McCann Steel Co., Inc.

McCANN STEEL CO 607 McCann Steel Company, Inc. and Shopmen's Local Union No. 733 of the International Association of Bridge, Structural and Ornamental Iron Workers, AFL-CIO and J. C Hmdsley Cases 26-CA-3661 and 26-CA-3717 June 10, 1976 SUPPLEMENTAL DECISION ON REVIEW AND ORDER By MEMBERS FANNING, PENELLO, AND WALTHER On February 24, 1976, Administrative Law Judge Thomas E Bracken issued the attached Supplemen- tal Decision on Review in this proceeding Thereaf- ter, General Counsel and Respondent filed excep- tions and supporting briefs and counsel for General Counsel filed an answering brief to Respondent's ex- ceptions 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 2 of the Administrative Law Judge and to adopt his recommended Order ORDER failed to work overtime during those several pay periods [September 6 1971 through April 3, 19721 when Hindsley's fellow draftsmen at the interim employer did work overtime " (Emphasis supplied ) It is clear, howev- er, from the court's May 16 order that the issue that troubled the court was "whether the Board had considered the fact that Hindsley's fellow drafts- men in the interim employment worked overtime during several pay periods when Hindsley failed to work the basic 40 hours " (Emphasis supplied ) Hence, the key consideration for the court was the reason , or reasons, why Hindsley did not work a 40-hour workweek from September 6, 1971 We are satisfied from a review of the record made after our order remanding this proceeding that all parties were aware of this distinction and litigated the case accordingly Respondent contends that, as overtime computations were included in determining the gross backpay due Hindsley , that Hindsley s interim earn rags should also include certain overtime pay he could have earned at the interim employer had he chosen to do so The gross backpay figure was initially based on Hindsley's average weekly earnings at Respondent during the last two quarters before his illegal discharge During those last two quarters, Hindsley did average 42- 1/2 hours of work per week , which in- cluded 2-1 /2 hours of overtime per week However, Respondents conten- tion that possible overtime at the interim employer should have been com- puted into Hindsley s interim earnings is without merit An employee is held only to reasonable exertions in his duty to mitigate backpay and is not held to the "highest standards of diligence' N L R B v Arduini Manufacturing Corporation, 394 F 2d 420, 423 (C A 1, 1968) In this case, holding Hindsley to a 40-hour workweek at his interim employer when work was available for him satisfies the test of reasonable exertion required of him As we noted in our supplemental decision in this case at 203 NLRB 750 fn 7 (1973), overtime work at Hindsley's interim employer was option- al and, in such circumstances, Hindsley's failure to work overtime there does not constitute a willful loss of earnings While it is true that overtime pay Hindsley had earned from Respondent was included in gross backpay Respondent introduced no evidence to show whether overtime was voluntary or mandatory at Respondent when Hinds- ley earned overtime In any event , without deciding the situation where overtime is mandatory at an interim employer, where, as here , overtime was voluntary at the interim employer, Hindsley did not fail to meet the test of reasonable exertion by not working overtime SUPPLEMENTAL DECISION ON REVIEW Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondent, McCann Steel Com- pany, Inc, Nashville, Tennessee, its officers, agents, successors, and assigns, shall pay to J C Hindsley as net backpay the sum of $1,922 together with inter- est thereon at 6 percent per annum less any tax with- holdings required by Federal and state law 1 We hereby correct the following inadvertent errors in the Administrative Law Judge's supplemental decision on review the net backpay due J C Hindsley for the third quarter of 1970 is corrected to read $595 the net interim earnings for the first quarter of 1972 is to read $1 487 20 2 The Administrative Law Judge's disposition on the backpay owed Hindsley for the period from April through June 1972, the period Hindsley started his self-employment is hereby affirmed as the law of the case As the Board has accepted the remand of this case from the United States Court of Appeals for the Sixth Circuit, the court's disposition on this issue is accepted as determinative in this case Cf W C Nabors Company v N L R B 323 F 2d 686, 691 (C A 5, 1963), Heinrich Motors Inc v N L R B 403 F 2d 145 148 (C A 2, 1968), Harvest Queen Mill & Elevator Company, 90 NLRB 320 (1950) In our Order reopening the record and remanding this proceeding for further hearing after the Sixth Circuits May 16, 1975, order we inadver- tently characterized one of the issues to be considered as why Hindsley STATEMENT OF THE CASE THOMAS E BRACKEN,' Administrative Law Judge This is a backpay case, arising out of the Decision and Order is- sued by the National Labor Relations Board on April 23, 1971, in the entitled proceeding 2 wherein the Board found, inter aha, that Respondent had discriminatorily discharged J C Hmdsley in violation of Section 8(a)(1) of the Na- tional Labor Relations Act Respondent, in pertinent part, was directed to make Hindsley whole for any loss of earn- ings resulting from the discrimination On July 6, 1972, the United States Court of Appeals for the Sixth Circuit en- tered its judgment enforcing this aspect of the Board's Or- der Thereafter, pursuant to a backpay specification issued by the Acting Regional Director for Region 26, a hearing was held before Administrative Law Judge Thomas S Wil- son to determine the amount of backpay due Hindsley, and Judge Wilson concluded that Hindsley was entitled to $4,967, the amount of backpay set out in the specification, with interest, less tax withholding required by law On May 18, 1973, the Board issued a Supplemental Decision and 1 The transcript of the current hearing contains numerous errors In the absence of any motion to correct the transcript I have not undertaken to do so on my own motion, and believe that the transcript is sufficiently accurate topermit the Board to carry out its statutory functions 190 NLRB 12 (1971) 224 NLRB No 82 608 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Order 3 affirming the Administrative Law Judge's decision that Respondent owed Hindsley $4,967 in backpay In enforcement proceedings, the United States Court of Appeals for the Sixth Circuit denied enforcement and, on January 8, 1974, remanded the case to the Board for clarifi- cation of its decision in two pertinent parts On March 12, 1974, the court denied the Board's petition for rehearing On June 28, 1974, the Board issued a Decision on Re- view in which it reconsidered the record, clarified certain of its previous findings, and reaffirmed its earlier conclu- sions and order 4 However, the court of appeals on May 16, 1975, denied the Boards motion for entry of a supplemen- tal judgment enforcing the Board's Supplemental Decision and Order, as clarified Thereafter, on July 11, 1975, the Board notified the par- ties that it had decided to again accept the remand from the court of appeals and, consistent with that order, to re- open the record to receive the additional evidence that the court felt necessary for the Board to have before it On September 23, 1975, the Board issued an order re- opening the record and remanding the proceeding to the Regional Director for hearing, and pursuant thereto a hearing was held before me in Nashville, Tennessee, on October 29, 1975, in which the record was reopened to receive the additional evidence that the court felt necessary for the Board to consider The additional evidence to be adduced was to concern (1) why Hindsley failed to work overtime during those several pay periods (September 6, 1971, through April 3, 1972), when Hindsley's fellow draftsmen at the interim employer did work overtime and (2) whether Hindsley's earnings from self-employment were less than he would have earned for the same expendi- ture of labor for the interim employer for which he worked before becoming self-employed At the reopened hearing, counsel for the General Coun- sel and counsel for the Respondent entered their appear- ances on the record In an opening statement, counsel for the Respondent asserted that the remand was unjustified and improper, stating that the United States Court of Ap- peals for the Sixth Circuit on May 16, 1975, by its denial of the Board's motion for entry of a supplemental judgment, terminated the case, and that the court order was a final "decision " Counsel for the Respondent thereafter advised that the Company was going to withdraw, and thereupon departed from the hearing The Board, in its September 23, 1975, Order Reopening the Record foresaw the possibility of such a contention, and stated in footnote 5 as follows Although the Court in its Order of May 16, 1975, did not specifically remand the case to the Board again, the Board considered the Court's earlier re- mand as still operative In short the Court denied the Board's motion for enforcement of the supplemental order because it found that the Board had not done what was contemplated by the earlier remand The Court, however, did not thereby cancel the earlier re- mand 3 203 NLRB 749 (1973) 4 212 NLRB 394 (1974) Since the Board had ruled on the issue raised by the Respondent, concluding that the order reopening the rec- ord and remanding proceeding to the Regional Director for hearing was the appropriate procedure, that order is binding upon the Administrative Law Judge, and the re- opening of the record proceeded Upon the entire record, including my observation of the demeanor of the witness, J C Hindsley, and after due consideration of the brief filed by the General Counsel, I make the following SUPPLEMENTAL FINDINGS OF FACT Failure to Work Overtime Hindsley testified, just as he had done at the hearing held on November 22, 1972, that he had not worked over- time at Englert Engineering Company, the interim employ- er, during the period of September 6, 1971, through April 3, 1972, when fellow draftsmen were working overtime When asked squarely by counsel for the General Counsel why he did not work overtime during that period, he replied They had really more draftsmen than they could work Plus the fact that my wife was in the hospital in June, July and August, three different trips because of her heart condition And I would go in late sometimes in the morning, quit at the regular work time in the af- ternoon, and go home and be with the family Take care of them When asked what he meant by his statement that the Company had more draftsmen than it had work, he replied that " other draftsmen would run a job in the ground so that they wouldn't run out of work," and, that "The other draftsmen would just sit there at their drawing boards and kill time dust to get overtime pay " He further testified that when the practice of overtime was resumed on September 6, 1971, the draftsmen were told they could work overtime if they wanted to, but that it was not neces- sary 5 In addition, Hindsley admitted that he had not always worked a 40-hour week during the period of October 1971 through April 1, 1972 His reason for not working 40 hours a week was that in October he thought he was going to put his wife back in the hospital (she actually returned to the hospital in February 1972), and this required him to take care of his wife and four children, ages 8, 10, 12, and 13, causing him to go in late in the morning and leave early in the afternoon According to Hindsley, there had never been any complaints from his interim employer for coming in late, " because I got my work out," and that he had never received any warning or reprimand of any nature He further testified that there was no set policy at Englert's that he had to work a 40-hour week, nor was he aware of any such rule However, when asked by the Administrative Law Judge 5 Hindsley s testimony on the voluntariness of overtime was corroborated by Ernest Philip Chandler chief draftsman of the interim employer at the November 22 1972 hearing when he testified It was optional with the individual We didn t say that he had to work overtime ' McCANN STEEL CO 609 Q If during that period of September 6, 1971 to June 29, 1972 you desired to work a forty hour week was there work available to you at the straight time hourly rate9 A (Hindsley) Well, you could say there was at times A review and compilation of the payroll data on drafts- men, read into the record by Office Manager Mable Polk at the November 22, 1972, hearing, reveals amply that there were 40 hours of work per week available for Hinds- ley in the disputed period of September 6, 1971, to April 3, 1972 Thus, it can be seen that during the period of September 6, 1971, through April 3, 1972, draftsmen Dean, Pitts, and Wakefield were working well over 40 hours per week aver- aging 48-1/2, 51-1/2, and 44 hours per week, respectively, when Hindsley was averaging 25-1/2 hours per week Cer- tainly the interim employer, as a matter of keeping his costs down, would have preferred paying Hindsley at the straight time rate of pay, instead of the time and a half rate that had to be paid to the draftsmen who worked overtime, week after week, on the very work that Hindsley could have been doing ENGLERT ENGINEERING COMPANY HOURS WORKED BY DRAFTSMEN IN BI -WEEKLY PERIODS 6/ September 6, 1971+ through April 1, 1973 Pay Period David Dean Merle Johnson James Pitts J. Wakefield J. C. Hindsley 9/6-9/18 /71 9/20-10 / 2 10/4-10/ 16 10/18-10/31 11/1-11 / 13 11/15-11/26 11/29-12/11 12/13-12/24 12/27-1 /8/72 1/10-1 /22 1/24-2/5 2/7-2/19 2/21-3 /4 3/6-3/18 3/20-4 / 1/72 97 96 97 101 98 93 92 93 90 110 112 76 103 99 97 0 84 110 102 100 48 103 104 104 104 105 97 103 95 95 107 123 103 105 104 99 94 88 94 97 85 92 100 83 3 88 102 91 48 Did not work 35 64 47 37 64 61 63 67 54 56 66 29 24 Total Hours 1454 544 1551 1057 715 Bi-Weekly Pay Periods 15 6 15 12 14 Bi-Weekly Average Hours 97 90 103 88 51 Weekly Aver- age Hours 48-1/2 45 51-1/2 44 25-1/2 Hindsley's statement that the other draftsmen would "run a job in the ground" and "sit and look at the drawings and kill time," while he did not, cannot explain away the many, many hours of overtime that the other employees In addition to the draftsmen listed above, the Company employed two other draftsmen during this period, George Fitzgerald and Tom Bible It was Englert's procedure after a draftsman had 5 years of service, to pay him a straight salary, whether he worked 40 hours or not, and also to pay him at the rate of time and one-half for all hours worked over 40 per week Fitzger- ald achieved his 5 years of service in July 1971, and Bible prior to 1971 Neither Fitzgerald's or Bible's hours of work for this period appear in the record worked, while he worked far less than 40 hours a week It is incomprehensible that the interim employer could have been duped in such a fashion over a period of 7 months General Counsel argues in his brief that it would be in- credible to believe that an employer would allow an em- ployee to work less than 40 hours a week unless the em- ployee was performing all available work to which he was assigned, and that there is no evidence that Hindsley re- fused to do any available work However, Englert's work policies for its employees were much more flexible and malleable than the average employer, whose employees 610 DECISIONS OF NATIONAL LABOR RELATIONS BOARD come and go at rigidly fixed intervals of time The interim employer allowed its draftsmen flexibility in selecting their time to come to work, their time to eat lunch, and their time to leave Chief draftsman Chandler explained this sys- tem at the earlier hearing "We try to have it so the individ- ual has some flexibility there and work the job the same way so that he will take a personal interest in it, like it was their own work " When Hindsley chose to work an average of 25-1/2 hours a week when three other draftsmen were working an average of 48 hours per week, he was exercising his right of flexibility, and was in effect refusing to perform available straight time work, and was thereby incurring a willful loss of earnings Backpay should be reduced when a willful loss of earning is shown Heinrich Motors, Inc v N L R B, 403 F 2d 145, 148 (C A 2, 1968) The law does require the discriminatee to make reasonable exertions in his interim employment "He [employee] is held, however, only to rea- sonable exertions in this regard, not the highest standard of diligence " N L R B v Arduini Manufacturing Corporation, 394 F 2d 420, 423 (C A 1, 1968) It certainly would have been reasonable for Hindsley to have worked 40 hours a week, when his fellow draftsmen were working far in excess of that figure' Earnings From Self-Employment The second issue on which additional evidence was to be adduced was whether Hindsley's earnings from self-em- ployment were less than he would have earned from the same expenditure of labor for the interim employer for which he worked before becoming self-employed Hindsley readily admitted that if he had worked a 40- hour week at the interim employer from April to June 29, 1972, he would have earned more money than he earned in self-employment for the same period of time While he did not know how much more he would have made, basic arithmetic shows that 13 weeks , times 40 hours , times $4 40 an hour,8 equals $2,288, as contrasted with the $922 70 he earned in self-employment Also, a review of the remaining work hours read into the record of the original hearing shows very strongly that there were many hours of overtime worked by the other draftsmen, and therefore there were 40 hours of work per week available for Hindsley Pay Period David Dean James Pitts J. Wakefield yy 4/3-4/15 / 72 98 103 86 4/17-4/ 29 88 103 83 5/1-5/13 95 95 80 5/15-5 /27/72 90 100 77 2/ Conclusions The record is now clear from Hindsley's own testimony, and an in-depth review of the overtime hours worked by other draftsmen, that there were 40 hours a week of work available for Hindsley to perform at Englert's during the period of September 6, 1971, until April 3, 1972, when he chose to work only an average of 25-1/2 hours per week While it is regrettable that his wife was ill during this peri- od of time, and Hindsley stayed home and cared for her in the morning and afternoon, the Respondent cannot be classified as an insurer required to indemnify Hmdsley during such a period of sickness, regardless of his work performance with the interim employer It was reasonable that Hindsley work 40 hours a week during that period, and I conclude, therefore, that by his failure to work 40 hours a week, Hindsley willfully incurred a loss of earnings for the period of September 6, 1971, until April 3, 1972 I shall, therefore, in recomputing his backpay, not use the net interim earnings figures used by the Acting Region- al Director in the backpay specifications for this period, but shall compute a constructive interim earning figure for this period, representing what he would have earned had he worked a 40-hour week Likewise, I will use a construc- tive interim earning figure for the period of April to June 29, 1972, when Hindsley was engaged in self-employment, and earned substantially less than he would have earned had he remained in the employment of the interim employ- er Calendar Gross Quarter Backpay 1970-2 (6/23-6 /30 $181.07 The revised figures for Hindsley are as follows Net Constructive Interim Interim Net Earnings Earnings Backpay - 0 - $181.00 No change from original specification . Hindsley did not work the first week of his discharge. 1970-3 $2,353 . 91 $1,759.00 - 0 - No change from original specification. Hindaley worked 40 hours a week, plus average overtime of other draftsmen. 7 Based on the same commonsense rule of reasonable exertion it was reasonable for Hindsley to have worked less than 40 hours a week from B Hindsley received two pay increases during his employment with Eng- February 6 to September 6, 1971 During this period of time because of the lert, going from $4 an hour to $4 20 an hour on January 1 1971 and to slowdown of the work flow Englert cut out overtime work except for the $4 40 an hour on January 1, 1972 biweekly period of June 14 through 26 The other draftsmen like Hindsley 9 Biweekly periods of 5/29 to 6/10 6/12 to 6/24, and week of 6/26 were did not work an average of 40 hours per week for that period of time not read into the record by Office Manager Polk at the 1972 hearing McCANN STEEL CO Net Constructive Calendar Gross Interim Interim Net Quarter Backpay Earninsts Earnings Backpay 1970-4 $2,353 . 91 $2,724.00 No change from original specification. Hindsley worked an excess of interim earnings. 1971 - 1 $2,353 . 91 $2,084.25 No change from original specification. Hindsley worked overtime hours in January, and worked less than 40 hours a week in February and March, as did other draftsmen when Englert cut out overtime in February. 1971-2 $2 , 353.91 $2,049.60 No change from original specification . Hindsley worked less than a 40 hour week as did the other draftsmen, except for 2 week period of June 14 -26, when other draftsmen worked overtime. - 0 - $270.00 $304.00 1971-3 $1.991 .77 ($1,587.60) $1,722.00 $270.00 No change from original specification for July and August. In September , after Englert reinstated overtime , Hindsley worked 48 hours in bi-weekly period of 9/6-9 /18, and should have worked 80 hours. His constructive earnings are increased as followst 32 hours X $4.20, $134.40. Hindsley did not work 9/20-10/2, and these weeks were not included in the original specifications nor here. $1,587 . 60 Net Ihterim Earnings 134.40 $1,722. 00 Constructive Interim Earnings 1971-4 $2,353.91 ($1,337.30) $2,184.00 Constructive Interim Ea Hindsley to work a 40 h $4.20 per hour , $2,184. rnings computed as requiring our week for 13 weeks, at 00. 1972-1 $2,353.91 $2,288.00 Constructive Interim Earnings computed as requiring Hindsley to work a 40 hour week for 13 weeks , at $4.40 per hour, $2,288.00 $170.00 $ 66.00 1972-2 $2,353.91 ($1,024.89) $2,288.00 $ 66.00 Constructive Interim Earnings computed as requiring Hindsley to work a 40 hour week for 13 weeks , at $4.40 per hour, $2,288.00. Total Net Backpay Upon the foregoing findings of fact and conclusions of law, and upon the entire record in the case, and pursuant to the Board's Order dated September 23, 1975, I hereby recommend that the Board issue the following SUPPLEMENTAL ORDER ON REVIEW 10 The Respondent, McCann Steel Company, Inc, its offi- cers, agents, successors, and assigns, shall pay to J C $1,922.00 611 Hindsley as net backpay the sum of $1,922 together with interest thereon at 6 percent per annum less any tax with- holdings required by Federal and state law 10 In the event no exceptions are filed as provided by Sec 102 46 of the Rules and Regulations of the National Labor Relations Board, the findings, conclusions, and recommended Order herein shall as provided in Sec 102 48 of the Rules and Regulations be adopted by the Board and become its findings, conclusions, and Order, and all objections thereto shall be deemed waived for all purposes