Laurels Hotel and Country Club

L.C.C. RESORT, INC. L.C.C. Resort, Inc. d/b/a Laurels Hotel and Country Club and Local 343, Hotel & Restaurant Employees and Bartenders Union, AFL-CIO. Cases 3-CA-2950,-2, -3, -4, -6,-7,-8,-9,-10,-11, -12, -15, -16, and -17 September 21, 1971 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING, JENKINS, AND KENNEDY On March 26, 1971, Trial Examiner Joseph I. Nachman issued a Supplemental Decision, attached hereto, finding that specific amounts of backpay be awarded to certain employees of the Respondent.' Thereafter, the Respondent filed exceptions to the Trial Examiner's Supplemental Decision and a supporting brief and the General Counsel filed exceptions to the Trial Examiner's Supplemental Decision. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Supplemental Decision,2 the exceptions and brief, and the entire record in these cases, and hereby adopts the findings, conclusions, and recom- mendations of the Trial Examiner, as modified below.3 SUPPLEMENTAL ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, L.C.C. Resort, Inc. d/b/a Laurels Hotel and Country Club, its officers, agents, successors , and assigns, shall i On April 8, 1968, the National Labor Relations Board issued a Decision and Order in which the Board directed the Respondent , inter aha, to offer each of the eight employees full reinstatement to his former or substantially equivalent position , and make each whole for any loss of pay suffered by reason of Respondent's discrimination 170 NLRB 1140 Thereafter, Respondent entered into a stipulation with the General Counsel that the latter should institute a backpay proceeding and, after a decision by a Trial Examiner as to the amount of backpay due, that issue would be subject to review by the Board , and, should judicial proceedings thereafter become necessary , the only issue before the appellate court would be the correctness of the backpay computations, Respondent conceding that the Board's Order of April 8 , 1968, was in all respects valid and proper On May 11 , 1970, the General Counsel issued his backpay specifications Subsequently, deeming the Respondent's answer thereto insufficient , the General Counsel on June 18 , 1970, moved for an order that the specifications be deemed true, that the affirmative defenses be stricken , and for summary judgment After issuance of an Order To Show Cause and considering the responses thereto in light of the pleadings, Trial Examiner William W . Kapell, on August 12, 1970, issued a Decision on the General Counsel's motion, in which he recommended that, as the Respondent had affirmatively alleged in its answer that the discriminatees failed to seek available interim employment and that they absented themselves from Respondent's geographical area during part of the 241 make the employees involved in this proceeding whole by payment to them of the amounts set forth opposite their names in the Supplemental Order in the Trial Examiner's Supplemental Decision attached hereto. CHAIRMAN MILLER, dissenting: In my view, the backpay computation with respect to employee Sturm is contrary to logic and to Board precedent. Sturm is eligible for backpay during the second and third quarters of 1966. On June 10, 1966, Sturm shipped out on a passenger vessel and was so employed until July 7. He was paid in full for his services on the voyage at the completion of the voyage, and the entire sum was credited as interim earnings for the third calendar quarter. The Respon- dent excepts to that treatment of Sturm's earnings and argues, alternatively, that the wages should either be pro-rated or that Sturm should be treated as unavaila- ble for work from June 10 until the end of the quarter. The Trial Examiner rejected both arguments and held, in effect, that Sturm was available for work, unemployed, and eligible for backpay during the 20 days he was at sea. The majority affirms that determination. Although no objection can be made to the practice of crediting interim earnings in the quarter when received, it seems ill advised to treat as available for work a man who is actually employed full time in a job distinguished only by the fact that compensation will be deferred, and Board precedent is to the contrary. Brown and Root, Inc., 132 NLRB 486, involved the problem of interim earnings for an employee whose sole employment after discharge was farming. The employee worked his farm, planted crops, and reported no income in any quarter other than the quarter in which the crops were harvested and marketed. The Trial Examiner held that the employee should be credited with interim earnings backpay period, a hearing be held to afford the Respondent an opportunity to examine the discrimmatees in support of its affirmative defenses On the same date the Board issued an order transferring the case to the Board. Subsequently, on August 24, 1970, the Board issued an order rescinding its order transferring the case, and the matter was returned to the Regional Director for Region 3 to comply with Section 102 26 of the Board's Rules and Regulations. 2 In addition to adopting the Trial Examiner's reasons for crediting Joachim Sturm's earnings for work performed between June 10 and July 7 to the third quarter of 1966, we are of the opinion that the question of whether one formula of computation is preferable to another does not turn on the question of whether the computation favors the employer or the employee That could change from case to case . Sound administrative practice, we believe, requires that we adhere as a matter of policy to the Social Security Administration's practice in this area and not attempt to go behind their policy Were we to accept the Employer' s argument here we would be creating very difficult compliance problems for our Regional Offices by attempting to go behind social security reports and determine when wages were earned rather than when they were received 3 We do not adopt the Trial Examiner 's findings that counsel for Respondent also appeared before the Board as counsel for Grossinger's in a prior matter before the Board, as it is not supported by the record. 193 NLRB No. 26 242 DECISIONS OF NATIONAL LABOR RELATIONS BOARD only for the calendar quarter in which he realized income from the sale of crops. Supra, 534. The Board expressly disavowed that means of computation and in an effort to assign some reasonable value to the employee's farm labors, credited him with an amount "equal to the average Arkansas farm laborers' income during the period [he] worked on this farm." Supra, 500. The only feature which distinguished Sturm's situation in the instant case is that the record discloses the amount of his interim earnings and, therefore, no fictional computation is necessary. The Brown and Root case seems clearly to require either that Sturm's earnings be pro-rated or that he be treated as unavailable for work after June 10 of the second quarter. While utilizing records as to actual receipt of earnings in any given quarter normally provides a convenient administrative technique for making backpay computations and works no basic injustice, where it is demonstrated that the use of that rule of thumb produces an illogical and substantially errone- ous result, we should not hesitate to make an appropriate adjustment. Here we have not only a showing that our rule of convenience does not fit the facts of the case but we also have all the facts necessary to make the required adjustment. In my view, the majority errs in ignoring this set of circumstances and instead permitting a mechanistic application of a practice which, in this case, has been shown to operate unfairly and illogically. TRIAL EXAMINER'S SUPPLEMENTAL DECISION STATEMENT OF THE CASE JOSEPH I . NACHMAN, Trial Examiner : This proceeding to determine backpay was tried before me at Monticello, New York, with all parties present and represented, on October 13, 14, and 15, and on November 9 and 10 , 1970, on the General Counsel's Backpay Specifications issued May 11, 1970.1 At the trial all parties were afforded full opportunity to adduce relevant evidence, to examine and cross-examine witnesses, to argue orally on the record, and to submit briefs. Oral argument was waived. Briefs submitted by the , On December 3, 1970, I issued an order reopening the record solely for the purpose of receiving a stipulation of the parties with respect to the number of employees in the classifications here involved hired by Kiamesha Concord, a competitor of Respondent , during the backpay period. The stipulation has been marked "Trial Examiner's Exhibit I," and filed with the record. 2 In one respect the transcript herein needs explanation because it does not, and cannot fully, reflect what actually happened . At page 534 of the transcript General Counsel's representative was speaking to some position he was urging. As the transcript reflects, Respondent's counsel interrupted the General Counsel to assert his objection to General Counsel's remarks. What the transcript does not reflect is that when counsel for Respondent arose he pounded the metal table at which he was seated with either his fist or the palm of his hand and made his remarks in a shouting voice. It was because of this conduct that I told counsel to sit down and be quiet until General Counsel and Respondent, respectively, have been duly considered. Upon the entire record in the case,2 including my observation of the demeanor of the witnesses while testifying, I make the following: FINDINGS OF FACT Background and Settings of the Issues On April 8, 1968, the Board adopted (with modifications not here material) the findings, conclusions, and recom- mendations of Trial Examiner Ricci that L.C.C. Resort, Inc., d/b/a Laurels Hotel and Country Club (herein Respondent or Company), violated Section 8(a)(3) and (1) of the National Labor Relations Act, as amended (herein the Act), by discriminatorily discharging eight employees. By way of remedy, the Board directed Respondent inter alia to offer each of the eight employees full reinstatement to his former or substantially equivalent position, and make each whole for any loss of pay suffered by reason of Respondent's discrimination. 170 NLRB No. 113.3 On May 11, 1970, the General Counsel issued his Backpay Specifications.4 On June 8, 1970, Respondent filed its answer to the Backpay Specifications, denying the allegations thereof, putting the General Counsel to his proof, and affirmatively alleging that each discriminatee failed to use reasonable diligence in seeking work during the backpay period and that, had such diligence been used, the interim earnings of each employee, in each quarterly period, would have at least equaled the pay they would have earned had they not been discriminatorily discharged by Respondent. Deeming Respondent's answer insuffi- cient, the General Counsel, on June 18, 1970, moved for an order that the Specifications be deemed true, that the affirmative defenses be stricken, and for summary judg- ment. After issuance of an order to show cause and considering the responses thereto in light of the pleadings, Trial Examiner Kapell, on August 12, 1970, issued a Decision on the General Counsel's motion, holding that Respondent's general denial of the formula pursuant to which the General Counsel computed the gross backpay did not conform to the requirements of Section 102.45 of the Board's Rules and Regulations, that the motion to deem the allegations of the Specifications with regard to the computation of gross backpay be granted, and that Respondent be "precluded from introducing any evidence controverting said allegations of the Specifications." Additionally, Trial Examiner Kapell concluded: he was given an opportunity to reply. Another example of counsel's behavior at the trial was his threat to filibuster the trial , apparently because he was not happy with a ruling I made. See transcript page 392. 3 No proceeding for enforcement or review of the Board's Order was instituted. Instead, Respondent entered into a stipulation with the General Counsel that the latter should institute a backpay proceeding and, after a decision by a Trial -Examiner as to the amount of backpay due, that issue would be subject to review by the Board ; and, should judicial proceedings thereafter become necessary, the only issue before the appellate court would be the correctness of the backpay computations, Respondent conceding that the Board's Order of April 8, 1968, is in all respects valid and proper. 4 By letter dated June 7, 1968, Respondent offered each discriminatee reinstatement as of July 1, 1968. Only Hartmut Sturm accepted reinstatement. L.C.C. RESORT, INC. It appears, however, that Respondent has affirma- tively alleged in its answer that the discriminatees failed to seek available interim employment, and that they absented themselves from Respondent's geographical area during part of the backpay period. The law is well settled that the employer must establish such defenses by the preponderance of the evidence.5 These matters, however, arewithin the knowledge of the discriminatees, not the employer. W bile the employer must raise this issue in his answer in mitigation of damages, it does not follow that he should be required to come forward with evidence by producing the discriminatees. Nor would it be a great hardship on the General Counsel to produce them. I, therefore, conclude that Respondent should be afforded an opportunity to examine the discriminatees at a hearing in support of its affirmative defenses, and that the General Counsel should produce them for that purpose. . .. It, accordingly, follows that the motion to strike the alleged affirmative defenses should be, and hereby is, denied, that the motion for summary judgment should be, and hereby is, denied, and that a hearing herein be set for the purpose and reasons set forth above. 3 See N L R.B v Mooney Aircraft, Inc, 366 F.2d 809 (C.A. 5); N L R B v Miami Coca-Cola Bottling Co, 360 F.2d 569 (C.A. 5), N LR B v Mastro Plastics Corp, 354 F 2d 170 (C.A. 2), cert. denied 384 U S. 972 Respondent'did not seek Board review of the aforemen- tioned Decision. The Issues Litigated at the Hearing In presenting his case the General Counsel called and examined each of the eight discriminatees with respect to his employment and efforts to secure employment during the backpay period, and Respondent cross-examined them in that general area. For its case, Respondent called three witnesses, and entered into a stipulation with the General Counsel. All of the testimony offered by Respondent related to its general defense that each of the discriminatees failed to use reasonable diligence in seeking employment during the backpay period. The gross backpay as computed in the Specifications being deemed admitted, and except as hereafter specifically dealt with no issue being raised by Respondent as to the interim earnings detailed in the Specifications, there is no reason to repeat here the computations pleaded by the General Counsel; such computations being incorporated here by reference. For clarity in presentation, the evidence dealing with the efforts of each discriminatee to obtain employment during the backpay period will be detailed, and in the course thereof any defenses relating only to a specific employee will be stated, and that issue disposed of. Louis Crossley The backpay period for Crossley, who had been employed by Respondent as a waiter, runs from June 5, 1966, through June 30, 1968, except that the General Counsel makes no claim for backpay for the first and second quarters of 1967 or the first and second quarters of 1968. 5 At Post & Paddock the owner stated that most of her help had been hired, but she did have an opening for a bartender. As Crossley had no 243 Immediately following his discharge by Respondent, Crossley notified the Local Union at Monticello that he was available for work, and shortly thereafter filed an application with Dependable Employment Agency (herein Dependable), a private employment agency in the Monti- cello area specializing in providing employees to resort hotels in that area. He did not, however, register with the New York State Employment Service. About a week or two following his discharge, the Union referred Crossley to the Concord Hotel (herein Concord), to work a lunch meal. While there, Crossley filed an application for employment with Concord, but was told by the latter that there were no openings for steady help because very little hiring was done after the Memorial Day holiday. In the next few weeks Crossley applied for work to several restaurants and hotels in the Monticello area, including Post & Paddock,5 Waldman's, Raleigh's, and Pines, resort hotels in the Monticello area, as well as Host Farms at Lancaster, Pennsylvania. Early in July 1966, Crossley obtained part- time employment at Gage's Diner where he worked mainly after 3 a.m., cleaning floors, doing maintenance work, cooking, and working the counter. While working at Gage he continued to check with the Monticello Local regarding available work, but nothing was available. In December 1966, Gage notified Crossley that the season was over and there was no further need for his services. Crossley then left for Miami, Florida, where he obtained employment at the Fontainbleau Hotel, where he had previously worked, being put to work shortly after January 1, 1967. Crossley remained on this job until the end of May 1968. However, during the summer of 1967, while Crossley remained on the job, his earnings at the Fontainbleau were substantially reduced from what they had been in the preceding winter and spring. The end of May 1968, Crossley terminated his employment with the Fontainbleau to take employment with the Gideon Putnam Hotel, Saratoga Springs, New York, where his interim earnings were in excess of the gross backpay for the quarter involved. Richard Tonn Tonn's backpay period is from May 27, 1966, the date of his discharge, to September 6, 1966, when he left the area to attend school as a full-time student, and from December 23, 1966, through December 31, 1966, when he returned to the area for the Christmas vacation, and sought work for that period. No backpay is claimed after the fourth quarter of 1966. Immediately following his discharge by Respondent, Tonn communicated with the Local's business agent, asking the latter to obtain work for him for the summer. During the month of June, Tonn obtained a temporary assignment at the Concord, which lasted only I day. Also during the month of June, Tonn went to Raleigh's, Pines, and Kutcher's, all hotels in the Monticello area, where he spoke to the maitre d' concerning employment as a waiter or busboy, but was told that no work was available. Additionally, Tonn filed an application for work at the local post office, but was told that he would be called only in the event of an emergency, and he was in fact never called. On June 22, Tonn obtained employment at experience in that work he did not qualify for the job. 244 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Monticello Cab Company, where he worked for 1 week, leaving that job because he regarded the cabs as unsafe.6 Following his work at the cab company, Tonn again talked with the business agent of the Local regarding possible employment, again visited Raleigh's and Kutcher's, and had a friend make inquiry at Grossinger's but no work materialized. On August 22, through the business agent of the Local, Tonn obtained employment at the Monticello racetrack as a meatcutter and was so employed until September 6, when he left that job to attend school as a full- time student at the University of Miami; being then in his third year. As was his practice in prior years, Tonn, who lived in the Monticello area, returned home for the Christmas-New Year school vacation and, as he had in the past, applied for work during the holiday period at Respondent, but was told by Lowenthal, an admitted supervisor, that ". . . there was no need for him." 7 During this period also, Tonn applied to Kutcher's and Raleigh's, and spoke to the Union's business agent relative to possible employment during his vacation period, but was unable to obtain such. There is no evidence that Tonn registered with the New York State Employment Service, or with any private employment agency.8 Robert Karosus The backpay period for Robert Karosus as pleaded by the General Counsel runs from May 30, 1966, the day of his discharge, to March 8, 1967.9 Immediately following his discharge Karosus, whose home is in Carbondale, Pennsyl- vania, and while employed by Respondent was provided with lodging by the latter, telephoned the Union's business agent, and asked for work. The business agent told Karosus that no work was available, but that he might call back the following week. Karosus then left for Carbondale, and several days later applied for unemployment benefits, but learned that he was not eligible. Karosus registered, however, for any available work. The following day as a result of a telephone call to the business agent, Karosus obtained a weekend job (Friday through Sunday) at the Concord. Returning to Carbondale upon completion of the Concord job, Karosus went to several industrial plants in Carbondale area,'° but was unable to find work. Karosus then went to the Monticello area where, in addition to talking to the business agent regarding possible work, he went to Grossinger's, Brown's, and Raleigh's hotels, speaking either to the maitre d' or a dining room captain at each place about work, but was told none was available.11 The first 2 weeks in July, Karosus was on National Guard duty, and upon completion of that duty went to Bingham- ton, New York, where he applied to several industrial firms for work, but was unable to obtain employment.12 During the first week of August, Karosus obtained employment with Griffie-Culp Corporation, a contractor engaged in the 6 Tonn credibly testified that the cabs were at the time about 8 years old, and the one assigned to him during the week he worked caught fire on one occasion, and on another the brakes failed to operate . His testimony in this regard is uncontradicted. 7 This latter finding, and my finding as to Lowenthal's supervisory status, is based on the findings in the unfair labor practice case. 170 NLRB No. 113. 8 Based on the uncontradicted and credited testimony of Tonn. 9 The reason for the termination of the backpay period on that date is not disclosed by the record. 10 Eastern Wood, Kendrick's, and Cross Engineering. construction of a housing development at Kingston, Pennsylvania, as a sheetrock finisher, and continued at that job until its completion in early October. Upon completion of this job, Karosus again communicated with the Union relative to possible employment, and again visited industri- al operations and the employment service at Carbondale. On this occasion the employment office gave Karosus a telephone number to call for possible employment as a sheetrock finisher. When Karosus communicated with this employer he was told that there was no work available. In January 1967, Karosus became eligible for unemployment benefits and registered with the Service for that purpose. He visited the office of the Employment Service each week thereafter until June 1, 1967, but was never referred to a possible job.13 Joseph Karosus Although the General Counsel pleads the backpay period for this employee to be from May 30, 1966, the date of his discharge, to June 30, 1968, the Specifications made no claim for backpay after the close of the third quarter in 1966. Accordingly, I limit my findings to the second and third quarter of 1966. Joseph Karosus, like his brother Robert, lived at Carbondale, Pennsylvania, and returned there immediately after his discharge by Respondent. Joseph Karosus promptly registered with the State Employment Service at Carbondale, and informed the Service that he had previously worked as a busboy, waiter, truckdriver, and wagon drill operator. He testified that he returned to the Service each Monday thereafter, but for what period of time the record does not show. The uncontradicted and credited testimony is that at no time did the Service refer him to any job. The evidence also shows that Karosus made one or more telephone calls to the Union's business agent relative to work in the Monticello area, but was told that none was available. Within a week following his discharge by Respondent Karosus also telephoned John Barna, captain of waiters at Grossinger's, regarding work, but was told "I can't touch you." In addition Karosus applied to various trucking companies and to Gillen Coal Company and Eastern Wood Products Corp., all in the Carbondale area. Although employment was not immediately available, Karosus did obtain employment with Gillen Coal early in August 1966, and in each quarter thereafter his interim earnings exceeded his gross backpay. Karosus admitted that during his backpay period he did not apply to any hotel or restaurant in the Carbondale area because no hotel existed and the restaurants were of the counter variety that did not employ waiters. Karosus also admitted that he made no applications to hotels or restaurants in Scranton, nor did he register with any private employment agency in the area, because such did not exist. 11 At Grossinger's Karosus spoke to Stanley Straetsky. The latter was not called by Respondent to contradict Karosus's testimony . It may be noted that Counsel for Respondent also appeared before the Board as Counsel for Grossinger. See S. & H. Grossinger's, Inc., 156 NLRB 233, enfd. 372 F.2d 26 (C.A. 2). Counsel also appeared for Pines Hotel, TXD-689-70, and Raleigh's Hotel, Case 3-CA-3978. 12 Among the firms to which he applied were Agfa-Amsco; General Electric; and Tri-City Construction. 13 As Karosus testified, and as the Specifications disclose, during the first quarter of 1967, he worked 2 days for Griffie-Culp doing repair work, and 2 weekends at Raleigh's Hotel. L.C.C. RESORT, INC. Martin Gartell Although the General Counsel pleads Gartell's backpay period as running from June 1, 1966, the date of his discharge, through June 30, 1968, backpay is claimed only for the second and third quarters of 1966. Upon discharge by Respondent on May 30, and having no place to stay in the Monticello area, Gartell went to Allentown, Pennsylvania, where his mother then lived For a short period of time he got odd jobs such as mowing lawns, and did some extra work for his uncle for which he was not paid wages as such, but was given a few dollars spending money. Gartell credibly testified that the total amount that he got from the odd jobs and from his uncle did not exceed $10 or $11.14 About mid-June 1966, Gartell obtained temporary employment for 2 weeks, and then a permanent job on which he began work about July 1, and continued on the latter job until sometime in August 1966, when he entered the military service. No backpay is claimed after the third quarter of 1966. Hartmut Sturm The General Counsel pleads the backpay period for this employee as running from May 2, 1966, the date of his discharge, through June 30, 1968, when he was offered and accepted reinstatement to his former job at Respondent. Backpay is claimed for each quarter except the second quarter of 1967, when admitted interim earnings exceeded gross backpay. Promptly following his discharge, Sturm registered with the Monticello office of the New York State Employment Service, and went to hotels and restaurants in the Monticello area seeking employment. Among the establish- ments Sturm visited was Kutcher's Hotel & Country Club where he spoke to one known to him as "Big John," who stated that he need a roast cook and a breakfast cook, and asked that Sturm wait while he talked to Milton Kutcher. In a short time "Big John" returned and told Sturm, "the way it sounds you won't get a job here." Sturm also applied to Monticello Diner where ajob was available which required that he do butchering and baking,15 and as he had no prior experience in those fields he felt himself unable to take that job. Sturm then applied to and obtained employment with Joe's Villa, starting work there about mid-May, and he worked for about a month and a half. Sturm testified without contradiction that he took this job at a salary of $125 a week with a promise that at the beginning of summer his salary would be increased by $25 weekly, and that when the time arrived and he asked about the increase he was told that two people could be hired for that price, and that he (Sturm) took this as a dismissal. Shortly thereafter Sturm obtained employment at Tuzzeo's Restaurant, as a cook. The job, however, was only for the summer, and would end with Labor Day. Accordingly, during the summer months Sturm looked for work to commence after Labor Day, and 14 Although the amount so earned is not credited by the General Counsel in his computations of interim earnings, he did credit the sum of $11 in the second quarter of 1966, as having been earned for work at the Concord Hotel The evidence shows, however, that Gartell performed the work at the Concord prior to his discharge, and, although reflected in the social security report for the second quarter of 1966, these wages are not interim earnings for which Respondent is entitled to credit The amount which Gartell received from the odd jobs and that his uncle gave him offsets the amount which the General Counsel improperly included, and no 245 found such a job at a restaurant known as Homestead in Bridgeville, New York. Sturm reported for this job immediately after Labor Day and worked for about 2 months, when thejob terminated for lack of work. While employed at Old Homestead, Sturm sought employment as a cook aboard luxury cruise ships operating out of New York City. To do this it was necessary that he secure the requisite seamen's papers and become a member of the National Maritime Union. The latter involved an outlay of $150 for initiation fees, and 2 months' dues in advance of $30 per month. In addition Sturm was required to make about eight trips from Monticello to New York City costing about $15 per trip for food, gas, oil, tolls, and parking. About half of these trips required that Sturm remain overnight, which involved hotel expenses of about $10 per night. Additionally, Sturm incurred expenses of about $12 for telephone calls. Because Sturm had no seniority and the hiring hall was operated strictly on seniority, there were times he went to New York to fill a possible call only to be beaten out by one with greater seniority. Sturm made two trips for Grace Lines of 28 days each; the first beginning in the latter days of December 1966, and the other dunng the second quarter of 1967.i6 During these cruises Sturm received no pay, but, upon returning to New York at the end of the cruise, he was paid the full amount of his earnings dunng the entire cruise. On each cruise Sturm was a relief man for some regular Grace Lines employee who, for some reason, did not wish to make the particular trip. At the end of the second trip Sturm, because of his low position on the seniority list, was unable to obtain further employment with Grace Lines, and returned to the Monticello area where he obtained employment for the summer season with Tuzzeo's Restau- rant. When the season terminated with Labor Day 1967, and the job at Tuzzeo's came to an end, Sturm obtained employment at Roack's Tavern, and was working there in June 1968, when Respondent offered and Sturm accepted reinstatement to his formerjob. Paul Besdansky The General Counsel pleads the backpay period for this employee as running from May 13, 1966, the date of his discharge by Respondent, through June 30, 1968, except that no backpay is claimed from February 7 through June 30, 1967, the period Besdansky was in the military service. Immediately following his discharge on May 13, Besdansky informed the Union' s business agent that he was available for work. However, Besdansky, by his own efforts, obtained a job with Mountain Linen Company and began working there on June 17. In addition Besdansky had a part-timejob with Seymour Wahl, the operator of the coffeeshop at Pines Hotel, but this ended a few weeks later for lack of work. On the last workday before Labor Day 1966, Besdansky terminated his employment with Moun- adjustment of the figures is necessary 15 The job also required that a man work 12-14 hours a day, 7 days a week, and paid $25 a week less than Sturm had been earning at Respondent. 16 Between the end of his employment with Old Homestead in November 1966, and the time he began his first cruise in December 1966, Sturm registered with the Monticello office of the State Employment Service, and reported there each week In addition , he unsuccessfully sought employment from various employers in the area. 246 DECISIONS OF NATIONAL LABOR RELATIONS BOARD tarn Linen to return to college at Middletown New York, approximately 25 miles from Monticello, as a full-time student. On September 9, 1966, Besdansky was reemployed by Respondent as a part-time employee,17 and worked until October 23, 1966, when he was again discharged by Respondent.18 Following this discharge, because his college work was his primary consideration, Besdansky could seek only part-time work. In an effort to obtain such he notified the Union's business agent of his availability for work; registered at the Monticello Employment Office, reporting there weekly for 3-1/2 months thereafter; and went to the Concord, Kutcher's, and Raleigh's hotels 19 seeking em- ployment, but was not successful. On February 7, 1967, Besdansky was inducted into the military service and upon his discharge therefrom on June 30, 1967, returned to the Monticello area. Besdansky testified that upon his dis- charge from the service he made his availability for work known to the Union's business agent, and applied to Shanks, Olympic, Neville, and Fallsburg hotels,20 but was told no employment was available.21 Besdansky admits that after his discharge from the service he did not apply to Mountain Linen for whom he worked during the summer of 1966, saying that he just did not think of it. The General Counsel's Backpay Specifications do not show any interim earnings for Besdansky for the year after his discharge from the military service. Joachim Sturm Although the General Counsel pleads the backpay period for Joachim Sturm as running from May 1, 1966, the day of his discharge, through June 30, 1968, no backpay is claimed for him after the fourth quarter of 1966. Promptly after his discharge by Respondent, Sturm registered with the Monticello office of the State Employ- ment Service, and with the Jupiter Employment Agency in New York City, which specializes in servicing the hotel industry, but did not register with any private employment agency in the Monticello area. About mid-May Sturm conferred with a representative of General Foods and received a job offer which he rejected because the pay offered was only about $8,000 a year as compared to the $12,000 he was earning at Respondent. About the same time Jupiter Employment Agency told Sturm of a possible short-term job in New England, but he rejected this because of anticipated more permanent employment with Grace 17 During this penod Besdansky worked a 24-hour week, mostly on weekends is In its Decision and Order in this case the Board found that Besdansky's second discharge was also discriminatorily motivated. 170 NLRB No. 113, section III, F. 19 Particularly with respect to Raleigh 's, Besdansky gave the name of the person with whom he spoke, a Mr Sid Salkind . Respondent's counsel, who as above indicated represents Raleigh 's, stated on the record that he would call Mr Salkind to testify, presumably to deny Besdansky's testimony in that regard, but that witness was not called 20 Besdansky gave the name or identity of the individual with whom he spoke at each of these hotels , but none of those persons was called by Respondent as a witness 21 Besdansky also testified that he talked with Harold Streifer, the owner of Dependable Employment Agency, who was his next door neighbor, regarding employment, and that the latter promised to give his request special consideration , but never gave him any referral However, Streifer testified that, while he saw Besdansky frequently, the latter never discussed possible employment with him I resolve this conflict by crediting Streifer 22 To obtain this employment with Grace Lines Sturm made 7 to 10 Lines. Early in June 1966, Sturm obtained employment with Grace Lines as a relief cook on the cruise liners. The first such cruise on which Sturm worked was for a period of 28 days which left New York June 10, returning to New York July 7. The custom and practice at Grace Lines was that employees received no pay while on the cruise, but upon return to New York were paid in full for all sums earned while on the cruise. Grace Lines reported such wages for social security purposes for the quarter in which they were actually paid.22 Sturm continued to work for Grace Lines until early September when, because of lack of seniority, he became unable to obtain employment. On one of his trips to New York seeking employment on the ships, he learned of possible employment with a country club in Miami Beach, Florida. After making an appointment, Sturm flew down to Florida for an interview, was hired, but granted a 2-week period to transport his family and effects to Miami Beach, reporting for duty about mid-October 1966.23 Contentions and Conclusions Except for one specific point hereafter discussed, Respondent's basic contention is that none of the discriminatees exercised due diligence in seeking employ- ment during the backpay period and all eight of the discriminatees here involved should for that reason be denied any backpay award. To support this contention Respondent relies on the testimony of Harold Streifer, president of Dependable Employment Agency, and a stipulation of counsel dealing with hiring at Concord Hotel during the backpay period. Streifer testified, in substance, that his agency has been in business since about 1935, and is the largest employment agency in the Monticello area specializing in employment in resort hotels; that, based on his experience, there would be available about 25 job offerings daily during the summer months (June-August), in the categories of waiters, busboys, and bellhops; and that while such employment opportunities diminish substantial- ly after Labor Day, because the hotels do not have sufficient guests, there was nevertheless a good chance that an experienced employee in the categories mentioned would get a steady weekend job. Streifer was not asked and did not explain why employee Crossley, whose testimony in trips from Monticello to New York, on at least 5 of them being required to spend the night He testified that these trips cost $5 to $6 for gas; $2 for tolls; $3 to $5 a day for parking, $20 to $25 a day for food and lodging, $150 for his union book, and union dues in advance of $30. The General Counsel pleads these expenses in the second quarter of 1966 as totaling $220 Respondent introduced no evidence to contradict Sturm's testimony in that regard 23 The General Counsel pleads Sturm 's expenses during the fourth quarter of 1966 as $523. Sturm testified that such expenses consisted of three or four trips to New York, at least one of which required him to stay overnight, at a minimum cost of $20 each; air fare to Miami and return for his interview, as well as food and lodging, costing about $125, the rental of a large U-Haul trailer costing about $175, to transport his personal effects, about $25 a day for each of 5 days the trip took, for food and lodging; about $ 14 for tolls, and about $50 for gas and oil. While Sturm did not mention it, he obviously incurred the expense of wear and tear on his car for this journey of about 1,500 miles. Respondent does not question any of these as legitimate items of interim expenses . It does argue that Sturm should not be awarded backpay for the 2 weeks he took to report to the Miami job I do not regard his action in that regard as unreasonable, and made no deduction for that period. L.C.C. RESORT, INC that regard I credit, and who did register with Dependable shortly after his discharge by Respondent, on June 5, 1966, never received ajob offer from or through Dependable. The stipulation of counsel above referred to, and upon which Respondent so strongly relies, is: During the period from June 1, 1966 through June 30, 1968, inclusive, the Kiamesha-Concord, Inc. employed new cooks and a substantial number of new bellboys and waiters who had not previously worked for that hotel. I do not regard the testimony of Streifer, nor the stipulation of counsel, all of which is general and exceedingly speculative in nature, as sufficient to overcome the specific evidence of the discriminatees, whom I credit, that they made application for employment to many of the hotels in the Monticello area, including the Concord, and were told that there were no jobs available. In many of these instances the discriminatee gave the name or gave a sufficient description of the individual with whom they spoke, and, despite the fact that counsel for Respondent represents some of these hotels, not a single individual from those hotels was called to deny the testimony of the discriminatees. Respondent's failure to call such witnesses, or explain the failure to call them legitimately gives rise to the inference that the representatives referred to would not support Respondent's contention. As the Supreme Court stated in Interstate Circuit v. United States, 306 U.S. 208, 226, "The production of weak evidence when strong is available can lead only to the conclusion that the strong would have been adverse." It is undoubtedly true that a discriminatorily discharged employee has the duty to seek interim employment to minimize the amount of backpay. But this principle ".. . does not require success; it only requires an honest good faith effort . . ." N.L R.B. v. Cashman Auto Company, etc., 223 F.2d 832, 836 (C.A. 1), enfg. 109 NLRB 720. And the burden of establishing that any discriminatee willfully incurred a loss of earnings rests on Respondent. N.L.R.B. v. Mastro Plastics Corporation, 354 F.2d 170, 178 (C.A. 2), cert. denied 384 U.S. 972; N L.R.B. v. Miami Coca-Cola Bottling Company, 360 F 2d 569, 575 (C.A. 5). This burden, I find and conclude, Respondent has wholly failed to carry. The one instance in which I find and conclude that Respondent has established that the discriminatee with- drew himself from the labor market and was not in fact seeking remunerative employment is Paul Besdansky. As 24 Indeed, for the third quarter of 1966, his interim earnings were $900, almost 50 percent in excess of his gross backpay of $612 25 In this connection it may be noted that during this period Besdansky did not register with the State Employment Service And, as I have indicated, while Besdansky claimed that he talked with Streifer, who happened to be his next door neighbor, about possible employment, Streifer denied that such a conversation occurred, and I have credited the latter in that regard 26 Such records were submitted by counsel for Respondent who moved that they be made a part of the record and considered in support of the contention now under consideration By my order of December 3, 1970, the motion to make said material a part of the record was taken under advisement , to be disposed of in this Decision Because for reasons hereafter stated I regard the material submitted by counsel to be irrelevant and immaterial, I now deny the motion to make it a part of the record I have, however, marked said material as Rejected Exhibit 1, and physically lodged it with record so that Respondent may have review of my Decision in that regard by the Board and a court of appeals, if it be so advised 247 above stated, Besdansky was discharged on May 13, 1966, and from that date until he entered the Armed Forces on February 7, 1967, although he was during that period a college student, nonetheless had substantial interim earnings.24 The evidence also shows that, when not employed during that period, he applied to hotels in the area, and registered with State Employment Service. However, following his discharge from the Armed Forces on June 30, 1967, until the end of the backpay period, Besdansky had no interim earnings. Although Besdansky testified that following his discharge from the Armed Forces he applied to various hotels in the area for work, but was told that no work was available, it is inconceivable to me that if he did apply that he would not have received some work, even if only for an occasional weekend.25 In short, I am convinced and accordingly find that during the year June 30, 1967, to June 30, 1968, Besdansky had withdrawn from the labor market to devote his full time to his college studies. Accordingly I shall recommend that he be awarded backpay only through the end of the first quarter of 1967, as computed in the General Counsel's Specifications. The final contention advanced by Respondent deals with the computation of backpay for Joachim Sturm. The Specifications plead that, for the second quarter of 1966, Sturm's gross backpay was $2,000 with $220 interim earnings in that quarter offset by expenses, leaving the net backpay for the quarter as $2,000. For the third quarter of 1966, the gross backpay is $3,000 and, because interim earnings for the quarter were $3,565, there is no net backpay for the quarter. The interim earnings for the third quarter resulted from Sturm's employment by Grace Lines, as a cook on their cruises out of New York. The payroll records from Grace Lines26 show that Sturm made three trips for Grace Lines during 1966, each for a period of 28 days. The first such trip left New York on June 10, returning on July 7, and for which Sturm received gross pay of $1,139.77.27 While on this trip Sturm received no money, but was paid the full amount of $1,139.77, less appropriate deductions, upon his return to the port of New York. Respondent contends that, because 5/7 of his earnings on that trip was for services actually performed in June, that amount should be regarded as interim earnings for the second quarter, to that extent reducing the net backpay for that quarter.28 Alternatively, Respondent argues that, if its aforementioned contention is rejected, then, for the 27 The other two trips left New York on July 8 and August 4, but the earnings from those trips are not involved in the contention counsel now makes 28 At first blush it would seem that the rule for which Respondent contends would not effect the total net backpay due, but simply transfer the liability from the second quarter to the third quarter However, because there was an excess of interim earnings in the third quarter, the figures do not work out that way Thus, if $814 10 (5/7 of $1,139 77) is regarded as interim earnings for the second quarter, the net backpay for that quarter becomes $1,185 90, and, if the $814 10 is then deducted from $3,565 interim earnings for the third quarter as shown by the Specifications, the interim earnings for the third quarter are $2,750 90 ($3,565 minus $814.10 equals $2,750 90) As the gross backpay for the third quarter is $3,000, deduction of $2,750 90, leaves net backpay of $249 10, and the total net backpay for the second and third quarters is $1,395 ($1,145 90 plus $249 10 equals $1 ,395), instead of $2,000 claimed in the Specifications, or a reduction in net backpay of $605 As Respondent makes no contention with respect to the fourth quarter of 1966, those figures are not discussed at (Continued) 248 DECISIONS OF NATIONAL LABOR RELATIONS BOARD purpose of computing the gross backpay for the second quarter, Sturm should be regarded as unavailable for work from June 10 to June 30. I find both contentions without merit. Although I have not been cited to, nor has my independent research revealed, any case in which the precise issue was decided by the Board, its decision in F. W. Woolworth Company, 90 NLRB 289, which was the initial pronouncement that backpay must be computed by quarters and that excess earnings in one quarter may not be used to offset a backpay liability for another quarter, set forth its reasons for the rule there announced. Among the considerations mentioned was the desire to avoid prejudice to an employee's rights under the Social Security Act, and to conform with and facilitate the practices of the Social Security Administration. In this connection the Board stated (90 NLRB at 293): In devising this method of computation, we have also heeded its concomitant effects upon [an employee's] rights and benefits under the Old Age and Survivors Insurance program of the Social Security Act. Payments to compensate for loss of wages, made in accordance with the orders of this Board, are "wages" within the meaning of the Social Security Act. The Social Security Administration is required to allocate such payments to the particular quarter in which the money would have been earned; only thus can the employee's Old Age and Survivors Insurance account be restored as eligibility for old age payments, as well as the measure of benefits, rest largely upon the number of quarters for which wages, in the amount of $50 or more, are received in employment covered by the Social Security Act. Our present order conforms with and facilitates the prescribed practice of the Social Security Administra- tion. All other things being equal, we desire to avoid prejudice to the employee's rights under other social legislation designed to "preserve the continuity and stability of labor remuneration." For this reason I find and conclude that, for the purpose of determining the quarter in which interim earnings should be credited, the determinative test is when were the wages due and payable under the labor contract or the employer's custom and practice. Thus, if, under the contract or practice, employees are paid on Thursday for all work performed in the previous calendar week, the fact that January 1 happens to fall on Wednesday preceding payday does not alter the fact that such wages were not due until and were in fact paid on January 2, within the first calendar quarter of the following year, even though the work for which such wages were paid was all performed in the fourth quarter of the preceding calendar year.29 Such a rule conforms not only to the practice under social security, but to the practice for income tax purposes as well. With respect to Respondent's alternative contention that, for the period from June 10 to June 30, Sturm must be regarded as not available for work, and that gross backpay computation should not include that time, it is plain that Respondent overlooks two important facts. In the first place, by failing to file the proper answer, the amount of gross backpay has been deemed admitted and may not be now questioned. Secondly, the term "unavailable for work," as used in backpay proceedings, refers to one who has, for one reason or another, withdrawn from the labor market. Although Respondent argues (Br. p. 13) that to hold that Sturm was available for work between June 10 and June 30 "would go against all rules of law30 and logic," I am unable to perceive how one can logically conclude that a man who is actually working, and earning wages to reduce Respondent's backpay liability is unavailable for work. RECOMMENDED ORDER Upon the basis of the foregoing findings and conclusions, and the entire record in the case , and pursuant to Section 10(c) of the National Labor Relations Act, as amended, it is recommended that the National Labor Relations Board issue the following: SUPPLEMENTAL ORDER It is hereby ordered that Respondent L.C.C. Resort, Inc., d/b/a Laurels Hotel and Country Club, forthwith pay to the following persons backpay in the amount set opposite their respective names, as required by our Order of April 8, 1968 (170 NLRB No. 113): Louis Crossley $2,180.00 Richard Tonn 763.00 Robert Karosus 826.00 Joseph Karosus 1,047.00 Martin Gartell 436.00 Hartmut Sturm 4,780.00 Paul Besdansky 635.00 Joachim Sturm 2,928.00 Each of the foregoing sums shall accrue interest at the rate of 6 percent per annum , computed in the manner set forth in Isis Plumbing & Heating Co., 138 NLRB 716. There shall be deducted from each of the foregoing amounts, social security taxes, income tax withholding, and such other deductions as may be required by the laws of the United States or the State of New York. with respect to the fourth quarter of 1966, those figures are not discussed at case the wages were available to the employee on December 31, and will be this point . regarded as having been paid on that day. 29 This is not to say that if wages are under the contract or practice due 30 As counsel cites no authority to support this statement I am unaware on December 31, and the employee fails to claim them until after January of the rules of law to which he refers. 1, that the wages would be deemed as paid in the following year In such a