumably because of his conclusion
that Hennessey’s reason for refusing Consolidated’s offer of reinstate-
ment were of no importance.

40a

invalid condition on Consolidated’s offer even entered Hennes-
sey’s mind when he decided to turn down the offer of reinstate-
ment. Looking to the actual reasons why Consolidated’s offer was
refused seems especially appropriate when there is every indica-
tion that Consolidated acted in good faith.’ Unlike the employer

15 Consolidated also argues that its good faith reliance on the arbitra-
tion award provides an independent basis for overturning the Board’s
decision. It suggests that even in cases in which the Board properly
refuses to defer to an arbitrator’s award, the Board should nonetheless
look to the award to determine the interim rights of the parties. Thus, it
argues, Hennessey should have been required to accept employment as
conditioned by the arbitrator’s decree, even though the Board ulti-
mately ruled that the arbitrator’s award contained an illegal condition.

Because we are remanding this case to the Board to reconsider the
significance of Hennessey’s motives for refusing Consolidated’s offer, we
need not reach the question whether Consolidated’s good faith reliance
on the arbitrator’s decree, in itself, would be sufficient to toll backpay
liability. We note, however, that resolution of this question depends on
whether the Board could properly further the strong national policy in
favor of private settlement of labor disputes without abdicatiny its
responsibility to remedy violations of national labor law. See Local
Union No. 2188, International Bth’d of Elec. Workers v. N.L.R.B., 494
F.2d 1087, 1091 (D.C. Cir., cert. denied, 419 U.S. 835 (1974); Associated
Press v. N.L.R.B., 492 F.2d 662, 667 (D.C. Cir. 1974). Thus, the Board
might well reach different conclusions regarding the employer’s right
to rely on an arbitrator’s decree pending a Board decision on a charged
unfair labor practice depending on the nature of the arbitrator’s deci-
sion and the specific circumstances following its issuance. In this case,
among the significant factors the Board would have to consider are
(1) the arbitrator ordered reinstatement with a warning letter, (2) Con-
solidated conformed its offer to the terms of the decree and (3) Hennes-
sey waited two and a half months after the decree before filing his
charge with the Board. Although Hennessey filed his charge within
the statutory period of six months, and the Board ruled that the offer
was improperly conditioned, a more refined consideration of the policy
in favor of private settlement might lead the Board to find that Consoli-
dated’s good faith reliance on the arbitrator’s award should work to
suspend its backpay liability. Different considerations would of course
be implicated if the arbitrator’s award had been plainly conditioned on

4la

in Leroy W. Craw, who made a conditional offer of reinstatement
in violation of an express order from the Board, Consolidated
offered Hennessey reinstatement in accordance with the terms of
the arbitrator’s decree; no Board precedent at that juncture spe-
cifically held that this offer would be inadequate; and Hennessey
gave no indication that the warning Jetter bore any significance
in his decision not to return to work. It was only after Hennessey
filed his charge with the Board, which was several months after
the arbitrator’s decision, that Consolidated received notice that
the warning letter presented any problem at all.

In view of the Board’s failure to reconcile its decision in this
case with its precedent, and its failure to explain its reasons for
abandoning any inquiry into the reasons why a conditional offer
is refused, we have no choice but to remand this case to the Board
to explicate the circumstances, if any, under which an inquiry
into wheth-r an employee would have rejected a valid offer of
reinstatement is proper.!® See generally Road Sprinkler Fitters Local

(footnote continued from preceding page)

a surrender of the employee’s statutory rights, or if the arbitrator had
upheld the discharge, thereby requiring no reinstatement offer at all. In
these cases, the Board might find that allowing the arbitration award to
reduce the remedy received by a wrongfully discharged employee
would seriously compromise the remedial purposes of the Act.

16 We are especially hesitant to decide this question without the
benefit of the Board’s reasoning in the light of contradictory signals
from the Board regarding the analogous situation in which an
employer who has made no reinstatement offer at all seeks to reduce his
backpay liability by proving that an offer would have been rejected.
Compare Roadway Express, Inc., 254 N.L.R.B. No. 26, 48-49 (1981)
(evidence that employee intended to quit does not obviate need for a
valid offer of reinstatement) and Lyman Steel Co., 246 N.L.R.B. 712, 715
(1979) (employer must make a genuine offer of reinstatement to toll
backpay liability) with Marlene Industries Corp., 255 N.L.R.B. No. 192,
14 n.12 (1981) (even in the absence of an offer of reinstatement, employer
may reduce liability by demonstrating that employee would not have
accepted the offer if made) aid Abilities & Goodwill, Inc., 241 N.L.R.B.
27, 27 n.5, enf. dented on other grounds, 612 F.2d 6 (1st Cir. 1979 (same).

42a

No. 669 v. N.L.R.B., 600 F.2d 918, 923 (D.C. Cir. 1979); N.L.R.B. v.
Madison Courier, Inc., 472 F.2d 1307, 1326 (D.C. Cir. 1972); Burin-
skas v. N.L.R.B., 357 F.2d 822, 827 (D.C. Cir. 1966).

Remanded.

43a

APPENDIX D

FJZ
253 NLRB No. 137 D—7248
Peru, IL

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD

CONSCLIDATED FREIGHTWAYS
and Case 33—CA—4364
CHARLES HENNESSEY, an Individual

DECISION AND ORDER

On July 30, 1980, Administrative Law Judge Jerry B. Stone
issued the attached Decision in this proceeding. Thereafter,
Respondent filed exceptions and a supporting brief, and the Gen-
eral Counsel filed a brief in answer to Respondent’s exceptions.

Pursuant to the provisions of Section 3(b) of the National
Labor Relations Act, as amended, the National Labor Relations
Board has delegated its ew in this proceeding to a three-
member panel.

The Board has considered the record and the attached Deci-
sion in light of the exceptions and briefs and has decided to affirm
the rulings, findings,! and conclusions of the Administrative Law
Judge and to adopt his recommended Order.

1 In adopting the Administrative Law Judge’s finding that Charles
Hennessey was discharged in violation of Sec. 8(aX1) of the Act, we note
that no exceptions were filed to that finding, or to the further finding
that deference to the arbitration award concerning Hennessey’s dis-
charge was unwarranted.

253 NLRB No. 137

44a
D—7248

In his Decision, the Administrative Law Judge intimated that
Respondent’s refusal to include backpay in its offer of reinstate-
ment to Charles Hennessey, by itself, could render the offer of
reinstatement inadequate. While a valid offer of reinstatement
must be specific, unequivocal, and unconditional, the refusal to
include accrued backpay in an otherwise valid offer of reinstate-
ment does not render the offer inadequate. The imposition of such
a requirement would nullify the right to litigate the lawfulness
of the discharge. Moro Motors Ltd., 216 NLRB 192 (1975), and
National Screen Products Co., 147 NLRB 746 (1964). Therefore,
insofar as Respondent’s offer of reinstatement to Hennessey did
not include accrued backpay, it was not, for that reason, invalid.

However, we agree with the Administrative Law Judge that
Kespondent’s offer of reinstatement was invalid. In so doing, we
rely on the Administrative Law Judge’s finding that placement
of a warning letter in Hennessey’s personnel file as a prerequisite
to his reinstatement renders the reinstatement offer conditional
and, thus, inadequate.

45a
D—7248
ORDER

Pursuant to Section 10(c) of the National Labor Relations Act,
as amended, the National Labor Relations Board adopts as its
Order the recommended Order of the Administrative Law Judge
and hereby orders that the Respondent, Consolidated Freight-
ways, Peru, Illinois, its officers, agents, successors, and assigns,
shall take the action set forth in the said recommended Order,
except that the attached notice is substituted for that of the
Administrative Law Judge.

Dated, Washington, D.C. January 5, 1981

John H. Fanning, Chairman

Howard Jenkins, Jr., Member

Don A. Zimmerman, Member
[SEAL] NATIONAL LABOR RELATIONS

BOARD

46a
D—7248
APPENDIX

[SEAL] NOTICE TO EMPLOYEES [SEAL]

Posted by Order of the
National Labor Relations Board
An Ageucy of the United States Government

WE WILL NOT discharge or otherwise discriminate against
employees in regard to hire or tenure of employment, or any term
or condition of employment because of their protected concerted
activities.

WE WILL NOT threaten employees with discharge or other
reprisals because of their protected concerted activities.

WE WILL NOT in any like or related manner interfere with,
restrain, or coerce employees in the exercise of the rights
guaranteed them in Section 7 of the Act except to the extent that
such rights may be affected by lawful agreements in accordance
with Section 8(a)(3) of the Act.

WE WILL offer to Charles Hennessey immediate and full
reinstatement to his former position or, if such position no longer
exists, to a substantially equivalent position, without prejudice to
his seniority or other rights previously enjoyed, and make him

47a
D—7248

whole, with interest, for any loss of pay or other benefits suffered
by reason of the discrimination against him.

CONSOLIDATED FREIGHTWAYS
(Employer)

Dated By

(Representative) (Title)

THIS IS AN OFFICIAL NOTICE AND MUST NOT BE
DEFACED BY ANYONE.

This notice must remain posted for 60 consecutive days from
the date of posting and must not be altered, defaced, or covered by
any other material. Any questions concerning this notice or
compliance with its provisions may be directed to the Board’s
Office, Savings Center Tower, 16th Floor, 411 Hamilton Avenue,
Peoria, Illinois 61602, Telephone 309-671-7081.

48a

APPENDIX E

JD—447—80
Peru, IL

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES

CONSOLIDATED FREIGHTWAYS

and Case No. 33—CA—4364
CHARLES HENNESSEY

Gary W. Wright, Esq., and
Lynn E. Gilfillan, Esgq.,
for the General Counsel.

Mr. Charles Hennessey, of
Warrenville, IL, Pro Se.

Sandra P. Zemm, Esq., and
John W. Powers, Esq.
(Seyfarth, Shaw, Fairweather
and Geraldson), of Chicago,
IL, for the Respondent.

DECISION

Statement of the Case

JERRY B. STONE, Administrative Law Judge: This pro-
ceeding, under Section 10(b) of the National Labor Relations Act,

as amended, was tried pursuant to due notice on February 14 and
15, 1980, at Peoria, Illinois.

The charge was filed on July 11, 1979. The complaint in this
matter was issued on August 30, 1979. The principal issues con-
cern whether the Respondent has violated Section 8(a)(1) of the

49a
JID—447—80

Act by threatening an employee concerning his exercise of pro-
tected concerted rights, and by discharging Charles Hennessey
on March 22, 1979, because he engaged in protected concerted
activity. There are also issues as to whether the Board should
defer its right to act and honor an arbitration award and whether
Respondent’s willingness to reinstate and “act of reinstatement”
of Hennessey constitutes a bar to reinstatement and a toll to
backpay.

All parties were afforded full opportunity to participate in the
proceeding. Briefs have been filed by the General Counsel and
Respondent and have been considered.

Upon the entire record in the case and from my observation of
witnesses, I hereby make the following:

Findings of Fact
I. The Business of the Employer

The facts herein are based upon the pleadings and admissions
therein.

Consolidated Freightways, the Respondent, is, and has been at
all times material herein, a Delaware corporation with corporate
headquarters located at Menlo Park, California, and terminal
facilities located at Peru, Illinois, and at other sites throughout
the United States. It is engaged in the business of intrastate and
intesstate transportation of goods and materials.

Respondent, during a representative 12-month period, derived
gross revenues in excess of $50,000 from transporting material
from points outside the State of Illinois directly to points within
the State of Illinois. Respondent, during the same representative
period, derived gross revenues in excess of $50,000 from trans-
porting material from the State cf Illinois directly to points
located outside the State of Illinois.

JD—447—80

As conceded by Respondent and based upon the foregoing, it is
concluded and found that the Respondent is, and has been at all
times material herein, an employer engaged in commerce within
the meaning of Section 2(2), (6) and (7) of the Act.

II. The Labor Organization Involved!

Local Union 710, International Brotherhood of Teamsters,
Chauffeurs, Warehousemen & Helpers of America, is, and has
been at all times material herein, a labor organization within the
meaning of Section 2(5) of the Act.

III. The Unfair Labor Practices

A. Preliminary Issues
Supervisory Status?

At all times material herein, the following-named persons
oceupied the positions set opposite their respective names, and
have been, and are now, agents of the Respondent at its Peru,
Illinois facility, acting on its behaif, and are supervisors within
the meaning of Section 2(11) of the Act:

Wiiliam Jones — Mechanics Shop Supervisor
Robert Tosch? — Dispatch Supervisor
Charles Schmalz — Dispatch Operations Manager

1 The facts are based upon the pleadings and admissions therein.

2 The facts are based upon the pleadings and admissions therein and
undisputed credited evidence.

3 According to the pleadings and the record otherwise, the correct
spelling of Dispatch Supervisor Robert Tosch’s name is “Tosh.”
Respondent’s brief refers to the dispatcher as “Tosch.” Reference to
“Tosh” herein is to Tosh or Tosch, whichever is the correct spelling of
the individual’s name. Since Respondent should be more aware of the
spelling of its supervisor’s name, I shall use “Tosch” in reference to
Tosh or Tosch.

dla
JD—447—80
B. Background

Consolidated Freightways, Inc., the Respondent, is and has
been for a number of years engaged in the business of intrastate
and interstate transportation of goods and materials. Respondent
opened a terminal at Peru, Illinois, in March of 1979.

At all times materia] herein Respondent had a collective-bar-
gaining relationship with Local Union No. 710 of the Interna-
tional Brotherhood of Teamsters, Chauffeurs, Warehousemen &
Helpers of America. Said bargaining relationship was governed
by contracts, one of which had the following provisions:

ARTICLE 16

EQUIPMENT, ACCIDENTS, REPORTS. The
Employer shall not require employees to take out on the
streets or highways any vehicle that is not in safe operating
condition or equipped with the safety appliances prescribed
by law. It shall not be a violation of this Agreement where
employees refuse to operate such equipment unless such
refusal is unjustified. All equipment which is refused
because not mechanically sound or properly equipped, shall
be appropriately tagged so that it cannot be used by other
drivers until the maintenance department has adjusted the
complaint. After equipment is repaired the Employer shall
place on such equipment an “OK” in a conspicuous place so
the driver can see the same.

Under no circumstances will an employee be required or
assigned to engage in any activity involving dangerous con-
ditions of work or danger to person or property or in viola-
tion of any applicable statute or court order, or in violation
of a government regulation relating to safety of person or

52a
JD—447—80

equipment. The term “dangerous conditions of work” does
not relate to the type of cargo which is hauled or handled.

Any employee involved in any accident shall immedi-
ately report said accident and any physical injury sus-
tained. When required by his Employer, the employee,
before starting his next shift, shall make out an accident
report in writing on forms furnished by the Employer and
shall turn in ali available names and addresses of witnesses
to the accident. The employee shall receive a copy of the
accident report that he submits to his Employer. Failure to
comply with this provision shall subject such employee to
disciplinary action by the Employer.

Employees shall immediately, or at the end of their shift,
report all defects of equipment. Such reports shall be made
on a Suitable form furnished by the Employer and shall be
made in multiple copies, one copy to be retained by the
employee. The Employer shall not ask or require any
employee to take out equipment that has been reported by
any other employee as being in an unsafe operating condi-
tion until same has been approved as being safe by the
mechanical departments.

When the occasion arises where an employee gives writ-
ten report on forms in use by the Employer of a vehicle
being in an unsafe working or operating condition, and
receives no consideration from the Employer, he shall take
the matter up with the officers of the Union who will take
the-matter up with the Employer.

If the Employer requests a regular employee to qualify
on equipment requiring a special license or in the event an
empioyee is required to qualify (recognizing seniority) on
such equipment in order to obtain a better job opportunity,
with his Employer, the Employer shall allow such regular

53a
JD—447—80

employee the use of the equipment in order to take the
examination.

All equipment used as City Peddle trucks and equipment
regularly assigned to peddle runs must have steps or other
similar device to enable drivers to get in and out of the body.

The Employer shall install heaters and defrosters on all
trucks and tractors.

There shall be first line tires on steering axle of road
units.

All new road equipment regularly assigned to the fleet
after July 1, 1973 shall be equipped with air-ride seats on
the driver’s side.

Newly manufactured over-the-road tractors which are
added to the road fleet, subsequent to April 1, 1977, and
assigned to road operations on a regular basis shall be air
conditioned. The National Negotiating Committees shall
designate an Employer-Union Committee which shall
undertake to determine the feasibility of converting road
tractors to provide air conditioning by April 1, 1980.

The Conference Joint Area Committee may, upon appli-
cation of either the Employer or the Local Union, waive the
installation of such air conditioning equipment as a result
of climatic conditions or other standards established by the
Committee.

The Employer and the Union together shall create a joint
committee of qualified representatives for the purpose of
consulting among themselves and with appropriate Govern-
ment agencies, state and federal, on matters involving high-
way and equipment safety, and such committee shall meet

JD—447—80

on a quarterly basis with a schedule to be agreed to by the
respective chairmen.

Any complaint arising under this article will be
processed through the Conference Area level in accordance
with rules and procedures to be agreed upon between the
parties. Within sixty (60) days from the signing of this
agreement, the Local Union will notify the Employer of the
representative who will be responsible for these matters.

The Respondent’s operations were also subject to Federal
Motor Carrier Safety Regulations as prescribed by U.S. Depart-
ment of Transportation Federal Highway Administration. At all
times material herein, such regulations included as part thereof
the following regulation:

Sec. 392.7 Equipment, inspection and use.

No motor vehicle shall be driven unless the driver thereof
shall have satisfied himself that the following parts and
accessories are in good working order, nor shall any driver
fail to use or make use of such parts and accessories when
and as needed:

Service brakes, including trailer brake connections.
Parking (hand) brake.

Steering mechanism.

Lighting devices and reflectors.

Tires.

Horn.

Windshield wiper or wipers.

Rear-vision mirror or mirrors.

Coupling devices.

55a
JD—447—80

Charles Hennessey was employed by the Respondent as a
transport operator from May 19, 1977, to March 22, 1979. Respon-
deni’s discharge of Hennessey on March 22, 1979, is in issue as an
alleged violation of Section 8(a)1) of the Act. The essential ques-
tion is whether Respondent discharged Hennessey because of his
protected concerted activity.

Hennessey refused to drive a tractor-trailer on March 22, 1979,
assertedly because the lights were not of such a nature as to be
safe. It is clear that if Hennessey’s refusal to operate or drive the
tractor-trailer constituted protected concerted activity, such
March 22, 1979, discharge would constitute conduct by Respon-
dent violative of the Act.

At first blush, the General Counsel’s pleadings merely asserted
that Respondent’s discharge of Hennessey was because of Hen-
nessey’s protected concerted activity. Such pleadings are loose
enough to allow litigation of whether Hennessey was discharged
because of protected concerted activity other than the activity on
wlarch 22, 1979. In this respect, I note that the General Counsel
adduced evidence toward establishing that Hennessey had
engaged in other protected concerted activity, that of refusing to
drive tractor-trailers which were overloaded as regards state
weight regulations, that Respondent’s agents had made remarks
to Hennessey revealing an attitude of discriminatory motivation
as regards employees who refused to drive overloaded trucks, and
in effect displeasure with Hennessey because of his refusal. The
Respondent objected to the receipt of such evidence and argued
that the issues were narrow and related to the question of safety
of the truck on March 22, 1979. The General Counsel cleared up
any ambiguity in the pleadings and stated in effect that the
evidence of the refusal to drive overweighted tractor-trailers was
“relevant” to show the conduct alleged in this case as regards the
issue of discharge for driving an unsafe tractor. I have carefully
reviewed the record and Genera! Counsel’s brief. It is clear that

JD—447—80

the issue as litigated is simply whether the Respondent dis-
charged Hennessey on March 22, 1979, for his refusal to drive a
tractor-trailer on March 22, 1979, and whether such refusal,
because of safety reasons, constituted protected concerted activ-

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_1616%3A1. Public record. Not legal advice.