Heinrich Motors, Inc.

HEINRICH MOTORS, INC. 783 Heinrich Motors, Inc. and International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, AFL-CIO. Case 3-CA-2334 July 14, 1967 SUPPLEMENTAL DECISION AND ORDER On July 23, 1965, the National Labor Relations Board issued its Decision and Order in the above- entitled proceeding,' finding inter alia that Respond- ent violated Section 8(a)(3) of the National Labor Relations Act, as amended, by discriminatorily discontinuing its night shift in the automobile ser- vice department. The Board ordered reinstatement with backpay for nine discriminatees. Pursuant to a backpay specification and ap- propriate notice issued by the Regional Director for Region 3, a hearing was held before Trial Examiner Josephine H. Klein on April 7, 1966, for the pur- pose of determining the amounts of backpay due two claimants, settlement having been reached as to the other discriminatees. On July 29, 1966, the Trial Examiner issued the attached Supplemental Decision, in which she awarded backpay to one of the claimants and de- nied backpay to the other. Thereafter, the General Counsel and Respondent filed exceptions, with sup- porting briefs, to the Trial Examiner's Supplemen- tal Decision. The Board has reviewed the rulings of the Trial Examiner made at the backpay hearing and finds that no prejudicial error was committed.2 The rulings are hereby affirmed. The Board has con- sidered the entire record in this case, including the Trial Examiner's Supplemental Decision, the ex- ceptions, and the briefs, and hereby adopts the findings, conclusions, and recommendations of the Trial Examiner as modified herein. 1. Unlike the Trial Examiner, we conclude that Cira was entitled to backpay for the period beginning with his discriminatory discharge on April 18, 1964, until September 11, 1965, when Respondent offered him reinstatement. For the period from April 18, 1964, until his entry into the service station operation on October 15, 1964, Cira was self-employed full time in a busi- ness which he had previously operated part time while he was employed by the Respondent. That self-employment is an adequate and proper way for the injured employee to attempt to mitigate loss of wages hardly requires citation.3 Equally well established is the principle that it is the employer's burden, as a matter of affirmative defense, to prove matters in mitigation of the losses caused the in- jured parties by its unlawful acts.4 The locus of the burden of proving failure to mitigate is sometimes blurred in our backpay proceedings by the practice of admitting in the backpay specification which initiates the proceed- ing the amounts of interim earnings which have been earned by discriminatees. Also, counsel for the General Counsel will often, as was done in the instant case, introduce exhibits relating to such earnings. See G. C. exh. 3 and 4. Such practice is consonant with the suggestion of the Supreme Court in N.L.R.B. v. Phelps Dodge Corp., 313 U.S. 177, 199, that the Board "has wide discretion to keep the present matter [trial of wilful loss issues] within flexible bounds through flexible procedural devices." But the willingness to admit without proof objectively verifiable facts which go to diminish the maximum amount of the wage loss in order to ex- pedite the hearing process does not relieve the Respondent in this case of its burdens of proof and persuasion as to other facts not admitted which also may diminish its backpay liability. As we said in Mastro Plastics Corp.: "Absent a showing by Respondent that the individual claimant acted un- reasonably or wilfully or that a job would not have been available [at the employer's plant] had the dis- crimination not occurred, the General Counsel has established a prima facie case." (136 NLRB at 1347.) We find no indication in the record here that Respondent has sustained its burden of showing that Cira willfully incurred a loss of earnings. The record shows that for approximately 2 years before his employment with the Respondent, Cira was en- gaged in the full-time business of selling used cars and making automobile repairs. When he accepted employment on Respondent's night shift, he con- tinued this business on a part-time basis. After his discriminatory layoff, Cira testified, he registered within 2 days with the New York State Employ- ment Service, and resumed the business of selling used cars and engaging in auto repairs on a full-time basis. He further testified that in addition to work- ing longer hours, he posted a sign, a few weeks after he left Respondent's employment, on his business premises reading, "Tuneups and General Repairs," and solicited business by telling people about start- ing automobile repairs. Sometime in September, after learning that his business premises were to be sold and he would have to vacate, he looked for and found the service station which he operated after October 15,1964. 153 NLRB 1575. The Trial Examiner's ruling revoking Respondent's subpena of Com- pliance Officer Hyman Dishner will be discussed in detail hereinafter ' L. B. Hosiery Co., 99 NLRB 630, 631 (Kiscaddin), Cashman Auto Company, 109 NLRB 720, 722, and, more recently Ardumi Manufactur- ing Corp., 162 NLRB 972 (Cassanelli). See also Fisher Construction Company v. Lerche, 232 F.2d 508 (C A. 9), and Cornell v T V. Develop- ment Corp., 17 N.Y. 2d 69, 215 N.E 2d 349, which collects and cites cases " Ozark Hardwood Co., 113 NLRB 1130, 1134; Mastro Plastics Corp., 136 NLRB 1342, 1347. See also Cornell v. T V. Development Corp., supra, 215 N.E. 2d at 352, 5 Williston Contracts § 1360 (1937). 166 N LRB No. 88 784 DECISIONS OF NATIONAL LABOR RELATIONS BOARD We are unable to agree with the Trial Examiner's characterization of Cira's testimony as "vague and inconsistent throughout."5 On the material issue as to whether he worked full time at the auto sales operation, his testimony was unshaken even after searching cross-examination concerning the nature of his operations in self-employment-a cross-ex- amination undertaken after Cira had submitted for Respondent's use financial statements prepared by his accountant and the books and records on which they were based-and Respondent failed to in- troduce independent evidence controverting it. 6 Since Cira was under no obligation to prove he had discharged any "duty to mitigate" the loss caused by the Respondent,' whereas the Respond- ent did have the burden of proving the un- reasonableness of Cira's efforts, there was no necessity for Cira to introduce corroborative evidence of the amount of time he spent in self-em- ployment, as the Trial Examiner mistakenly con- cluded. Nor would the fact that "corroboration of such objective facts would presumably have been easy to provide"8 shift the burden of producing them to Cira (or the General Counsel).9 As stated by the Fifth Circuit in N.L.R.B. v. Mooney Aircraft Corp., 366 F.2d 809, 813: "The cases are unanimous that the Employer must establish these defenses by a preponderance of the evidence. N.L.R.B. v. Miami Coca-Cola Bottling Co., supra [360 F. 2d 569]: N.L.R.B. v. Mastro Plastics Corp., 2 Cir. 1965, 354 F.2d 170; N.L.R.B. v. Brown & Root, Inc., supra [311 F.2d 447 (C.A. 8)]." That Cira may have spent less than full time at the used car business while searching for another source of business in October 1964, after he had been informed that the lot at St. Paul Street had been sold and would no longer be available for rent, does not in any way detract from a finding that he was engaged in full-time self-employment. The time spent by an entrepreneur in seeking business opportunities is in these circumstances necessarily related to his self-employment.10 On the record in this case, the failure of Cira to operate his used car business at a 'profit, or to in- crease its revenues after his discharge, furnishes no support for a finding that he did not devote his full time to the business. As the First Circuit said in en- forcing the Board's backpay determination of two self-employed auto mechanics in Cashman Auto Co.; v. N.L.R.B. 223 F.2d 832, 836 (C.A. 1) "But the principle of mitigation of damages does not require success; it only requires an honest good faith effort . . ." We cannot find, because the revenues from the used car business amounted to $3,256 in approximately 9 months of 1964, and that $1,948 of this sum was earned in the 6 months between April 18 and October 15, that Cira's sworn and uncontradicted testimony that he devoted his full time to the operation of his used car business after discharge must be disregarded, and a finding made that he did not act with reasonable effort to minimize his wage loss.11 There is a failure here to show that Cira acted "unreasonably or wil- fully" unless those words are to take on a meaning not previously ascribed to them.12 We find contrary to the Trial Examiner, moreover, that Cira is entitled to backpay from Oc- tober 15, 1964, until September 11, 1965. During this period it is not questioned that Cira was en- gaged in full-time self-employment, and, as noted above, a claimant in that category need not seek other employment. The Trial Examiner's inference that Cira's full-time operation of the service station demonstrated a withdrawal from the labor market is inconsistent with out settled view that full-time self-employment is not tantamount to such a withdrawal.13 The statements by the Examiner that the operation of the service station imposed such responsibilities upon Cira that he would not have accepted reinstatement with Respondent are not in the nature of findings of fact. Rather they are no more than an expression of her views, which differ from our own, that self-employment, unlike other employment, represents as a matter of law a withdrawal from the labor market. We reaffirm our Trial Examiner's Decision under "Findings and Conclusions " 6 Cf. MJ McCarthy Motor Sales Co, 147 NLRB 605, 615-618 (Mar- zana). 7 5 Corbin Contracts, 1039, 5 Williston, on Contracts §§ 1353, 1359, (rev ed , 1937), Contracts Restatement §336, commented to subsec. (1); 22 Am. Jur. 2d article "Damages," § 71 at 106. 8 Trial Examiner's Decision, under "Findings and Conclusions." 9 Fisher Construction Co. v Lerche, supra, 510, Realty Acceptance Corp. v. Montgomery, 6 F. Supp. 593, affd. 77 F.2d 762 (C.A. 3), cert. denied 296 U.S. 390, rehearing denied 296 U S. 662 11 See Cornell v T.V. Development Corp, supra, where at the time of trial the plaintiffs self-employment had amounted principally-if not sole- ly-to his efforts to become self-employed-". A he proof shows that the plaintiff was borrowing funds to form a corporation for the purpose of going into the electronic business . At the time of trial, the corporation had no bank account, it owned no assets; and the plaintiff received no employ- ment income after his discharge , but did receive $600 in unemployment insurance payments." 215 N.E. 2d at 352. 11 In this connection, compare the rather stringent standard of proof required in seeking recovery for wages under a state statute which was determined to be penal in nature - Standard Fruit & Steamship Co. v. Hampton, 233 F.2d 782, 783 (C.A. 5) By the same reasoning, to penalize Cira by forfeiting all backpay due him for a period of 6 months would seem to require more clearcut proof than appears in this record. 1z Our finding that the Respondent failed by a preponderance of the evidence to sustain its burden of proving that Cira had failed to act reasonably in lessening the loss caused by it makes it unnecessary to con- sider the effect of the telephone call received at his home by his wife from the New York State Employment and Service "two or three weeks" after April 20, 1964, when he registered for unemployment benefits. But in any event a person is not required to look for other employment while em- ployed, even though that employment may be at a rate of pay less than that from which he was discharged. East Texas Steel Castings Co., 116 NLRB 1336, 1344-45 (Bogan). Further, it was not shown that the call was in connection with a job offer, that the job, if any, was substantially equivalent to the one from which he had been discharged unlawfully, or that it was a job for which Cira was qualified. See Arduini Manufacturing Corp, 162 NLRB 972 (Gibeault). It is clearly within the Board's discre- tion not to consider "remote and speculative claims by employers .. (Phelps Dodge Corp v. N L R B., 313 U.S 177, 199). 1" E.g., Brown and Root, Inc, 132 NLRB 486,500 HEINRICH MOTORS, INC. 785 rule that self-employment is not the equivalent of a willful loss of earnings, but is to be treated as other interim employment.14 Nor do we find the Trial Ex- aminer's conclusion to be supported by Cira's refusal of the eventual offer of reinstatement. Neither alone nor in the context of self-employment is this refusal probative of the prior situation.15 Accordingly, we shall order that Respondent make Cira whole for any loss of earnings resulting from its discriminatory discharge for the period from April 18, 1964, to September 11, 1965. 2. As we have determined that Respondent has a backpay obligation to Cira, we must consider a procedural issue raised by Respondent. Respondent made a timely request of the General Counsel to permit Board Agent Hyman Dishner, compliance officer in Region 3, to testify at the hearing.16 Respondent also served a subpena upon Dishner. Respondent thereby sought evidence as to the method of computing gross backpay an as to any statement by claimant Cira to Dishner that reinstatement with Respondent was not desired. The General Counsel granted permission to Dishner only as to the former matter. When the issue came before the Trial Examiner upon the General Counsel's petition to revoke the subpena served upon Dishner, the issue as to gross backpay had been mooted by agreement as to the correctness of the grossJbackpay figure used by the General Counsel. The Trial Examiner revoked the subpena, insofar as it sought evidence from Dishner as to statements by Cira, on the ground that the General Counsel had not granted permission for Dishner to testify on this issue and that therefore Section 102.118 of the Board's Rules required her to revoke the subpena.17 In her Supplemental Deci- sion, however, the Examiner concluded that she had erred in revoking the subpena in reliance upon Section 102.118,18 but found her ruling nonprejudi- cial as she was awarding no backpay to Cira. We consider it unnecessary to pass on whether the Trial Examiner erred in revoking the subpena on the strength of Section 102.118. In our view, the subpena should have been revoked in any event upon another ground urged by the General Coun- sel, and that is the irrelevancy of the evidence Respondent sought from Dishner. We hold that whether or not Cira told Dishner that he did not desire reinstatement was wholly irrelevant to the is- sues in this case. Section 10(c) of the Act expressly empowers the Board to order "reinstatement of employees with ... backpay;" and as the Supreme Court has noted, "Reinstatement is the conventional correction for discriminatory discharges."19 Thus, our remedial order in this case provides that Respondent must offer Cira reinstatement and make him whole for any loss of earnings suffered until the offer of rein- statement is made. The fact that a remedial offer of reinstatement may be declined, particularly where, as here, it is made long after the discriminatory discharge, does not diminish the importance of the offer in our remedial scheme. Reinstatement is basic to our remedy here, for "to limit the sig- nificance of discrimination merely to questions of monetary loss to workers would thwart the central purpose of the Act."20 Respondent's offer of rein- statement was required to comply with our order and to remedy its discrimination by demonstrating to employees that their rights will be vindicated. To toll Respondent's backpay obligation prior to its offer in September 1965 would eliminate the practi- cal incentive for compliance with our order. We note initially that a statement by Cira to Dishner that reinstatement was not desired could not be relevant to indicate a wilful loss of earnings. Furthermore, Respondent does not suggest that its backpay obligation should be tolled because it re- lied in any way upon Cira's statement and delayed its offer of reinstatement. Indeed, there is no sug- gestion that such a statement ever came to Re- spondent's attention. As to whether Cira's alleged statement to Dishner would constitute a waiver of his right to reinstatement, we consider it clear that such a state- ment prior to Respondent's offer could not manifest "an unequivocal resolve not to accept reinsta- tement."21 Both in order to preserve the public in- terest in Respondent's meaningful compliance with our order and to safeguard a discriminatee's rights, we consistently have discounted statements, prior to a good-faith offer of reinstatement, indicating un- willingness to accept reinstatement.22 We are mind- ful of the fact that such statements may reflect only a momentary state of mind that is subject to change; prior to an offer of reinstatement, such statements 14 E g., Mastro Plastics Corporation, 136 N LRB 1342, 1350 15 Brown and Root, Inc., 132 NLRB 486, 500, 534 is Section 102.118 of the Board Rules and Regulations provides, as here relevant, that no Board employee "shall produce ... any files, docu- ments, reports, memoranda, or records of the Board or testify in behalf of any party to any cause pending . . before the Board ..." without the written consent of the Board or General Counsel. Unless otherwise directed, any employee served with a subpena covering Board records of information is to move to revoke such subpena on the ground of privilege. 17 See footnote 16, supra 18 The Trial Examiner appears to have viewed the Board's Decision in J. H. Rutter-Rex, 158 NLRB 1414,-which issued after the hearing in this case-as an acquiescence by the Board in General Engineering, Inc. v N.L.R.B., 344 F.2d 367 (C.A. 9), remanding 147 NLRB 936. The court there held that Section 102.118 was not in itself a valid basis for the revo- cation of a subpena upon a Board agent in a backpay proceeding The court stated that such revocation could only be predicated upon a ground recognized in a Federal district court trial. 1q Phelps Dodge Corporation v. N.L.R B., 313 U.S. 177, 187 20 Id., at 193 21 Arista Service, Inc., 127 NLRB 499,500 22 E.g., Leeding Sales Corp., 155 NLRB 755; Hatch Chevrolet, 136 NLRB 284, 293; Borg-Warner Controls, 128 NLRB 1035, 1044; Burnup & Sims, Inc, 157 NLRB 366. 786 DECISIONS OF NATIONAL LABOR RELATIONS BOARD are in the nature of answers to a hypothetical question; and the discriminatee's expression "may have been made in the heat of dissatisfaction with his treatment by Respondent."23 That Cira's alleged statement was made to a Board agent during compliance discussions does not convert it into a waiver of reinstatement. 24 To the contrary, the fact that Cira's alleged statement was made to a Board compliance officer is itself good reason to find it incompetent as well as irrele- vant for evidentiary use.25 Board experience in- dicates that it is not unusual for an employer to seek settlement of his compliance obligations by offering backpay if reinstatement is waived.26 Should litiga- tion ensue a compliance officer has explored the necessity for reinstatement with the discriminatee, matters developed in such conversations cannot be relevant in determining the employer's obligations. The pressures here upon the discriminatee to waive his rights are obvious and his situation is markedly different from one where he is confronted with a bona fide offer of reinstatement. Apart from the un- fairness to a discriminatee in considering state- ments made to compliance officers in such a con- text, the use of such statements would disrupt set- tlement procedures, as the discriminatee's attitude could not be readily explored if this could only be done at the risk of having settlement views ex- pressed by the discriminatee used as a basis. to eliminate a respondent's need to remedy his dis- criminatory conduct whether or not a settlement is effected. 3. Respondent has excepted to the Trial Ex- aminer's treatment of vacation pay for Edward Knaak. If Knaak had remained in Respondent's em- ploy he would have been granted a vacation with pay, while at his subsequent place of employment he did not receive paid vacations. In calculating the backpay due Knaak in the quarters during which vacation pay is involved, the Trial Examiner backpay and the interim earnings totals. To the net backpay for each of those quarters, she added the 2 weeks' vacation pay Knaak would have received had he remained with Respondent. In like manner, the difference between the $25 Knaak would have gotten as a bonus from Respondent and the $15 he received at his interim employment was added to the net backpay. We agree with the Trial Examiner, for the reasons set forth in her Decision, that vacation pay must receive special treatment in determining net quarterly backpay due. However, we disagree with her method of computing the vacation pay entitle- ment of the discriminatees. The Trial Examiner added the 2 weeks' vacation to net quarterly backpay due. The effect of this is to grant the dis- criminatee vacation pay even in quarters in which his interim earnings exceed his gross backpay plus vacation pay. We believe this to be unwarranted. Accordingly, we shall calculate the backpay due Knaak and Cira by providing for vacations through deducting from net interim earnings 2 weeks' pay. The bonus amounts are included in gross backpay and net interim earnings. SUPPLEMENTAL ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respond- ent, Heinrich Motors, Inc., Rochester, New York, its officers, agents, successors, and assigns, shall pay to the employees involved in this proceeding as net backpay the amounts, including interest at 6 percent per annum from the date of the Board's Decision'27 but minus the tax withholding required by Federal and State laws, set forth below. Anthony Cira-$4129.5228 eliminated 2 weeks' pay from both the gross Edward Knaak-$152.88 29 23 Borg-Warner Controls, supra missible in a subsequent litigation 4 Wigmore , Evidence, § 1071 (3ed 24 E.g., Burnup & Sims, Inc., supra; The Triple AAA Water Co., 142 1940). NLRB 803, 810. To the extent that English Freight Company, 67 NLRB 26 E.g , Burnup & Sims, Inc., supra 643, is inconsistent with our holding, we hereby overrule it 27 Local 138, International Union Of Operating Engineers, 151 NLRB 25 Positions taken for settlement purposes are of course generally mad- 972. 23 Year and Quarter Weekly Wage Weeks of Work in Quarter Gross Backpay Net Interim Earnings Net Backpay Due 1964 - 2 $74.04 10 $740.40 $159.46 $580.94 1964- 3 80.92 13 1051.96 -.0- 1051.96 1964- 4 80.92 11 902.62* 169.38 733.24 1965- 1 80.92 13 1051.96 281.38 770.58 1965- 2 80.92 13 1051.96 140.90 911.06 1965- 3 80.92 11 890..12 988.02** 81.74 * Includes the $12.50 bonus that Cira would have received from Heinrich. ** Deduct $179.64, representing 2 weeks' vacation pay. 29 After providing for vacations by suncontracting 2 weeks from Net Interim Earnings, the Net Interim Earnings exceed Gross Backpay for the third quarter of 1965 so that there is no backpay due for that quarter; the Trial Examiner awarded $242.64. The amount due Knaak totals $545,01, from which is deducted the $392.07 already advanced by Respondent. HEINRICH MOTORS, INC. TRAIL EXAMINER'S SUPPLEMENTAL DECISION STATEMENT OF THE CASE JOSEPHINE H. KLEIN, Trial Examiner: On July 23, 1965, the Board issued its decision and order finding that Heinrich Motors, Inc., Respondent, had violated Section 8(a)(3) of the Act by discriminatorily discontinuing the night shift of its automobile service department. The Board ordered the reinstatement with backpay of nine employees. Respondent did not seek review of the Board's deci- sion. Pursuant to agreement reached between Respond- ent and a representative of the General Counsel, Respondent offered reinstatement to all the dis- criminatees and paid eight of them agreed amounts of backpay. Agreement could not be reached as to the amount of backpay due Anthony Cira, one of the dis- criminatees, and it was stipulated that a Backpay Specifi- cation and Notice of Hearing thereon was to be issued by the Regional Director. (The stipulation of the parties is quoted and discussed infra.) On February 21, the Regional Director issued a Backpay Specification and Notice of Hearing claiming backpay for Cira and for Edward Knaak, another of the discriminatees covered by the Board's order. In its answer to the Backpay Specification , Respondent contended that nothing was due Cira because he had been guilty of a willful loss of earnings . Respondent pleaded that nothing was due to Knaak because, pursuant to the agreement reached with the General Counsel, Respond- ent had paid him "$392.07 in payment of all back pay owing to" him. A hearing was held before the duly designated Trial Examiner in Rochester, New York, on April 7, 1966. At that time, without objection , the backpay specification and Respondent's answer were amended . Both parties waived of al argument at the end of the hearing. Briefs have been received from both parties and have been fully considered by the Examiner. Before the hearing, Respondent addressed a request to the General Counsel for permission to Hymen Dishner, compliance officer in the Board's Regional Office, to ap- pear and produce records and testify at the hearing. Respondent also served a subpeona duces tecum on Mr. Dishner. The General Counsel filed a petition to vacate the subpena. That petition was referred to the Trial Ex- aminer for disposition. The petition, along with Respond- ent's attempts to call Mr. Dishner as a witness, is discussed infra. Upon a consideration of the entire record' in this sup- plemental proceeding, including consideration of the briefs filed by the parties, the prior decision of the Board, and observation of the witnesses while they were testify- ing, the Examiner makes the following: ' The General Counsel's unopposed motion to correct the transcript is granted. L There was no testimony as to whether he worked either for Respond- ent or at his used car business on Saturdays . It seems unlikely, however, that Respondent's night service department operated on Saturdays FINDINGS AND CONCLUSIONS 787 Anthony Cira Cira worked as an automobile mechanic on Respond- ent's night shift from early in February 1964 until April 18, 1964, when the night shift was abolished under cir- cumstances which the Board has found constituted a violation of Section 8(a)(3) and (1) of the Act. While so employed by Respondent, he also conducted a used car sales business which he had been operating since some time in 1962. He worked for Respondent from 5 p.m. to 1 a.m. and at the used car sales business from 10 a.m. to 3 p.m.2 He testified that , upon being discharged by Respondent, he extended the time spent on his used car business to the hours of 8 a.m . to 5:30 p.m. the same hours which he had maintained before going to work for Respondent? He also testified that, after leaving Re- spondent's employ, he changed the nature of his own business by adding repair services. He testified that "a couple of weeks after he left Respondent's employ," he posted a sign on his business premises reading "tuneups and general repairs" and solicited business by telling "people about his starting automobile repairs." Although Cira testified unequivocally that he had not been providing repair services before he was discharged by Respondent, his profit and loss statements and a stipu- lation of facts reached at the hearing show that in the first quarter of 1964 (which included most of the time he worked for Respondent) his gross income from the busi- ness consisted of $768.29 for repairs and $540 for used car sales. In the third quarter of 1964, the only full quarter during which he operated this business after being discharged by Respondent, his gross income was $600 from sales and $314.68 from repairs. On April 20, 1964, Cira registered with the New York State Employment Service . About 2 or 3 weeks later, the Service telephoned him. Since he was not at home at the time, the Service representative told his wife to have Cira visit the Service's office . Although his wife relayed the message, he never did call. He testified that he "intended to call them but it slipped [his] mind." When asked why he had registered with the State Employment Service, he answered: I might have gotten a job similar to the one I had over to Heinrich's nights ... And he explained his conceded failure to make any other attempt to secure employment as follows: Well, I was - I went into like repairs, the repair busi- ness and it seemed to be doing all right as of then. And maybe unemployment would have called me again, I don't know. On cross-examination he admitted that he "thought [he] should have been working some place else besides" his own business and stated that he "was waiting for the unemployment, but ... missed their call." 3 Concerning his business hours before he was employed by Respond- ent, Cira testified : " I had all hours because I used to bring cars South to the wholesale auction , too, so I had no specific hours . But on regular days, it was about from 8 to 5:30." 788 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Profit and loss statements covering the period January 1, through October 15, 1964, show that business sustained a net loss in each quarter. Cira received no sa- lary or other compensation from the business.4 The business was conducted on rented premises. At some unspecified time, probably in the first half of Sep- tember, Cira was notified that the premises were to be sold and he would have to vacate. He then made arrange- ments to take over management of a Sinclair gasoline ser- vice station. He testified that he originally anticipated winding up his used car and repair business sometime in November but the sale of the premises occurred sooner than expected, with the result that he terminated the busi- ness hurriedly on October 15 and commenced operation of the service station the next day. He conceded that in September he started to take time off from his used car sales and repair business to make arrangements for taking over the service station. However, he minimized the amount of time so used and testified that actual prepara- tions for moving to the gas station were "only a question of about three days." No testimony was introduced as to the nature of Cira's ownership or propriety interest in the service station, the method of its financing, etc. However, profit and loss statements for the period October 15, 1965, indicate that the premises are rented but there was no evidence as to the duration of the lease. Cira has no paid employees. He testified that he works at the service station from 7 a.m. to 8 p.m. on Mondays through Fridays and from 8 a.m. to 6 p.m. on Saturdays. Net profits were realized from the service station for all periods up to September 11, 1965, when Cira was offered reinstatement by Respondent. He rejected the offer of reinstatement. The original Backpay Specification stated that Cira was "unemployed" during the second and third quarters of 1964 and "self-employed" during the remainder of the backpay period. At the beginning of the hearing, how- ever, the Specification was amended to show him as "self-employed" during the entire period. At the outset of the hearing, the parties stipulated also as to the accuracy of the "gross backpay" computations contained in the Backpay Specification as amended at that time.5 Cira's net losses from the automobile sales and repair business and his net profits from operation of the service station, as shown in the amended Backpay Specification, were supported by his records and were not controverted at the hearing.6 In his brief, the General Counsel contends that Cira's expansion of the nature of his business and extension of the hours of operation serve to bring him within the sub- stantial body of Board precedent that " a discriminatee who devotes his full time to self-employment is entitled to back pay, the amount to be computed by deducting his net profits from his gross back pay." Armstrong Tire & Rubber Co., 119 NLRB 353, 356, enforcement denied in pertinent part 363 F.2d 680 (C.A. 5). For the reasons hereafter set forth, the Examiner concludes that Cira's postdischarge activities do not constitute due diligence within the "self-employment" rule developed in prior Board decisions. The undisputed evidence shows that at all times-be- fore he went to work for Respondent, while he was work- ing for Respondent, and after he was discharged-Cira's business consisted of both used car sales and automobile repairs. Cira's testimony was vague and inconsistent throughout. His testimony that he expanded his hours of operation was uncorroborated although corroboration of such objective facts would presumably have been easy to provide. His volume of business did not increase after he left Respondent's employ. Indeed, his gross sales were highest in the first quarter of 1964, during which he was working for Respondent.7 On direct examination he stated that he had worked his full expanded hours until he took over the gas station operation in October. On cross- examination, however, he conceded that for some time, never clearly defined, he had been devoting time to secur- ing a new business. On all the evidence, the Examiner finds that Cira did not change the nature or extent of his self-employment to compensate for the loss of income from Respondent. Citing Harvest Queen Mill & Elevator Co., 90 NLRB 320, 327, as "particularly applicable," the General Coun- sel argues that Cira chose self-employment over seeking other employment expecting "to improve his financial position." The present case is entirely different from Harvest Queen. In that case the discriminatee had not previously been self-employed. It was only when he was discriminatorily fired by the respondent that he decided to go into a venture with his father because, as he testified, "he expected to make more money." In the present case, Cira had been self-employed for about 2 years before he went to work for Respondent, which was only about 2 months before he was discharged. At no time did he testify that he thought enlarging and concen- trating on his own business would be more profitable than taking outside employment to replace his job with Respondents Had he thought that "expansion" of his own business was practicable and would be profitable, presumably he would not have gone to work for Respond- ent, as he had only about 2 months earlier. Any present claim that he thought total self-employment would be more profitable than partial self-employment supple- mented by an outside job is inconsistent with his testimony that he registered with the New York State " He testified that he owned three houses and lived on the income from them during this period 5 Respondent withheld agreement as to the method of computing vaca- tion pay if any was to be allowed This matter is discussed infra 6 The Backpay Specification listed such net profits in their entirety as "net interim earnings " and allowed them as a credit to Respondent in computing net backpay due" for the first, second, and third quarters of 1965 Assuming, contrary to the Examiner's holding, that any backpay was due for the period in question, the net profits should not have been credited as "interim net earnings" in their entirety , but should have been apportioned and credit should have been given to Respondent only for such portion thereof as could be found to have resulted from his "non-em- ployment by Respondent " Rice Lake Creamery Co, 151 NLRB 1113, 1114, fn 4, enfd in part 365 F 2d 888 (C A D C ) The Examiner further notes that the tabulation of backpay due Cira in the Backpay Specification contains an apparently inadvertent error in fail- ing to subtract the stated "net interim earnings" from the "gross backpay" shown for the fourth quarter of 1964 On the General Counsel 's method of computation "net backpay due" for that quarter should be $882.58 rather than the $1,051 96 listed ' His profit and loss statements for the automobile sales and repair busi- ness show gross income of $ 1,308 29 in the first quarter of 1964, $689 86 in the second, $914 68 in the third, and $342 65 in the first half of Oc- tober " The closest he ever came was to adopt the General Counsel's state- ment in a leading question that he "hoped to make a go of his own busi- ness HEINRICH MOTORS, INC. 789 Employment Service for the purpose of securing works and with his concession that he thought he should have outside employment. As said in N.L.R.B. v. Cashman Auto Co., 223 F.2d 832, 835 (C.A. 1), enforcing 109 NLRB 720, "There is no essential incompatibility between operating a business of one's own while at the same time seeking employment." In part of his testimony at least, Cira testified that he pursued this dual course. Yet the only step he took toward finding a job was initial registration with "the unemployment." Although the sub- sequent telephone call by the Employment Service was not affirmatively shown to have been in connection with a job offer, Cira's failure to return the call bespeaks a total disinterest in employment, particularly when his testimony makes it clear that he believed or assumed that the call related to a job opportunity. His initial application to the Employment Service, with no followup or other job hunt was not sufficient to establish due diligence. Southern Silk Mills, Inc., 116 NLRB 769, 770-771, en- forcement denied 242 F.2d 697 (C.A. 6), cert. denied, 355 U.S. 821; American Bottling Co., 116 NLRB 1303, 1306-07; N.L.R.B. v. Pugh and Barr, Inc., 207 F.2d 409 (C.A. 4). The General Counsel's present position, contrary to much of Cira's testimony, 19 is that Cira chose total self- employment as the means of mitigating his damages This being so, the General Counsel argues, Cira was not obligated to seek employment. Of the cases cited in the General Counsel's brief, Rice Lake Creamery Co., 151 NLRB 1113, enfd. in pertinent part, 365 F.2d 888 (C.A.D.C.), is superficially most analogous to, but clearly distinguishable from, Cira's. 11 In Rice Lake, the dis- criminatee, instead of seeking employment upon discharge by the Respondent,12 expanded his existing business and took on additional new enterprises. The Ex- aminer has hitherto found that Cira did not expand the scope of his self-employment when he was discharged by Respondent. Further, the discriminatee in Rice Lake, unlike Cira, did not reject a good-faith offer of reinstate- ment. While the Board had often ruled that a dis- criminatee is not required to make a decision as to rein- statement until he has received a bona fide offer13 and ul- timate refusal of reinstatement is not conclusive as to earlier availability, 14 the Examiner does not read the Board decisions as precluding consideration of a refusal of reinstatement as relevant in a backpay case to cor- roborate other evidence indicating that, as a matter of fact, a discriminatee had previously withdrawn from the labor market. The Examiner discredits Cira's testimony that it was not until he was offered reinstatement on September 11, 1965, that he decided he did not want it. He explained his failure to return the call of the State Employment Service about 2 weeks after the discharge in part by stating that "the repair business ... seemed to be doing all right as of then." The Examiner construes his testimony as manifesting a clear decision at that time to withdraw from the labor market and to devote his entire energies to self- employment. See Deena Artware, Inc., 112 NLRB 371, 378, enfd. 228 F.2d 871 (C.A. 6), cert. denied, 345 U.S. 906. In any event, Cira certainly removed himself from the labor market at least as early as October 1964, when he took over operation of the gasoline service station. His hours in this operation were such as to have precluded his having worked for Respondent, or anybody else, in either a day or a night shift.'5 While the burden of proof is on Respondent to establish that Cira was not entitled to backpay, the Examiner believes that that burden has been met by the undisputed facts of the service station opera- tion. Those facts warrant an inference that Cira was unavailable for employment,' since it is unlikely that he would have abandoned this new business or entrusted it to somebody else. In the Examiner's opinion, this in- ference is strengthened by his refusal of Respondent's offer of reinstatement about 11 months later, when the service station operation was presumably fairly well established and could probably more readily be entrusted to somebody else. Having removed himself from the labor market, Cira was not entitled to backpay. Rutter- Rex Manufacturing Co. (Dorothy B. Rubit), 158 NLRB 1414, 1420; English Freight Co., 67 NLRB 643, 644, 658. The fact that Cira's postdischarge activities did not produce as much income as he had been receiving from Respondent does not affect the result, since withdrawal from the Respondent's labor market disentitles an em- ployee to backpay irrespective of the success or failure of his operations. Underwood Machinery Co., 95 NLRB 1386, 1399. On all the evidence, including Cira's demeanor while testifying, the Examiner concludes that during the entire backpay period Cira was guilty of willful loss of earnings 9 He indicated that he hoped he might secure night work. Manifestly, daytime work would have been incompatible with either his automobile sales and service business or his service station operation . His failure to make any genuine effort to secure night work obviates the necessity of considering any potential problems that might have arisen under the Board's order, which gave Respondent the option of offering the dis- criminatees reinstatement in its day shift or reestablishing the night shift. to J. H Rutter-Rex Manufacturing Co., 158 NLRB 1414, 1420: "We find that [the discriminatee's] testimony, which at best is inconsistent, is insufficient to warrant a finding that she was diligent in her search for work during the backpay period. Accordingly, we find that she incurred a willful loss of earnings and is not entitled to any backpay." 11 In Mastro Plastics Corp., 136 NLRB 1342, enfd. 354 F.2d 170 (C A. 2); Brown & Root, Inc, 132 NLRB 486, modified 311 F.2d 447; and N.L.R .B. v. Cashman Auto Co., supra, 223 F.2d 832, upon which the General Counsel relies, the "self-employed" discriminatees had made diligent efforts to secure employment. 12 He admitted that he registered with the State Employment Service solely for the purpose of securing unemployment compensation. Cira, on the other hand, as previously observed, testified that he registered for the purpose of securing employment. 13 East Texas Steel Castings Co., 116 NLRB 1336, enfd 255 F.2d 284 (C.A. 5); Leeding Sales Co., 155 NLRB 755, 756-757 ; Burnup & Sims, Inc., 157 NLRB 366. 14 Brown & Root, Inc., supra, 132 NLRB at 534. 15 Availability for part-time employment would not alter this conclu- sion. Mastro Plastics Corp., supra, 136 NLRB at 1351. 308-926 0-70-51 790 DECISIONS OF NATIONAL LABOR RELATIONS BOARD or had removed himself from the employment market. Accordingly, he is not entitled to any backpay. 16 Edward Knaak Edward Knaak was employed by Respondent from July 1963 until April 18, 1964, when, as a member of the night shift, he was discriminatorily discharged. He was offered reinstatement on September 1 1 , 1965. He declined the offer because he was then satisfactorily em- ployed elsewhere. According to the Backpay Specification, net backpay due Knaak is $582.88 for the second quarter of 1964; $181.21 for the third quarter of 1964; $111.16 for the fourth quarter of 1964; $242.64 for vacation pay in the third quarter of each of the years 1964 and 1965; and $10 in bonus pay for the fourth quarter of 1964. As a total defense to the claim for backpay for Knaak, Respondent pleads, in effect, an accord and satisfaction arising from a settlement agreement and payment of $392.07 pursuant thereto. As previously stated, the Board's original order in this case required reinstatement with backpay for nine employees. Respondent did not seek review of the Board's decision. It offered reinstate- ment to all nine and agreement was reached between Respondent and personnel in the Board's Regional Office concerning the amount of backpay due to eight, including Knaak. Respondent made payments pursuant to such agreement. A formal stipulation was then executed by Respondent and the General Counsel for the Board.17 The stipulation, in its entirety, reads as follows The following matters are stipulated by and between counsel for Respondent and the General Counsel for the National Labor Relations Board: 1. Respondent has no objection [to] the Board's Order of July 23, 1965; 2. Respondent has not been able to reach an agree- ment with the General Counsel as to the amount of backpay due Anthony Cira under the terms of said Order; 3. The Regional Director for the Third Region may issue an order setting a date for hearing before a Trial Examiner to determine the amount of backpay due Anthony Cira; to In view of the decision here reached, the Examiner 's exclusion of evidence concerning events immediately following the discharge is academic However, since the Board may not agree with the Examiner's substantive decision, and Respondent has moved to reopen the record, a brief discussion may be in order Respondent sought to show that when the night shift was abolished, Respondent asked Cira to come in the following Monday, when Respond- ent "would try to make a place for him " Respondent contends that Cira's failure to visit Respondent until later in the week , when he ap- peared to get his severance pay, would provide further evidence that Cira did not want reinstatement but rather had withdrawn from the labor mar- ket The Examiner here reaffirms her ruling excluding the proffered evidence and would deny the motion to reopen for the receipt of such evidence Cira was under no obligation to discuss anything with Respond- ent short of an unconditional offer of complete reinstatement (Monroe Feed Store, 122 NLRB 1479, 1480), which Respondent freely concedes was not made Cira was not obliged immediately after his discharge to 4. Following the report of the Trial Examiner is- sued after such hearing, the matter will be sub- ject to review in due course by the Board. In the event judicial proceedings are thereafter neces- sary to enforce or to review the Board's backpay determination, the only issue before the court will be the validity of the backpay computation as Respondent concedes that in all respects the Board's Order of July 23, 1965 is valid and proper. So far as appears from the present record, the agreements as to the amounts paid to the eight discriminatees other than Cira were not reduced to writing in any formal way. Were we concerned with private litigation between Knaak and Respondent, there would be an accord and satisfaction precluding the present claim for additional backpay for Knaak. However, in backpay proceedings to implement Board orders in complaint cases, "it is well settled that only formal approval by the Board will make a settlement binding upon the parties." Decker Truck Lines, 139 NLRB 65, 66, enfd. 296 F.2d 338 (C.A. 8). As said by the Court of Appeals for the Fifth Circuit in Armstrong Tire & Rubber Co., supra, 263 F.2d 680, 682, . the Act vests in the Board itself the sole authority to determine the amount of backpay due an employee who has been discriminated against ... and this authority has not been and could not validly be delegated to subor- dinates so as to bind the Board in circumstances of this kind." In its brief, citing Sherry & Gordon Co., 107 NLRB 13, Respondent attempts to invoke a form of equitable estoppel against the Board. Sherry & Gordon, however, involved a complaint proceeding in which a Board agent had erroneously told the respondent that the Regional Director had approved the charging party's withdrawal of the charges upon the respondent's taking certain action. The Regional Director had authority to permit withdrawal of the charges without approval of the Board.1' Here, however, the Board's original order required reinstatement with full backpay and nobody was authorized to "settle" for anything less than full backpay or to determine conclusively how much backpay was due. The Examiner concludes that the quoted stipulation and the payment by Respondent of $392.07 to Knaak as backpay do not preclude the present claim for additional backpay due to Knaak., The $392.07 will, however, be credited against any amount here found to be due Knaak. Robinson Aviation, Inc., 99 NLRB 196, 197. consider "a lesser job," which were the terms in which Respondent's pre- sident was thinking Moss Planning Mill Co, 119 NLRB 1733, 1743-44, modified 256 F 2d 653 (C A 4). Cira' s declination of Respondent's in- vitation would not serve to establish that Cira would have refused rein- statement at that time Leeding Sales Co , supra, 155 N LRB at 757 The Examiner's substantive conclusion also renders moot Respond- ent's attempt to secure the testimony of Mr Hymen Dishner, com- pliance officer in the Board's Regional Office If the issue were not academic, however, the Examiner would reverse her rulings in this con- nection and would permit Respondent to question Dishner concerning any statements Cira might have made to the effect that he did not want reinstatement with Respondent English Freight Co, supra, 67 NLRB 643. See discussion infra i7 The stipulation was signed by a Deputy Associate General Counsel 18 Cf. Jackson Tile Mfg Co, 122 NLRB 764, 767, enfd 272 F 2d 181 (C.A 5), where the Board denied reinstatement and backpay to an em- ployee who had received payment pursuant to a settlement of a complaint proceeding HEINRICH MOTORS, INC. Absent the settlement, the Knaak case, as developed at the hearing, presents two substantive issues, which will be discussed in order: (1) Whether Knaak is chargeable with willful loss of earnings for the period between April 18, 1964, when he was discharged, and June 10, 1964, when he went to work for Keystone Auto Mart; (2) The proper method for computing the amount of backpay due for paid vacations which Respondent con- cedes that he would have been granted in the third quarter of 1964 and 1965 had he remained in Respondent's employ. t 9 (1) Although Respondent's answer to the Backpay Specification relied solely upon the "settlement" as a defense to the Knaak claim, at the hearing, without objec- tion, Respondent was allowed to amend its answer to add a "general denial" and the parties fully litigated the specific issue of whether Knaak had incurred a willful loss of earnings from the time of his discharge until he ap- plied for and secured employment with Keystone Auto Mart. After being discharged by Respondent, Knaak promptly registered with the New York State Employ- ment Service but never received any calls from the Ser- vice concerning job openings. He testified that he went to about six or seven gasoline service stations and observed them for a while. At those which appeared to have suffi- cient work for a full-time mechanic he discussed employ- ment possibilities. Although the record is not entirely clear, it appears that he received some offers from gasoline stations, but, according to Knaak's testimony, the highest pay offered was "$65 or a little over a week," as contrasted with the $111 average he had been receiv- ing from Respondent. Around the third week of May (approximately a month after he was discharged by Respondent) he went to Hall- man Chevrolet, an automobile sales agency at which he had worked in the past. He testified that he did not apply for work there, however, since one of the employees with whom he had previously worked told him that all the available mechanics' stalls were occupied, i.e., that there were no vacancies. Knaak stated that he also made inqui- ries of friends-"employees in other garages, and so forth" -concerning possible openings, but he supplied no details and no corroboration was presented. Within a week or two after he was laid off by Respond- ent, he received a telephone call from Mr. Memmel of Brown Chevrolet, where he had worked for about 5 months just before going to work for Respondent in 1963. At Memmel's request, Knaak said he would stop by for lunch soon but he did not do so. Memmel then called again about a week later, renewing his luncheon invitation and also stating that 1 wanted Knaak to return to work at Brown's. Knaak agreed to stop in, but again he did not do so. Memmel appears to have pursued the matter with additional calls, but Knaak never did visit Brown's. Knaak testified that he did not want to work for Brown's not only because it paid less than Respondent did, but also because the working conditions were bad. He maintained that the inefficient exhaust system and ex- tremely poor lighting in the old building in which Brown's was located constituted a health hazard. In the course of "' The vacation pay issue would also be presented by Cira's claim if it were not denied in Coto. There is no indication in the record (nor was any given off the record) as to why no "supplemental" claim has been made for vacation pay for any 791 cross-examining Knaak, Respondent produced and in- troduced into evidence a letter which Knaak had written to Compliance Officer Hymen Dishner of the Board's Regional Office on March 21, 1965. In this letter'20 Knaak said that he had not refused Brown's offer of em- ployment, "but [he] would let [Memmel] know of [his] decision." The letter to Dishner then proceeded: Having worked for Brown Chevrolet, from February 1963 to August 1963, prior to going to work for Heinrich's, I knew my earnings of $2,051.78 averaged out to less that $100 wkly, which would be less than I had been earning at Heinrich's. There was no guarantee, that I would be able to earn any more at Brown's than I had at the previous time they employed me: I knew Ed Memmel, and I was flattered that Brown's was willing to employ me for a second time, but I had to think of my family's welfare, so I decided to look further for the best offer I could get, in the quickest possible time. The letter to Dishner made no mention of working condi- tions at Brown's. On cross-examination, Respondent's counsel elicited testimony that Knaak had not gone to Brown's to discuss wages or to ascertain whether the lighting and exhaust systems had been changed or im- proved since his prior employment there. Knaak conceded that there were "may 25 or 30" car agencies in Rochester and a number of them had adver- tised in the newspapers for mechanics during the period in question. However, he did not apply for employment at any until June 8, 1964. On that day, in answer to newspaper advertisements, he applied to two car agen- cies-Fincher Chevrolet and Keystone Auto Mart. Keystone offered him a job on the spot. He accepted and started to work on June 10. On June 9, Fincher offered him a job, which he declined because of his commitment to Keystone. In explanation of his delay in applying for employment by an automobile agency, the type of establishment at which he had been working, Knaak said he "was a little bit leery to get into that" because he had been fired pur- portedly for being "non-productive" and "any of these garages around town ... want somebody that is produc- tive." This explanation is totally unconvincing and is dis- credited by the Examiner. Both the persistent offer by Brown Chevrolet and the alacrity with which Keystone and Fincher offered him employment when he applied ness." Neither his demeanor nor his testimony showed Knaak to be an abnormally shy or timid person. And he did not attempt to explain what overcame his "leeriness" in June, when he did apply to Keystone and Fincher. The Examiner also discredits Knaak's testimony that he made some investigation of employment possibilities with gasoline service stations. Such testimony was vague and totally uncorroborated. Further, with his long ex- perience as an automobile mechanic in the Rochester area, Knaak may be presumed to have known of the ap- parent wide difference in the wages paid to mechanics by service stations and car agencies. Thus, in the absence of of the other seven discrmunatees 20 The letter was in reply to one by Dishner dated March 19. Dishner's letter was not produced at the hearing. 792 DECISIONS OF NATIONAL LABOR RELATIONS BOARD any sound explanation for Knaak's failure to apply for employment with car agencies, the Examiner finds that, under the facts of this case, investigation of gasoline ser- vice stations would not constitute a diligent search for means to mitigate Knaak's damages. And the Examiner similarly finds that Knaak's vague testimony that he made inquiries of friends in the business does not establish any sincere, good-faith effort to secure employment. Respondent sought to call Dishner as a witness for ex- amination as to the basis for the "settlement" of Knaak's claim. The Examiner refused to permit Dishner to testify because the General Counsel had refused to grant per- mission for Dishner to testify except as to a matter which was no longer in dispute. (See discussion infra.) The General Counsel contends that Dishner could not be required to testify and that the opinion of a Board agent as to Knaak's diligence in seeking employment would have "no binding effect whatsoever" on the Board Assuming arguendo that these contentions were correct, the Examiner believes that the General ( ounsel's refusal to permit Dishner to testify concerning any facts known by him which entered into the computation of the backpay agreed upon would warrant an inference that the facts developed by the Board's investigation supported the uncontradicted testimony of Respondent's president that "it was [the] feeling of [Messrs. Heinrich, Lawler and Dishner] that [Knaak] had not made a serious at- tempt to find employment "21 Knaak himself provided corroboration for the inference that Dishner was aware of facts warranting this conclusion In this connection, on cross-examination, over the objection of the General Counsel, Knaak testified as follows A. . . . [Dishner] explained to me just how the figures were- Q. How the $392- A How it was figured out. Q. And what was that explanation , can you recall how he explained that to you? A. I can't for the life tell you how this sum was ar- rived at because I'm pretty good in mathematics and I couldn't come to this figure if I had sat down with a pencil and paper from now until doomsday. Q. Well, was any conversation had, Mr. Knaak, that you were not going to be paid backpay from the time of April 18th [to] the time you went to work for Keystone because you had not made a good faith ef- fort to obtain employment" A. Yes, there was some conversation like that Q. Will you tell us what that consisted of? A. I think maybe it was said how much time did you spend painting your house" * * * * * Q. Well, Mr. Knaak, are you saying that someone told you that because you painted your house and you didn't-what else was there mentioned, what else besides the fact that you painted your house dur- ing this period; what else was mentioned as the reason why you only received $392. A. I don't know. On all the evidence, including the demeanor of the wit- nesses, the Examiner finds that Knaak made no diligent effort to secure employment between April 18, the date of his discharge, and June 8, when he sought and secured employment with Keystone Auto Mart. He is, therefore, chargeable with willful loss of earnings and thus not enti- tled to any backpay for this period. Knickerbocker Plastic Co., 132 NLRB 1209, 1218. Except for its contention that the "settlement" ended the matter, Respondent does not dispute Knaak's entitle- ment to backpay for the period during which he was working for Keystone Auto Mart, where his earning rate was lower that it had been with Respondent. Excluding the period between April 18 and June 10, Knaak's gross backpay during the second quarter of 1964 would be $310.80 (2-4/5 weeks at $110). During that time he received $290 in wages from Keystone. Thus, for that quarter he would be entitled to net backpay in the amount of $20.80. However, during that period he received $217.12 from Respondent as severance pay. At the out- set of the hearing the Backpay Specification was amended to provide that the severance pay was deducti- ble from the net backpay due for the second quarter of 1964. Adopting this provision of the amended Specifica- tion,22 to which Respondent did not object, the Examiner finds that there is no backpay due Knaak for the first quarter of the backpay period; i.e., 1964-2. (2) The major issue between the parties concerns Knaak's claim for vacation pay for the third quarters of 1964 and 1965. Respondent concedes that if Knaak had remained in Respondent's employ he would have been granted a vacation with pay in the amount of $242.64 in each of these years. Respondent also concedes that Knaak did not receive paid vacations at his subsequent places of employment. The General Counsel has proposed a method of com- putation designed to give Knaak the benefit of his having worked through periods which would have been vaca- tions had Respondent not discharged him. For the third quarter of each of the years involved, the General Coun- sel has eliminated 2 weeks from both the gross backpay and the interim earnings calculations. To the net backpay for each of those quarters he has added the 2 weeks' vaca- tion pay Knaak would have received had he remained with Respondent. In this way, Knaak, rather than 21 According to the Backpay Specification , net backpay due Knaak was $875 25 exclusive of vacation pay and bonus Presumably the Board per- sonnel had some factual basis for the original decision to "settle" for $392 07. The Examiner believes that considerations of fairness dictate that the facts be made available to Respondent , even though the opinions or conclusions reached therefrom by Board personnel are not binding and probably would be inadmissible 22 The parties have not furnished any information concerning the basis for paying or computing severance pay it appears that both Cira and Knaak received a little more than twice their average weekly earnings, although the lengths of their employment differed substantially The Ex- aminer has some question whether severance pay constitutes interim earnings to be credited to the particular quarter in which it was paid Hearst Consolidated Publications, Inc., 10 NLRB 1299, 1316, allowing severance pay as a credit to the employer, antedated F W Woolworth Co, 90 NLRB 289, and thus sheds no light on the timing of the credit HEINRICH MOTORS, INC. 793 Respondent, secures the benefit of working time in ex- cess of that he would have worked for Respondent.23 Respondent contends that, because Knaak was em- ployed and receiving compensation throughout those periods, to grant him vacation pay in addition without crediting his actual interim earnings against his gross backpay would amount to double compensation and would be improper. In support of its position, Respond- ent cites Hill Transportation Co., 102 NLRB 1015, and Story Oldsmobile, Inc., 145 NLRB 1647. In the Ex- aminer's opinion, these cases do not support Respond- ent's contentions. In Hill the Examiner computed "gross backpay" for the entire period, added vacation pay, and then subtracted net interim earnings as com- puted under a formula (102 NLRB at 1030 (App. E)) and 1032 (App. I). In Story, the discriminatee's gross backpay had been computed by reference to the earnings of two other employees who had remained in the Re- spondent's employ. The Trial Examiner disallowed any addition for vacation pay, stating that the earnings of those employees used for computing the discriminatee's poten- tial earnings "must have included and vacation pay given them during the period." So far as appears, there was no evidence as to whether the discrimiii!atee had received a paid vacation at his subsequent employment during the backpay period, which would have been reflected in his interim earnings. In the present case the General Counsel has shown that Knaak did not receive any paid vacations at his new job. Thus, to credit Respondent with Knaak's total earnings without then adding vacation pay would be to give Respondent the "product of [Knaak's] working time in excess of the total time he would actually have worked for the Respondent." Underwood Machinery Co., supra, 95 NLRB at 1400. Respondent's method of calculation would be sound only if Knaak had not worked steadily throughout the periods involved, as was the situation presented in the Underwood case.24 The Examiner finds that backpay is due Knaak for va- cations as claimed in the Backpay Specification. There is no substantial disagreement as to the claim for $10 as a net bonus for the fourth quarter of 1964. This is based on the admitted facts that at Respondent's Knaak would have received a bonus of $25, whereas he received only $15 at Taylor's Chevrolet, where he was then work- ing. Thus, the following is a tabulation of the backpay due Knaak under the Backpay Specification, and the Ex- aminer's findings: 1964-3 $181.21 1964-3(vacation) 242.64 1964-4 111.16 1964-4 (bonus) 10.00 1965-3 (vacation) 242.64 Less: $787.65 Paid per settlement 392.07 Net due $395.58 "-3 The Examiner is not looking behind the Backpay Specification How- ever, it might well be proper to compute backpay due for the entire period on the basis of actual gross backpay and actual net interim earnings and then simply add the vacation pay, giving the discruninatee monetary com- pensation in lieu of the time off with pay which he was deprived of as a result of the Respondent's misconduct. This simple method of computa- tion appears best suited to the concept of vacation pay as "deferred wages." Mooney Aircraft, Inc., 148 NLRB 1057, 1059. The suggested method appears to have been used in Barberton Plastics Products, Inc, Subpena of the Board's Regional Compliance Officer In view of the Examiner's conclusions that both Cira and Knaak were chargeable with willful loss of earnings, Respondent's objections to the General Counsel's motion to revoke the subpena of Mr. Dishner and its motion to reopen the record are moot. However , since the Board may disagree with the Examiner's factual conclusions on the present record, some discussion may be in order. On March 25, 1966, Respondent addressed a request to the General Counsel for permission under Section 102.118 of the Board's Rules and Regulations for permis- sion to have Hymen Dishner, regional compliance of- ficer, appear and produce records and give testimony at the hearing . On March 28, 1966, Respondent served a subpoena duces tecum on Mr. Dishner. The General Counsel then filed a petition to revoke the subpena, which petition was referred to the Trial Examiner for disposition at the hearing. During the hearing, Respondent called Mr. Dishner, who was present throughout the hearing. Counsel for the General Counsel produced a letter dated April 5, 1966, by the General Counsel addressed to Respondent. It reads, in pertinent part, as follows: . permission is hereby granted for Compliance Officer Dishner to testify only with respect to the gross backpay computation in the instant case, and to produce those documents listed in the subpoena which are identifiable , in our possession, and rele- vant to the issues in the case. This permission, how- ever, is subject to the rulings of the Trial Examiner and the Board on a pending petition to revoke the subpoena as well as other appropriate objections which may be offered. Insofar as your request relates to permission for Compliance Officer Dishner to tes- tify concerning any other issue in this case or to produce interagency memoranda, working papers, or memoranda, reflecting thought processes contained in the Regional Office file, your request is hereby de- nied. Respondent's counsel stated that he sought to elicit from Mr. Dishner testimony (1) that Cira had early in- dicated that he did not want reinstatement with Respond- ent; and (2) that $392 in backpay previously paid to Knaak, at the direction of or with the agreement of the Regional Director, had been computed on the basis of Knaak's failure to seek employment between April 18, 1964, the date of his discharge, and June 10, 1964, when he commenced work for Keystone Auto Mart. It might be argued, with considerable force, that, since "withdrawal from the labor market" cuts off the backpay period, the evidence which Respondent sought to elicit from Mr. Dishner, particularly that with respect to Cira, was relevant to "the gross backpay computation" and therefore came within the limited permission which the General Counsel granted for Dishner to testify. How- 146 N LRB 393, 394, reversed, 354, F.2d 66 [C.A 6], and Hill Transpor- tation Co., 102 NLRB 1015,1030,1032. Applied in this case the suggested method would increase the total due Knaak by $32 90. 24 The same situation appears to have prevailed in Moss Planing Mill Co., 110 NLRB 933, 934, reversed 224 F.2d 702 (C A 4), in which the Board reversed the Examiner's allowance of vacation pay in addition to the difference between gross backpay and net interim earnings 794 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ever, the Examiner believes that, against the background of the pleadings and the apparent purpose of the General Counsel's restriction on the testimony, the phrase "the gross backpay computation" referred only to the figures shown as "Gross Backpay" in the Backpay Specification, i.e., the earnings which the discriminatees would have realized had they remained in Respondent's employ. Counsel for the General Counsel so construed Mr. Ord- man's letter and counsel for Respondent apparently agree, saying in the course of the hearing: ... We are not questioning the gross backpay com- putation, right, but I think we are not getting the basic truths in this matter and it's holding up everything, . . Since the "Gross Backpay" figures contained in the Specification were agreed to at the outset of the hearing, there was no occasion or need for Mr. Dishner to testify on that issue, which was the only matter as to which he was permitted to testify. Accordingly, the Examiner granted the General Counsel's petition to revoke the sub- pena and refused to require Mr. Dishner to testify. This ruling was based solely on the Board's Regulation and the General Counsel's restriction of permissible testimony by Mr. Dishner to "the gross backpay computation." She declined to rule on the General Counsel's contention that Mr. Dishner's testimony would be "irrelevant and im- material to the issues to be resolved at a backpay hear- ing." Under Section 102.118 the Examiner was required to refuse to permit Mr. Dishner to testify beyond the limited scope of the permission granted by the General Counsel; she was not at liberty to follow N.L.R.B. v. Capitol Fish, 294 F.2d 868 (C.A. 5), and General En- gineering Inc v. N L R B., 341 F.2d 367 (C.A. 9), on which Respondent relies. See, e.g., Harvey Aluminum (Inc.), 142 NLRB 1041, 1042 fn. I Iowa Beef Packers, Inc., 144 NLRB 615, 616-617 modified 331 F.2d 176 (C.A. 8); The Great Atlantic & Pacific Tea Co., 145 NLRB 361, 385-386 enfd. in part 340 F.2d 690(C.A 2); Campbell Soup Co., 152 N LRB 1645, fn. 1.25 Since the close of the hearing in this case, however, the Board appears to have ruled that Section 102.118 of its Regulations is not applicable in backpay proceedings. In an opinion affirming the Trial Examiner 's ruling in a situa- tion essentially similar to the present, the Board, in J. H. Rutter-Rex Manufacturing Co., supra, 158 NLRB 1414, 1417, said: . in contrast with the General Engineering case [supra, 341 F.2d 367], here the Trial Examiner in his rulings did not rely upon the Board rule men- tioned above Thus, although the General Counsel in Cf Harvey Aluminum (Inc ) 147 NLRB 1287, 1288, In 2, Id, 156 N LRB 1353, Id, 139 NLRB 151, 155, Singer Serving Machine Co, 140 NLRB 1061, 1063, enforcement denied 329 F 2d 200(C A 4)-all limit- ing the Capital Fish decision to cases where evidence is sought to establish impiopriety or misconduct by Boaid agents No such limited reading of General Engineering seems possible 2 Contrary to Respondent 's contention, an Examiner has jurisdiction to revoke subpoenas dices terum Herman Bias Pet Supply, Inc v NLRB,360F2dl76(CA 6) 'T The General Counsel's permission to produce documents appears bioadei than that to give testimony Not having seen the subpena, the Ex- aminer is in no position to pass on the General Counsel's contentions that, except for the documents already produced and those not in his posses- sion, the items listed are not relevant or are not described with sufficient his letter of March 8, 1963, to the Respondent de- nied permission to representatives of the Board in New Orleans to produce any of the items listed in the subpoenas duces tecum, the Trial Examiner did require the production of many of the items listed in both subpenas and they were in fact produced at the hearing. During the hearing, the Trial Examiner ex- hibited concern lest the Respondent be prejudiced in its cross-examination of witnesses by the General Counsel's withholding of documents under a strict interpretation of Section 102.118 of the Rules. For this reason, the Trial Examiner required the General Counsel to produce material , including affidavits, from files containing information about the claimants without regard to whether or not the claimants were called to testify. In this respect, the Trial Examiner expressed the view that the Board 's general procedu- ral rules were not designed to cover backpay proceedings, and his conduct of the hearing was con- sistent with this view. If the present Examiner correctly understands the deci- sion in Rutter-Rex as holding the Board ' s procedural regulations inapplicable in backpay proceedings, she would reconsider her rulings revoking the subpoenas duces tecum26 and refusing to permit Mr. Dishner to tes- tify. It would then be necessary to consider the matters from the point of view of relevancy, the primary ground advanced by the General Counsel for his petition to revoke the subpena.27 As previously indicated supra, the evidence which Respondent's counsel stated he hoped to elicit from Mr. Dishner would have been relevant to the issues in this case. Thus, had the Examiner not relied on Section 102.118 of the Board ' s Regulations , she would have per- mitted Respondent to call Mr. Dishner as a witness.211 Accordingly, the Examiner recommends that, if the Board should disagree with the substantive conclusions here reached, the order vacating the subpoena duces tecum should be set aside and the record should be reopened for receipt of testimony by Mr. Dishner. CONCLUSION Upon all the evidence, the Examiner finds that the obligation of Respondent to make whole the dis- criminatees pursuant to the Board 's order will be discharged by the payment to Edward Knaak of $395.58.2} RECOMMENDED ORDER It is recommended that the Board adopt the foregoing findings and conclusions. particularity At the hearing , Respondent 's counsel did not specifically seek any documents but attempted only to secure testimony by Dishner '" Any questions as to "disclosure of analysis memoranda and similar memoranda and reports prepared by various agents for the Board or General Counsel in the course of their investigation" (Rutter-Rex, supra, 1417) would be dealt with if and when they arose in the course of Dish- nei's testimony , as would any possible questions concerning the expres- sion of "opinions" or "conclusions" by Dishner 20 The Examiner questions whether the addition of interest in this case would "achiev [ e] a more equitable result [and ] encourag [e] compliance with Board Orders" (Isis Plumbing & Heating Co, 138 NLRB 716, 720) in view of Respondent 's conduct in accepting the Board 's order and pay- ing Knaak pursuant to agreement with Board personnel