Appendix — J. H. Rutter Rex Manufacturing Co. v. National Labor Relations Board

APPENDIX A

IN THE

United States Court of Appeals

FOR THE FIFTH CIRCUIT

No. 71-3260

J. H. RUTTER REX MANUFACTURING COMPANY,

INC.,

Petitioner-Cross Respondent,

versus

NATIONAL LABOR RELATIONS BOARD,

Respondent-Cross Petitioner.

Petition for Review and Cross Application for

Enforcement of an Order of the National Labor

Relations Board (Louisiana Case)

(January 16, 1973)

Before COLEMAN, GOLDBERG and GODBOLD,

Circuit Judges.

GOLDBERG, Circuit Judge: This case involves the

propriety of a back-pay order issued by the N.L.R.B.

against petitioner, J. H. Rutter Rex Manufacturing

Company, Inc. The genesis of the back pay claim is

the company’s failure to reinstate various employees

2=A

2 J.H. RUTTER REX MFG. CO,, INC. v. N.L.R.B.

who had participated in an unfair labor practice strike

in 1954. This is the fifth time this case has appeared

before this Court and hopefully, it will be the last."

The background chronology of this judicial mara-

thon is as follows: In April, 1954, there was a strike

at petitioner’s plant that lasted for one year. On Feb-

ruary 13, 1956, the N.L.R.B. issued a decision holding

that the company had violated $$ 8(a)(1) and 8(a)(5)

of the N.L.R.A. and that therefore the strike had been

an unfair labor practice strike. 115 N.L.R.B. 388. The

Board's order of mandatory reinstatement of al] the

strikers was enforced by this court. N.L..B. v. J. H.

Rutter Rex Mfg. Co., Inc., 5 Cir. 1957, 245 F.2d 594.

Included in that order was a requirement that Rutter

Rex make whole any striker for lost earnings resulting

from the company’s failure to offer reinstatement. See

§$ 10(c) of the N.L.R.A., 29 U.S.C. § 160(c). Many of the

strikers were denied timely reinstatement and to re-

medy this the Board undertook the preparation of a

back-pay specification.

Four years later, in November, 1961, following a

lengthy investigation, the Board issued the first back-

pay specification and notice of hearing. The specifica-

tion consisted of the back-pay claims of all strikers

1In 1968, the last time this case was here, Judge Coleman re-

marked: “After thirteen years let the books be closed on this

controversy.” 399 F.2d 356, 365. Four and one-half years later,

we can only echo his words.

2The facts surrounding the strike are succinctly set out in N.L.R.B.

v. Rutter Rex, 1969, 396 U.S. 258, 259-260, 24 L.Ed.2d 405,

408. The Board proceedings are more fully discussed in

ae v. J. H. Rutter Rex. Co., Inc., 5 Cir. 1957, 245 F.2d

4.

Ber.

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 3

who had been denied reinstatement for any part of

the period in question. An attempt by Rutier Rex to

have the proceedings permanently enjoined because

of the four year delay was denied by this court.

N.L.R.B. v. J. H. Rutter Rex, 5 Cir. 1962, 305 F.2d

242. Extensive hearings were then held on the claims

in the specification, and in June of 1964 the trial ex-

aminer issued his initial findings. Two years later, in

June of 1966, the Board adopted most of the trial ex-

aminer’s findings and issued its first supplemental de-

cision and order of back-pay liability. 158 N.L.R.B.

1414.5

This court, reviewing the Board's initial back-pay

order. modified that order by terminating petitioner’s

back-pay liability as of July 30, 1959. N.U.R.B. v. J.H.

2utter Rex Mtg. Co., Inc., 5 Cir. 1968, 399 F.2d 356.

The primary justification for the modification was that

the prolonged delay of the Board in issuing the order

prejudiced the company’s ability to defend the claims

and that equity therefore required that an appropriate

limit be put on the liability. On appeal, the Supreme

3In its order the Board specifically reserved the possibility of

further back-pay being ordered for those claimants who had

not been offered reinstatement by June, 1961, which was the

terminal date for computing liability for the first back-pay

specification.

“With respect to those employees whose backpay was

still accruing, as found by the Trial Examiner in his

Supplemental Decision, payment to them of the net

amount found to be due and accruing constitutes

satisfaction of {the Company’s] obligation only up to

June 24, 1961, which is the end of the period covered

by the specification.”

Id. at 1425. It is the back-pay for the period after June 24,

1961, that is the subject of the appeal sub judice.

ar AL Brae LON le ORG SETS SEDATE RI:

4m.

4 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

Court reversed this court’s modification and held, in

essence, that the claimants should not be penalized

for the Board’s delay. N.L.R.B. v. J. H. Rutter Rex

Mfg. Co., Inc., 1969, 396 US. 258, 24 L.Ed.2d 405. In

April, 1970, this court, on remand from the Supreme

Court, issued its judgment enforcing the Board’s orig-

inal back-pay order.

Following entry of the final order in the above pro-

ceedings, which involved the first back-pay order

{Rutter Rex I], the Board’s Regional Director began

preparation of a second back-pay specification for

those claimants whose back-pay claims extended be-

yord June, 1961. The second back-pay specification and

notice of hearing was issued on November 30, 1970.

A hearing on the specification was held in February

and March of 1971, and the trio] examiner's decision

issued in June, 1971. On November 5, 1971, the Board

issued its order granting supplemental back->av to 33

claimants who had not been offered reinstatement un-

til after June, 1961. 194 N.L.R.R. No. 3 (1971). Six of

the claims extended beyond 1963 and the remaining

twenty-seven were for a period cf only two vears or

less.*

4The tota! back-ray awareod in the secctnd order was $53 078 plus

interest at 6° comme ncir-: Jure 2. 1°64. The sums awarded

to individual cinimerts were as follews:

Victeria Alor £2.543 TLoeul-e Jackson

Sonora Berres (Rochor) 340 (deceased) $1 236

Peris E. Bowles 812) Eurice Johncon 2.772

Marguerite Bo-orier 1,691 Lita Mae Landry

Miriom Cheri 530 (Co:ton) 1¢2

Bessie Ceover (Lee) 1591) Dersihv White (Learson) 1,591

Geer-iana Davis L>o-nrd Lewis 386

(Deru'sa) bp Me

anh.

J. H. RUTTER REX MFG. CO., INC. v. N.L-R.B. 95

On November 17, 1971, Rutter Re: filed a petition

in this court for review of the Board's second supple-

mental back-pay order. On December 27, 1971, the

Board filed a cross application for enforcement of its

order. In seeking to have this court set aside the back-

pay order for the post-1961 period, the company raises

the following contentions of error: (1) The Board failed

to consider its own delay in setting the second back-

pay award; (2) the punitive nature of the hearing, par-

ticularly the Board's refusal to > rocuce various Board

records, denied the company a fair hearing; and (3)

the evidence failed to support the awards to many of

the claimants. With the exception of the oard’s fzil-

ure to produce certain notes relating to the Watford

claim, we reject each of the company’s assertions.

I. The Board’s Deley

As it did in Rutter Kex I, the company is alleging

that the Eoard’s delay prejudiced its ability to defend

and that, therefore, the delay should somehow allow

it to escape its liability to the claimanis. Specifically,

the company claims that the Board erred in refusing

Lenora Davis 236 Bevsie Montgomery 393

Alice T. Denly (Gabriel) 21 Ade'e Nash (Hall) 1,532

Gloria Dixon 191 Desideria O’'Campo 766

Minnie M. Fernandez 2.185 Yvonne Parnell

Ethel Mae Foreman (Charles) 1,367

(Askin) 1.414 Dorcthy K. Reed 962

Edna Francis 1.161 Adele L. Robertson 1,181

Jimmie Lou Green 3.536 Rosalie Thornton 807

Gustavia Haynes (Gale) 4.530 Marjorie Walker 351

Victoria Henderson 2.121 Alma Wallace 52

Rose Marie Hicks 1,778 Fannie M. Watford 9,592

Beatrice White (Lane) 3,007

DY Sinn ee a

pny

,

Om,

6 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

to even consider the delay as a factor. In support of

its argument, the company continually refers to Jus-

tice Marshall's words in Rutter Rex I, in which he

Said that the opinion was limited to the “circumstances

of this case.” 395 U.S. at 259. Therefore, the company

argues, the delay should have been considered anew

in the second back-pay proceeding. We reject the com-

pany’s argument for two reasons.

First, there is no indication that the Board did not,

in fact, consider the delay.5 Indeed, there is ample

evidence to ihe contrary. The trial examiner ordered

the gexera! counsel to explain the delay in issuing the

second speciticaiion. Only after the e<aminer consid-

ered and eecepied the explanation was the delay fac-

tor rejected.

Secondiv, we e-niic i:ly find thet the Board was cor-

rect in refusing to allow the adminisirative delay to

prejudice the cleimants. In Rutter Rex I, the Supreme

Court rejecied the identical claim on almest identical

facts, satire:

“We do not mean that delay in the adminis-

trative process is other than deplorable. It is

deplorable if, as the Court of Appeals thought,

the company was hampered in the presenta-

tion of its defenses to the back-pay specifica-

tion by the delay. It is even more deplorable

if, as seems clear, innocent employees had to

5The company points to one sentence in the Board’s opinion, that,

referring to whether the Board’s delay should be a factor in re-

ducing liability, stated “The Supreme Court [in Rutter Rex qT]

has answered it adversely to the respondent.”

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J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 7

live for some years on reduced incomes as a

combined result of the delay and the cem-

pany’s illegal failure to reinstate them. It may

be that the company could have, through the

courts, compelled earlier Board action. But the

Court of Appeals exceeded the narrow scope of

review provided for the Board’s remedial or-

ders when it shifted the cost of the delay from

the company to the employees in this case.”

396 U.S. at 265-256.

In this second back-pay order we find the caSe a-

gainst allowing the delay factor to prejudice the claim-

ants to be even stronger than in Rutter Rex I. Before

commencing the second back-pay specification, the

Board wisely waited until after the first back-pay order

was approved by the courts. Had the Court of Appeals

decision limiting back-pay liability to the pre-1959 pe-

riod been accepted by the Supreme Court, a fortiori,

a post-1961 back-pay specification would have been of

dubious legality. We cannot fault the Board for wait-

ing until after the first back-pay order was finalized

before beginning the second specification. In addition,

the company had been on notice from the time of the

1966 Board order that post-1961 back-pay remained to

be computed.® The fact that the company did not offer

reinstatement to some of the claimants until 1970 pro-

vides further justification for the Board’s waiting until

it did to begin the second back-pay specification. As

the Board points out, “If the Board had held the second

hearing prior to the May, 1970 reinstatement of the

6See note 3, supra.

8 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

last striker, yet a third hearing would have to have

been held after their backpay periods kad been tolled

by offers of reinstatement.”

The delay that has taken place in the adjudication

of these claims is most unfortunate. Some of the fault

obviously lies with the sluggish internal operations of

the Board. The company, however, in failing to rein-

State as ordered by the Board and by appealing the

initial order is also very much to blame. Certainly,

it would be both unjust and inconsistent with the Su-

preme Court's decision in Rutter Rex I to require that

the otherwise entitled claimants pay the price for the

delay, which was in no Way caused by them. We find

that the Board was correct in rejecting this defense.

II. Denial of a Fair Hearing

The primary focus of the company’s claim that it

was denied a full and fair hearing before the Board

is the refusal of the Board to allow the company ac-

cess to certain Board files that might have aided the

company in impeaching some or all of the back-pay

claimants. We discern three somewhat distinct objec-

tions made by the Company: (A) The general failure

of the Board to follow its normal procedure of collect-

ing statements from the back-pay claimants and later

making them available to the employer; (B) The

Board’s overruling of a subpoena duces tecum by

which the company sought access to the Board's inves-

tigative files, and the continued refusal of the general

counsel to produce these files upon request; and (C)

The Board’s refusal to allow Witness Lacey, a former

Board compliance officer, to refresh his recollection

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J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 9

while testifying by referring to his own memoranda

located in the Board files. With the exception of the

third point, we find the company’s arguments to be

without legal merit.

A. Board Procedures as a Denial of a Fair

Hearing.

In its briefs and argument to this court, the company

unleashes a broad based attack on the procedures fol-

lowed in this case. It alleges, in substance, that the

Board’s goal was to inflict “a monetary penalty upon

respondents in as high an amount as obtainable.” Spe-

cifically, the company refers to the Board's refusal

to follow the usual procedures of collecting statements

from the claimants and making them available to the

company for impeachment purposes. As support for

the charge of unfairness, the company points to the

fect that the ultimate award in the second back-pay

order was almost unchanged from the back-pay spceci-

fication originally prepared by the Regional Director.

Since the specification contains, in effect, the gross

claims. this indicates that the company’s defense to

the second back-pay order was, by and large, totally

impotent.”

We begin by noting that it is not the proper role

of ‘his court to establish Board investigative or discov-

ev precedures. Absent a showing of unfairness, we

are not at liberty to pass legal judgment on their proc-

7In the first back-pay order, the company waged a vigorous de-

fense against the back-p-y claims with the result being that

only $119,720 was awerded. The amount claimed in the first

back-pay specification was $342,000.

s

'

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10 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

esses. See N.L.R.B. v. Vapor Blast Mfg. Co., 7 Cir.

1961, 387 F.2d 402, 407. If, on occasion in the past, the

Board has chosen to collect certain information and

provide various items from its records to employers,

that is its prerogative and it might well be the better

practice in many cases. Where the Board, however,

chooses to forego collection of the formal statements

and to resist production on grounds of certain judicial-

ly approved privileges, as it did here, we cannot con-

demn the practice simply because the Board has used

different procedures in the past. The Board's proce-

dures are not that strait-jacketed.

In Erown v. Thompson, 5 Cir. 1970, 430 F.2d 1214,

this court was faced with the contention of a wrongful

death claimant that the government, by refusing to

produce a police report involving the investigation of

the deceased’s death, had made it impossible for plain-

tiff to succeed. Upholding the district court's refusal

to require disclosure, we said:

“Government documents are the outstand-

ing example of matter which is privileged and

which is not subject to disclosure. . Whether

there should be a disclosure is within the dis-

cretion of the trial court and, like other discre-

tionary matters, the determination of the court

should be made by a balancing of interests.

The exercise of discretion, like other matters

of discretion vested in trial courts, will be con-

sidered upon review for an abuse of discretion.

It is the unusual and exceptional case where

the determination of the trial court is set aside.

Swanner vy. United States, 5th Cir. 1969, 406

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J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 11

F.2d 716; Adams v. United States, 5th Cir. 1958,

260 F.2d 467, cert. den., 359 U.S. 934, 79 S.Ct.

649, 3 L.Ed.2d 635 (1959). The judges of the

Court of Appeals might well feel that under like

circumstances they would have exercised the

judicial discretion in a manner different from

that in which it was exercised by the trial

court. But, this is not a basis for reversing the

determination of the trial court. The test is

whether there has been an abuse of that dis-

cretion and in this case we hold that there was

no such abuse.”

430 F.2d at 1216. Although that case involved a district

court and not the Board, we think its reasoning is fully

applicable here. Simply because an appellate court

perceives that a fairer result might have been reached

through the production of certain investigative notes,

it does not follow that such production should be ju-

dicially mandated. The Board did not arbitrarily re-

fuse disclosure in this case, c.f. N.L.R.B. v. Capitol

Fish Co., 5 Cir. 1961, 294 F.2d 868, to the contrary,

it based its refusal to produce, at least in part, on

a recognized evidentiary privilege — the qualified priv-

ilege that protects the internal deliberations of a g0v-

ernment agency. Absent some showing of manifest in-

justice, the Board behavior must stand or fall on the

existence vel non of that privilege and not on what

this court perceives to be the fairest way for the Board

to run its proceedings. Since we find, see § B infra,

that the Board’s claim of privilege was legally justi-

fied, we refuse to abort the proceedings on the grounds

that the Board did not follow some other procedure.

12=:

12 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

As further grounds for claiming that the Board pro-

ceedings were unfair, the company points out that its

task of defending the back-pay claims was, in effect,

impossible without the aid of the Board records. The

key defensive issues in a back-pay hearing are whether

the claimant had sufficiently attempted to mitigate his

back-pay claim by seeking equivalent work or whether

in refusing to accept a bonafide offer of reinstatement

the claimant has waived his back-pay entitlement. See

generally, N.L.R.B. v. Miami Coca-Cola Bottling Co.,

5 Cir. 1966, 360 F.2d 569. Since much of the information

regarding these questions is peculiarly within the prov-

ince of the claimant’s own mind, it is argued that it

is unfair to preclude the company from having access

to whatever relevont evidence the Roard has that could

be used to impeach the claimant’s allegations of full

mitigation efforts. That is particularly true, as the

company points out, when most ef the facts in issue

took ploce some ten vears earlier and the marshalling

of Cofonsive evidence is therefore all the mere difficult,

Althouch this srsument jc logical on its face, it ig-

nores the esioblished law on the burden of proof in

back-rav nroccodines, In addition, it fails to give a

fair account of the evidence evrilable in the proceed-

ings below, It is well established in this circuit and

mosi other: thet the Taard’s primer: duty in back-ray

precestiegs je ty chow the e¢rass beek-pay due each

Cloiment. As Judee Wiséom stated jn N.L.R.PB. v.

Rocio Aireve!t, ine. 5 Cir. 1996. 296 F.2d 809, 812-13:

“While the Cereral Counsel has the burden

ef proving unlawtul discrimination on the part

of the emplover, and hence that backpay is

13

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 13

due, the employer usually has the burden of

establishing affirmative defenses which would

mitigate his liability. NLRB v. Miami Coca-

Cola Bottling Co., supra; NLRB v. Brown &

Root, Inc., 8 Cir. 1963, 311 F.2d 447. Among

these affirmative defenses are the unavailabil-

ity of jobs because of nondiscriminatory fac-

tors, the employees’ wilful loss of earnings,

and employees’ interim earnings to be deduct-

ed from the buckpay award.” (footiotes cmit-

ied)

See also, Winn-Dixie Stores, Inc. v. N.L.R.B., 5 Cir.

1969. 413 F.2d 1008, 1009; Florence Printing Co.

v. N.L.R.B., 4 Cir. 1967, 37 F.2d 216, 922-223; N.L.R.B.

v. Reynolds, 6 Cir. 1968, 399 F.2d 688, 669-670;

cf. N.L.R.B. v. Mastro Plastics Corv., 2 Cir. 1965, 354

F.2d 170.

If the burden of proof is on the company, and not

the Board, to show a failure of the claimant to mitigate

fully his back-yay claim, a fortieri, there is no burden

on the Board to gather this evidence ond make it avail-

able. The fact that the Board might possibly possess®

relevant evidence with potential value as impeach-

ment material should not entitle the company ipso fac-

to to a wholesale fishing expedition into the Foard’s

files in derogation of the claimed privilege.

8Although a positive showing of materiality should not always be

necessary, it is relevant that the company has not, with ex-

ception of the Watford claim, made a very strong showing

that the Board files did, in fact. contain any evidence at all

that would be usable in impeaching the claims.

ly=\

14 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

Although much can be said for a rule requiring the

Board to open wide its files to all parties in proceedings

such as these, we cannot forget that the Board’s role

in a back-pay proceeding is, in large part, to represent

the interests of claimants who have already been ad-

judged to be entitled to reparations for the company’s

earlier transgressions of the Act. While we must never

lose sight of the ultimate fact that the Board remains

a governmental body, with concomitant obligations of

impartiality in its functions, some concessions must

be made to the Board’s role as advocate on behalf

of the public and of the victims of unfair labor prac-

tices.° In accommodating these necessarily conflicting

roles, we believe the Board has adequately separated

its prosecutorial arm from iis judicial arm and that

a private litigant can still get a fair hearing without

the Ponrd’s rele os an advocate suffering. In any event,

Congress has chosen to amalgamate the Board’s arms

and we do not have the privilege of amputating them.

Certcinixv, the burden of proof in back-pay proceedings,

as enimciated in Mconez, is not so onerous as to require

that the ceraveny be allowed to defend the back-pay

claims with the Board's files in its hands. As with other

prosecutorial avd regulatory agencies, in order for the

N.L.R.B. to fulfill its statutory duties, it must be ac-

corded some semblance of evidentiary privilege to pro-

tect its informal investigatorial and trial-preparatory

processes. See, e.g., United States v. Morgan, 1941,

313 U.S. 409; N.L.R.B. v. Clement Brothers Co., 5 Cir.

1969, 407 F.2d 1027; Davis v. Braswell Motor Freight

Lines, 3 Cir. 1964, 363 F.2d 600.

®The problem inherent in the dual role imposed on administrative

bodies in litigation of this sort is thoughtfully discussed in

K. DAVIS, 2 AD. LAW TREATISE, chap. 13.

Zz 5 =A

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 15

It is true that the behavior of the general counsel,

the Board’s prosecutorial arm, can be characterized

as partisan, but we cannot say that this partisanship

denied Rutter Rex a fair hearing. There is no allegation

or showing that the trial examiner was in any way

biased or that the Board did not accord a fair review

to the trial examiner's findings. Numerous avenues

for impeaching the claims were, in fact, available to

the company. Literally all of the claimants were vol-

untarily produced by the general counsel'® and were

available for cross-examination under oath, The rec-

ord indicates that the company received from the

Board any statements made by these claimants that

reasonably fell within the Board’s Jencks rule. See note

12, infra. The back-pay specification provided the

names of the claimants’ interim employers and the

interim earnings of each claimant. Furthermore, the

general counsel supplied all of the claimants’ Social

Security records and the claimants themselves pro-

duced numerous documentary records pursuant to sub-

poena. In short, although it might have been difficult

for the company to meet its burden under Mooney,

we cannot say that it was impossible. The company

was not, as it would have us believe, sent into the river

without an oar. We refuse to find that a company can-

not receive a fair hearing in a back-pay suit unless

it has the broad access to Board investigatory files

that was requested and denied here. The Supreme

Court in Rutter Rex I, supra, 396 US. at 263, made

it quite clear that this court serves a limited function

————————

1oLouise Jackson (deceased) and Alice Denley who resides in

California and whose claim is less than $25 were the only

claimants not produced.

16=4

16 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

when reviewing a back-pay award made by the Board.

See also N.L.R.B. v. Seven-Up Bottling Co., 1953, 344

U.S. 344, 346. With this mandate in mind, we cannot,

with the exception of the Watford claim, say that this

record compels a finding that the company was denied

a fair hearing. See N.L.R.B. v. Chambers Mfg. Co.,

5 Cir. 1960, 278 F.2d 715, 716; N.L.R.B. v. Vapor Blast,

supra,

B. The Existence vel non of a Privilege for

the Board's Files.

We next deal more specifically with the company’s

claim that the Board's investigatory files were not en-

titled to the privilege or immunity from discovery ac-

corded in this proceeding. In the course of the litiga-

tion below, the company issued a subpoena duces te-

cum requiring the Board to produce:

“Each and every statement, written and/or

recorded and memoranda made by or as a re-

sult of interview or contact with any person,

including backpay claimants. which pertains

to employment. search for employment, in-

terim earnings, availability for employment

and or any other matter affecting any back-

pay claimant named in the Supplemental

Backpay Specification for the periods January

1, 1961 through December 31 of the year in

which each individual claim terminates .. .”

The trial examiner overruled the general counsel’s pe-

tition to revoke the subpoena, but upon a special tele-

graphic interim appeal the Board reversed the exam-

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J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 17

iner, holding that the “trial examincr’s ruling is too

broad with respect to mater required to be produced.”

The trial examiner then denied the company’s motion

to dismiss the supplemental specification because of

the refusal to divulge and the Board upheld this denial.

The question we must decide is whether the internal

investigatory files of the Board, and specifically notes

taken during interviews with back-pay claimants,

should be accorded some evidentiary privilege protect-

ing them against the wholesale production requested

here.

We feel it is necessary to dispose first of the com-

pany’s persistently urged contention that our decision

in N.L.R.B. v. Capitol Fish Co.. 5 Cir. 1961, 294 F.2d

868, precludes the claim of privilege relied on by the

Board. See also General Engineering, Inc. v. N.L.R.B.,

9 Cir. 1965, 341 F.2d 367. In both Capitol Fish and Gen-

eral Engineering requests were made by the company

for the Board to produce its files relating to the issue

being tried. The Board’s refusal to produce in both

cases was based solely on its own internal rule

($ 192.118) prohibiting the production of any Board

documents without the written consent of the Board

or the general counsel. Since the only basis for with-

holding the documents was this self-created internal

ru'e, which gave the Board unlimited ability to pre-

serve secrecy, the courts wisely overruled the Board

~od required production.

tn Capitel Fish, Judge Wisdom explicitly excepted

frorn hic ruling the type of situation before us now.

Ho said:

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18 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

“There is no suggestion in the record that the

testimony sought to be elicited from the

Board's attorney is privileged. ... The Board’s

General Counsel made no explanation and the

trial examiner was satisfied with the bare fact

that the agency head charged with knowing

what is right and good for the public to know

had made its decision.”

294 F.2d at 875. The court concluded by condemning

the Board's refusal to produce because it was based

solely on the whim of the Board itself. rather than

on some recognized evidentiary or other privilege.

“Responsibility for deciding the question of privilege

properly lies in an impartial independent judiciary —

not in the party claiming the privilege and not in a

party litigant.” Id. at 876."

"Similarly. in General Engineering. supre. 341 F.2d at 375. the

court specifically said, when rejecting the open-ended claim

of privilege made by the Board:

“There are probably some court decisions which recog-

nize a carte blanche ‘privilege’ of this kind. But, in

view of section 10(b) of the Act. discussed above, and

the last seatence of 5 U.S.C. § 22. discussed above, we

believe that the claim must be particularized with

reference to some cenerally recou“nized privilege ac-

corced governmental agencies. Such. for example,

are claims that the information sought v-ould disclose

confidential informants (Mitchell v. Bass, 8 Cir., 252

F.2d 513). state secrets (United States v. Reynolds,

345 US. 1, 7, 73 S.Ct. 528. 97 L.Ed. 727). military

secrets (United States v. Reynolds. supra), or men-

tal processes of those engaged in investigative or de-

cisional functions (United States vy. Morgan, 313 U.S.

409, 61 S.Ct. 999. 85 L.Ed. 1429: Appeal of Securities

& Exchange Commission, 6 Cir., 226 F.2d 501, 519)13.

In the proceeding now befere us no such privilege

was either claimed or found to exist.” (Emphasis

added)

19-4

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 19

This is a different case. From the very beginning,

the Board based its refusal to produce, at least in part,

on the established evidentiary privilege that accords

qualified protection to the informal deliberations of all

prosecutorial agencies and branches of government.

See, e.a., United States °r. Morgan, supra: N.L.R.B.

». Clement Brothers Co.. supra. In scrutinizing the in-

stant claim of privilege. we therefore receive little

guidance from Capitol Fish, supra: rather, we must

bu-e our decision Gn an analysis of whether the privi-

lege claimed is a valid ene in ihe sittuition before Us.

The subpoena quashed by the Board requested pro-

duction of all the material from the Boara’s files that

was obtcined from the Joard’s investigetions and in-

terviews with the claimants. The matter contained in

these files was admittedly informal, hand-written

notes taken by Beard officers during end efter inter-

views with the claimants. There is ro claim that unyv

statements producible under the Boers Jencks

Rule? were not produced. While it might be a better

practice to collect formal statements from the claim-

ants, which would be producible under the Jencks

Rule. that was not the procedure followed here and

we are not at liberty to dictate the investigatory pro-

cedures the Board must follow.

12See NLRB. v. Safway Steel Scaffolds Co. of Georgia, 5 Cir.

1967. 383 F.2d 273. 278. It is not disputed that the Board notes

that were withhe!d did not contain any statements that were

signed or otherwise approved by the claimants: nor were

there any substantially verbatim transcriptions in the with-

held files. Thus, in short. the rationale for production under the

Jencks Act was simply not present here. See Id.: see also

Palermo v. United States, 1958, 360 US. 343: United States

y. Blackburn, 5 Cir. 1971, 446 F.2d 1089: United States v.

Roberts, 5 Cir. 1972. 455 F.2d 930.

cee |

20—A

20 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

The notes sought to be discovered here were

the thoughts, deliberations and impressions of Board

officials, recorded during and after interviews with the

claimants. There is absolutely no guarantee that such

notes are either complete or accurate. Aside from the

potential inaccuracy of these notes, we must also con-

sider the Board's interest in keeping the informal proc-

esses and deliberations of the Board free from man-

datory production. This interest is grounded in the need

to keep the Board’s investigatory and prosecutorial

functions uninhibited, and, as with the work product

of any litigant, there should be some limit on the a-

mount and type of preparatory material that can be

subject to mandatory production. Cf. Hickman v. Tay-

lor, 1945, 329 U.S. 495.'3

The fact that these were notes of non-lawyers, see

Rule 26\b)(3) of the Federal Rules of Civil Procedure,

Crocker v. United States, 51 F.R.D. 155 (S.D. Miss.,

1970); see also Harper & Row Publishers, Inc. v. Deck-

er, 7 Cir. 1970, 423 F.2d 487, aff'd by equally dirided

court, 1971, 409 US. 348, reh. denied, 401 U.S. 950: see

generally, WRIGHT & MILLER, 8 FEDERAL PRAC-

TICE & PROCEDURE § 2024; and non-department

heads, cf. United States v. Morgan, supra, does not

preclude the Board from claiming a qualified privilege

for its investicative work files. The work ef the Board

13Althouch the need to prevent inhibition of employee testimony is

not quite as sreat in a back-pay interview as it is in unfair

labor practice cases, we fee! that what Judge Morgan has

called “the common sense necess'ty of protecting the inves-

tigatory function and vrocedures of the Board” de-erves

recognition here. Clement Brothers, Ine. v. N.L.R.B., 282

F.Supp. 540, 542 (N.D. Ga., 1968). aff'd, 5 Cir. 1969, 407 F.2d

1027.

21-<i1,

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 21

officers here was an integral part of the preparation

of the Board’s lawsuit, and the files here requested

are entitled to whatever qualified privilege would

normally be available to such documents. See general-

ly, 4 MOORE’S FEDERAL PRACTICE §&§ 26.63,

26.64; cf. Southern Railway C®. v. Lanham, 5 Cir. 1968,

403 F.2d 119, 131-133.

We feel it necessary to emphasize that the qualified

privilege we here recognize is not a blanket privilege

that arises solely from the fact that the information

being sought is investigatory matter in the hands of

an investigatory or prosecutorial agency. There is no

such universal privilege, qualified or otherwise. Rath-

er, in any given situation there may be — or may not

be — a qualified privilege.'* It all depends on who

is investigating, what is being investigated, and the

nature and content of the information sought to be dis-

covered from the investigator. Here, where the inves-

tigative material sought was informal impressions and

deliberations, the qualified privilege attaches.

Another fatal deficiency in the company’s subpoena

is that in seeking to gain access to the Board's files

for impeachment maierial, it failed to state with suf-

14The differences between the issue of whether an evidentiary

privilege exists and the issue of whether an existent privilege

has been overcome so as to deny its availability in the par-

ticular circumstances is a substantive difference and not a

semantical one. Recognition of the difference may control,

among other things, the respective burdens of the claimant

of the privilege and of the seeker of information to come for-

ward with evidence and the burden of ultimate persuasion as

to whether the information is or is not to be produced. We

do not in this case create a plenary privilege where no such

privilege theretofore existed.

WE ey AME i

9

oe™. 0

22 J. H. RUTTER REX MFG. CO., INC. v. N.L.RB.

ficient particularity what value. if any, the files would

have to it. “Although a party is entitled to production

of documents that would be useful to impeach a wit-

ness, his mere surmise that he might find impeaching

matter has been held not sufficient to justify produc-

tion.” WRIGHT & MILLER. supra, $ 2025 at 226-227;

see Haucer v. Chicago, Ri. & P.R. Co. 7 Cir. 1954,

216 F.2d 501. 508. The primary balancing interest fav-

oring production is need. The requisite showing of ma-

teriality and necessity must be greater than the utter

Speculation exhibited here by Rutter Rex if the privi-

lege is to be overriden.

In sur. we believe that the Board's claim of priv-

ilege was properly interposed. cf. N.L.R.B. vr. Capitol

Fish, supra, and that the Board did not abuse its dis-

cretion in grantirg the motion to quash the subpoena

or in refusing to dismiss for non-production of the files.

The privilege we here recognize is not. to be sure. an

unqualified ene. Rather, it recognizes the fine balanc-

ing of interest thet is involved in the creation. enforce-

ment. and drawing of exceptions to any evidentiary

rule. Were the documents here sought more facially

reliable. or if there did not exist any feasible alterna-

tive means to impeach the claimants.'5 or if there were

a more specific Cemand than the one made here, the

balance might very well be struck in such a way as

1SAgain, we repeat that the Board voluntarily produced all claim-

ants, the claimants were subject to examination under oath.

see 4+ MOORE'S FEDERAL PRACTICE § 26.64 [3], n. 12 and

cases cited therein, numerous earnings records were made

available to the company, and all Jencks Acts statements

were produced.

25-8

J. H. RUTTER REX MiG. CO., INC. v. N.L.A.B. 23

to overcome the qualified privilege , PeLecuing the

Board's investigative files.'®

Whether we label the protection here accorded the

Board's files a “privilege” or a qualified “immunity”

from discovery is not essential.'7 What is important

is that in seeking to pierce this privilege, the factors

favoring production, including inter alia, reliability,

materiality, necessity, and specificity, must outweigh

the factors in favor of the qualified protection. In the

case before us, we find that the balance was properly

struck by the Board’s granting of the motion to quash.

C. The Board's Refusal to Produce the Wat-

ford File for Purposes of Refreshment.

Although closely related to the above discussion, we

find that the Board’s refusal to provide the file contain-

ing officer Lacey's notes, when requested to refresh

Lacey's memory on the stand, warrants both a sep-

arate discussion and a different result.

During the board hearing on the second back-pay

specification the company called as a witness John

T. Lacey, a retired Board compliance officer who had

interviewed Fannie Watford, to testify as to his recol-

lection of Watford’s claim. Watford ultimately was a-

warded back-pay of ¢9.592 for the period July 25, 1961,

————— ae

16In Davis V. Braswell Motor Freight Lines. Inc.. 5 Cir. 1966, 363

F.2d 600, 605, . Judge Thornberry stated the issue thusly:

“Since Braswell has not presented sufficient justification in

this case for overriding this privilege. the sound policy be-

hind the privilege requires that the subpoena be quashed.”

17See WRIGHT & MILLER, supra. § 2025.

2h=.

24 J. H. RUTTER REX MFG. CO,, INC. v. N.L.B.B.

through April 19, 1968, the Board having found that

no reinstatement was offered prior to the latter date.

The company vigorously opposed the finding, claiming

that Watford had, in fact, been offered reinstatement

in December, 1961, and, in fact, there was some evi-

dence of such in the record. The compeny lacked spe-

cific documentation for its allegation that Watford was

offered reinstatement in 1961, and sought the testimony

of Lacey. The company believed that Lacey could give

testimony that Watford had, during an interview, ad-

mitted that some sort of offer had been made to her

by the company in 1961.

The following exchanges took place at the hearing

before the trial examiner after it had become clear

that Lacey was unable to recall the details of the Wat-

ford interview:

“BY MR. LUND [Counsel for Rutter Rex]:

Q. Did you make a memorandum of your in-

terview with Mrs. Watford?

A. [Lacey] I believe I did because I think I

made one in each and every instance.

Q. Do you know where that memorandum is

today? Do you have it with you?

A. No, I don’t have any of that material. It

Was retained by the Board when I left but

all I can suggest is that wherever I had

made notes, there was an individual file

folder for a particular person and it would

be contained in that small file for that per-

son.

Q. Do you think a reference to that file folder

would help you refresh your recollection

on this individual?

wan

25-4

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 25

A. It might well do that. I couldn’t be certain

of that. It would be dependent upon how

extensively I had taken notes. It’s the only

method whereby I think my memory could

be refreshed.

MR. LUND:

I would call for production of the file Mr.

Lacey referred to containing the memo-

randum of this interview.

MR. CHAMPAGNE {Counsel for N.L.R.B.]:

We will not furnish them, Mr. Examiner.

It does not fall within the purview of 102.118

and the Board's rule and regulations are,

and Mr. Lacey is not an employee of the

Board anymore.

MR. JOHNSTON [Counsel for N.L.R.B. J:

Mr. Lacey is not testifying as our witness.

TRIAL EXAMINER:

Perhaps you could interpret tc me what

the Board means when it says, “The Trial

Examiner's ruling is too broad with re-

spect to the matter required to be pro-

duced.” Now, the Respondent has nar-

rowed it.

MR. CHAMPAGNE:

Except for one thing, Mr. Examiner. Your

ruling pertained to Mr. Norton [Board

ay

9 *

a

So; .

26 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

Attorney], as I recall, and this is not Mr.

Norton.

TRIAL EXAMINER:

That's right. But it refers to the Board’s

files. I take it you are raising the privilege

against disclosure. Is that what you're

raising?

MR. CEAMPAGNE:

To someone other than a Board employee.

Mr. Lacey is not testifving as a Board em-

plovee, from the files of the Board.

TRIAL EXAMINER:

I have not reached the point where there

should be any waiver of privilege. I am

simplv indicating that now we have a spe-

cific request for specific information

which has to do with something that is in

the files of the Poard. Are vou standing on

the privilege not to produce them?

MR. CHAMPAGNE:

He is not entitled to them because he is

not an emplovee of the Board.

TRIAL EXAMINER:

We have a situation where the Trial Ex-

aminer has held that anv evidence Mr.

Lund is seeking to adduce is material to

these proceedings. We have a_ witness

whose memory is not such that he can re-

member the content of an interview which

27 mis

Load

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 27

he hed with a pariy to thesc procecaings,

a claimant, and what would retresh his

recollection now is in the hands, held by

the Government. Are you taking the posi-

sion that the Government can hold that

memorandum, stand upon the privilege of

102.118? Is that your point of view?

{|A short recess was then taken at the

Board's request |

MR. JOHNSTON:

We will not at this time furnish it, since

there has been no ruling that we are re-

quired to.

MR. LUND:

I ask for such ruling. I cal] for production

of the records and the witness is here pre-

pared to refresh his recollection from it.

It is his record and it is being used for that

particular purpose, in refreshing his recol-

lection. So, I would ask —

TRIAL EXAMINER:

Are you asking that the Trial Examiner

order General Counsel to produce the rec-

ords?

MR. LUND:

I call for production of it and suppose I

would ask the Trial Examiner to order it

produced.

2h=i,

28 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

I think it would be relevant and admissa-

ble [sic]. If the memorandum is here, it

is relevant and admissable [sic] and we

Simply ask that he be allowed to refresh

his recollection.

[At this point there was further testimony

involving the Watford claim, various let-

ters were produced and it became clear

that there was at least some question as to

whether reinstatement was offered prior

to 1968].

A. [LACEY, in response to question wheth-

er reinstatement had been offered]:

Like I say, I’m just at a loss without ref-

erence to perhaps some other records that

would reflect some information that would

refresh my memory.

Q. Such as the memoranda we referred to be-

fore, that would be likely to be in Mrs. Wat-

ford’s personal file.

A. Possibly.

TRIAL EXAMINER:

Do you have further questions of this wit-

ness?

MR. LUND:

I would ask, in view of Mr. Lacey’s further

testimony, whether the Government would

now produce the memorandum. To me, it

298

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 29

is simply a question of this witness review-

ing his records. So, I would just reiterate

that request and then I have a few ques-

tions to ask him on another point.

TRIAL EXAMINER:

What’s the Government's position?

MR. CHAMPAGNE:

Mr. Examiner, we don’t think he has laid

a proper foundation. First of all, he ap-

pears to be fishing for them. Secondly, this

is his witness, not ours. The Government

did [not] call him. Section 102.118 of the

Board's rules and also Ra-Rich pertaining

to witnesses that are produced for cross

examination —

MR. CHAMPAGNE:

Mr. Examiner, we would stand on Rule

102.118, that the proper request has not

been made for these records through the

General Counsel. It is not General Coun-

sel's witness and does not come under

102.118 or Ra-Rich on cross examination.

He’s on a fishing expedition and Mr. Lacey

said his decision was probably made on

the April 16th letter and nothing else and

he just said there was a possible memoran-

dum in the file, which has not been estab-

lished. These are all the work product of

an individual and we reiterate that he is his

20-.

30 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

Witness and I don't believe there is any ap-

plicable Board law or procedure or any

other precedent that has been established

that requires production of these docu-

ments pursuant to any subpoena duces te-

cum issued upon us and, also —

TRIAL EXAMINER:

Any further questions of this witness [La-

cey |?

(No response.)

TRIAL EXAMINER:

If not, this witness is excused.

MR. CHAMPAGNE:

Just a moment. Mr. Examiner.

One thing I do want to bring up before he

leaves. as I recall at this point in connec-

tion with any possible memoranda that

Mr. Lund had requested from my files per-

tuining to Mr. Lacey's testimony, that we

had argument on this but T don’t believe

you directed us to produce or have ruled

on it. at this point and Mr. Lund just de-

cided to go ahead.

MR. LUND:

I don’t intend to withdraw from any posi-

tion I have taken on the record. I also think

there ought to be a point: where an issue

3l-.

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 31

was framed and we ought to go about con-

cluding the hearing but I don't withdraw

from any position I have taken.

TRIAL EXAMINER:

It is not clear in the Trial Examiner's mind

whether there is anything for him to rule

on in this respect.

MR. CHAMPAGNE:

We have nothing of Mr. Lacey.

TRIAL EXAMINER:

You may be excused, Mr. Lacey.”

App. Vol. 2. pp- 940-978.

Although the record is far from precise on this point,

our reading of the foregoing leads us to conclude that

the company did, both as a matter of fact and law,

make a sufficient request at the hearing for the Wat-

ford file to be produced for the purpose of allowing

Lacey to refresh his memory and that the Trial Ex-

aminer acceded to the Board's refusal to produce the

file. The following narrow question is therefore before

us: Should the general counsel have been required to

produce the Watford file. containing Lacey's notes, for

the purpose of allowing Lacey to refresh his mem-

ory?

Although Lacey's notes were part of the internal files

that we have today held were not producible under

a subpoena duces tecum, there are several factors that

32=4,

32 J. H. RUTTER REX MFG. CO,, INC. v. N.L.R.B.

distinguish this particular request for the Watford file.

First, the primary justification for the existence of the

qualified privilege for the Board’s internal files is to

protect the government’s interest in retaining some

sort of confidentiality in its interna] deliberations. The

request here was not for the entire set of 33 files but

Only for the Watford file and, in particular, Lacey’s

notes within that file. Had Lacey’s memory been bet-

ter, he could have recited the material from the stand.

At one time he did have access to all of the material

that was being requested, much of which was, in es-

sence, his own personal deliberations on the matter.

It is true that Lacey was no longer with the Board,

but we think that fact is not crucial here.

The Board has little real need to prevent its former

officers from remembering a particular factual] mat-

ter. We are not here dealing with some sort of military

information that the government has an overriding in-

terest in keeping secret. The confidentiality sought to

be preserved in the type of case before us is the inter-

nal communications and deliberations of the agency

members themselves. It serves little purpose to ex-

pand this privilege to the point where the Board can

withhold notated deliberations from the very person

whose deliberations are being sought. Admittedly, a

similar argument can be made regarding the need to

preserve the confidentiality of the entire back-pay

files. But the point is that, in this instance. the argu-

ment for preserving the confidentiality of one file from

the eyes of one who at least partially constructed the

file is far less compelling than when we were dealing

33-A

J. H. RUTTER REX MFG. CO,, INC. v. N.L.R.B. 33

with the company’s broadly addressed subpoena duces

tecum.

A second distinguishing feature is that the request

here made was more narrow and specific than the sub-

poena request. Unlike the subpoena which was, in ef-

fect, a request to use the Board’s investigatory files

in order to uncover any information that might pOssi-

bly benefit the company’s case, this request had a very

narrow focus and purpose. Lacey had stated on the

stand quite clearly that if he could see the file, he

might be able to clear up in his own mind the narrow

question of Fannie Watford’s reinstatement offer. The

Watford file was sought with this in mind, and as the

Trial Examiner apparently recognized, this request

cannot be compared to the “fishing expedition” that

was attempted with the subpoena.

Third, we must pay due deference to the purpose

for which the files were requested. The specific rea-

son was not to obtain evidence that the company could

use to impeach Watford’s claim. That was the sole

purpose of the subpoena requesting all of the files.

Rather, the Watford file was sought for the explicit

purpose of refreshing the recollection of a witness who

was already on the stand and testifying directly about

a matter that he himself thought could be more ac-

curately resolved if he could review the file.

The law is wel] established that in many situations

a party eannot depend upon an otherwise valid evi-

dentiary privilege when an otherwise inadmissible

item is being used for the purpose of refreshing a wit-

3h=\

34 J. He. RUTTER REX MFG. CO., INC. v. N.L.R.B.

ness’ memory and is not being used as evidence. For

example, in Thompson v. United States, 5 Cir. 1965,

342 F.2d 137, the defendants, on appeal from their crim-

inal conviction, claimed that it was error to permit

a police officer, testifying against them to use certain

of his own recorded statements to refresh his memory

on the stand. It was admitted that the recorded state-

ments were inaccurate, and that they were dictated,

but not recorded by the officer on the stand. It is clear

that the statements would have been inadmissible as

independent evidence. We held there that as long as

the district court properly supervised the use of the

statements to refresh and that they were genuinely

used only for that purpose, it was not error to permit

the use of the otherwise unreliable and inadmissible

recorded statements. See also, Allis-Chalmers Mfq. Co.

v. City of Fort Pierce, Fla., 5 Cir. 1963, 323 F.2d 233;

United States v. Barrata, 2 Cir. 1968, 397 F.2d 215;

United States rv. Tolbert, 7 Cir. 1966, 367 F.2d 778;

Kremer rv. Commissioner, 7 Cir. 1968, 389 F.2d 236;

Hall Bartlett Prod. v. Republic Pictures Corp., 20

F.R.D. 625 (S.D. N.Y. 1957): see generally, III WIG-

MORE § 758-765 (Chadbourn Rev.). The technica] pre-

requisites for refreshment were clearly met by Lacey.

These are, as we Said in Thompson v. United States,

supra, 342 F.2d at 139, that “the witness demonstrated

a need for having his memory refreshed and the paper

used had that effect.” This is not a case of one party

seeking to have items in his possession, otherwise ex-

cludable, admitted into evidence under the question-

able guise of refreshing a witness’ memory. Cf.

N.L.R.B. v. Hudson Pulp and Paper Corp., 5 Cir. 1960,

35=h

J. H. RUTTER REX MFG. CO., iN. v- N.L.R.B. 35

273 F.2d 660, 665-666, but rather this was a legitimate

effort 10 reiresh an exhausted recollection.

We are aware that most of the cases allowing re-

freshment deal with claims that the item sought to

be employed was inadmissible, generally under the

hearsay rule, and that in this case the use of an item

for refreshment was being objected to by the party

who was in possession of the items and who was with-

holding them under a claim of privilege. But as we

said earlier, the privilege here claimed is a qualified

one, and it is defeasible on good cause shown. Cer-

tainly, the reasoning underlying the above cited cases,

which clearly favors the allowance of refreshment

even where items are otherwise inadmissible can be

applied here. In short, (1) since the items were being

sought solely to refresh and not as evidence; and (2)

since the law clearly favors the procedure of permit-

ting a witness to refresh an otherwise exhausted recol-

lection from items, admissible or otherwise. thet are

capable of jolting the memory, the Board’s claim of

privilege when confronted with the request for the Wat-

ford file is much weaker than in the case of the broad

subpoena.

A fourth reason for treating the request for the Wat-

ford file differently from the broad subpoena request

is the clear showing made here by the company that

production of the Watford file for the purpose of re-

freshing Lacey’s memory might very well resolve a

disputed material factual issue. Throughout Lacey’s

testimony it is clear that the company might possibly

have offered reinstatement to Watford in December,

3 6 =.

36 J. H. RUTTER REX MFG. CO, iNC. v. N.L.R.B.

1961, and if this was the case, the award to Watford

would have been only a fraction of the ultimate award

granted. The file was sought solely for the light it would

throw on this issue, and from our reading of the record,

there is a good chance that production of the file could

have resolved the issue, at least in the mind of witness

Lacey. Unlike ihe subpoena, for which there was no

showing of any specificity that anything in the

file would have had impeachment value, the request

for the Watford file was supported by a clear showing

of materiality and for that reason we feel its non-pro-

duction was prejudicial to Rutter Rex.

Finally, despite the existence of many of the similar

dangers of unreliability discussed above, there are

good reasons for treating the reliability problems of

the Watford file request differently. In the case of the

Subpoena request. we are dealing with files the use

of which for impeachment purposes would be fraught

with dangers of double hearsay. Not only would we

be allowing the interviewer’s notes of what the claim-

ant said to be used for disputing the truth of what

the claimant was alleging (one level of hearsay), we

would be ascending to the second level of hearsay be-

cause there is no guarantee that the author of the rough

inierview netes in each file would be available to testify

as to the accuracy of his own recorded impressions.

The use of interview notes under such circumstances

cannot be considered conducive to the ascertainment

of a reliable factual picture and, indeed, it might likely

be counterproductive to the search for truth.

374

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 37

By contrast, the use of Lacey’s notes to refresh his

own recollection has little if any of these dangers. The

<econd level of hearsay is removed by virtue of the

fact that Lacey is present, on the stand and subject

to cross-examination as to any matter adduced from

his notes. The objection to the first level of hearsay,

arising from the use of Lacey’s notes as to what Wat-

ford said in the past, is answered by three factors.

First, the claimant, Watford, did in fact appear and

was available for examination and cross-examination

as to any matter ascribed to her by Lacey’s recorded

impressions. Secondly, any of Watford’s statements

from the interview that are usable against her on the

issue of reinstatement are technically admissions and

would thereby be exempt from the exclusionary rule.

See. McCORMICK, EVIDENCE §§ 39. 239: see also,

Straughan v. Barge MVL No. 802, 291 F.Supp. 282, 285

(S.D. Tex. 1968). Thirdly, and most important of all,

the Watford file was not reauesied for use to impeach

nor as evidence; rather. we are asked only to allow

‘ts limited use to refresh the memory of a witness.

It must be remembered that in upholding the Board’s

aua-hing of the subpoena, ve were strongly influenced

bv the inherent unreliability of the rough interview

notes. With Lacey. ence he was on the stand ard tes-

tifvirg as to what he remembered about the interviews

in anection, we eannot believe thet allowins him to

sce his own notes, however incomplete or inaccurate

thew mav be. would »resent the same dangers as di-

rectly using incomnlete interview notes to imnecch all

the -laimants. The comrany sought these notes solely

22 .

=

ShA

38 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

as a means to help Lacey better remember, and we

agree that the quest was a proper one.

For all of the foregoing reasons we find that even

though the Board was noi required to produce all of

its interview and investigative files relating to the

back-pay order, the trial examiner did err in not re-

quiring the Board to produce the Watford file for the

narrow purpose of allowing Lacey to refresh his mem-

ory. We emphasize that the file was producible only

for the purpose of refreshing Lacey’s memory and not

for use as independent evidence for the company to

use to impeach Watford. For al] the reasons outlined

in section B, supra, the files retain the qualified priv-

ilege regarding their use as evidence. See Allis-Chal-

mers Mfg. Co. v. City of Fort Pierce, Fla., supra.

Since we find that the Board erred in refusing to

produce Watford’s file for the purpose of allowing re-

freshment of witness Lacey’s memory and that such

refusal was prejudicial, it follows that Rutter Rex was

denied a fair hearing on the claim of Fannie Watford.

The company is entitled to a new hearing before the

Board on the Watford claim, at which time the Board

must permit Lacey to review the Watford file if a simi-

lar situation arises.

The company further asserts that the trial] examiner

should have applied an adverse inference against the

Board when it failed to produce relevant evidence. See

Auto Workers v. N.L.R.B., D.C. Cir. 1972, 79 LRRM

2332. Although this might be appropriate in certain sit-

uations, we fee] that it would be a fairer disposition

39 <8

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 39

to remand the Watford claim and give the general

counsel an opportunity to produce before applying an

adverse inference that would prejudice the innocent

claimant.

Our holding does not give the parties in a Board

proceeding the right to subpoena Board investigative

personne] as a device to circumvent otherwise valid

Board privileges, and we assume that the factual pos-

ture of this case is somewhat unique. Our holding is

limited in that Lacey voluntarily appeared; he explicit-

ly testified that he once had knowledge of the fact at

issue and that if he could review the file, his recollec-

tion of that fact could probably be revived, and that

due to his retirement, he no longer had access to the

file.

As we stated in part B., supra, the evidentiary priv-

ilege asserted by the Board to protect its informal in-

vestigative deliberations is a qualified one that can

be overcome when the need for production outweighs

the rationale for the privilege. Professor Moore has

defined our task in these cases as follows.

“Whether particular material is or is not

privileged must be determined from case to

case and not on the basis of any general formu-

la that all Government files are privileged. On

the other hand, a blanket inspection of Govern-

ment investigation files should not be allowede

40—A

40 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

“In each case the court must also balance

the degree of necessity for disclosure shown

by the private litigant against the importance

of the maintenance of secrecy as to the particu-

lar privileged matter.”

4 MOORES’s FEDERAL PRACTICE §26.26 [6. — 4]

pp. 316-317.

After carefully balancing the interests asserted here,

we uphold the Board’s quashing of the subpoena, but

we find that the Board erred in not permitting Lacey

to view the Watford file for the purpose of refreshing

his memory.

III. Sufficiency of the Evidence

Rutter Rex contends that the awards to many of the

claimants were not supported by the evidence and

should therefore be disallowed by this court. Rutter

Rex correctly argues that a claimant is not, under the

law, entitled to back-pay to the extent that she (1)

fails to remain in the labor market during the period

for which back-pay is claimed, (2) refuses to accept

substantially equivalent employment, (3) fails to

search diligent'y for alternative work, or (4) voluntari-

ly quits alternative emplovment. N.L.R.B. v. Mastro

Plastics, supra. Despite these requirements, however,

the law is also clear that the defense of willful loss

of earnings is an affirmative defense that places the

burden of proof squarely on the employer. N.L.R.B.

v. Mooney Aircraft, Inc., supra, 366 F.2d at 813. If the

employee shows that gross back-pay is owing to him,

4l-A

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 41

the burden is then on the company to disprove liability

by showing the existence of any of the four above fac-

tors. See N.L.R.B. v. Cashman Auto Co., 1 Cir. 1955,

223 F.2d 832.

The company, dividing the claimants into categories,

contends that it met its burden by proving that many

of the claimants did not meet their mitigation obliga-

tions and that therefore we should disallow the claims.

We reject the company’s arguments categorically.

A. Category 1 — This group consists of eleven

claimants'® who Rutter Rex claims remained at low

paying jobs while laid off from the company and who

therefore “failed to seek substantially equivalent em-

ployment” as they are required to do. There is sub-

stantial evidence in the record indicating that these

claimants were quite possibly working at the highest

level of employment they could find. Certainly by “low-

ering their sights” and accepting what might have

been the best job available, the claimants were doing

all that could reasonably be expected of them by way

of mitigation. See N.L.R.B. v. Southern Silk Mills

18 Doris F. Bowles

Ethel Mae Foreman (Askin)

Jimmie Lou Green

Louise Jackson

Eunice E. Johnson

Dorothy White (Learson)

Adele Nash (Hall)

Desideria O’'Campo

Yvonne Parnell (Charles)

Dorothy K. Reed

Beatrice White (Lane)

2mA

42 J. H. RUTTER REX MFG. CO,, INC. v. N.L.R.B.

6 Cir. 1957, 242 F.2d 697, cert. denied, 355 US. 821.

B. Category 2 — In this group the company places

four claimants'® whose mitigation efforts, in part,

were proved by showing that they remained eligible

for state unemployment compensation. Since the state

unemployment procedures were apparently quite lax

and one could evidently remain on the rolls without

ever making a bona fide effort to find employment,

the company argues that it was error for the trial ex-

aminer to base his finding of the claimant's eligibility

on this. Although we agree that meeting the state eli-

gibility requirements for unemployment benefits

should not, in itself, be sufficient to meet the burden

of due diligence, see N.L.R.B. v. Pugh & Barr, Inc.,

4 Cir. 1953, 207 F.2d 405, we find substantial evidence,

other than the unemployment qualification, in the rec-

ord of a bona fide effort made by each of the four

claimants to obtain employment at various times dur-

ing their eligibility period.

C. Category 3 — This group consists of four claim-

ants2° who the company asserts confessed to a Board

agent in May, 1963, that they had abandoned any in-

19 Victoria Allen

Marguerite Bozonier

Sonora Barnes (Rochon)

Gustavia Haynes Gale

20 Mariam Cheri

Gloria Dixon

Desideria O’Campo

(Also included in Category I)

Marjorie Walker

Ben

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 43

terest in returning to Rutter Rex. The trial examiner

excluded as irrelevant an offer of evidence as to this.

The company, claiming that this materially bears on

the question of mitigation effort, urges that this was

error, We agree with the Second Circuit that exclu-

sion of such statements, although possibly probative

on the issue of mitigation effort, should not constitute

reversible error where there is no real indication that

the statements were reliable. Heinrich Motors, Inc.

». N.L.R.B., 2 Cir. 1968, 403 F.2d 145, 149-150. As did

the Second Circuit. we believe that the statements here

excluded “are of little value in determining whether

there has been a withdrawal from the labor market

or a waiver of reinstatement when they [the state-

ments| are made befere the company has offered rein-

statement” Id. at 150. Here. the only basis for assert-

ing that the claimants abandoned interest were some

contested notations in the Board files. Under such cir-

cumstances we consider Heinrich fullv applicable and

we refuse to hold that the exclusion of this evidence

was reversible error.

D. Category 4 — This group contains two claim-

ants2t who the company asserts should have had their

back-pay period terminated at the time thev tempo-

rarily left the job market for health reasons. This argu-

ment is based on the company’s contention that the

claimants would not have been entitled to return to

work after such an absence if they had been working

at Rutter Rex. This argument assumes that Rutter

21 Adele L. Robertson

Rose Marie Hicks

Lie.

44 J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B.

Rex did not have any sick leave policy that would per-

mit employees leaving for health reasons to return to

work. In Rutter Rex I, the Board found “the record

shows a general pattern among the female employees

of leaving {the Company’s] employ because of preg-

nancy, illness, etc., and later returning to work.” 158

N.L.R.B. at 402. The company has not shown that such

a policy does not still exist and we cannot say that

the Board's finding that back-pay should not be ter-

minated was improper.

i. Category 5 — In the fifth and final category the

company lumps Bernice Cooper Lee, whose claim we

already disposed of in § C. supra. and Georgiana Davis

(Deruisa), who the company claims could not meet

her burden of seeking employment because of her need

to stay home with little children. There was no direct

testimony that Deruisa was in fact unavailable for work

during the day, and we agree with the trial examiner

that the company’s contrary assertion was “sheer

speculation.” In sum, the company not having dis-

proved the claimants’ eligibility, we find that there

was substantia] evidence to support all of the awards.

By wavy of conclusion, we must add a word relating

to the seemingly never ending posture of this case.

If this litigation were a drama, it would be either a

farce or a tragedy. With statistics to the right of us

and statistics to the left of us. these eighteen long vears

of judicial journeying furnishes a demonstrable ex-

ample for those who deplore litigation delav. There

are those. be they a diminishing breed, who believe

that justice shal] triumph over time. Once again, we

ona

J. H. RUTTER REX MFG. CO., INC. v. N.L.R.B. 45

are hopeful that precedent, logic, and law, here merg-

ing with common sense, will enable us to write finis

to this elongated contretemps.

In crossing the bar of decision we hope, but do not

really believe, that the combatants will retire in si-

lence, if only to nurse their wounds. Having uttered

cur novena for spéed, however, we cannot forsake the

belief that litigants believing in the rectitude of their

cause are entitled to their days and perhaps years in

court, we shal] never fail in our duty to keep the forum

open, our ears dinned daily by the anguished cries of

judicial statisticians. In summary, we deplore the de-

lay, but we would not substitute one hour of efficiency

for one moment of justice.

After carefully considering each of the company’s

contentions of error, we order, with the exception of

the Watford claim, enforcement of the Board’s entire

back-pay order. The Watford claim is remanded to

the Board for further proceedings not inconsistent with

this opinion.

ENFORCED IN PART

REMANDED IN PART

46-A

APPENDIX B

Filed—Feb. 7, 1973

Edward W. Wadsworth, Clerk

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 71-3260

J. H. RUTTER REX MANUFACTURING COMPANY,

INC.,

Petitioner,

v.

NATIONAL LABOR RELATION BOARD,

Respondent.

JUDGMENT

Before: Coleman, Goldberg and Godbold, Circuit Judges.

THIS CAUSE came on to be heard upon a petition to

review, and on a cross-application for enforcement of, a

back-pay order of the National Labor Relations Board dated

November 5, 1971, and corrected November 17, 1971,

directed against J. H. Rutter Rex Manufacturing Company,

Inc., its officers, agents, successors and assigns. The Court

heard argument of respective counsel on October 24, 1972,

and has considered the briefs and transcript of record filed

in this case. On January 16, 1973, the Court being fully

advised in the premises handed down its opinion granting

enforcement of the Board’s said order in part and remand-

ing the case in part to the Board for further proceedings

consistent with the Court’s opinion. In conformity there-

with, it is hereby

47-A

ORDERED AND ADJUDGED by the Court that J. H.

Rutter Rex Manufacturing Company, Inc., its officers,

agents, successors and assigns, shall pay to the following

employees involved in this proceeding as net backpay the

amounts awarded to them with interest at the rate of six

percent per annum, commencing June 2, 1964, and con-

tinuing until the amounts are paid in full, but minus tax

withholding required by Federal and State laws.

Victoria Allen $2,543

Sonora Barnes (Rochon! 340

Doris E. Bowles 812

Marguerite Bozonier 1,601

Miriam Cheri 530

Bessie Cooper (Lee! 1,591

Georgiana Davis ( Deruisa! 2,252

Lenora Davis 236

Alice T. Denley ‘Gabriel! 21

Gloria Dixon 191

Minnie M. Fernandez 2.185

Ethel Mae Foreman ‘Askin! 1,414

Edna Francis 1,161

Jimmie Lou Green 3.536

Gustavia Haynes ‘Gale! 4,530

Victoria Henderson 2.121

Rose Marie Hicks 1,778

Louise Jackson ‘deceased! 1,286

Eunice Johnson 2.772

Lila Mae Landry ‘Coston! 192

Dorothy White ‘Learson! 1,591

Leonard Lewis 386

Bessie Montgomery 393

Adele Nash (Hall: 1,532

Desideria O’Campo 766

Yvonne Parnell (Charles! 1,367

Dorothy K. Reed 962

Adele L. Robertson 1,181

Rosalie Thornton 807

Marjorie Walker 351

Alma Wallace 52

Beatrice White ‘Lane! 3,007

48-A

IT IS FURTHER ORDERED in view of the death of

Louis Jackson, that Respondent pay to Jackson’s estate

or any person or persons as their interests may appear

the backpay due and owing on behalf of Jackson, including

interest.

IT IS FURTHER ORDERED AND ADJUDGED by

the Court that the case with respect to the Watford claim

be and it is hereby remanded to the Board for further

proceedings consistent with this Court’s opinion.

ENTERED: FEB. 7, 1973

Issued as Mandate: MAR. 20, 1973

49-A

APPENDIX C

IN THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 71-3260

J. H. RUTTER REX MANUFACTURING COMPANY,

INC.,

Petitioner-Cross Respondent,

versus

NATIONAL LABOR RELATIONS BOARD,

Respondent-Cross Petitioner.

Petition for Review and Cross Application for

Enforcement of an Order of the National Labor

Relations Board (Louisiana Case)

ON PETITIONS FOR REHEARING AND PETI TIONS

FOR REHEARING EN BANC

(Opinion Jan. 16, 1973, 95 Cir., 1973, 373 F.2d 223).

(March 12, 1973)

Before COLEMAN, GOLDBERG and GODBOLD,

Cireuit Judges.

PER CURIAM: The Petitions for Rehearing are

DENIED and no member of this panel nor Judge in

regular active service on the Court having requested that

the Court be polled on rehearing en bane, (Rule 35 Federal

Rules of Appellate Procedure; Loeal Fifth Circuit Rule 12)

the Petitions for Rehearing En Bane are DENIED.

50-A

APPENDIX D

New Orleans, La.

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS

BOARD

Cases 15-CA-721

15-CA-723

J. H. RUTTER-REX MANUFACTURING COMPANY,

INC.

and

AMALGAMATED CLOTHING WORKERS OF

AMERICA, AFL-CIO

ORDER CORRECTING

SECOND SUPPLEMENTAL DECISION AND ORDER

On November 5, 1971, the National Labor Relations

Board issued a Second Supplemental Decision and Order’

in the above-captioned proceeding in which there is an

inadvertent omission.

IT IS HEREBY ORDERED that said Second Supple-

mental Decision and Order be, and it hereby is, corrected

by adding the words “with interest” at the end of the first

sentence of the Order.

IT IS FURTHER ORDERED that the Second Supple-

mental Decision and Order, as printed, shall appear as

hereby corrected.

1194 NLRB No. 6.

51-A

Dated, Washington, D. C., November 11, 1971.

By direction of the Board:

John C. Truesdale

Deputy Executive Secretary

52-A

D—5620

New Orleans, La.

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS

BOARD

Cases 15—CA—721

15—-CA—723

J. H. RUTTER-REX MANUFACTURING COMPANY,

INC.

and

AMALGAMATED CLOTHING WORKERS OF

AMERICA, AFL-CIO

SECOND SUPPLEMENTAL DECISION AND ORDER

On February 13, 1956, the National Labor Relations

Board issued a Decision and Order in the above-entitled

proceeding' in which it found that Respondent had violated

Section 8taii1) and (5) of the National Labor Relations

Act, as amended. The Board’s Order directed Respondent,

inter alia, to offer to the unfair labor practice strikers who

made unconditional requests for reinstatement immediate

and full reinstatement to their former or substantially

equivalent positions, and to make them whole for loss of

pay resulting from the failure to reinstate them on request.

Thereafter, the Board’s Order was enforced in full by the

United States Court of Appeals for the Fifth Circuit,

including its reinstatement and backpay provisions.*

Pursuant to a backpay specification and appropriate

notice issued by the Regional Director for Region 15, a

hearing was held before Trial Examiner Owsley Vose for

the purpose of determining the amounts of backpay due

1115 NLRB 38s.

= 245 F.2d 594.

53-A

the discriminatees. On June 6, 1966, the Board issued a

Supplemental Decision and Order* in which it ordered

Respondent to pay to certain enumerated discriminate-s

backpay in the amounts found by trial Examiner Vose,

as modified by the Board. The Board found, inter alia,

that with respect to those employees whose backpay was

still accruing, payment to them of the net amount

found to be due and accruing constituted satisfaction of

Respondent's obligation only up to June 24, 1961, the

terminal Cate of the backpay specification.

Thereafter, the United States Court of Appeals for the

Fifth Circuit granted in part and denied in part the Board's

cross-petition for enforcement of its Supplemental Decision

and Order.' The court found that the Board had been

guilty of “inordinate” delay in issuing the backpay speci-

fication and it modified the Board's Order to eliminate all

backpay accruing after July 1, 1959. On writ of certiorari

to the Fifth Circuit Court of Appeals, the United States

Supreme Court reversed the circuit court’s judgment.” On

April 6, 1970, the circuit court issued its supplemental

judgment enforcing the Board's Supplemental Decision

and Order.

Pursuant to a supplemental backpay specification and

appropriate notice issued by the Regional Director for

Region 15 on November 30, 1970, a hearing was held

before Trial Examiner Lowell Goerlich for the purpose of

determining the amounts of backpay due the 33 discrim-

inatees whose backpay continued to accrue beyond June

24, 1961, the end of the period covered by the initial back-

pay specification. On June 23, 1971, the Trial Examiner

3158 NLRB 1414.

4399 F.2d 356.

5396 U.S. 258.

54-A

issued his Decision in Backpay Proceedings, which is at-

tached hereto, in which he awarded specific amounts of

backpay to the 33 discriminatees. Thereafter, Respondent

filed exceptions to the Trial Examiner’s Decision in Back-

pay Proceedings and a supporting brief. The General

Counsel filed exceptions to the parts of the Decision, a

supporting brief, and a brief in support of the Trial Ex-

aminer’s Decision.

Pursuant to the provisions of Section 3(b! of the Act,

the Board has delegated its powers in connection with this

proceeding to a three-member panel.

The Board has reviewed the rulings of the Trial Ex-

aminer made at the hearing and finds that no prejudicial

error Was committed. The rulings are hereby affirmed.

During the hearing Respondent served a subpoena duces

tecum on the Regional Director for Region 15 requiring

him to produce “each and every statement, written and or

recorded and memoranda made by or as a result of inter-

view or contact with any person, including backpay claim-

ants, Which pertains to employment, search for employ-

ment, interim earnings, availability for employment and or

any other matter affecting any backpay claimant for the

periods January 1, 1961 through December 31 of the

year in which each individual claim terminates.” Pursuant

to National Labor Relations Board Rules and Regulations

and Statements of Procedure, Series 8, as amended, See-

tions 102,117 and 102,118, Respondent sought the General

Counsel's permission for the Regional Director for Region

15 to comply with the subpena, Thereafter, the General

Counsel denied Respondent's request on the ground that

“the information sought is in the nature of pretrial dis-

covery Which is not available in unfair labor practice hear-

ings” and it “is in the nature of investigatory materials

55-A

compiled for law enforcement, and is of a privileged or

confidential nature,” falling within the exemptions of 5

U.S.C. Section 552(b).

Thereafter, Respondent served a subpoena duces tecum

on Thomas D. Johnston, counsel for the General Counsel

in the instant proceeding, requiring him to produce the

identical material previously sought from the Regional Di-

rector. Counsel for the General Counsel then filed a petition

to revoke subpoena duces tecum with the Trial Examiner

contending, inter alia, that, as noted above, the General

Counsel had refused to release the same information pur-

suant to the subpena directed against the Regional Di-

rector: that in the instant situation Respondent had not re-

quested the General Counsel's permission to allow Counsel

Johnston to comply with the subpena; that the material

sought by Respondent constituted the Board agents’ “work

product” and thus need not he produced; that the subpena

did not describe with sufficient particularity the evidence

sought; and, in any event, that all witnesses’ statements,

as defined in Rules and Regulations Section 102.118 'd),

would be made evailable tor purposes of cross-examination

pursuant to Section L2I1tbr i.

In opposing the General Counsel's petition to revoke,

Respondent argued to the Trial Examiner, as it did in its

brief in support of exceptions bevore the Bord, that, im

view of the protracted nature of the proceeding and Re-

spondent’s inability therefore to obtain evidence needed

te formulate its defense, the General Counsel should be re-

quired to produce the data upon which he based the supple-

mental backpay specification.

The Trial Examiner concluded that, since the General

Counsel had called the compliance officer who prepared

56-A

the supplemental backpay specification, and he had as a

witness testified how each discriminatee’s backpay claim

was determined, the General Counsel had “waived the

privilege against disclosure and has impliedly given his con-

sent, disclosing to the Respondent all files, documents,

reports and memoranda and other records which were util-

ized by Mr. Norton {the compliance officer] in framing his

testimony as well as framing the specifications. In the

Trial Examiner's opinion, therefore, the Respondent is

entitled to any files, documents or memoranda or records

of the Board which touch upon the testimony or are

relevant to the testimony of Mr. Norton or to the specifica-

tions as filed in this proceeding. Consequently, the Trial

Examiner overrules the motion to revoke the subpoena.”

Thereafter, the General Counsel filed a request for

special permission to appeal the Trial Examiner's ruling

to the Board contending that the Trial Examiner cited no

precedent for his ruling, that Respondent had not secured

permission for release of said documents, and, moreover,

that the Compliance Officer only testified to matters con-

tained in the supplemental backpay specification and did

not physically refer to documents, memoranda, notes, ete.,

in the files while testifying except those already in Re-

spondent's possession.

By telegraphic order dated March 25, 1971, the Board

granted the General Counsel's request for special permis-

sion to appeal the Trial Examiner's ruling denying the

petition to revoke subpena. The Board then reversed the

Trial Examiner's ruling, stating that it was too broad with

respect to matter required to be produced.

In the interim, on March 24, 1971, Respondent filed a

motion to dismiss the supplemental backpay specification on

5T-A

the ground that General Counsel had refused to comply

with the Trial Examiner's ruling to produce the subpenaed

documents. Respondent contended that the evidence sought

Was necessary and material to the defense of the claims

alleged in the supplemental backpay specification and that

the refusal of the General Counsel to comply with the

Trial Examiner's ruling substantially prejudiced Respond-

ent. Upon receiving the Board's telegraphic order revers-

ing the Trial Examiner's ruling, the Trial Examiner de-

nied Respondent's motion to dismiss. We agree with that

ruling. Moreover, we note that in all other respects the

General Counsel complied with applicable Board evidentiary

rules. Thus, where affidavits cf witnesses ‘alled by the

General Counsel existed, the General Counsel made them

available to Respondent’s counsel. In a few instances, mem-

oranda of conversations between Board agents and discrim-

inatees were also turned over to Respondent. In keeping

with the Board practice, Respondent received copies of

all official social security documents pertaining to the

discriminatees. Finally, except for discriminatee Denley,

whom Respondent had an opportunity to call, the General

Counsel called all the discriminatees involved herein so

Respondent's counsel could engage in cross-examination.

The Board has considered the Trial Examiner's Deci-

sion, the exceptions and briefs, and the entire record in

this proceeding, and hereby adopts the findings, conclu-

sions, and recommendations of the Trial Examiner with

the following minor modifications.

We adopt the Trial Examiner's findings and determina-

tions of backpay due the following discriminatees except

where modified herein:

Victoria Allen $2,543

58-A

Sonora Barnes ‘Rochon: 340

Doris E. Bowles 812

Marguerite Bozonier 1,601

Miriam Cheri 530

Bessie Cooper (Lee) 1,591

Georgiana Davis (Deruisa) 2,252

Lenora Davis" 236

Alice T. Denley ‘Gabriei) 21

Gloria Dixon 191

Minnie M. Fernandez 2,185

Ethel Mae Foreman ‘Askin? 1414

Edna Francis 1,161

Jimmie Lou Green 3,536

Gustavia Haynes 'Gale! 4,530

Victoria Henderson® 2 2.121

Rose Marie Hicks 17 iis

Louise Jackson ‘deceased: 1,286

Eunice Johnsen” 2.772

Lila Mae Landry ‘Coston: 192

Dorothy White ‘ Learson) 1.591

Leonard Lewis 3A6

Bessie bares sf sis)

Adele Nash” «Hail: 1.532

Dexideria O'Compo 766

Yvonne Parnell «Charles: 1.67

Dorothy K. Reed 52

Adele L. Robertson 11s]

Rosalie Thornton SOT

“In the amended — nial backpay specifieation Lenera Davis’

claimed cross backpay was reiuced frem 329% te $226 but the Trial

EAirminer inadve rte ntl ¥ fa led te note this change. The award #s

stated refleets this corr ’

7 In the amended ape Yemental tan ipay specifieation Vieteria Hender

sems claimed cress bachpa Was lihewise reduced from s2.162 te $2,161

Which, less found additi aad interim earnings of 34°, results in mt

bachkpay of S211. The award us stated vette ets this correction

“In the supplemental Iaehpay specifieatien Euni e Johnsen's alleged

backpay was $2,772 but in his brief the Ge neral Counsel erroneous’ s

asserted that backpay due Johneon amounted to 32.272. Tue Trial Es-

aminer wpparenutiy relied on the General Counsel's inadvertent error. The

award as stated refleets this correstion

‘The Trial Examiner foun! that Ade le Nash «Hail was dus $1,533,

as sated im the General Counsels brief. In tact. the supplemental

bas = ay spe ifation alleges that Nash is due $1,532 and the award

a5 ed refleets this correstion

59-A

Marjorie Walker 351

Alma Wallace 52

Fannie M. Watford'" 9 592

Beatrice White ‘Lane! 3,007

ORDER

On the basis of the foregoing Second Supplemental De-

cision and Order and the entire record in this proceeding,

the National Labor Relations Board hereby orders that

Respondent, J. H. Rutter-Rex Manufacturing Company,

Inc., New Orleans, Louisiana, its officers, agents, succes-

sors, and assigns, shall pay to the employees involved in

. this proceeding as net backpay the amounts awarded to

them in this Second Supplemental Decision and Order. It

is further ordered in view of the death of Louise Jackson

that Respondent pay to Jackson's estate or any person OF

persons as their interests May appear the backpay due

and owing on behalf of Jackson, including interest.

Dated, Washington, D. C. Nov. 5, 1971.

Edward 2B. Miller, Chairman

John H. Fanning, Member

Howard Jenkins, Jr.. Member

National Labor Relations Board

SEAL!

In the amended supplemental backpay spe ification Fannie M

Watferd’s claimed gross backpay was reduced Trem SLT toa Sees but

the Trial Examiner apparently overlooked this amendment in) award-

ine Watierd 39.7 backpay. The award as stated reflects this «+ ‘

tion, Jess sie found additional interim earninss.

We agree with the Trial Examiner that Watterd is entitled te buack-

pay durmsc the pecied she engaged in a strike ucaimst her interim

emplever, Louisiana Garment. As found by the Trial Examiner. she

iceurred no willful Joss of earnings in lecking ter work. She seucht

and for a brief time obtained werk during the strike perted tor w ch

interim earnings amounting te S10) have been deducted) from her

gross backpay. The evidence indicates that she would have beonm recey~

tive to am offer te return te werk from the Respondent during the

Louisiana Garment strike; ne such offer was fertheemine. Ip theese

eireumstanees, we wll net penalize Watferd by disallowing her beckpay

for the pormad of that strike, WLC. Nehors Comprny, A NLD lees J seten;

To held otherwise would be to compel a discriminates In sttiations sim-

ilar te Watferd’s te forge the lecitimate exercise ef Section 7 rights

against hus interim employer in erder to reduce the backpay ability

of the employer whe discriminatorily discharged him . ;

60-A

TXD—308—71

New Orleans, La.

UNITED STATES OF AMERICA

BEFORE THE NATIONAL LABOR RELATIONS

BOARD

DIVISION OF TRIAL EXAMINERS

WASHINGTON, D.C.

Cases 15—CA—721

15—_CA—723

J. H. RUTTER-REX MANUFACTURING COMPANY,

INC. :

and

AMALGAMATED COLTHING WORKERS OF

AMERICA, AFL-CIO

Thomas E. Johnston, Esq., and

Edward A. Champagne, Esq.,

of New Orleans, La., for the

General Counsel.

Ralph Jackson, Esq., of New Orleans,

La., and Philip Lambert, Esq.,

of St. Louis, Mo., for the

Charging Party.

Daniel Lund, Esq., and Henry J.

Read, Esq., of New Orleans, La.,

for the Respondent.

TRIAL EXAMINER’S DECISION IN

BACKPAY PROCEEDINGS

History of Proceedings

LOWELL GOERLICH, Trial Examiner: On February

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13, 1956, the National Labor Relations Board, herein re-

ferred to as the Board, issued a Decision and Order’ in

the within captioned cases directing Respondent, J.

Rutter-Rex Manufacturing Company, Inc., inter alia, upon

application, to offer to all those employees who went on

strike on April 21, 1954, or thereafter immediate and full

reinstatement to their former or substantially equivalent

positions without prejudice to their seniority or other

rights and privileges, dismissing if necessary all persons

hired on or after that date, and make such applicants

whole for any loss of pay by reason of the Respondent's

refusal, if any, to reinstate them by the payment to each

of them of a sum of money equal to that which he would

normally have earned, less his net earnings during the

period from 5 days after the date on which he applied for

reinstatement to the date of the Company's offer of rein-

statement, to be computed on a quarterly basis. There-

after on June 10, 1957, the Court of Appeals for the Fifth

Circuit issued its decision granting enforcement of the

Board’s Order. The court entered its decree of enforce-

ment on August 19, 1957.

On November 16, 1961, the Regional Director for Region

15 of the National Labor Relations Board issued the initial

backpay specification in this matter. On January 25.

1963, Trial Examiner Vose issued his Preliminary Inter-

mediate Report and Order in Backpay Proceeding in which

he approved the method of computing backpay set forth

in the specification but provided that such computation in

regard to group 5 employees should be subject to a 6 per-

cent reduction which he found necessary in order fully

to reflect the number of absences characteristic of a typical

tJ. H. Rutter-Re Vanufacturing Company. In 115 NLRB 3ss

SN LIB. vo JW. Ratter-Ree Manufacturing Cow pans Ine. 245 F.2d

44

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employee. Thereafter, on various dates between February

12, 1963, and September 30, 1963, hearings were held on

the issues raised by the Backpay Specification and the

Respondent’s amended answer.

On June 2, 1964, the Trial Examiner issued his Supple-

mental Decision in Backpay Proceedings in which he

ordered specific amounts of backpay to approximately 172

claimants and denied backpay to approximately 35 others

while providing for 6 percent interest on the backpay due

for each quarter commencing from the date of his Decision.

On June 30, 1966, the Board issued its Supplemental

Decision and Order." On July 23, 1968, the United States

Court of Appeals for the Fifth Circuit handed down its

opinion granting in part and denying in part the cross-

petition for enforcement of the Board’s Supplemental De-

cision and Order.t On March 3, 1969, the Supreme Court

of the United States granted the Board’s petition for a

writ of certiorari and on December 15, 1969, the Supreme

Court handed down its opinion reversing the judgment

of the United States Court of Appeals for the Fifth

Circuit.* On remand the United States Court of Appeais

for the Fifth Circuit issued on April 6, 1970, its Supple-

2158 NLRB 1414. directing. inter alia, that the Respondent pay to the

employees involved in the backpay proceeding the net backpay amount

including interest from the date of the Trial Examiner's Supplemental

Decision but minus the tax withholding required by the Federal and

state laws as set forth opposite their names in the Appendix to the

Trial Examiner’s Supplemental Decision except for certain individuals

named in the Supplemental Decision and Order who were to be paid

the amount set forth by the Board. Additionally, the Board held: “With

respect to those employees whose hackpay was still accruing, as found

by the Trial Examiner in his Supplemental Decision, payment to them

of a net amount found to be due and accruing constitute the satisfac-

tien of Respondent's obligation only up to June 24, 1961, which is

the end of the period covered by this specification.”

‘J. H. Rutter-Rer Manufacturing Company, Inc. v. N.L.R.B., 399 F.2d

356 (CA. 5).

5N.LRRB. v. J. H. Rutter-Rer Manufacturing Company, Inc., 396

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mental Judgment Enforcing the Supplemental Backpay

Order of the Board dated June 3, 1966, except as to certain

individuals, none of whom are included in the Supplemental

Backpay Specification which is the subject of this pro-

ceeding.®

A controversy having arisen over the amount of backpay

due under the terms of the Board’s Supplemental Decision

and Order as enforced by a United States Court of Appeals

for the Fifth Circuit, the Regional Director of the Na-

tional Labor Relations Board for Region 15, pursuant

to authority duly conferred upon him by the Board, issued

a Supplemental Backpay Specification on November 30,

1970, in which it was alleged the amount of backpay

which the Regional Director claimed was due under the

Board’s Supplemental Order as enforced by the court.

On February 16, 17, 18, and 19 and March 22, 23, 24,

and 25, 1971, this proceeding came on for hearing on the

Supplemental Backpay Specification, amendments thereto,

and on the Respondent’s answer. Each party was afforded

a full opportunity to be heard, to call, examine, and cross-

examine witnesses, to argue orally on the record, to submit

proposed findings of fact and conclusions, and to file briefs.

All briefs in total, 122 pages, have been carefully con-

sidered by the Trial Examiner.

Upon consideration of the Supplemental Backpay Speci-

fication, the amendments thereto, the Respondent's answer,

the evidence adduced at the hearing, the record as a

whole, and the posthearing briefs of the parties and in

view of the Trial Examiner’s observation of the demeanor

of the witnesses, the Trial Examiner makes the following

_-—————

6J. H. Rutter-Rer Manufacturing Company, Inc. v. N.L.R.B., 434

F.2d 1318.

64-A

findings of fact, conclusions of law, > reasons therefor.

First: In the Supplemental Backpay Specification, as

amended, hereafter referred to as the Specification, the

General Counsel seeks backpay for 32 black female claim-

ants and 1 black male claimant covering the period from

July 1, 1961,* until each claimant was offered reinstate-

ment. With the exception of Louise Jackson, now deceased,

and Alice Denley ‘Gabriel’ who presently resides in the

State of California and whose claim amounts to $21, all

the claimants were produced for testimony by the General

Counsel and were cross-examined by Respondent's counsel.

Gross backpay claims for all of the claimants, with the

exception of Leonard Lewis, were based on a formula

which utilized the average quarterly earnings of 15 em-

ployees in a control group, excluding those quarters where

their earnings were less than $100 or less than 60 percent

of the average of their three previous quarter earnings.

These quarters were excluded because they were not rep-

resentative. The 15 employees in the control group were

among those employees in the control group used in the

initial backpay proceeding and were still employed by

the Respondent throughout the backpay period in the

instant case. This group was selected because they were

female production workers and had been treated in a

similar manner in the initial backpay proceeding for de-

termining gross backpay.

With respect to the remaining claimant, Leonard Lewis,

a different formula was used because of the nature of

his work and the limited backpay period. Lewis’ gros=

backpay was computed by taking the gross earnings of

7 The Specification in the initial backpay proceeding ended with th.

date of June 24. 1961

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another employee, Isaac Williams, who performed similar

work and who was one of the control group used in com-

puting Lewis’ backpay in the initial backpay preceeding,

and comparing his earnings in the last quarter set forth

in the initial backpay specification with the amount of

earnings which Trial Examiner Vose feund Lewis was en-

titled te for that quarter and then applying percentage ratio

between the earnings of WilHams and Lewis for that

quarter with Williams’ earnings for the quarter claimed

in the instant cuse, thereby determining Lewis’ gross

backpay.

The gress curnings of the contre! group employees were

computed from July 1, 1861, through the period the claim-

ants were ontitlhd te backpay in the instant case. The

average quarteriy earrings fer the control group em-

ployees were roduced by 6) percent to compensate for nermz!

absenteeism of ctiplovees:-such a reduction had been pre-

vided for by Trial kxaminer Vose in the initial backpa:

proceeding,

ave : er :

Pie earnings of the control vroup emp] iVees Were Taken

from their social security earnings records.

The figures ~et forth in the Specification for the quarter

170-72 are projected earnings based on the previou-

quarter earnings because secial security. records for that

period Were unavailable at the time the Specification was

prepared,

The interim earning= of the claimants reflected in the

Specification were based on information taken from their

social security earnings recorcs for those earnings reported

to the Social Security Administration and from informa-

tien obtained from each claimant fer anv earnings not

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reported on their social security e»*nings records. How-

ever, the majority of the interim earnings were reflected

on the Social Security 4180 Forms, copies of which were

furnished to Respondent. The exceptions of those earnings

not reported on the social security earnings records, prim-

arily related to domestic work and, in one instance in-

volving Georgiana Davis (Deruisa), related to earnings

derived from part-time work at two different restaurants.

Only one employee, Adele Robertson, claimed expenses

in connection with her search for work, which expenses

were deducted from her interim earnings during that par-

ticular quarter. This involved a $33 train fare from New

Orleans to Chicago, where she subsequently obtained em-

ployment.

No claims in the Specification were made for those

quarters in which net interim earnings exceeded gross

hackpay or for quarters or portions of quarters where the

claimant was out of the labor market because of illness,

maternity or personal reasons, inadequate search for work,

or where backpay was tolled during the quarter.

The net interim earnings set out in the Specification

were those earnings of the claimants earned during the

quarters or portions of the quarters claimed, less expenses

incurred in seeking work.

The net backpay of each claimant set forth in the

Specification was determined by reducing the gross back-

pay by the net interim earnings of each claimant for each

quarter or portions of each quarter claimed and by adding

the quarters together, giving the total amount of backpay

due each claimant, not including interest.

67-A

Recovery was sought for the net backpay of each claim-

ant as well as interest in the amount of 6 percent to be

computed on the basis of Jsis Plumbing & Heating Co.,

138 NLRB 716.

Joseph G. Norton, the compliance officer of the Board

who had drawn the Specification, explained the formula,

its application, and the computations contained in the

Specification. His testimony was clear, forthright, and

honest and the Trial Examiner was impressed that he was

an ingenuous person, knew his business, and had drawn

the Specification with great care and caution. Indeed the

Trial Examiner is convinced that the testimony of Norton

as well as the Specification reveal that doubts were re-

solved in favor of the Respondent. There is no question in

the Trial Examiner’s mind that the Specification is fairly

drawn. Furthermore, the Respondent, for al! practical

purposes, conceded the correctness of the gross backpay

figures* contained in the Specification.

The Trial Examiner finds that the formula employed by

the General Counsel was fair and reasonable and that the

General Counsel established a prima facie case for the

amounts sought in the Specification.

SIn comparing the General Counsel's formula to the Respondent's

proposed formula, in support of which no evidence was adduced, counsel

for Respondent said,

There are some differences to a greater or lesser extent in

individual cases but, in general, the overall result was substan-

tially the same. .. . We don't intend to waive any contention

that the method adopted by the Board as compared to a

realistic departmental method, was designed to achieve the

highest backpay result and, as best we can determine, it) Was

purely coincidental that the figures end up as they have and

we emphasize, we did not discover this until after the answer

was filed but we think the legal issue is framed and we just

don't choose to litigate all these details of actual gross dollar

amounts. Not net but gross dollar amounts which are similar

in our computation and the Board’s computation because we

think that on balance that will achieve little. . . . So, we stick

to our contentions about the formula but in saying this we

understand you will, in all probability, adopt those gross

figures.

GS-A

Second: The Respondent contends that the supplemental

backpay claims should be dismissed because of the un-

justified delay of the Board in filing the Supplemental

Backpay Specification and because of the General Coun-

sel’s refusal to produce evidence, As to the latter conten-

tion, the Board has answered it adversely to the Respondent

in the Respondent's direct appeal to the Bourd. As to the

forme contention, the Supreme Court in the above-cap-

tioned Matler-Re case at S95 ULS. 258 has answered it ad-

versely to the Respondent. The defense, of course, would not

lie, in the cases of claimants Green, Haynes, Hicks, or

Lewis, who by reason of alleged strike misconduct were

not offered employment until 1970, and claimants Davis

and Watford, who also were not offered employment until

1970.

While the Supreme Court thought it “deplorable” if

the Respondent were hampered in the presentation of its

defenses to the Backpay Specification by delay, it held

that it was “even more deplorable” that innocent employees

had to live for some years on reduced incomes as a com-

bined result of the delay and the Respondent's illegal fail-

ure to reinstate them.

Of the Respondent, the United States Court of Appeals

for the Fifth Circuit has said (399 F.2d 356) ‘after re-

ferring to the Respondent's confrontations with the Board) :

It convinces us, of course, that Rutter-Rex is not,

and has not been, a babe in the woods, now about

to be victimized fer ignorance or inadvertent in-

eptitude in the field of employer-employee rela-

tions, as regulated by the National Labor Re-

lations Act.

The court also said:

69-A

The Company, experienced in labor disputes and

represented by outstanding counsel, could not have

possibly overlooked the plain command of the

Court’s decree that employees should be reinstated

upon application and made whole for any loss of

pay they might have suffered by refusal to rein-

state.”

The Trial Examiner also found Respondent's counsel

to be outstanding and surely capable of comprehending

a long time ago Jusuice Marshall's sueyvestion that ‘{ilt

may be that the company could have, through the courts,

compelled earlier Board action.” Justice Marshall was re-

ferring to Section 106e+tAr ot the Administrative Lro-

cedure Act. 5 USC. 100dte: (AN C1964, which provides

that courts sti “compe! agency action aniawdully with-

held or unreasonably delayed.” That learned Counse! did

not try this procedure, if the Respondent were npprehensive

of delay. seems to indicate that the Responder accepted

the delay and pursued a course which was best fitted to

its antiunion needs. In any event, any discouragement of

its employees’ union activities which was cuused by its

withholding backpay payments for such a long period

mitigated to the advantage of the Respondent, and its emn-

ployees were left to wonder for many years Whether their

employer was obligaied to fully comply with the Act

and whether the Act really afforded them protection

in the pursuit of their union activities. For the em-

ployees such a state was “even more deplorable.”

In light of the Supreme Court’s decision, with which

the Trial Examiner is wholly in accord, the Trial Ex-

aminer finds that the Respondent's contention as set out

above is without merit. Under the circumstances of this

It is the latter part of this decree which the Respondent seeks

now to avoid,

70-A

case fair play does not demand that the remedial policies

of the Act be so lightly treated as to exonerate a convicted

wrongdoer of the consequences of his misconduct. As a

matter of public concern, it is better that the salutary

purposes of the Act be accommodated.

The General Counsel’s explanation for the delay is both

reasonable and adequate:

The Supplemental Backpay Specification in the

instant case Was not issued until November 30,

1970, because of the Respondent's refusal at all

times to comply with either the Trial Examiner’s

Supplemental Decision in Backpay Proceeding or

the Board's Supplemental Decision and Order in

the initial Backpay Specification proceedings,

whereby Respondent was required to pay certain

amounts of backpay to the same claimants as in

the instant proceeding and whose backpay was

still occurring, until after the United States Court

of Appeals for the Fifth Circuit issued its Sup-

plemental Judgment on April 6, 1970; Respon-

dent’s failure or refusal to offer reinstatement to

some of these claimants until as late as May 1970;

and because of the intervening proceedings before

the Board and Courts between the issuance of the

initial Backpay Specification and the above-men-

tioned Supplemental Judgment of the Court on

April 6, 1970. In addition, Respondent refused to

make any of its records available for the purpose

of computing the gross backpay in the Supple-

mental Backpay Specification, thereby causing ad-

ditional time for preparation of the Supplemental

Backpay Specification, as well as time spent for

settlement purposes.

Third: In the recent case of Fibreboard Paper Products

Corporation, 180 NLRB No. 33, the Board has reviewed

71-A

and summarized some of the guiding principles applicable

to backpay cases:

“Willful loss of earnings is an affirmative defense, and

the burden of proof is on the Respondent.” Once the Gen-

eral Counsel has shown the gross amount of backpay due,

the burden is upon the employer to establish facts to nega-

tive or mitigate liability to a given employee.'' And finally,

‘any uncertainty is resolved against the wrongdoer whose

conduct made certainty impossible.’ ”

“It is accepted by the Board and reviewing courts that

a discriminatee is not entitled to back pay to the extent

that he fails to remain in the labor market, refuses to

accept substantially equivalent employment, fails diligently

to search for alternative work, or voluntarily quit alterna-

The Board cites N.LRB v. Mooney Aircraft, Ine. 366 F.2d sag

(CLA. 5). In such case the court commented at $12:

While the General Counsel has the burden of preving unlawful

discrimination on the part of the employer, and hence that

backpay is due, the employer usually has the burden of estab-

lishing affirmative defenses which would mitigate is liability.

NUL.R.B. ¥. Miami Coca-Cola Bottling Co. supra i360 F.2d 569):

VL.R.B. vy. Broiwn & Root, Inc. S Cir. 1063, 311 F.2d 447. Among

these affirmative defenses are the unavailability of jobs because

of nondiscriminatory faetors, the employees’ wilful loss of

earnings, and employees’ interim earnings to be deducted from

the backpay award,

* * * * . 7

The cases are unanimous that the Employer must— establish

these defenses by a preponderance of the evidence. NLRB. vy.

Miami Coca-Cola Bottling Co. supra; N.L.RLB. ve Mastro Plastics

Corp. 2 Cir, 1465, 254. F.2d 170; NLRB. ve Brown & Root,

Tne. Supra,

The Court of Appeals for the Fifth Circuit has suid in the above-

captioned Rutter-Rer case OS99 Fitd 3560:

; backpay, as used in’ the applicable statute, includes

moneys Which it is reasonably found that an employee would

actually have received in the absence of unlawful diserim-

ination: that lack of available jobs is an affirmative defense,

that the burden of establishing such a detense rests on the

employer, and the burden likewise rests with an employer at-

tempting to prove a former employee's failure to make reason-

able search for other employment.

11 See also United States Air Conditioning Corporation, Al NLRB

1278, 1280, enfd. 386 F.2d 275 (CLA. 6).

72-

tive employment without good reason.” N.L.R.B. v. Mastro

Plastics Corporation, 354 F.2d 170 (C.A. 2) fn. 3.

The test is whether the discriminatee has made reason-

able efforts to find new employment which is substantially

pages to his ag are American Manufacturing

Co., 167 NLRB 520, . In this respect the duty imposed

on 8 ninever sana ney minimize his loss of earnings stems

from “the healthy poliey of promoting production and em-

ployment.” See Southern Sil: Mills, lne.. 116 NLRB 769,

772. But this duty “. . . does not require success; it only

requires an honest good faith effort. . . .” NLRB. v.

Cestivan Auto Co., 223 F.2d 832, 836 1C.A. 1).

In computing the backpay awards the Board endeavors

to restore the employee to the status quo he would have

enjoyed if he had not been discriminatorily discharged.

NLRB v. U.S. Aix Conditioning Co., 336 F.2d 275, 277

(CLA. 6); NLRB. ve Robert Haws Company, 403 F.2d

$79 «CA.

A diseriminatee who has otherwise made reason-

zhle efforts to seek out new employment is not re-

quired in each specific quarter t to repeat job ap-

plications which from her past efferts she knows

ea foredoomed to futility in order to protect

er claim of bh: ackpay for that particular quarter.

Rather, the entire hackpay p<riod must be seru-

linized to determine whether throughout that

period there was, in the light of all surrounding

circumstances, a reasonable continuing sezrch

such as to foreclose a finding of willful loss.

|Cornwell Company, Inc., 171 NLRB No, 43.]

The Respondent's affirmative defenses other than those

which were purely legal were supported primarily by cross-

examination of the claimants. Since these defenses must

73-A

relate to the credibility of the claimants, the Trial Ex-

aminer carefully observed the demeanor of each witness

as it related to the truthfulness of his or her testimony.

In this endeavor the Trial Examiner was aided by the

searching and exacting cross-examination of counsel for

the Respondent. Weighing all factors the Trial Examiner

has concluded that none of the claimants deliberately lied

for the purpose of dishenestly obtaining backpay. This

conclusion is fertified by the fact that, had the claimants

lied about crucial matters, the depth and artfulness of

Respondent’s counsel's cross-examinaiion in most cases

would have wrung the truth from these unsophisticated

and unlearned witnesses. While there mey have been a few

taradiddles, these did not reflect adversely on the wit-

nesses’ overall credibility as to the material matters in

issue.

Each discriminatee’s backpay claim will be examined

in the light of the feregoing discussion, the whole record

before the Trial Examiner, and the Respendent’> affirma-

tive defenses articulated in its answer and its memorandum

to the Trial Examiner.

|The remainder of the Trial Examiner's Decision has

not been reproduced, as it deals solely with the thirty-three

individual claims to backpay, which the petitioner believes

to be irrelevant to the instant petition. A copy of the full

decision appears at page 58 of the appendix printed in the

Fifth Cireuit proceeding which appendix will be certified

by the Clerk of the United States Court of Appeals for

the Fifth Cireuit and lodged with this Court.|

74-A

APPENDIX E

OPINION

SUPREME COURT OF THE UNITED STATES

No. 32.—October Term, 1969.

On Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit.

National Labor Relations Board,

Petitioner,

v.

J. H. Rutter-Rex Manufacturing

Company, Inc., et al.

|December 15, 1969}

Mr. Justice Marshall delivered the opinion of the

Court.

This case presents the question whether, when an em-

ployer has improperly failed to reinstate striking employ-

ees, and the National Labor Relations Board has after

considerable delay ordered backpay for those employees,

a court of appeals may, on account of the delay, modify

the Board’s order to provide an early cutoff date for

backpay. In the circumstances of this case, we hold such

a modification to be an unwarranted interference with

the Board’s remedial power to implement the policies of

the National Labor Relations Act.

I

The employees in question chose the Amalgamated

Clothing Workers of America, AFL-CIO, as their bar-

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gaining representative in January 1954. After three

bargaining sessions between the union and the company,

the employees went out on strike in April 1954. At that

point and thereafter the company refused to bargain

further with the union representatives. Charges of unfair

labor practices, including a refusal to bargain in good

faith, were filed against the company. In April 1955,

while these charges were pending, the union terminated

the strike and applied for the reinstatement of many of

the strikers. The company reinstated some of these em-

ployees and failed to reinstate others.

In February 1956, the Board found that the company

had indeed been guilty of an unlawful refusal to bargain.

It ordered the company to offer reinstatement to all

strikers who applied, and to “make such applicants whole

for any loss of pay suffered by reason of the .. . re-

fusal, if any, to reinstate them.” J. H. Rutter-Rex

Mfg. Co., 115 NLRB 388, 391 (1956). As is apparently

the Board’s practice in reinstatement cases involving

strikers, the order did not name the individuals cov-

ered, but left disputes over the details of reinstatement

and backpay to the compliance stage of the proceedings.

The Court of Appeals enforced the Board’s order, NLRB

v. J. H. Rutter-Rex Mfg. Co., 245 F. 2d 594 (C. A. Sth

Cir. 1957), and entered its decree on August 19, 1957.

On August 21, 1957, the Board’s regional office sent

the company the standard letter describing compliance

procedures, which included the following:

“When you have fully complied with the af-

firmative terms of the decree and there are no

violations of its negative provisions, you will

be notified that the case has been closed. Until

7T6-A

you receive such notice you will know that the

case remains open for all purposes as awaiting

compliance.”

On November 7, 1957, the company wrote to the re-

gional office stating that it had complied with “scme

of the provisions of the decree,” and asking that the

regional office bring “any instance of a failure to comply

fully with the order” to the company’s attention. The

regional otfice did not answer this letter, and the com-

pany heard nothing until Mareh 22, 1960, when a Board

compliznce officer notified the company that the case

had been assigned to him. and requested payroll and

other records necessary to determine the employment

and backpay rights of employees.

On November 16, 1961, the regional office filed a 428-

page backpay specification, alleging that the company

owed more than $342,000 to seme 207 strikers who had

either not been reinstated within five days after apply-

ing, or who had never been reinstated. in violation of

the board and court orders. The company applied to

the Court of Appeals for a permanent stay of further

action in the backpay proceedings, alleging that the

Beard had delayed improperly in issuing the specifica-

tion. By affidavit, the Board explained that the delay

Was caused in part by the great complexity of the task

of processing the claims of approximately 660 strikers,

and in part by the extremely heavy caseload and severely

limited staff which the New Orleans regional office ex-

perienced during the late 1950's. The Court of Appeals

noted that the delay was regrettable, but denied the

requested stay. NLRB v. J. H. Rutter-Rex Mfg. Co,

305 F. 2d 242 +C. A. 5th Cir. 1962).

After a lengthy hearing, a Trial Examiner denied

backpay to 35 of the 207 claimants, and reduced the

amount due to just over $160,000, He determined that

each employee should receive net backpay, computed

according to the Board's usual formula,’ for the period

running from five days after his application for rein-

statement until the company made a compiying offer.

Where no offer was made, the backpay was to accrue

through the last quarter of 1961, the quarter in which

the specification was filed. His findings and recom-

mendations were adopted with minor modifications by

the Board on June 3, 1966. J. H, Retter-Ree Mig. Co.

158 NLRB 1414 (1966). Both the Examiner and the

Board considered and rejected the company’s contention

that the delay in issuing the specification should bar

the backpay award, either in whole er in part.

On review, the Court of Appeals found that the Board

had been guilty of “inordinate” delay, in violation of

$ Gta) of the Administrative Procedure Act, 5 U. 5. C.

£ 1005'a', and to the prejudice of the company, which

had been “lulled into the belief that the Board was

satisfied and that no further relief was to be expected.”

J. H. Rutter-Rex Mig. Co. «. NLRB, 399 F 2d 356, 365

iC. A. Sth Cir, 1968). Arguing that the purpose oi

backpay awards is to “deter unfair labor practices,” /d.,

at 364, and believing that a substantial award of back-

pay would be sufficient to achieve such deterrent effect,

the court modified the Board order to eliminate all

backpay accruing after July 1, 1959, thus reducing the

awards of some 37 strikers who had not yet received

complying offers of reinstatement by that date. We

granted certiorari to consider the propriety of this modi-

1 NLRB vy. Seven-lUp Bottling Co., 344 U.S. 344, 345 (1953).

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fication,? 393 U. S. 1116 (1969), and we reverse the

judgment below.

II

We start with the broad command of § 10‘c) of the

National Labor Relations Act, 29 U. 8S. C. § 160(c),

that upon finding that an unfair labor practice has been

committed, the Board shall order the violator “to take

such affirmative action including reinstatement with or

without back pay, as will effectuate the policies” of the

Act. This Court has stated that the remedial power

of the Board is “a broad discretionary one, subject to

limited judicial review.” Fibreboard Corp. v. NLRB,

379 U.S. 203, 216 (1964).

The legitimacy of backpay as a remedy for unlawful

discharge or unlawful failure to reinstate is beyond dis-

pute, Wastro Plastics Corp. v. NLRB, 350 U.S. 270, 278

(1956), and the purpose of the remedy is clear. “A

back pay order is a reparation order designed to vindi-

cate the public policy of the statute by making the

employees whole for losses suffered on account of an

unfair labor practice.” Nathanson v. NLRB, 344 U. S.

25, 27 (1952). As with the Board’s other remedies, the

power to order backpay “is for the Board to wield, not

for the courts.” NLRB v. Seven-Up Bottling Co., 344

U. S. 344, 346 (1953). “When the Board, ‘in the exer-

cise of its informed discretion, makes an order of

restoration by way of back pay, the order ‘should stand

unless it can be shown that the order is a patent attempt

to achieve ends other than those which can fairly be

2 The Court of Appeals also reversed backpay awards as to 10 strikers

in their entirety, finding the awards not supported by substantial

evidence. 399 F.2d, at 365. Certiorari was not sought as to this modifica-

tion of the Board's order.

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said to effectuate the policies of the Act.’” Id., at

346-347.

Here the Board ordered backpay through December

1961 for employees who had not yet received complying

offers of reinstatement by that date. That order clearly

falls within the general purpose of making the employees

whole, and thus restoring the economic status quo which

would have obtained but for the company’s wrongful

refusal to reinstate them. The employees encompassed

by the order earned less during the relevant quarterly

periods than they would have had they been reinstated

in their old or substantially equivalent jobs with the

company. Thus the Court of Appeals’ modification, cut-

ting off the accrual of backpay at the arbitrary date of

July 1, 1959, left the employees who had not been

reinstated by that date worse off than they would have

been but for the company’s wrongful action in refusing

reinstatement. Either the company or the employees

had to bear the cost of the Board’s delay. The Board

placed that cost upon the company, which had wrong-

fully failed to reinstate the employees. In an effort to

discipline the Board for its delay, the court shifted part

of that cost from the wrongdoing company to the inno-

cent employees.

The Court of Appeals justified the modification as a

proper balancing of the interests of the company, which

it found was prejudiced in litigating the backpay claims

by the Board’s delay, and the interests of the employees

in full restitution. It found statutory support for the

company’s position in what it took to be the Board’s

violation of its duty under the Administrative Procedure

Act “to proceed with reasonable dispatch to conclude

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any matter presented to it.” 5 U. S.C. § 1005ta)

(1964). Thus, the Court of Appeals reasoned, the case

fell within the admonition that reviewing courts in labor

‘ases not “rubber-stamp their affirmance of administra-

tive decisions that they deem inconsistent with a statu-

tory mandate or that frustrate the congressional policy

underlying a statute.” NLRB v. Brown, 380 U.S. 278,

291 (1965). :

Assuming without deciding that the delay in issuing

the specification did violate the Board's duty of prompt

action under the Administrative Procedure Act, it does

not follow that enforcement of the full backpay remedy

was an abuse of the Board's discretion. Wronged em-

ployees are at least as much injured by the Board’s

delay in collecting their backpay as is the wrongdoing

employer. In view of “the economic hardship caused

by many years of undeservediy substandard carnings,”

lengthy delays “must render the back pay award a

wholly inadequate and unsatisfactory remedy” to the

employees for the company’s refusal to reinstate them.

NLRB ov. Mastro Plastics Corp., 354 F. 2d 170, 180

iC. A, 2d Cir, 1965). This Court has held before that

the Board is not required to place the consequences oi

its own delay, even if inordinate, upon wronged em-

ployees to the benefit of wrongdoing employers. NLRB

, Electric Cleaner Co., 315 U.S. 685, 698 (1942); Labor

Board v, Katz, 369 U.S. 736, 748 n. 16 (1962).

The Court of Appeals reasoned further that the pur-

pose of the backpay remedy is deterrence of unfair labor

practices, and that the substantial backpay award which

it enforced would sufficiently serve that deterrent pur-

poses. But the Board could properly conclude that

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backpay is not only punishment for an unfair labor prac-

tice, but is also a remedy designed to restore, so far as

possible, the status. quo which would have obtained but

for the wrongful act. Cf. Phelps Dodge Corp. °. NLRB,

313 U.S. 177, 194 (1941).

Finally, the Court of Appeals reasoned that the com-

pany was “lulled into the belief that the Board was

satisfied and that no further action was to be expected.”

399 F. 2d at 363. We need not decide whether this sort

of estoppel argument would justify a court in reducing

a backpay award, for no estoppel appears in this case.

The Board clearly informed the company that this case

would remain open as awaiting compliance until the

company received a notice that the case was closed.

No such closing notice was ever given. As the Court

of Appeals itself stated, the company’s subsequent letter

asking that violations of the order be called to its atten-

tion “could not shift or avoid its duty of compliance.”

Ibid.

We do not mean that delay in the administrative

process is other than deplorable. It is deplorable if, as

the Court of Appeais thought, the company was ham-

pered in the presentation of its defenses to the backpay

specification by the delay. It is even more deplorable

if, as seems clear, innocent employees had to live for

some years on reduced incomes as a combined result

of the delay and the company’s illegal failure to rein-

state them. It may be that the company could have,

through the courts, compelled earlier Board action.*

3Section 10(e)(A) of the Administrative Procedure Act, 5 U.S.C.

1009(e)(A) (1964), provides the courts shall “compel agency action

unlawfully withheld or unreasonably delayed.”

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But the Court of Appeals exceeded the narrow scope of

review provided for the Board’s vemedial orders when it

shifted the cost of the delay from the company to the

employees in this case.

Reversed,

&3-A

SUPREME COURT OF THE UNITED STATES

No. 32.-—October Term, 1969

On Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit.

National Labor Relations Board,

Petitioner,

?

J. H. Rutter-Rex Manufacturing

Company, Inc., et al.

‘December 15, 1969

Mr. Justice Douglas, with whom The Chief Justice

and Mr. Justice Harlan concur, dissenting.

Universal Camera Corp. v. NLRB, 340 U.S. 474, re-

quires a dismissal of the writ of certiorari,

To start with, the Board is allowed a wide field of

diseretion over 2wards of back pay against a company

found to have committed an unfair labor practice As

the Court said in Phelps Dodge Corp, «. NLRB, 315 U.S.

177, 198:

“The remedy of back pay, it must be remem-

bered, is entrusted to the Board's discretion: it

is not mechanically compelled by the Act. And in

applying its authority over back pay orders, the

Board has not used stereotyped formulas but has

availed itself of the freedom given it by Congress

to attain just results in diverse, complicated

situations.”

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Thus the employees in this case have no automatic

“right” to any award of back pay.

The Universal Camera case concerned the scope of

judicial review of orders of the Board. Prior to that

decision, many courts had conceived their function of

review as an extremely narrow one; some courts looked

only for evidence which. when viewed in isolation, sub-

stantiated the Board’s findings. Congress registered its

dissatisfaction with this resiricted scope of review by

stating the proper test in the Taft-Hartley Act as one of

“substantial evidence on the record considered as a

whole.” 61 Stat. 148, 29 U.S. C. $ 160te) This meant

that the courts of appeals were to “assume more respon-

sbility for the reasonableness and fairness of Labor

Board decisions” than had been the practice of many

of these courts in the past. 340 U.S., at 490.

The impact of this decision was to vest the courts of

appeals with general supervisory responsibility over

Board decisions and orders. Accordingly, the role of

this Court was to be an extremely limited one. The

Court in Universal Camera put it this way:

“Our power to review the correctness of appli-

cation of the present standard ought seldom to

be called into action. Whether on the record as

a whole there is substantial evidence to support

agency findings is a question which Congress has

placed in the keeping of the Court of Appeals.

This Court will intervene only in what ought

to be the rare instance when the standard ap-

pears to have been misapprehended or grossly

misapplied.” Jd., at 490-491.

The problem in the present case is one of working out

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the equities of a back-pay order. Because the Board’s

delay in initiating compliance proceedings with respect

to its original order was deemed unreasonable, the Court

of Appeals saw fit to modify the terms of that order.

The impact of the specific facts relating to the Board’s

and the company’s actions in this case were taken into

account by the Court of Appeals in reviewing the terms

of the back-pay order. It arrived at its judgment as

an exercise of its responsibility “for assuring that the

Board keeps within reasonable bounds” (/d., at 490) in

a subject area that necessarily involves “diverse, com-

plicated situations.”

Casting the issue as one of “law” rather than as one

of “fact” does not conceal the substantial departure in

this case from the learning of Universal Camera: that the

courts of appeals, and not this Court, are the watchdogs

of the Board.

I would dismiss the writ as improvidently granted.

Sa Sats ch fers