Inter-Lakes Engineering Co.

148 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Inter-Lakes Engineering Company and International Union, United Automobile, Aerospace and Agricul- tural Implement Workers of America (UAW). Case 7-CA-8819 March 28, 1975 DECISION AND ORDER BY MEMBERS FANNING, JENKINS, AND KENNEDY On October 10, 1974, Administrative Law Judge Samuel Ross issued the attached- Decision in this pro- ceeding. Thereafter, Respondent filed exceptions and a supporting brief, and General Counsel filed an answer- ing 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 at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, findings, and conclusions of the Administrative Law Judge only to the extent consistent herewith. The General Counsel on September 9, 1971, issued a complaint against Respondent which alleged that Re- spondent had engaged in unfair labor practices within the meaning of Section 8(a)(1) and (3) when it, inter alia, laid off 15 employees on July 6, 1971, in retaliation for their union activities and to discourage membership in the Union. On November 22, 1971, under circum- stances more fully detailed by the Administrative Law Judge, the parties entered into a settlement stipulation which provided, inter alia, for the withdrawal by the Respondent of its answer and for the entry of a Board order and court of appeals decree against the Respond- ent. The Board approved the settlement stipulation on January 14, 1972. On April 20, 1972, the United States Court of Appeals for the Sixth Circuit entered a con- sent judgment enforcing the Board's order. Since that time a controversy has arisen between the parties as to the correct interpretation of a portion of the settlement stipulation. The settlement stipulation required Respondent to make the alleged discriminatees whole by payment of a lump sum of $10,000 "to be apportioned by and at the discretion of the Regional Director for the Seventh Region . . . in accordance with the normal procedures and practices of the National Labor Relations Board." The settlement further provided in paragraph 10 as follows: 10. The parties hereto recognize that the amount of backpay to be paid herein represents a compromise settlement of pay due for the period of July 7, 1971 to September 20, 1971. It is agreed, therefore, that in the event any of the dis- criminatees reimburse the Michigan Employment Security Commission for any unemployment com- pensation they received as a result of a loss of pay because of the alleged unfair labor practices in this matter, the Employer will compensate the dis- criminatees for any -money they are required to repay the Michigan Employment Security Commis- sion in excess of the settlement received by the in- dividual employees in this matter. [Emphasis supplied.] The parties are in disagreement as to the meaning of the underlined portion of the quoted clause. General Counsel contends that the clause requires Respondent to reimburse discriminatees an amount equal to that which the discriminatee must repay to the Michigan Employment Security Commission (MESC) with the total amount not to exceed 100 percent of the backpay due. Respondent contends that the clause unambigu- ously requires Respondent to reimburse discriminatees only the amount by which their repayment to MESC exceeds the amount which they received under the terms of the settlement stipulation. Respondent further contends that since the settlement stipulation is unam- biguous the Parol Evidence Rule precludes the taking of any evidence as to its meaning. The language used in paragraph 10 was a product of the settlement negotiations and is somewhat different from the language usually included in settlements reached in Region 7 in cases where less than 100 per- cent of backpay is obtained.' Following settlement, the Region determined the proportion of the $10,000 each employee was entitled to receive. Respondent made the payments to the employees. Respondent also notified the Michigan Employment Security Commis- sion (MESC) that these payments had been made. On August 31, 1973, MESC ordered 10 of the 14 dis- criminatees to make restitution of various sums.' The Region has asked Respondent to reimburse the dis- criminatees in accordance with the General Counsel's interpretation of _the clause. Respondent refuses to reimburse the discriminatees, except that it is willing to 1 The Region usually seeks a provision which reads as follows- The parties hereto recognize that the amount of backpay to be paid herein represents a compromise of the total amount due the dis- crimmatee It is agreed, therefore, that in the event the discrimmatee reimburses the Michigan Employment Security Commission for any unemployment compensation the discrimmatee received as a result of a loss of pay because of the alleged unfair labor practices in this matter, the employer will compensate the discriminatee in an amount equal to that which the discriminatee repays to the Michigan Employment Security Commission. This amount, however, shall not exceed z The discnminatees have appealed that order. 217 NLRB No. 26 INTER-LAKES ENGINEERING COMPANY reimburse individual employees for any amounts they repay MESC over the amount they received under the terms of the settlement stipulation. Turning first to the question of whether it was proper for the Board to take evidence before determining which interpretation of the clause in question is correct, we conclude that it was. It is well settled that the Parol Evidence Rule is a rule of substantive law which re- quires that when parties have made a contract "and have expressed it in a writing to which they, have [all] assented as the complete and accurate integration of that contract, evidence, whether parol or otherwise, of antecedent understandings and negotiations will not be admitted for the purpose of varying or contradicting the writing."3 Concededly, the settlement stipulation constitutes a complete and accurate integration of the terms of the settlement stipulation.' Thus, evidence outside the agreement cannot be introduced to vary its terms. However, it is also well established that evidence may be introduced for the purpose of ascertaining the correct interpretation of an agreement.' The evidence here was taken in order to ascertain the meaning of the settlement stipulation, and not to vary its terms. Under these circumstances, it was properly received for that purpose. Next, we turn to the primary question in this case. Which interpretation of the settlement stipulation is correct? In agreement with the Respondent's conten- tion, we conclude that the language "the Employer will compensate the discriminatees for any money they are required to repay the Michigan Employment Security Commission in excess of the settlement received by the individual employees in this matter" seems on the sur- face to require Respondent to reimburse the dis- criminatees'only the amount by which their repayment to MESC exceeds the amounts they received under the terms of the settlement stipulation. Certainly that is the plain meaning of the words. This meaning is supported by the fact that the parties in agreeing to this clause modified language in the clause usually used which would unquestionably have achieved the result the General Counsel urges.' Having said that, we must examine the evidence in the record to ascertain whether the evidence establishes 3 2 Corbin, Contracts § 573 (1960); see also 9 Wigmore, Evidence § 2400, et seg. (3d ed. 1940). 4 An agreement is integrated where the parties thereto adopt a writing or writings as the final and complete expression of the agreement . An integra- tion is the writing or writings so adopted. Restatement of the Law , Contracts § 228 5 2 Corbin, Contracts § 572(b) (1971 Pocket Part.), § 579 (1960). See also 9 Wigmore, Evidence § 2740(3) (3d ed 1940); Restatement of the Law, Contracts § 242. Evidence, of course may be introduced for a number of other purposes not relevant here. 6 'William Schaub, the General Counsel's attorney who negotiated the settlement, testified the changes were made to assure Respondent that Re- spondent's liability would not exceed 100 percent of backpay. Since this change has nothing to do with that problem, this explanation is very weak. 149 that the parties ascribed some other meaning to the language in question. At the outset we note that for the most part the General Counsel's evidence as to the negotiations deals with general discussions of the goal the Region ordinarily seeks to achieve in seeking clauses of the type it sought here and how the language in its usual clause is interpreted. Schaub's testimony is very general and lacks any specifics as to what was said during settlement negotiations as to the meaning of the revised clause. (To the extent that Schaub's testimony is specific as to what was said during negotiation, it relates to the clause usually sought by the Region and which was originally proposed by Schaub.) There are only two items of credited testimony which tend to support the General Counsel's contention that the par- ties intended the interpretation General Counsel now asserts is the correct one: (1) Union Representative Ken McDivitt testified that Schaub told him in the presence of and without objection from Respondent's attorney, Statham, that if the discriminatees "had to pay any of it [the settlement] back [to MESC] then it [was to] be borne by the company." (2) Field Examiner Diane Lepsig testified that shortly after February 25, 1972, she asked Statham if he was not aware that, if the employees had to reimburse MESC, that his client would have to, in turn, reimburse them for moneys that had to be returned, and that he responded, "Yes, he was aware of that." As to the first item, the weight to be given it is somewhat diminished by the lack of any affirmative indication that Statham agreed with what was being said or was even listening to the conversation between the General Counsel and the discriminatees. As to the second, Statham's apparent agreement during the telephone conversation with the interpretation as- serted by the General Counsel may have been inadver- tent since Respondent shortly thereafter, on April 4, 1972, wrote the Region appearing to assert the contrary position, and held a meeting with its employees, includ- ing the discriminatees, in which it cautioned the dis- criminatees that the MESC may be seeking restitution from them. Further, Respondent, both before and since Statham's conversation with Lepsig, has not taken any position inconsistent with the interpretation it asserts we should place on the settlement stipulation. Thus, while there is some evidence to support the General Counsel's position, we are not persuaded that General Counsel has presented sufficient evidence to establish that the parties gave to the clause any meaning other than the meaning we would normally ascribe to the language used. Finally, the General Counsel has requested that the settlement stipulation be set aside if we conclude that Respondent's assertions as to its meaning are correct. The Administrative Law Judge has indicated that he would do so under these circumstances. We do not 150 DECISIONS OF NATIONAL LABOR RELATIONS BOARD agree. As we have found, the meaning of the settlement stipulation is clear on its face. There is nothing in the terms of the settlement stipulation which is repugnant to the purposes and policies of the Act. Respondent has fully-complied with its terms. The Board's policy is to encourage the parties to enter into settlement stipula- tions where possible. That policy would be discouraged were we to set aside a settlement under the circum- stances present herein. Accordingly, our order shall only require that Respondent comply with the terms of the settlement agreement as interpreted herein. ORDER It is hereby ordered that the Respondent, Inter- Lakes Engineering Company, Mt. Clemens, Michigan, shall be required to reimburse the discriminatees for moneys they are required to repay the Michigan Em- ployment Security Commission only to the extent that the repayment exceeds the amount the employees re- ceived under the terms of the settlement stipulation. DECISION STATEMENT OF THE CASE SAMUEL Ross, Administrative Law Judge: Pursuant to a charge filed by the above-named Union on July 12, 1971, and an amended charge filed on July 14, 1971, the General Coun- sel of the National Labor Relations Board issued a complaint on September 9, 1971, against Inter-Lakes Engineering Com- pany (the Respondent) which alleged that the Respondent had engaged in unfair labor practices within the meaning of Section 8(a)(1) and (3) of the Act by coercively interrogating employees about their union activities, and by laying off 15 employees on July 6, 1971, in retaliation for their union ac- tivities and to discourage membership in the Union. On Sep- tember 15, 1971, the Respondent offered the 15 alleged dis- criminatees unconditional reinstatement to their former jobs as of September 20, 1971, and the offer was accepted. On September 16, 1971, the Respondent filed an answer to the complaint denying the commission of any unfair labor prac- tices. The issues thus joined came on for hearing in Detroit, Michigan, on November 22, 1971, before then Trial Exam- iner, now Administrative Law Judge, Arnold Ordman. After the hearing opened, the parties entered into a written settle- ment stipulation which provided, inter alia, for the with- drawal by the Respondent of its answer and for the entry of a Board order and court of appeals decree against the Re- spondent. The hearing was then closed pending approval of the settlement by the General Counsel and the Board. On December 10, 1971, the settlement stipulation was approved by the General Counsel, and on January 14, 1972, the Board also approved it and entered its Decision and Order based thereon. On April 20, 1972, the United States Court of Ap- peals for the Sixth Circuit entered a consent judgment enforc- ing the Board's order. One of the provisions of the settlement stipulation in this case required the Respondent to make whole the employees who were laid off on July 6, 1971, and reinstated on Septem- ber 20, 1971, by the payment of a,lump sum of $10,000 "to be apportioned by and at the discretion of the Regional Direc- tor for the Seventh Region-in accordance with the normal procedures and practices of the National Labor Relations Board." The settlement stipulation further provided in para- graph 10 as follows: 10. The parties hereto recognize that the amount of backpay to be paid herein represents a compromise set- tlement of pay due for the period of July 7, 1971 to September 20, 1971. It is agreed, therefore, that in the event that any of the discriminatees reimburse the Mich- igan Employment Security Commission for any unem- ployment compensation they received as a result of a loss of pay because of the alleged unfair labor practices in this matter, the Employer will compensate the dis- criminatees for any money they are required to repay the Michigan Employment Security Commission in excess of the settlement received by the individual employees in this matter. There has since developed a substantial dispute between the parties regarding their intent and the interpretation of this provision, and the extent of the Respondent's liability, if any, to indemnify the discriminatees for the amounts of unem- ployment insurance benefits which they have been ordered to repay to the Michigan Employment Security Commission. On January 30, 1974, the Regional Director for Region 7 of the National Labor Relations Board filed a motion with the Board to clarify its order approving the foregoing settle- ment stipulation. On February 20, 1974, the Respondent filed an opposition to the said motion. On March 25, 1974; the Board denied the motion of the Regional Director, and or- dered that a hearing be held before a duly designated Ad- ministrative Law Judge "for the purpose of taking evidence to resolve said issues." Pursuant to the said order, a hearing was conducted before me in Detroit, Michigan, on June 5 and 6, 1974. Upon the entire record, including my observation of the witnesses and their demeanor, and after due consideration of the briefs filed by the parties, I make the following: FINDINGS OF FACT A. The Settlement Discussions on November 22, 1971 Since 1967, it has been the consistent policy of Region 7 of the Board to require in all cases where a settlement is ob- tained in which discriminatees receive less than 100 percent of their backpay, that the Respondent also agree to indemnify the discriminatees in the event that they later are required to make restitution to the Michigan Employment Security Com- mission (herein called MESC) of benefits which they received by reason of their unemployment during the backpay period. This policy was instituted by then Regional Director Jerome H. Brooks to discourage a practice which he had observed of employers who, after settling unfair labor practice cases and paying backpay to discriminatees, notified MESC to recoup the unemployment compensation benefits previously paid to the discriminatees. To eliminate "what [he] at that time con- sidered to be an injustice," Regional Director Brooks drafted a provision for inclusion in settlement agreements "in cases INTER-LAKES ENGINEERING COMPANY where less than 100 percent backpay was obtained for dis- criminatees," and he adopted the policy of requiring "a clause of [that] type" in such case.' The provision thus drafted by Brooks for inclusion in such settlements was as follows-' The parties hereto recognize that the amount of backpay to be paid herein represents a compromise of the total amount due the discriminatee. It is agreed, therefore, that in the event the discriminatee reimburses the Michi- gan Employment Security Commission for any unem- ployment compensation the discriminatee received as a result of a loss of pay because of the alleged unfair labor practices in this matter, the employer will compensate the discriminatee in an amount equal to that which the discriminatee repays to the Michigan Employment Security Commission . This amount, however, shall not exceed $ The maximum total liability of the Respondent was supposed to be 100 percent of the backpay lost by the discriminatee as a result of the alleged unfair labor practice. On November 22, 1971, when this case came on for hearing of the Respondent's alleged unfair labor practices, William Schaub, Jr., appeared on behalf of the General Counsel, Mr. Ken McDivitt, an International representative, appeared for the Union, and the Respondent was represented by James Statham and Robert S. Rosenfeld from the law firm of Key- well and Rosenfeld. Only 4 of the 15 employees whose layoff by the Respondent was alleged in the complaint to have been motivated by antiunion considerations- attended the hearing. As previously noted, all 15 of the alleged discriminatees had previously been reinstated by the Respondent on September 20, 1971 . Consequently, although the length of the period during which these employees were on layoff status was known, the amount of their total net loss of earnings was not available to the representatives of the General Counsel and the Union. In this context, settlement discussions were undertaken by the parties shortly after the hearing opened . Agreement was reached on the terms of the formal settlement agreement and of the notice for posting, leaving only the amount of the backpay to be paid by the Respondent in dispute. In the absence of net backpay information for all 15 of the dis- criminatees, the parties discussed a lump sum to be paid by the Respondent to settle its possible backpay liability to all 15 of the alleged discriminatees which later, when the specific information was ascertained, would be apportioned among the discriminatees by the Regional Office according to a for- mula based on the percentage of the net loss of pay of each to the total net loss of pay suffered by all of them. The Respondent first made a lump sum offer of $2,000, and later of $8,000, to settle its possible backpay liability, but both offers were rejected as insufficient in the light of the Region's "normal policy" of not settling cases involving backpay for less than 80 percent of the backpay claim. The Respondent then made a final offer of $10,000 which its counsel told Schaub they "believed" to be "at least 80 percent of the total I The quotes above are from the credited testimony of Brooks who, following retirement from the Board , has been employed since September 1972 by the law firm of Keywell and Rosenfeld, the Respondent's counsel in this case. 2 See G C Exh. 2, second paragraph. 151 amount due." Union Representative McDivitt regarded this offer as acceptable to the Union, and the discriminatees who were present also considered the Respondent's offer to be "fair." Schaub accordingly went to see then Regional Direc- tor Brooks to obtain his approval of the Respondent 's settle- ment offer. Schaub notified Brooks of the amount of the Respondent's backpay offer, that the Union and the dis- criminatees were willing to accept it, and that the offer ap- peared to represent "something around 80 percent." Brooks agreed to approve the settlement provided that the settlement agreement contained "our indemnification [MESC] clause to make whole the individual employees in the event they were required to reimburse the Michigan Employment Security Commission."3 - Upon the conclusion of his conference with Regional Di- rector Brooks, Schaub returned to the settlement discussions and notified all the parties that the Respondent's settlement offer was acceptable to the Region provided that the stipula- tion included the Region's MESC indemnification clause. Schaub exhibited a verbatim draft of the clause to Respon- dent's attorneys Statham and Rosenfeld, and they protested that "there was no need for this kind of clause," and that they didn't "understand it." Schaub sat down with Statham and gave him several examples of how the clause operated.4 One example given to Statham by Schaub was that of a dis- criminatee whose total net backpay loss was $1 ,000, who received $600 in settlement from the Respondent, and who subsequently was required to make restitution of $800 to MESC for unemployment benefits received by him for the backpay period. Schaub explained that in such a case, the Respondent would be required to indemnify the dis- criminatee for $400 (of the $800) paid by the latter to MESC, which together with the $600 previously paid to him in settle- ment, constituted 100 percent of the discriminatee's backpay loss. Another example given by Schaub to Statham was the case of a discriminatee who had an identical backpay loss and settlement of $1000 and $600 respectively, but who is re- quired to make restitution to MESC for only $100. Schaub explained that in such a case, the Respondent's liability to indemnify was $100 inasmuch as that amount, when added to the settlement previously received by the discriminatee, was still less than 100 percent of his backpay loss. Statham again repeated that he saw no need for the MESC clause 3 The findings and quotes above are based on the testimony of Schaub which I credit. Former Regional Director Brooks, who testified for the Respondent, did not controvert Schaub's testimony regarding the condition precedent which he imposed upon the acceptance of the Respondent's offer of settlement. Respondent's counsel Rosenfeld testified that "there was no conversation that I recall by me or by Mr Statham in my presence . . . that this was about an 80 percent settlement. " For reasons explicated infra, I consider Rosenfeld's testimony in this case as unreliable in many respects, and I therefore do not credit his testimony which suggests that no such representation was made to Schaub. Statham, a practicing attorney in De- troit, was not called by the Respondent to testify, assertedly because he was out of town and would not be back until the following Monday No applica- tion was made by the Respondent to continue the hearing for the purpose of adducing testimony from Statham . I infer therefrom that Statham, if called, would not have supported Rosenfeld's testimony in this respect. International Union UnitedAutomobile, Aerospace, andAgriculturallmple- ment Workers ofAmerica [Gyrodyne Co. ofAmerica] v N.LR B., 459 F 2d 1329 (C.A.D.C , 1972); 2 Wigmore, Evidence § 285 (3d Ed 1940) 4 While Schaub and Statham were thus engaged, Rosenfeld admittedly left "to consult with [his] client about this new development in [the] negotia- tions." 152 DECISIONS OF NATIONALLABOR RELATIONS BOARD because in his opinion the settlement reimbursed the em- ployees for at least 80 percent of what was due them. Schaub responded that if the settlement represented 80 percent of the discriminatees' backpay, there was "very little liability left" for the Respondent, and the maximum for which it could be held responsible "would be another couple of thousand," and therefore it shouldn't matter to the Respondent whether the clause was in or not in the settlement stipulation. Schaub further said that "we have to worry about protecting [the] individuals." Statham nevertheless continued to object to the inclusion in the settlement of the MESC clause, and Schaub "insisted that we would have no settlement unless the clause was inserted in the settlement agreement."5 According to Schaub whom I credit in these respects, he and Statham at this point "had reached a virtual impasse upon this particular point," and Statham and Rosenfeld "caucased [sic] with the[ir] client, came back and indicated that we could work out something using this [MESC] lan- guage." Schaub accordingly "sat down with Mr. Statham," and, using the Region's MESC clause as a base they "tailored the clause through negotiations," and arrived at the language which ultimately was incorporated in the settlement stipula- tion as paragraph 10 quoted above in the section of this Decision entitled "Statement of the Case." According to Schaub, the changes thus effected from the Region's standard MESC clause were made to assure Statham that his client's liability thereunder would not exceed 100 percent of the total net backpay loss suffered by the 15 discriminatees. The changes thus effected consisted of striking the last sentence of the standard MESC clause because of the lack of knowl- edge at that time of the amount of the total net backpay loss of the 15 discriminatees, and in substituting therefor a state- ment of the precise backpay period to which the indemnifica- tion provision applied. In addition, the clause in the standard MESC form which read, "The employer will compensate the discriminatee in an amount equal to that which the dis- crimmatee repays to the Michigan Employment Security Commission," was changed to read, "The Employer will compensate the discriminatees for any money they are re- quired to repay the Michigan Employment Security Commis- sion in excess of the settlement received by the individual employees in this matter." Following the conclusion of his negotiations with Statham of the language of paragraph 10, Schaub took the proposed settlement stipulation back to Re- gional Director Brooks, showed him and Compliance Officer Marvin Scott the language changes which had been made, obtained their approval of the changes, and then returned to the hearing room where all the parties signed the settlement stipulation. Schaub testified that in agreeing to the changes in para- graph 10 from the Region's standard MESC form, he at no time intended to recede from the Region's MESC policy which he had explicated by the hypothetical examples to Statham, and that his intent and understanding at all times, which he conveyed to both Statham and Rosenfeld as well as to Union Representative McDivitt and the discriminatees, was that "in the event the individuals had to repay money to 5 The findings above are based on Schaub's credited testimony. As pre- MESC, the Respondent would have to reimburse them for the moneys paid up to 100 percent of the [backpay] liability." Schaub's testimony in the latter regard was corroborated by McDivitt, who testified that Schaub told him in the presence of Statham that if the discriminatees "had to pay any of it [the settlement] back [to MESC] then it be borne by the company." Two of the four discriminatees who were present at the hearing on November 22, 1971, when the settlement was reached, similarly testified that they were told by Schaub and McDivitt that: the $10,000 settlement . . . would be split up between the group of people that were laid off . . . And that in the event that Michigan Unemployment would request the monies that Inter-Lake Engineering would reim- burse us for any monies that we had to pay into MESC.6 Respondent's attorney Rosenfeld's version of how agree- ment was reached on the language of paragraph 10 of the settlement stipulation, and what all the' parties understood and intended by its terms, is contrary to the testimony of Schaub, McDivitt, and the two discriminatees Walgrave and Marushak. Rosenfeld's testimony in this regard was as fol- lows: After Schaub returned from his conference with Re- gional Director Brooks and said that the $10,000 settlement offer "was satisfactory" if the settlement included the Re- gion's MESC indemnification clause, he told Schaub that there was "no need for this kind of clause," and "besides, I don't understand it." Schaub then explained the clause to Statham while he (Rosenfeld) discussed this "new develop- ment" with his client. Upon his return "to the conference with Mr. Schaub," Rosenfeld assertedly rejected "the proposal" contained in the Region's standard MESC clause, and he told Schaub "that we would not agree on a dollar for dollar basis [that] what was paid by [the] employees to MESC would be paid by us to them." Instead, he assertedly counter- proposed "that if anybody had to pay back to the MESC more than what they got under the settlement we would pay them on an individual basis that excess." According to Rosenfeld, Schaub expressed concern that under the counter- proposal, the discriminatees might "end up with nothing" more than they had already received from MESC, and he replied, "That's right, [the] people may end up with nothing but they won't be worse off ...." Schaub then assertedly expressed the opinion that the Respondent's counterproposal was contrary to the policy expressed in the Region's MESC clause, and Rosenfeld "agreed that my proposal was different than his." Rosenfeld testified that notwithstanding the foregoing, Schaub "agreed to" his counterproposal, and "the next thing I remember was there was an attempt to reduce it [Rosenfeld's proposal] to writing." Rosenfeld admitted that the negotiations regarding the language in'paragraph 10 were conducted by Schaub and Statham while he "went back to report to my client," and that his only contribution thereto was to later have the word "individual" inserted in the last sentence. Schaub then left to obtain the approval of his su- periors, and when he returned, he reported that the settle- viously noted, the Respondent did not call Statham to testify, and thus 6 The quotes above are from the credited testimony of Robert V. Wal- Schaub's testimony regarding this conversation with Statham during Rosen- grave, one of the discrimmatees Robert A. Marushak, another dis- feld's absence is uncontroverted criminatee, gave similar testimony INTER-LAKES ENGINEERING COMPANY ment was "acceptable." The stipulation "was then reduced to typewritten form," and: ... in the presence of all those people to be sure every- body understood I explained to my client out loud that this Paragraph 10 which is inserted means the $10,- 000.00 may not be the limit of your liability under this agreement; that if anybody has to pay back to MESC more than you're paying them under this agreement you may have-you will have to pay them the difference.? No one, according to Rosenfeld, objected to or controverted his interpretation of paragraph 10, the settlement stipulation was signed, and the parties "shook hands and we went home." For reasons explicated infra, I credit Rosenfeld's version of the settlement negotiations only to the extent that it accords with that of Schaub credited above. B. Postsettlement Developments Indicative of the Parties' Interpretation of Paragraph 10 The terms of the settlement agreement executed by the parties on November 22, 1971, required the approval of the General Counsel and the Board, and it was to have "no force or effect" until such approval was granted. Accordingly, on November 23, 1971, Regional Director Brooks forwarded the formal settlement stipulation to Assistant General Counsel Francis E. Dowd in Washington, D.C., together with a memorandum recommending that it "be submitted to the Board for approval."8 Thereafter, on December 10, 1971, Deputy Associate General Counsel John E. Higgins, Jr., ap- proved and signed the settlement stipulation on behalf of the General Counsel, and on December 21, 1971, Associate Gen- eral Counsel John S. Irving forwarded it to the Board's Ex- ecutive Secretary Ogden W. Fields, together with a memo- randum recommending its approval by the Board. In connection with that recommendation, Irving called to the specific attention of the Board paragraph 10 of the settlement stipulation, and said in reference thereto. Please note that paragraph 10 of the Stipulation pro- vides that the discriminatees will be reimbursed by Re- spondent for any monies which they return to the State of Michigan as repayment of unemployment compensation.9 As previously noted, the Board thereupon approved the set- tlement stipulation and entered its order based thereon on January 14, 1972, and on April 20, 1972, the Court of Ap- peals for the Sixth Circuit entered a consent judgment enforc- ing the Board's order. As indicated above, the settlement stipulation of the parties also provided that the $10,000 lump sum settlement was "to be apportioned" among the discriminatees "at the discretion of the Regional Director," and "in accordance with the nor- mal procedures and practices of the National Labor Relations Board." On January 18, 1972, Regional Director Brooks as- 7 The "people" who assertedly were present when Rosenfeld allegedly made this statement were Respondent's President Casper, Its General Manager Rott, Union Representative McDivitt, and Attorneys Schaub and Statham 8GC Exh 3. 9 See G C. Exh. 4 153 signed Supervisory Field Examiner Diane M. Lepsig to pre- pare the backpay computation which was needed for deter- mining the apportionment of the lump sum settlement. She contacted Statham, the Respondent's attorney of record in the case, and requested him to furnish her with the gross backpay information. Statham complied. Lepsig also re- quested and obtained from the discriminatees the information necessary to determine their interim earnings during the backpay period, and their expenses, if any, in connection with obtaining interim employment. Based on the information thus obtained, Lepsig computed the total net backpay loss suffered by 14 of the 15 discriminatees.10 Based on these computations, she determined that the total net backpay lost by the discriminatees was $26,608, the percentage of the $10,- 000 settlement to which each of the 14 discriminatees was entitled, and the amount in dollars which that percentage represented. Lepsig then prepared a letter to Attorney Sta- tham for Regional Director Brooks' signature (together with tables attached setting forth her backpay computations) which requested that 14 checks in specified amounts (less necessary deductions for social security and income taxes) be drawn to the order of the 14 discriminatees and sent to the Regional Office. That letter and the attachments thereto were sent to Statham on February 25, 1972.11 Shortly after his receipt of that letter, Statham called Lep- sig and asked if it would be possible for the Regional Office to notify MESC that the discriminatees were about to receive the Respondent's checks in settlement of its backpay obliga- tion. Statham told Lepsig that his client intended to notify MESC, but would prefer the Region to do so. Lepsig replied that it was not "our custom" to do so, and she asked Statham if he was not aware "that if the employees had to reimburse MESC, that his client would have to in turn reimburse them for any monies that had to be returned." Statham replied, "Yes, he was aware of that." Lepsig asked Statham, "Have you discussed it with your client?" Statham answered that "he had and his client didn't care." Statham asked Lepsig to check with Regional Director Brooks about notifying MESC and she agreed to do so. However, before she did, Statham called her again and said that he had spoken to MESC, and had been advised by it to have the settlement checks drawn to the joint order of the discriminatees and MESC. Statham asked Lepsig if that would be acceptable to the Board. Lepsig replied that in her opinion it would not. Statham asked her to check with the Compliance Office or Brooks, and she said she would. Lepsig then prepared a memorandum to Regional Director Brooks and to Compliance Officer Scott dated Feb- ruary 29, 1972, in which she described her two conversations with Statham and what she had told him.'2 Brooks sent the memorandum back to Lepsig with the notation, "I agree. Gullett Gin US. Payment must be to discriminatee. J.B."13 After receiving Brooks' response, Lepsig met him in the hall and reported to him that she had told Statham that "it was my impression that should the discriminatees have to 10 One of the discriminatees had greater interim earnings during the backpay period than what he would have earned working for the Respond- ent during that period 11 See G C. Exh. 5. 12 ALJ Exh 1 13 This was a reference to the case of Gullets Gin Company, Inc. v. N.L.R.B, 340 U S. 361 154 DECISIONS OF NATIONAL LABOR RELATIONS BOARD reimburse MESC for any monies that had to be restored then to MESC, that the employer would have to reimburse these employees." Lepsig asked Brooks if that was correct, because she "wanted to let Mr. Statham know." Brooks agreed that Lepsig'-s "interpretation [of paragraph 10] was correct." Lep- sig then called Statham and told him that the Region would not accept,checks made out jointly to the discriminatees and MESC, and that the checks had to be made out solely to the discriminatees. Lepsig further told Statham that "it was the Region's position," as she had previously told him, "that in the event that the employees would have to reimburse MESC-the monies [they] received from MESC, the em- ployer would have to reimburse them with the monies that they paid back," and she cited to Statham the Gullett Gin case, supra.14 At about the same time that Lepsig and Statham had the foregoing conversations, Respondent's General Manager Rott notified MESC that the Company was about to pay the employees whom it had laid off a backpay settlement for the period during which the said employees had drawn unem- ployment compens tion from MESC. According to Rott, his purpose in notifying MESC was merely "to find out just what the liability [of the employees] involved would be," because, "we were interested in the welfare of our employees," and not, to thereby instigate restitution proceedings by MESC and reduce the Respondent's unemployment experience-rat- ing record and unemployment insurance tax rate. About a month later on April 4, 1972, the Respondent sent the checks for the employees' backpay settlement to the Region, together with a letter signed by Rott in which, he stated, inter alia, that a "majority of these employees drew unemployment compen- sation" during backpay period in amounts which "in most cases" represented "more than 90% of the face amount of these checks," and that he was concerned about "placing these employees" in the "financially awkward position" of "having - another government agency" later demanding "repayment of this money" after it was spent." 14 The findings above are based on Lepsig's testimony which I credit and which the Respondent has not controverted. As previously noted, Statham was not called by the Respondent to testify , and no application was made for a continuance of the hearing to adduce his testimony Former Regional Director Brooks, who now is employed by Respondent's counsel, testified on behalf of the Respondent, but he did not controvert Lepsig's above credited testimony regarding the conversations between them about the meaning of par '10 of the settlement stipulation. 15 See G C. Exh. 6. I regard Rott's profession of concern for the welfare of the discriminatees as apocryphal The record does not disclose that the Respondent was under any compulsion to notify MESC regarding the back- pay settlement of this case , but it nevertheless did so and thereby triggered- the restitution proceedings which MESC instituted. Indeed, as found above, even before the Respondent notified MESC about the settlement, it had sought unsuccessfully through its Attorney Statham to have the Region do so, and to accept checks made out jointly to the order of the discnminatees and MESC. The reason for this conduct of the Respondent is quite apparent. Restitution by the discriminatees to MESC of employment benefits received by them for the backpay period admittedly will reduce the Respondent's unemployment experience rating record and its tax rate percentage of liabil- ity to MESC. Contrary to Rott's testimony, I am persuaded that his concern was not, as he professed, in the welfare of the employees, but rather in effecting a reduction of Respondent's MESC tax rate . I regard the words of Judge Learned Hand in Dyer v. MacDougall, 201 F.2d 265, 269 (C.A. 2), quoted with approval by the Supreme Courtin N.L.R.B. v Walton Manufac- turing Co & LoganvillePants Co., 369 U S 404, 408 (1962), as particularly appropriate to this testimony of Rott Judge Hand there stated- The Region did not respond to Rott's letter, and it dis- tributed the Respondent's checks to the discriminatees. The Region subsequently was advised that MESC had ordered these employees to repay the unemployment compensation which they had received from MESC for the backpay period. Accordingly, on January 17, 1973, Acting Regional Director Bernard Gottfried, who replaced former Regional Director Brooks (see fn. 1, supra), notified Respondent's attorney Rosenfeld by letter of this development, and reminded him that: Pursuant to normal Regional Office policy, a clause was [had been] inserted in the Settlement Stipulation [in this case] providing for reimbursement by the Em- ployer of certain amounts these employees might have to pay MESC if that agency demanded restitution. Gottfried further advised Rosenfeld that when the "amounts requested by MESC" became known, he would provide him with "the further details "1fi Rosenfeld responded by letter dated January 23, 1973. Therein, he advised Gottfried that inasmuch as paragraph 10 of the. settlement stipulation created no reimbursement liability on the part of the Re- spondent until the discriminatees "are required to repay to MESC," Gottfried's letter, if it "constitutes a demand for reimbursement . . . is premature." Rosenfeld's letter con- tinued, "We do not believe that Respondent is required to take a final position concerning this matter until adequate proof is submitted to it that repayment in some certains have, indeed, been made by specific discriminatees to the MESC."17 Rosenfeld's letter suggested that since the Board's order and the court of appeals consent judgment entered thereon did "not contain any provision similar to paragraph 10" of the settlement agreement, ... could not [the] Respondent reasonably have con- cluded that the Board , as distinguished from its regional office, had decided to eliminate Paragraph 10 of the Agreement as a condition for voluntary' settlement of this matter. Rosenfeld's letter further made the following additional "ob- servation:" Paragraph 10 of the aforementioned Settlement Agreement provides that the employer will compensate the discriminatees [f]or money they are required to repay the MESC "in excess of the settlement received by the individual employee." To say the least, this statement is ambiguous. The paragraph appears to indicate that reim- bursement may come into play after the discriminatee has paid MESC an amount "in excess" of the payment- the discriminatee received pursuant to the Settlement Agreement. [Emphasis supplied.] For the demeanor of a witness 11. . may satisfy the tribunal, not only that the witness' testimony is not true, but that the truth is the opposite of his story; for the denial of one, who has a motive to deny, may be uttered with such hesitation, discomfort, arrogance or defiance, as to give assurance that he is fab- ricating, and that, if he is, there is no alternative but to assume the truth of what he denied " 16 Exh D attached to G C Exh. 1(a). 17 See Exh E attached to G C. Exh. 1(a). INTER-LAKES ENGINEERING COMPANY 155 Rosenfeld invited Acting Regional Director Gottfried's "comments" in respect to the foregoing "observations." Gottfried replied on March 21, 1973.18 He noted that the Board's order in this case had "expressly approved the total settlement stipulation,", including paragraph,,l0; that he saw "no ambiguity" in that provision; and that he had been ad- vised by "the trial attorney [Schaub]" that all of the partici- pants in the settlement discussions, "including your associate [Statham] could not have misunderstood . . . that the em- ployer would be required to compensate the individuals for any MESC reimbursement payments they were required to make, up to the difference between total actual backpay ow- ing to the individuals had they been made whole and pay- ments already made under the settlement agreement." Re- spondent's attorney Rosenfeld did not respond to Gottfried's letter of March 21, 1973. On September 25, 1973, Gottfried wrote to Rosenfeld and advised him that he had been informed by an attorney repre- senting the discriminatees that a decision by MESC had is- sued on August 31, 1973, ordering 10 of the 14 discriminatees to make restitution in various sums, and that he now regarded paragraph 10 of the settlement stipulation as "operative." Gottfried requested that the Respondent send checks to his office on or before October 5, 1973, drawn to the order of the 10 discriminatees in specified amounts therein stated. At- tached to this letter was a schedule which showed the names of the 10 discriminatees who had been ordered to make resti- tution to MESC, the amount of the MESC demand, the total net backpay loss which each of them had incurred, the amount he had received as his share of the $10,000 settle- ment, and the "amount now due from Respondent" for each of them.19 Rosenfeld answered Gottfried's letter on October 10, 1973. Therein he stated: It is our view, based on my specific recollection of the settlement negotiations as well as what I think is the clear language of paragraph 10 of the settlement agree- ment that we agreed to pay any alleged discriminatee under that paragraph any money he might pay the Mich- 18 Exh. F attached to G.C Exh. 1(a) 19 Exh G attached to G. C. Exh 1(a). Except for the totals which I have added, the schedule attached to this letter was as follows- CLAIMANT MESC DEMAND Robert Marushak - $810 Donald DeCaluwe $1,095 Edmund Polakowski 1,093.50 William Weideman 1,007 Gordon Munn 657 Robert Waigraves (sic) 870 George Brown 627 Charles May 657 Gerald Fratarelli 522 James Puissant 511 $7,849.50 TOTAL AMT. RECD. AMT. BACKPAY 4/4/72 DUE - $1,8$9 $709 T8 1 0 2,934 1,102 1,095 2,440 917 1,093 1,099 414 685 2,427 917 657 2,934 1,102 870 2,545 956 627 2,202 827 657 1,173 440 522 1.673 628 511 $21,316 $8,012 $7,527 igan Employment Security Commission in excess of the settlement he received under the settlement agreement. We are, therefore, willing to pay Robert Marushak $101, Edmund Polakowski $176.50, William Weideman $271, and Gerald Fratarelli $82. Your theory of our present obligation is inconsistent with any understanding derived from the negotiations I participated in as well as with the language of the settle- ment agreement.20 As previously noted, the Region's motion to clarify the Board's order approving the settlement stipulation, and these proceedings, followed the foregoing correspondence. C. Analysis of the Record Regarding the Intent of the Parties As previously indicated, the testimony in this case regard- ing what the parties intended by the inclusion of paragraph 10 in the settlement agreement is in diametric conflict. Ac- cording to Attorney Schaub, in insisting on the inclusion of an MESC provision in the settlement agreement, he was car- rying out the Region's policy in cases of settlement for less than 100 percent of backpay pursuant to the specific instruc- tions of then Regional Director Brooks; he understood and intended paragraph 10 as finally negotiated to be a require- ment on the part of the Respondent to make whole the dis- criminatees, up to but not exceeding 100 percent of their backpay loss in the event that they were required to repay MESC for unemployment benefits which they had received for the backpay period; and he conveyed that intent and understanding to Respondent's attorneys, Statham and Rosenfeld. According to Union Representative McDivitt, and discriminatees Walgrave and Marushak, that was the explanation of paragraph 10 which was given to them on November 22, 1971, by Attorney Schaub. On the other hand, Respondent's Attorney Rosenfeld testified that he specifi- cally rejected and refused to accept any clause in the settle- ment agreement which embodied the foregoing Regional policy and intent, and paragraph 10 which resulted from the negotiations represented his counterproposal, that if any dis- criminatee had to pay back to MESC more than he received as his share of the $10,000 settlement, the Respondent would reimburse that discriminatee only for the difference between what he received in settlement 'and what he had to repay to MESC. According to Rosenfeld, he explained this intent and operation of paragraph 10 "out loud" to all the parties, he agreed with Schaub that his counterproposal "could defeat 20 Exh H attached to G C. Exh. 1(a) It should be noted that even under Rosenfeld's "understanding" of par. 10, the Respondent's obligation to reimburse William Weldeman is $593, and not the $271 offered in the said letter. 156 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the intention of his [Schaub's] proposal" and that under it, the discriminatee might "end up with nothing" more than they had already received in unemployment benefits from MESC, and his counterproposal nevertheless was accepted by Schaub and approved by Regional Director Brooks.Z' I place no credence in Rosenfeld's testimony that this was the intent of this provision when it was negotiated , and none in his and Rott's testimony that this intent and construction was conveyed to Schaub and McDivitt and was agreed to by them. I base these conclusions on the following considerations: In order to credit Rosenfeld's testimony (and that of Rott) in these respects, I am required to believe that with full knowledge of the intent and meaning that Respondent now ascribes to paragraph 10, the discriminatees and Union Rep- resentative McDivitt agreed to accept a settlement pursuant to which the discriminatees might wind up with nothing more than they already had received from MESC in unemployment benefits. Rosenfeld's and Rott's testimony further requires one to also believe that Schaub and Regional Director Brooks knowingly approved and agreed to accept a settlement provi- sion which was contrary to and "defeat[ed]" the very MESC policy in furtherance of which the Region had insisted upon the inclusion of a clause to provide indemnification for the discriminatees in the event that they were required to make restitution to the MESC of the unemployment benefits which they had previously received. I consider these conclusions which are required by Rosenfeld's and Rott's testimony as patently implausible, and I regard their testimony in these respects as stretching credulity beyond belief. The record clearly indicates that what the Respondent now urges as the agreed-upon intent and understanding of all the parties when paragraph 10 was negotiated on November 22, 1971, was never the Region's intent and understanding of this provision. 1. On November 21, 1971, after Schaub and Respondent's Attorney Statham negotiated and agreed upon the language changes in paragraph 10, Schaub brought the revised provi- sion to Regional Director Brooks for his approval, he showed Brooks the changes which had been made from the standard language which Brooks had authored and whose inclusion in the settlement agreement he had demanded as a condition precedent to acceptance of the Respondent's settlement offer, and Brooks approved its, acceptance. 2. Brooks, who now is employed by Respondent's counsel, testified as a witness for the Respondent that based solely on the "terminology" of paragraph 10 of'the settlement, and of the Region's standard MESC clause, he now is of the opinion that "the results which are derived" from the two provisions ,.are different." Brooks admitted, however, that absent unusual circumstances, which he conceded were not present in this case, he would "never knowingly" have accepted a settlement with the type of provision which he now regards paragraph 10 to be. Moreover, on November 23, 1971, Brooks forwarded the settlement (which he now interprets as 21 Rosenfeld's testimony regarding his "out loud" explanation of the meaning of par 10 in the presence of Schaub and McDivitt was cor- roborated by Respondent's General Manager Rott. contrary to the MESC policy-which he initiated) to the Gen- eral Counsel with a recommendation for its approval. It is thus quite obvious, as Brooks in effect conceded, that he never intended by the acceptance of paragraph 10 of the settlement stipulation to deviate from the MESC policy which he had initiated. 3. When the General Counsel sent the settlement to the Board for its approval, the memorandum specifically stated: Please note that paragraph 10 of the Stipulation pro- vides that the discriminatees will be reimbursed by Re- spondent for any monies which they return to the State of Michigan as repayment of unemployment compensa- tion. It therefore is quite clear that the General Counsel's and the Board's approval of the settlement was based on an -under- standing of paragraph 10 which conforms with that which the Region has consistently attributed to it. 4. As found above, when Field Examiner Diane Lepsig subsequently asked Respondent's Attorney Statham in the latter part of February 1972-if he was not aware "that if the employees had to reimburse MESC, that his client would have to in turn reimburse them for any monies that had to be returned," Statham replied, "Yes, he was aware of that." It thus-Appears that Respondent's counsel Statham also un- derstood paragraph 10 to mean what the Region contends it does. 5. And, when Lepsig thereafter told Regional Director Brooks what she had told Statham regarding the Respon- dent's obligation under paragraph 10, Brooks agreed that Lepsig's interpretation of paragraph 10 was correct. All of the foregoing, and Acting Regional Director Gott- fried's later letters to Respondent's Attorney Rosenfeld, per- suade me that the Region and its personnel at all times in- tended and understood paragraph 10 of the settlement stipulation to be an effectuation of the Region's standard MESC policy, that they never intended by the language changes in paragraph 10 to deviate or recede from that policy, and that the acceptance of the Respondent's settlement offer was based on that intent and understanding of paragraph 10. On the other hand, the record also clearly indicates that Respondent's Attorney Rosenfeld's testimony regarding the intent and understanding of all the parties when paragraph 10 was negotiated on November 22, 1971, is patently an afterthought on his part, and worthy of no credence. In this regard, the record discloses as follows: In the latter part of February 1972, Field"Examiner Lepsig told Respondent's Attorney James Statham "that if the em- ployees had to reimburse MESC, his client would have to in turn reimburse them for any monies that had to be returned," and Statham replied that "he was aware of that." A few days later, Lepsig again told Respondent's Attorney Statham that "it was the Region's position,that in the event that the em- ployees would have to reimburse MESC-the monies [they] received from MESC, the employer would have to reimburse them with the monies that they paid back." It is thus obvious that as far back as February 1972, the Respond- ent was aware of the Region's understanding of paragraph 10 of the settlement agreement, and it not only did not then dispute the Region's interpretation of the provision but, to the INTER-LAKES ENGINEERING COMPANY 157 contrary, Statham agreed with the construction placed by the Region thereon." One year later, when Acting Regional Director Gottfried notified Attorney Rosenfeld that MESC had demanded resti- tution of unemployment benefits paid to some of the dis- criminatees, and that under the settlement stipulation' "the reimbursement undertaking agreed upon by the Employer would now come into play," Rosenfeld did not then contend or claim (as he now does) that paragraph 10 specifically was intended to limit the Respondent's liability to only the excess which the employee would have to repay MESC over what he had received in settlement. To the contrary, in his response to Gottfried dated January 23, 1973, Rosenfeld wrote: Paragraph 10 of the aforementioned Settlement Agreement provides that the employer will compensate the discriminatees [f]or money they are required torepay the MESC in excess of the settlement received by the individual employee. To say the least, this statement is ambiguous. The paragraph appears to indicate that reim- bursement of a discriminatee may come into play after the discriminatee had paid the MESC an amount "in excess" of the payment the discriminatee received pursu- ant to the Settlement Agreement 23 [Emphasis supplied.] Rosenfeld's statements in this letter that paragraph 10 was "to say the least, ambiguous," and that "it appears to indicate that the Respondent's reimbursement liability was limited only to the "excess" paid to MESC by the discriminatee over what he received in settlement from the Respondent, is incon- gruous with, and belies, his testimony that he expressly in- tended that meaning when he agreed to paragraph 10 on November 22, 1971, and that he made that meaning clear to all the parties at that time. I note in this regard that the first time that Rosenfeld claimed that his current "understand- ing" of paragraph 10 was "based on my specific recollection of the settlement negotiations" was in his letter of October 10, 1973, that the provision was "ambiguous," and was capable of the construction which he now asserts was always his understanding and intent in agreeing to paragraph 10. In the light of the foregoing, as well as demeanor, I place no cre- dence whatsoever in Rosenfeld's testimony in this respect, and I regard this current "final position" as an obvious after- thought on his part. 22 As previously noted (see fn. 14, supra), the finding above is based on the uncontroverted credited testimony of Field Examiner Diane Lepsig, the Respondent did not call Attorney Statham, who negotiated the language of paragraph 10 on its behalf, to testify, and it made no application for a continuance of the hearing for the purpose of adducing his testimony. I infer from the Respondent's failure to call Statham to testify that, if called, he would not have supported Rosenfeld's testimony regarding the alleged un- derstanding by all the parties of the Respondent 's limited reimbursement liability under paragraph 10 of the settlement stipulation. International Union, U4W [Gyrodyne] v. N.L.R.B, supra,' 2 Wigmore, Evidence, § 285, supra - 23 As previously noted, Rosenfeld also said in this letter that the Respond- ent was not "required to take a final position concerning this matter until adequate proof has been submitted" that repayment had been made to MESC by "specific discriminatees," and he also suggested that the absence of par. 10 from the Board's order and the court's judgment gave the Re- spondent the right to reasonably conclude that the Board had "eliminate[d] Paragraph 10 of the Agreement as a condition for voluntary settlement of this matter " D. Additional Contentions of the Respondent 1. The parol evidence rule The Respondent contended at the hearing, and again urges in its brief, that inasmuch as the language of paragraph 10 is "clear and unambiguous," parol evidence was not admissible- and should not now be considered in determining the intent and interpretation of this provision by the parties. I regard this contention as devoid of merit for the following reasons: The positions of both parties on the question of whether paragraph 10 is clear or ambiguous have been ambivalent. On January 23, 1973, the Respondent contended that the lan- guage of paragraph 10 (which it now urges to be "clear and unambiguous") was, "to say the least ... ambiguous ." Simi- larly, the Regional Director, who now contends that the lan- guage of paragraph 10 "contains an ambiguity which could give rise to at least two interpretations,"24 asserted in his letter dated March 21, 1973, that he saw "no ambiguity in the phraseology employed in paragraph 10." Thus, at one time or another (albeit at different times), both parties to this dispute have regarded the meaning of this provision as am- biguous and unclear. Similarly, the Board's order which di- rected the instant hearing to determine "the intent of the parties and [the] interpretation of such Settlement agree- ment," was an implicit- finding by the Board that an am- biguity exists in paragraph 10, for otherwise no hearing would have been required or ordered. My own assessment of the language of paragraph 10 accords with the view that the clause is capable of both the construction which, as found above, the Region at all times has placed on it, and also that which the Respondent now urges for it. In determining the meaning of this provision, I therefore have considered not only the clause itself, but also parol evidence of the intention of the parties by this clause. 2. The contention of no case or controversy The Respondent further contends that "the instant pro- ceeding should be dismissed because at the present time no actual controversy exists between the parties."25 The Re- spondent bases this contention on the argument that under the plain language of paragraph 10 of the settlement agree- ment, even under the General Counsel's interpretation thereof, it has no obligation to reimburse the discriminatees for any monies they have to repay MESC until such restitu- tion occurs, and inasmuch as that event admittedly has not yet transpired, no "real" controversy exists. I regard the Respondent's contention as without merit. The Michigan Employment Security Commission has al- ready issued an order which requires 10 of the 14 dis- criminatees who received backpay settlements from the Re- spondent to make restitution of the unemployment benefits received by them. Under the terms of the MESC order, these 10 discriminatees, who together received $8,012 of the lump sum backpay settlement of $10,000, are required to repay MESC $7,849.59. Under the General Counsel's interpreta- tion of paragraph 10 of the settlement agreement, the Re- spondent's reimbursement liability to these discriminatees is 24 Brief, p 8. 25 Resp. brief, p 13. 158 DECISIONS OF NATIONAL LABOR RELATIONS BOARD $7,527.26 Under the Respondent's current interpretation of this provision, its reimbursement liability is limited to only the 4 of the 10 discriminatees who have been ordered to repay MESC more than what they received as their share of the backpay settlement, and it has offered to reimburse the 4 for a total of $630. 50.27 The discriminatees have retained pri- vate counsel and are appealing MESC's order in the state courts of Michigan . Their decisions to pursue this appeal undoubtedly is motivated by the dispute over the meaning of paragraph 10, for under the General Counsel's theory of the Respondent's reimbursement liability, there would be no practical reason for doing so. I note, moreover , that in its opposition to the Regional Director's motion to clarify the Board's order, the Respondent made the same contention before the Board that it makes now, to wit, that the Region's motion was premature because the discriminatees had not "reimbursed the MESC in any amount," and "the litigation before the MESC . . . had [not] been finally resolved by the MESC and the appropriate appelate [sic] courts of the State of Michigan." Notwithstanding this contention of the Re- spondent, the Board nevertheless ordered that a hearing be conducted to resolve the issue of "the intent of the parties and [the] interpretation of such Settlement agreement." By so doing, the Board quite obviously rejected the contention which the Respondent now raises again . I conclude from all the foregoing that a real case or controversy regarding the intent and meaning of paragraph 10 exists which requires current resolution. 3. The contention that paragraph 10 is inoperable because it does not appear in the Board's order or the court's judgment As found above, in Rosenfeld's letter to Acting Regional Director Gottfried dated January 23, 1973, he argued on behalf of the Respondent that inasmuch as the Board's order and the court's subsequent consent judgment in this case do not contain any provision comparable to paragraph 10 of the settlement agreement, it was reasonable to conclude "that the Board, as distinguished from its regional office, had decided to eliminate Paragraph 10 of the Agreement as a condition for voluntary settlement of this matter." In its opposition to the Regional Director's motion to clarify the Board's order, the Respondent similarly argued that the "Motion fails to allege any basis for concluding that Paragraph 10 of the Settlement Stipulation was incorporated into and became a part of the Board's Decision and Order of January 14, 1972." The Respondent's opposition to the said motion further ar- gued that to its knowledge, no other regional office of the Board "exacts such a provision" as a condition for the settle- ment.of cases, and that neither the Board 's Rules and Regula- tions nor its Statements of Procedure "provide for this type of committment." There is no merit to this contention. The Board's order specifically approved the settlement stipulation which in- cluded paragraph 10, and made it a part of the record in this case. The form of the Board's order was precisely that to which the parties agreed by the settlement stipulation. If the 26 See fn. 19, supra 27 See fn 20, supra, and the accompanying text. Board had decided to disapprove paragraph 10, its order obviously would have expressly so stated. I conclude from all the foregoing that this contention is patently without merit, and that it is merely a device by which the Respondent seeks to completely avoid the MESC reimbursement obligation which it accepted in paragraph 10 of the settlement agree- ment. E. Concluding Findings The dispute between the parties regarding the interpreta- tion of paragraph 10 of the settlement stipulation centers on the words: ... the Employer will compensate the discriminatees for-any money they are required to repay the Michigan Employment Security Commission in excess of the set- tlement received by the individual employees in this mat- ter. It cannot be gainsaid that these words are capable of the interpretations and construction that the Respondent's reim- bursement liability is limited to only those discriminatees who have to repay MESC more than they received from the Respondent as their share of the lump sum settlement, and then only for the difference between what they have to repay MESC and what they received in settlement from the Re- spondent. That construction of this clause indisputably is contrary to the Region's policy in cases such as this where less than 100 percent of backpay is accepted in settlement, and it unquestionably defeats the very purpose for which the Region insisted on this provision as a condition precedent to accept- ance of the Respondent's settlement offer. Paragraph 10 has been conceded by both the Respondent and the Region, albeit at different times, to be ambiguous. The Region suggests that the words "in excess of," should be read as synonymous with "in addition to," in accordance with its intent for this provi- sion. Alternatively, the Region suggests that its intention for this clause is clarified if the words "in excess of the settlement received by the individual employees in this matter" are transposed and placed immediately after the word "dis- criminatees." The sentence would then read as follows: the Employer will compensate the discriminatees, in excess of the settlement received by the individual employees in this matter, for any money they are re- quired to repay the Michigan Employment Security Commission. As found above, the Region's acceptance of the Respon- dent's settlement offer in this case was bottomed on its under- standing that by paragraph 10, the Respondent accepted the Region's standard MESC policy and undertook to reimburse the discruninatees up to 100 percent of backpay if they subse- quently were required to repay to MESC the unemployment benefits which they had received for the backpay period. The subsequent approval of the General Counsel and the Board of the Respondent's settlement offer was based in part on this interpretation of paragraph 10, for in the former's memoran- dum to the Board recommending approval, he specifically called attention to the fact that this provision required "the discriminatees [to] be reimbursed by Respondent for any mo- INTER-LAKES ENGINEERING COMPANY nies which they return to the State of Michigan as repayment of unemployment compensation." In addition, as noted above, I disbelieve the testimony of Respondent's Attorney Rosenfeld (and General Manager Rott) that he always in- tended, and that he made clear to all the parties, that the Respondent's liability under paragraph 10 was limited to reimbursing only those discrimmatees who had to repay MESC more than what they received by the settlement, and then only for the overage, and that' the Region, with full knowledge of this intent, nevertheless accepted his settlement offer. To the contrary, as found above, the interpretation which Rosenfeld now urges quite obviously was an after- thought on his part, and is one of several devices by which he seeks to absolve the Respondent from the MESC reim- bursement obligation which it undertook as a condition precedent to the settlement of this case.29 Moreover, this conclusion is supported by the subsequent conversations it February 1972 between Field Examiner Diane Lepsig and Respondent's Attorney Statham (who negotiated the lan- guage changes in paragraph 10 for the Respondent), which clearly disclose that Statham's interpretation of this provision accorded with that which the Region his- consistently at- tributed to it. All of the foregoing persuades me, notwithstanding Rott's apocryphal letter of April 4, 1972,29 that paragraph 10 represents the intention of both the Region and the Respond- ent to effectuate the Region's standard MESC policy, and that the changes in language from the standard form were made only because of the absence of information regarding the total net backpay suffered by the discriminatees, and to assure the Respondent that its maximum MESC reimburse- ment liability would not exceed that amount. 2t See fn 23, supra 2'4 See fn. 15, supra, and the accompanying text. RECOMMENDATION 159' Having found above that by paragraph 10 of the settlement agreement both the Region and the Respondent intended to effectuate the Region's standard MESC policy in cases settled for less than 100 percent of net backpay, and in view of the latent ambiguity of paragraph 10 which makes it capable of a construction which defeats the very purpose for which it was intended when it was negotiated and agreed upon, I recommended that this provision be interpreted to be an obligation on the part of the Respondent to reimburse the discrimmatees (in addition to the amounts previously paid to them in settlement of this case) for any monies which they may be requiredto return to the State of Michigan as restitu- tion of unemployment benefits received for the backpay period, provided, however, that the Respondent's maximum reimbursement obligation to any discriminatee shall not be more than that sum which when added to the amount pre- viously received by the discriminatee as his share of the settle- ment, equals 100 percent of his total net backpay as set forth in the letter of the Regional Director dated February 25, 1972.30 30 See G C. Exh 5 As indicated above, in connection with my finding that the Respondent intended to accept and effectuate the Region's standard MESC policy when it agreed to the inclusion of par 10 in the settlement stipulation , I discred- ited the testimony of Respondent's Attorney Rosenfeld and its General Manager Rott that they intended a quite different , limited, reimbursement liability from that which the Region , as I have found, clearly intended. Even if I were to credit Rosenfeld 's and Rott's testimony regarding what they intended by the acceptance of paragraph 10 (which I do not), I would still find that the Region did not so intend, and that, therefore, there was no meeting of the minds regarding the Respondent's reimbursement obligation under this provision. In that event, my recommendation would be that the Board withdraw its approval of the settlement, that the agreement be de- clared mull and void, and that the case be set down for hearing on the merits of the issues raised by the complaint and answer herein.