Nickey Chevrolet Sales, Inc.

NICKEY CHEVROLET SALES, INC. 395 Nickey Chevrolet Sales, Inc. and American Federation of Professional Salesmen. Case 13-CA-6401 February 15, 1972 SECOND SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN MILLER AND MEMBERS FANNING AND JENKINS On May 4, 1965, the United States Circuit Court of Appeals for the Seventh Circuit entered its decree en- forcing the National Labor Relations Board's Order' of March 2, 1965, in which the Board found that Re- spondent had discriminatorily discharged two em- ployees in violation of Section 8(a)(3) and (1) of the National Labor Relations Act, as amended. On November 10, 1965, the court adjudged Respondent in civil contempt for refusing to reinstate the two em- ployees. On September 23, 1966, the Board issued its Supplemental Decision and Order' directing Respond- ent to pay the two employees backpay in specified amounts. On March 11, 1971, the court again adjudged Respondent in contempt finding, inter alia, that Re- spondent violated the court decree by discharging Har- old Sergott, a salesman employed by Respondent, be- cause of his union activities. The court ordered Respondent to offer Sergott full and bona fide reinstate- ment and to make him whole for all pay and benefits lost due to the discrimination against him.' On August 6, 1971, pursuant to the court order the Regional Director for Region 13 issued and served on the parties a backpay specification detailing the sum of money due Sergott for the period from October 5, 1969, to March 24, 1971.On September 2, 1971, Respondent filed an answer thereto. Upon appropriate notice issued by the Regional Director, a hearing was held on Sep- tember 28, 1971, before Trial Examiner Henry L. Ja- lette. On October 29, 1971, the Trial Examiner issued the attached Decision in this proceeding, Thereafter, the General Counsel filed exceptions and a supporting brief. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the Trial Examiner's Decision in light of the exceptions and briefs and has decided to affirm the Trial Examiner's rulings, findings, and conclusions and to adopt his Unpublished 160 NLRB 1279 N.L.R B v Nickey Chevrolet Sales, Inc., 65 LC & 11,650 recommended Order, only to the extent consistent herewith. 1. The Trial Examiner found, and we agree, that during the backpay period Sergott would have had the use of a demonstrator automobile, and that the value of such use during the backpay period was $125 per month, or $375 per quarter.4 2. The Trial Examiner further found that, because of the discrimination against him, Sergott suffered a loss in prizes he would have received in sales contests spon- sored by General Motors, Inc., in the total amount of $82.88. The Trial Examiner reasoned that since Sergott earned a total of $675 in prizes during the year preced- ing his discharge, this amount must be prorated over a period of 19 quarters because that was the representa- tive period agreed to for determining loss of earnings other than prizes. By this method, the Trial Examiner concluded that Sergott's average quarterly prize money would have amounted to $35.52 and that amount should be added to his quarterly backpay. Thus, the Trial Examiner prorated the value of prizes received during a 4-quarter period over a 19-quarter period in estimating the value of prizes lost. We do not agree with the Trial Examiner's computation of the average quarterly prize money. The specification alleged that Sergott should be reim- bursed for the prizes he would have received, absent the discrimination against him, at the rate of $675 per year. Respondent denied this allegation, but presented no formula of its own.' The General Counsel selected the formula in the specification because Sergott had a record of the prizes he had received during the year before his discharge. In the absence of any evidence to the contrary, we find that the selection of this formula was reasonable. Although we do not necessarily agree with the Trial Examiner that the General Counsel could not, without justification, use a formula for prizes which was different from that used for sales commis- sions, we find, based on the foregoing, that there was justification in this case. Moreover, it is clear that the formula devised by the Trial Examiner was unfair to the discriminatee because it assumed he would have earned the same amount over a 19-quarter period as he in fact earned in only 1 year. ' In making this determination , which is concededly less than the full scheduled $200 monthly rental for an automobile, we have taken into con- sideration the restrictions on the use of demonstrator automobiles by sales- men at Nickey Chevrolet The record shows that the salesman is expected to have the vehicle at the agency when he is on duty, he uses it for demon- strator purposes and makes it available to other salesmen for such purpose, it is used for lending to deserving customers, and demonstrators are subject to sale at any time. ' In view of our determination that Respondent's contentions as to this issue are without merit , we find it unnecessary to decide whether the answer was insufficient under Sec 102 54 (b) and (c) of the National Labor Rela- tions Board Rules and Regulations and Statements of Procedure , Series 8, as amended, to entitle Respondent to litigate the issue as the General Coun- sel contends 195 NLRB No. 76 396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD In all the circumstances, therefore, we find that the formula set forth in the specification is fair and reasona- ble, and that Sergott is entitled to prize money at the rate of $675 per year or $168.75 per quarter during the backpay period.6 3. The Trial Examiner found that there was insuffi- cient basis to deny Sergott backpay during the period from October 5, 1969, to April 30, 1970. We agree. The Trial Examiner concluded, however, that after the ex- piration of his unemployment benefits on April 30, 1970, Sergott did not make reasonable efforts to find equivalent employment and therefore was not entitled to backpay for the period after April 30, 1970. We find merit in the General Counsel's exceptions to this finding. The record shows that during the backpay period Sergott called in person on 24 different automobile dealers, and contacted them, either in person or by telephone, a total of approximately 113 times. Of these, 72 contacts were made after April 30, 1970. Respond- ent admittedly made an independent check to ascertain whether Sergott sought employment during the period October 5, 1969, through March 24, 1971, and learned that Sergott had visited various automobile agencies. There is no evidence that Sergott at any time during this period received or refused any job offers.' There also is no showing that any jobs were available at any of the automobile dealers to which Sergott applied or at any of the other Chicago automobile dealers. When the Trial Examiner asked Sergott why he did not apply to some of the other dealers, Sergott replied, "I applied to the dealers that gave me hope as [sic] getting a job there." He explained that he had worked exclusively for Chevrolet and Cadillac dealers during the 18 years he had sold automobiles. Between April 30, 1970, and March 17, 1971, Sergott sought employment 11 or 12 times at Stamer Cadillac and the same number of times at Brigance Chevrolet where he had been previously employed. Thus, we find that Sergott continued to make a reasonable search for employment during the entire backpay period. In these circumstances, we find that Respondent has failed to sustain the burden of establishing that Sergott willfully incurred a loss of interim earnings at any time during the backpay period.' We shall therefore reverse the Trial Examiner's Decision insofar as it related to his finding that Sergott is not entitled to backpay for the period from April 30, 1970, to March 24, 1971. We conclude therefore that Respondent's obligation to make Sergott whole shall be fulfilled by payment to him of the total net backpay set forth and computed below: Quarterly Period 4 -- 69 1 -- 70 2 -- 70 3 -- 70 4 -- 70 1 -- 71 Gross backpay $3 , 158,41 $ 2,065 . 81 $3,040 . 14 $3,168.51 $3,179 . 92 $2,730.80 Value of demon- strator at $125 per month 375.00 375.00 375.00 375.00 375.00 375.00 Value of prizes 168.75 168.75 168.75 168.75 168.75 168.75 Total Quarterly $3,702.16 $2,065 . 81 $3,583.89 $3,712.26 $3,723 .67 $3,274.55 Gross Backpay Total Net Backpay $20,606.09 NLRB v Charley Toppino and Sons, Inc, 358 F.2d 94 (C A 5) ' Marlene Industries Corporation, 183 NLRB No 3, enfd. 440 F 2d 673, Nickey Chevrolet Sales, Inc, 160 NLRB 1279, 1280 (C A 6), Golay & Co., Inc v. NLR B, 447 F 2d 290 (C A 7) NICKEY CHEVROLET SALES, INC 397 ORDER On the basis of the foregoing Supplemental Decision and Order and the entire record in this case , the Na- tional Labor Relations Board hereby orders that the Respondent, Nickey Chevrolet Sales , Inc., Chicago, Il- linois, its officers, agents, successors, and assigns, shall pay to Harold Sergott as net backpay $20,606.09, less any tax withholding required by the laws of the United States and the State of Illinois, plus interest thereon at the rate of 6 percent per annum in accordance with the formula prescribed in Isis Plumbing & Heating Co., 138 NLRB 716. tion was $202 a month or $606 per quarter. The Respondent admits that Sergott would have had the use of a demonstrator automobile during the backpay period, but it contends that the value of the use of such a demonstrator was $125 per month. The specification alleges that during the backpay period Sergott would have received prizes from the Respondent or the Chevrolet Division of General Motors , Inc., in the value of $675 per year . Respondent denies this allegation. The specification admits to no interim earnings for the entire backpay period and Respondent contends that Sergott did not make reasonable effort to find substantially equivalent employment and that he should therefore be awarded no backpay, or that he be denied backpay for a substantial por- tion of the backpay period. II THE VALUE OF THE USE OF A DEMONSTRATOR AUTOMOBILE TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE HENRY L. JALETTE , Trial Examiner: On March 11, 1971, the United States Court of Appeals for the Seventh Circuit issued its opinion and order on a petition filed by the National Labor Relations Board to adjudge Respondent in civil con- tempt for disobeying and failing and refusing to comply with a decree of the Court entered May 4 , 1965, in which the Court concluded, inter alta, that Harold Sergott , a salesman em- ployed by Respondent, had been discharged because of his union activities , and in which the Court ordered Respondent to purge itself of contempt by offering Sergott full and bona fide reinstatement and to make him whole for all pay and benefits lost due to the discrimination against him.' Pursuant to such order, the Regional Director for Region 13 issued a backpay specification on August 11, 1971, detailing the sum of money due the said Sergott. On September 28, 1971, a hearing was held in Chicago, Illinois. Upon the entire record, including my observation of the witnesses, and after due consideration of the briefs by General Counsel and the Respondent , I make the following: FINDINGS OF FACT I PRELIMINARY STATEMENT The specification alleges, the answer admits , and I find that the backpay period is from October 5, 1969, to March 24, 1971. The specification alleges, the answer admits, and I find that Sergott would have earned 89.67 percent of the average gross earnings of three representative salesmen earned in the period from January 1, 1965, through September 30, 1969, as set forth in Appendix C of the specification. The specification also alleges that during the backpay period Sergott would have had the use of a new demonstrator automobile and that the value of the use of such a demonstra- ' NL R B v Nickey Chevrolet Sales, Inc., F 2d As previously noted, it is undisputed that as a salesman Sergott would have had the use of a demonstrator automo- bile. According to Edward J. Stephani , president of Respond- ent, the use of a demonstrator by a salesman is figured to be the equivalent in compensation of $125 per month . Accord- ing to the specification , the value of the use of a demonstrator automobile is $202 per month. The only evidence submitted in support of the specification was the rate schedule used by Nickey Rent-A-Car, a corporation also owned by Stephani, and a $200 per month quotation given to Sergott by the former manager of the Rent -A-Car operation for the rental of a four-door Impala for a period of 12 months. I accept the testimony of Stephani and conclude that the value of the use of a demonstrator automobile is $125 per month. The rate schedule submitted into evidence sets forth rates for rentals for varying periods of time, not including periods longer than 1 month, and it does not take into ac- count the use which will be made of the automobile, including such limitations as are imposed by having to use the car as a demonstrator. The $200 quotation on the back of the rate schedule was not explained by the individual who made it and is hearsay evidence. This is insufficient basis to overcome the testimony of Stephani who testified that the cost of rentals is a negotiable matter . I find, therefore, that the value of the use of a demonstrator during the backpay period was $125 per month, or $375 per quarter. III THE VALUE OF THE PRIZES SERGOTT WOULD HAVE RECEIVED General Motors sponsors sales contests pursuant to which salesmen employed by dealers such as Respondent obtain points based on sales which can be converted into merchan- dise prizes. Sergott testified that in the year preceding his discharge he received prizes with a total value of $675. Gen- eral Counsel contends that Sergott would have earned prizes of equal value annually during the backpay period and that he is therefore entitled to an additional amount of $ 168.75 per quarter for the value of the prizes he was prevented from earning by reason of his discriminatory discharge. As previously indicated insofar as gross earnings were con- cerned, the specification alleged that the appropriate measure of Sergott's gross backpay was 89.67 percent of the gross 398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD earnings of three representative salesmen earned in the period from January 1, 1965, through September 30, 1969. For some unexplained reason, where prizes were concerned, General Counsel not only abandoned the 89.67 percent formula and the representative employees, but also he abandoned the January 1, 1965, through September 30, 1969, representative period. Respondent contends that General Counsel was not warranted in carving out the year 1969 as a period representa- tive of the prizes Sergott would have earned annually during the backpay period, nor was he warranted in relying on Ser- gott's prizes rather than those of the representative em- ployees. I agree. Having selected a representative period and representative employees for earnings other than prizes, Gen- eral Counsel could not select a different period and Sergott's prizes without justifying the variance. No justification was offered. I therefore reject the backpay claim for prizes as alleged in the specification. Despite the deficiency of the allegation, General Counsel has established that Sergott did suffer a loss in prizes by reason of the discrimination against him and Sergott is enti- tled to be made whole to the extent of the proof. As I view the record, for the period conceded by the specification to be an appropriate period to measure Sergott's earnings, namely January 1, 1965, to September 30, 1969, Sergott earned prizes for a total of $675.2 Since that period consists of 19 quarters, Sergott's average quarterly prize money amounted to $35.52 and that amount shall be added to his quarterly backpay for the backpay period. IV SERGOTT'S WILLFUL LOSS OF EARNINGS A. Sergott's Search for Employment During the backpay period of October 5, 1969, to March 24, 1971, Sergott had no interim earnings. He registered with the United States Employment Service on October 10, 1969, 1 week after his discharge, and he continued to report to the claims office every week until April 30, 1970, when he had exhausted his benefits. Beginning November 13, 1969, he sought employment as a automobile salesman (the occupa- tion in which he had been engaged for 18 years) either by personal visits to automobile dealers or by telephone calls. Between that date and March 18, 1971, Sergott sought em- ployment in this fashion from 25 dealers and made 114 con- tacts. B. Analysis and Conclusions Despite the impressive evidence of attempts by Sergott to obtain interim employment, Respondent contends that on the facts of this case he did not make a diligent search for employ- ment. Before analyzing Respondent's contentions, it should be noted that there is no dispute about the controlling legal considerations. A discriminatorily discharged employee must make reasonable efforts to find new employment which is substantially equivalent to the position from which he was discharged. N.L.R.B. v. Miami-Coca Cola Bottling Co., 360 F.2d 569 (C.A. 5). However, failure to make a reasonable search for interim employment in an affirmative defense to backpay liability and the burden of proof is on the employer. N.L.R.B. v. Mooney Aircraft, Inc., 366 F.2d 809 (C.A. 5); N.L.R.B. v. Brown & Root, Inc., 311 F.2d 447 (C.A. 8). Respondent's contention that Sergott's testimony is imcompetent or insufficient to establish the value of the prizes he received is without merit It is settled law that an individual's testimony about the value of his personal property is admissible, and the only issue is the weight to be accorded the testimony In this instance, Sergott's testimony is uncontradicted and was based on proper observations 3 Wigmore, Evidence 716, 719 (Chadbourn Rev 1970) It is with these principles in mind, and with special empha- sis on what is almost a truism, namely, that whether an employee acted reasonably or not in seeking employment is a question of fact,' that I turn to the factors enumerated by Respondent in support of its contentions. These are as fol- lows: (1) Sergott did not apply to any employer until November 14, 1969, 40 days after his termination. (2) During the backpay period of nearly 18 months, Sergott contacted only 24 different automobile dealers. (3) He did not contact his previous employer, Brigance Chevrolet, until nearly 4 months after his discharge. (4) Sergott ignored the rest of some 500 Chicago area dealers through the entire backpay period, including a num- ber of sizable dealers in the immediate area of his residence. (5) As soon as his unemployment compensation benefits expired, he stopped reporting to the State employment office. (6) After April 30, 1970, he called on only four different dealers in a period of 11 months, and from May I to Novem- ber 15, 1970, he applied to none. As to item (1) I deem it insufficent to warrant a denial of backpay for the first period of Sergott's unemployment. There is no requirement that an employee wrongfully terminated must instantly seek new work, and Sergott's failure to apply to any employer until November 13, 1969, must be weighed with the evidence that he registered with the United States Employment Service within a week of his termination and was reporting to the claims office every week. Sergott may well have hoped that the agency would be able to refer him to employment and his waiting to make personal applications for a period of about 40 days cannot in the circumstances be deemed unreasonable. As to item (3), Sergott's failure to contact his previous employer for a period of nearly 4 months, I see no basis to disqualify Sergott. During that 4-month period, he was re- porting to the state employment office and he had received no referrals to any employer. When he did apply to his previous employer he was unsuccessful. Items (2), (4), (5), and (6) are complementary. In agree- ment with Respondent, I deem it significant that during a backpay period of nearly 18 months during which he had no interim employment, Sergott contacted only 25 out of some 500 automobile dealers in the Chicago metropolitan area. Sergott offered no explanation for his failure to apply to more than 25 dealers. Nevertheless, I do not agree with Respond- ent that by reason of the limited search Sergott made to find employment he is not entitled to any backpay. During the period from October 10, 1969, to April 30, 1970, Sergott was registered with and reporting to the state employment office. While there is no evidence that he received a single referral during the entire period he was registered, it was not unrea- sonable for him to place some reliance on that office to refer him to employment, particularly when he was contemporane- ously seeking employment through his own efforts from at least some of the Chicago area's automobile dealers. Under these circumstances, and because I do not believe that a discharged employee must exhaust all possibilities in seeking interim employment, I conclude that Sergott's failure to broaden his search for employment between the date of his discharge and April 30, 1971, is insufficient basis to deny him backpay for that period. A different conclusion is warranted, however, with regard to Sergott's efforts to find employment after the expiration of his employment benefits on April 30, 1970. Those efforts cannot be deemed reasonable on the facts presented herein. After April 30, 1970, he kept applying to the same employers ' Florence Printing Company v. N.L.R.B., 376 F 2d 216 (C A. 4) NICKEY CHEVROLET SALES, INC 399 repeatedly although there is no indication he was receiving any encouragement. For example, between April 30, 1970, and March 17, 1971, he applied at (or telephoned) Starner Cadillac, 11 times; Moell Cadillac, 11 times; Gateway Chev- rolet, 11 times; Brigance Chevrolet, 11 times. These were all dealers to whom he had applied before April 30. Not until November 18, after a period of 6-% months, did he apply to a new dealer. Thereafter, he contacted another new dealer on January 4, 1971; another one on January 8, 1971; and yet another on March 12, 1971, There is no explanation why, having limited his search to 21 dealers over a period of 13 months, Sergott decided to expand his search, and yet to do so in such a limited fashion, In my judgment, many of the contacts made by Sergott were window dressing. An undeter- mined number were merely telephone calls, and as previously noted they were repeat calls. Given the size of the employ- ment market and the fact that he was no longer registered with the state employment office, it cannot be said that such efforts to find equivalent employment were reasonable. Ser- gott is 44 years old with 18 years of experience. It is incon- ceivable to me that he would have been unemployed for 18 months had he made reasonable efforts to find equivalent employment. On the facts of this case, I conclude that Sergott is not entitled to backpay for the period after April 30, 1970. V SUMMARY Summarizing the foregoing, I conclude that Respondent's obligation to make Sergott whole shall be fulfilled by payment to him of the total net backpay set forth and computed below: Quarterly Period 4-69 1-70 2-70 4/ Gross Backpay $3 ,158.41 $2,065.81 $1,013.38 5/ Value of Demonstrator at $125 a month 375.00 375.00 125.00 Value of Prizes 35.52 35.52 11.84 Total Quarterly $3,568.93 $2,476.33 $1,150.22 Gross Backpay Total Net Backpay $7,195.48 RECOMMENDED ORDER Upon the basis of the foregoing findings and conclusions, I recommend that the Board issue the following: SUPPLEMENTAL ORDER Respondent, Nickey Chevrolet Sales, Inc., its officers, agents, successors, and assigns, shall pay to Harold Sergott as net backpay $7,195.48, less any tax withholding required by the laws of the United States and the State of Illinois, plus interest thereon at the rate of 6 percent per annum in accord- ance with the formula prescribed in Isis Plumbing & Heating Co., 138 NLRB 716. To April 30, 1970 ' One-third of the gross backpay set forth in Appendix C to the backpay specification