Florida Steel Corp.

FLORIDA STEEL CORPORATION Florida Steel Corporation and United Steelworkers of America, AFL-CIO. Case 12-CA-7450 August 25, 1977 DECISION AND ORDER On May 5. 1977, Administrative Law Judge James L. Rose issued the attached Decision in this proceeding. Thereafter, the Respondent filed excep- tions and a supporting brief, the General Counsel and the Union filed reply briefs, and the Union filed cross-exceptions. The Board has considered the record and the attached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings,t and conclusions of the Administrative Law Judge. The General Counsel has requested the Board to increase the interest rate awarded on backpay and other monetary remedies from the current 6 percent per annum to 9 percent and has submitted a detailed brief in support of such request. For the reasons set out below, we agree that the 6-percent interest rate is not in line with current economic conditions. The current interest rate was established in 1962 in Isis Plumbing & Heating Co., 138 NLRB 716. Although no reason was given for the choice of 6 percent, at that time 6 percent was the rate used by the Internal Revenue Service, in suits by the Government, and was the legal rate of interest in most States. The Board explained the rationale behind award- ing interest in some detail in Isis. The statutory obligation creates a debtor-creditor relationship between the respondent and the discriminatee. The purpose of interest is to compensate the discrimina- tee for the loss of use of his or her money. In addition to producing a more equitable result, the Board noted that the addition of interest would encourage more prompt compliance with Board orders without placing a significant additional burden on the wrongdoer. Although the Board has in recent years refused a number of requests to raise the interest rate 2 and has rejected the notion of varying the rate of interest by I The Respondent has excepted to certain credibility findings made by the Administrative Laws Judge. It is the Board's established policy not to overrule an Administrative Law Judge's resolutions with respect to credibility unless the clear preponderance of all of the relevant evidence convinces us that the resolutions are incorrect. Standard Dry Wall Products, Ii.. 91 NLRB 544 (1950), enfd. 188 F.2d 362 (C.A. 3, 1951). We have carefully examined the record and find no basis for reversing his findings. Certain inadvertent errors in the Administrative Law Judge's Decision have been noted and corrected. ' See. e.g.. Hiter Company, 220 NLRB 1230 (1975); Mercr Peninsula Aithuhlanse Sern ie. Inc., 217 NLRB 829 (1975); Fuqua Homes Missouri, Inc., 201 NLRB 130(1973!: TheNationalC(sh Register ompanre, 190 NLRB 581 (1971)1: Regol Aluminum, Inc., 190 NLRB 468 (1971): B & G C(hrsler- 231 NLRB No. 117 geographical area,3 we have decided to reexamine our 15 years of experience with the 6-percent rate in light of the General Counsel's brief, which contains persuasive economic and legal support in justifica- tion of an increase. This country's economy has for some time been caught up in an inflationary trend which the experts predict will continue into the foreseeable future, although perhaps at a reduced rate. To cite an example, the purchasing power of the dollar, adjust- ed to 1957-59 value, was $.949 in 1962 but had fallen to $.533 by 1975.4 As a consequence of the sustained inflationary trend, interest rates charged by private lending institutions have increased. Congress and state legislatures have expressed concern over the disparity between statutory interest rates and interest rates in the private money market. Since 1969, the state judgment interest rate has been increased in 24 jurisdictions.5 The judgment rate statutes of a majority of the States now provide for interest rates greater than 6 percent.6 In enacting the 1974 amendments raising the interest rate applicable to Federal-tax underpay- ments and overpayments, Congress noted its concern that the 6-percent rate encouraged taxpayers to "borrow" tax funds rather than pay taxes promptly. 7 Similarly, in the oversight hearings on the National Labor Relations Act, the possibility that the 6- percent rate makes it profitable to violate the Act was discussed. 8 Taking into consideration all of the above factors, we are now convinced that the flat 6-percent interest rate no longer effectuates the policies of the Act. A rate of interest more accurately keyed to the private sector money market would have the effect of encouraging timely compliance with Board orders, discouraging the commission of unfair labor practic- es, and more fully compensating discriminatees for their economic losses. However, we are reluctant to adopt the straight 9-percent rate urged by the General Counsel. Rather, after careful consideration, we have decided to adopt the sliding interest scale charged or paid by the Internal Revenue Service on the underpayment or overpayment of Federal taxes.9 A number of factors led to the choice of the Internal Revenue Service's "adjusted prime rate" as P!vmouth, Inc., and its successor Bill George Chr)sler-Plymouth. Inc., 186 NLRB 282 (1970). 3 Russell Motors, 198 NLRB 351 (1972). ' U.S. Department of Labor Bureau of Labor Statistics. Handbook of Labor Statistics 1967 at 199. and Handbook of Labor Statistics 1976 at 243. s See Appendix A. Table 1. 6 See Appendix A, Table 2. 7 Leg. His. P.L. 93-625, 1974 U.S. Code Cong. & Adm. News 7478. 7494-98. Q Oversight Hearings on the National Labor Relations Act Before the Subcomm on Labor-Management Relations of the House Committee on Education and Labor. 94th Cong.. 2d Sess. at 761 (1976). 9 Pursuant to 26 U.S.C. §6621. added January 3, 1975 (P.L. 93-625. sec. (Continued) 651 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the Board's interest rate. First, it is directly tied to interest rates in the private money market. Second, it is subject to periodic semiautomatic adjustment. Third, it is relatively easy to administer, as it cannot be changed more frequently than once every 2 years; adjustments are announced well ahead of the effective date: and the rate is rounded to the nearest whole percent.10 Therefore, we shall require that backpay be computed utilizing the Woolworth formula," with interest to accrue commencing with the last day of each calendar quarter of the backpay period on the total amount then due and owing at the "adjusted prime interest rate" then in effect and continuing at such rate, as modified from time to time by the Secretary of the Treasury, until compliance with the order. l 2 The Respondent excepted to the Administrative Law Judge's recommended remedy which added an "inflation factor" to the backpay award.': We do not adopt that part of the remedy. In our view, as the increase in interest rates is in large part caused by inflation, our decision to key the interest rate computed on backpay awards to the adjusted prime interest rate utilized by the Internal Revenue Service has the effect of adjusting backpay awards for inflation.14 The Union excepted to the failure of Administra- tive Law Judge Rose to grant a number of additional remedies. In light of the clear tendency of Florida Steel to commit the same types of violations at each of its locations in response to organizing efforts by the Union,' 5 we agree that the requested additional remedies are warranted.1 6 Accordingly, we shall order that the Respondent mail the notice to all company employees, read the notice to all company employees, include the notice 7(a()I), 88 Stat. 2114), the Secretary of the Treasury is directed to adjust the interest rate not more than once every 2 years to reflect changes in the money market. The "adjusted prime rate" is defined as "90 percent of the iaverage predominant prime rate quoted by commercial banks to large businesses, as determined by the Board of Govenors of the Federal Reserve System." rounded to the nearest full percent. The adjusted rate is to be a;nounced by October 15 of any year to take effect the following February "' See fn. 9. supra. t F W. Woxoilworth Company, 90 NLRB 289 (1950). 12 We shall apply the current 7-percent rate to pending cases for backpay anid other monetary awards accruing in periods prior to the issuance of this Decision, in which the "adjusted prime interest rate" as used by the United States Internal Revenue Service in calculating interest on tax payments was at least 7 percent. I: At the hearing. Administrative Law Judge Rose suggested the idea of adjusting the backpay award, if any, to reflect changes in the value of the dollar. and he asked the parties to brief that issue, Both the Charging Party and the General Counsel initially argued in favor of such an adjustment. and the Respondent opposed it. In its brief to the Board, the General Counsel withdrew from that position and instead requested the increased interest rate. Although we do not adopt the inflation factor, we do not agree with the Respondent that the Administrative Law Judge acted improperly in suggesting a novel remedy, nor do we believe that in so doing he showed bias or prejudice. in appropriate company publications such as em- ployee newsletters, provide the Union access for 1 year to bulletin boards at the Tampa plant, and furnish the Union with a list of the names and addresses of all employees at the Tampa plant.17 ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board hereby orders that the Respondent, Florida Steel Corporation, Tampa, Florida, its officers, agents, successors, and assigns, shall: 1. Cease and desist from: (a) Discharging or otherwise discriminating against employees employed throughout its corporate facili- ties because of their interest in, or activity on behalf of, the Union or any other labor organization. (b) In any other manner interfering with, restrain- ing, or coercing employees employed throughout its corporate facilities in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action designed to effectuate the policies of the Act: (a) Offer reinstatement to Donald C. Bassett and make him whole for any loss incurred by reason of the discrimination against him in accordance with this Decision. (b) Preserve and, upon request, make available to the Board or its agents, for examination and copying, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary and relevant to analyze and compute the amount of backpay due under the terms of this Order. (c) Mail a copy of the attached notice marked "Appendix B" 8 to each employee employed 'l While Chairman Fanning may believe we have "missed the point" in failing to adopt the recommended "inflation factor" remedy, the over- whelming majority of American tribunals similarly engaged in restitutionary relief do not apparently share his opinion. Furthermore, the General Counsel in this proceeding withdrew his support for the Administrative Law Judge's suggested remedy and advocated the alternative, not supplemental. remedy of increased interest rates. 1, As noted by Administrative Law Judge Rose, this is the 13th Board decision finding that the Respondent has engaged in various unfair labor practices, and 8 other matters are currently pending before the Board. '6 See, e.g.. Tiidee Products, Inc., 174 NLRB 705 (1969), enfd. in relevant part sub nom. Inrernational Union of Electrical, Radio and Machine Workers, AFL-CIO v. N.LR.B., 502 F.2d 349 (C.A.D.C., 1974); J. P. Stevens & Co., Inc. (Dublin-Nathaniel Plants), 171 NLRB 1202 (1968), enfd. 417 F.2d 533 (C.A. 5, 1969). As the recommended cease-and-desist order is ambiguous, we shall clarify it to explicitly include all of the companywide facilities. i' Chairman Fanning and Member Jenkins would require that access to bulletin boards and the list of names and addresses be provided on a companywide basis. Is In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursuant to a 652 FLORIDA STEEL CORPORATION throughout its corporate facilities, post copies at each of its corporate facilities, and include it in appropri- ate company publications. Copies of said notice, on forms provided by the Regional Director for Region 12, after being duly signed by the Respondent's representative, shall be posted by the Respondent immediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in conspicu- ous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that said notices are not altered, defaced, or covered by any other material. (d) Convene during working time all of its employees throughout its corporate facilities at assembled meetings, either by shifts or departments or otherwise, and have a responsible official of the Respondent, at department supervisor level or above, read to the assembled employees the contents of the attached Appendix B. (e) Upon request by the Union, immediately grant the Union and its representatives reasonable access, for a I-year period beginning with the issuance date of this Decision, to its bulletin boards and all places where notices to employees are customarily posted at its Tampa plant. (f) Upon request by the Union, made within I year of the issuance date of the Decision, immediately give to the Union a list of the names and addresses of all employees employed at its Tampa plant. (g) Notify the Regional Director for Region 12, in writing, within 20 days from the date of this Order, what steps the Respondent has taken to comply herewith. CHAIRMAN FANNING, concurring in part and dissent- ing in part: I concur in the decision in all respects except as noted in footnote 17, supra, and the refusal of the majority to adopt the "inflation factor." The rationale behind the addition of an inflation factor is ably explained in Administrative Law Judge Rose's Decision. I repeat it here only because my colleagues seem to have missed the point. The inflation factor and the interest rate are entirely separate and noncumulative means of making the discriminatee whole. Interest is added to the backpay award because the Act creates a quasicontractual debtor-creditor relationship be- tween the Respondent and the discriminatee.i 9 It serves to compensate the discriminatee for the loss of the use of his or her money during the period that the Respondent unlawfully deprived him or her of it. Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." "' Isis Plumbing & Hearing Co., 138 NLRB 716 (1962). Although the increase in the interest rate above 6 percent is to some extent caused by inflation, our decision to allow a higher interest rate will only compensate the discriminatee for the inflationary effect of the loss of use of the money due and not the loss in value of those dollars. A simple backpay-plus-interest award does not make the discriminatee whole because the individual is not receiving the same purchasing power he or she would have enjoyed if the wages had been paid when due. In addition, the failure to adjust for inflation allows the Respondent to profit by delaying compli- ance as it can then pay its obligation in devalued dollars. The inflation factor is designed to remedy these problems by adjusting the backpay award to the current value of the dollar. This is not merely a hypothetical problem to be argued by economists in ivory towers. To cite a very real example involving the Respondent, two employ- ees who were unlawfully discharged in 1973 had to wait until 1976 for a final court order entitling them to reinstatement with backpay and they are currently involved in the compliance process.20 When they are finally paid, they will receive dollars which have declined in value over 25 percent. I fail to see how an increase in the interest rate on backpay compensates these employees for this loss in real spending power. I would adopt Administrative Law Judge Rose's recommendation that an inflation factor be added to backpay awards. 20 Florida Sieel Corporation, 215 NLRB 97 (1974). enfd. 529 F.2d 1225 (C.A. 5, 1976). Appendix A Table I CQanges (percent par annum) in Statutory Judgment Interest Rates Jurisdiction Alaska Arkansas Colorado Delavare Idaho Iowa Kansas Kentucky Louise an Maine Neasachusltts Nichigan tiseiesippi Nebraska Nyw Jersey Oklahom South Dakota Texas Tennessee Virgin Islands Vir Kini Prom To 6 8 6 10 6 8 6 9 6 8 5 7 6 8 6 8 5 7 6 10 6 8 5 6 6 8 6 8 6 B 6 10 6 8 8 10 6 9 6 8 6 9 6 8 Year Made 1969 1975 1975 1970 1974 1973 1969 1976 1970 or'72 1971 1974 1972 1975 1972 1972 1972 1972 1975 1975 1976 1975 1974 or'75 653 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Washington 6 8 1969 Wisconsin 5 7 1971 Wyoming 7 10 1973 The information in this chart was drawn from the pocket supplements to the various compilations of state statutes. It appears in the General Counsel's brief as footnote 22. Table 2 Statutory Judgment Interest Rates Alabama 6 Alaska 8 Arizona 6 Arkansas 10 California 7 Colorado 8 Connecticut 6 Delaware 6 District of Columbia 6 Florida 6 Ceorgia 7 Hawaii 6 Idaho 8 Illinois 6 Indiana 8 Iowa 7 Kansas 8 Kentucky 8 Louisiana 7 HMaine 10 Maryland 6 aess. 8 Michigan 6 Minnesota 6 Mississippi 8 Missouri 6 Montana 6 Nebraska 8 Nevada 7 New Hampshire 6 New Jersey 8 New Mexico 6 New York 6 North Carolina 6 North Dakota 6 Ohio 6 Oklahoma 10 Oregon 6 Pennsylvania 6 Puerto Rico 6 Rhode Island 6 South Carolina 6 South Dakota 10 Tennessee 8 Texas 9 Utah 8 Vermont 8-1/2 Virgin Islands 9 Virginia 8 Washington 8 West Virginia 6 Wisconsin 7 Wyoming 10 This chart was prepared from the various compilations of state statutes. It appears with anno- tations in the Ceneral Counsel's brief as Appendix 1. APPENDIX B NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all the parties participated, the National Labor Relations Board has found that we have violated the National Labor Relations Act. We have been ordered to stop committing these unfair labor practices, to post this notice, and to abide by its terms. Our employees have the right to join the United Steelworkers of America, AFL-CIO, or any other labor organization or to refrain from doing so. When we discharge or discriminate against our employees because of their interest in, or activity on behalf of United Steelworkers of America, AFL- CIO, we violate the law of the United States of America. We violated the law when we fired Donald C. Bassett. WE WILL NOT discharge or otherwise discrimi- nate against our employee because they are active on behalf of the United Steelworkers of America, AFL-CIO, or any other labor organization. WE WILL NOT in any other manner interfere with, restrain, or coerce our employees in the exercise of the rights guaranteed them by Section 7 of the Act. WE WILL put Donald C. Bassett back to work at his regular job and give him backpay plus interest for any loss he suffered as a result of our discrimination against him. Upon request by the above-named Union, WE WILL immediately grant it access for a l-year period, beginning with the issuance date of the Board's Decision and Order, to our bulletin boards and all places where notices to employees are customarily posted at the Tampa plant. Upon request by the above-named Union, made within the I-year period from the issuance date of the Board's Decision and Order, WE WI! L immediately give to the Union a list of the names and addresses of all employees employed at the Tampa plant. FLORIDA STEEl CORPORATION DECISION STATEMENT OF THE CASE JAMES L. ROSE, Administrative Law Judge: This matter was heard before me on March 2 and 3, 1977, at Tampa, Florida. The General Counsel's complaint alleged that on September 27, 1976, the Respondent discharged Donald C. Bassett because of his union activity in violation of Section 8(a)(3) of the National Labor Relations Act, 29 U.S.C. § 151, et seq., as amended. The Respondent admitted discharging Bassett but denied the antiunion motivation, alleging that it had discovered Bassett made material misrepresentations on his employment application and, pursuant to an inflexible policy of the Company, he was discharged. On the basis of the record as a whole, including my observation of the witnesses, briefs, and arguments of counsel, I hereby make the following: FINDINGS OF FACT AND CONCLUSIONS OF LAW I. THE BUSINESS OF THE RESPONDENT The Respondent is a Florida corporation engaged in the manufacture and distribution of steel products. In the operation of its Tampa facility, the Respondent annually ships goods, products, and materials directly to points outside the State of Florida valued in excess of $50,000 per year. The Respondent also receives at its Tampa facility directly from points outside the State of Florida goods, products, and materials valued in excess of $50,000 654 FLORIDA STEEL CORPORATION annually. The Respondent admits, and I find, that it is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 11. THE LABOR ORGANIZATION INVOLVED Respondent admits, and I find, that United Steelworkers of America, AFL-CIO (herein the Union), is a labor organization within the meaning of Section 2(5) of the Act. 111. THE ALLEGED UNFAIR LABOR PRACTICES A. Background For a number of years, the Union has been engaged in various organizational campaigns at several of the Respon- dent's facilities. These organizational efforts have resulted, among other things, in 12 Board decisions finding that the Respondent engaged in various unfair labor practices, of which to date 5 have been enforced by the circuit courts.' There are some eight other matters currently pending before the Board. The organizational campaign at the Tampa facility began in 1974 and, following litigation over the scope of the unit, culminated in an election held in February 1976. A majority of votes cast at that election were for no union and the Charging Party filed objections. At the time of the hearing herein, the objections had been sustained and a rerun election was pending scheduling by the Regional Director. Following the election there was little further union activity among the Respondent's employees at the Tampa facility until about September 15. On that day Estes Riffe, the Union's principal organizer, held a meeting among employees to reestablish the inplant organizing committee and to recommence organizing activity looking toward the rerun election. About 10 or 15 employees were present at this meeting, including Bassett. Riffe asked them to sign a petition stating that they would be members of the inplant organizing committee and to pass out such petition among other employees. Bassett took a petition, and within the next few days did in fact proffer it to other employees in the breakroom as well as sign it himself. Bassett had earlier been active on behalf of the Union, having become a member of the inplant organizing committee, and had engaged in such activity as passing out leaflets at the plant gate, getting authorization cards signed by fellow employ- ees; he was the Union's alternate observer and had asked management for permission to use the closed circuit TV prior to the election. He also testified at hearings before the National Labor Relations Board on behalf of the Union. On or about March 1, Bassett hurt his back while at work. This resulted in a workmen's compensation claim by him and he was off work until mid-August, although he came back on or about July 14 for 2 days in an attempt to see if he was sufficiently well to return to work. 214 NLRB 264 (1974): 215 NLRB 97 (1974). enfd. in part 529 F.2d 1225 (C.A. 5. 1976): 220 NLRB 260 (1975). 220 NLRB 225 (1975); 220 NLRB 1201 (1975). enfd. 538 F.2d 324 (C.A. 4. 1976); 221 NLRB 554 (1975): 221 NL RB 371 (1975)., enfd. 93 LRRM 2018. 82 LC 10.147: 222 NL'IRB 955 (1976). enfd. 536 F.2d 1385 (C.A. 5. 1976). 223 NLRB 174 During the investigation of the claim by the workmen's compensation insurance carrier, Bassett was asked if he had ever had a previous back injury. He stated that he had hurt his back sometime in 1963 or 1964 for which he had received a chiropractic adjustment. According to the insurance company's files, the adjustor asked Bassett for whom he was working when this occurred and Bassett said it was Sheet Metal Local No. 70, out of Akron, Ohio. Later, the claims supervisor contacted the Respondent advising that their investigation revealed that Bassett may have had a previous back injury while working for another company and they should investigate to determine whether the Company would be eligible for reimbursement pursu- ant to the Florida special compensation act.2 Thus it was, according to the testimony of James Rogers, the personnel supervisor of the Tampa facility, that his department checked into Bassett's employment application form and noted that Sheet Metal Local No. 70 was not listed as a previous employer. From this Rogers determined to verify the other employers listed by Bassett on his application. As a result of this, he determined that Bassett had made material misrepresentations with regard to the dates he worked for various employers and the number of previous employers, most of whom he had not put down on his application. Rogers testified that he first confronted Bassett with this information on September 14, 1976, the day before the resumption of union activity at the plant. Bassett, on the other hand, recalls the date being September 16 or later. In any event, both agree that Rogers did talk to Bassett on at least three occasions concerning the misrepresentations on the application, which Bassett readily admitted. Indeed he told Rogers that the reason he had not put down many previous employers in the early 1960's and before was because he had had both drinking and family problems. According to the testimony of Rogers and Bassett's immediate supervisor, David Davis, Rogers gave this information to Davis and those two met with the plant superintendent. Then it was Davis' decision to terminate Bassett because of the material misrepresentations on his 1971 employment application. Rogers stated that he had no authority to discharge anyone and Davis testified that the reason he effected the discharge was because he had been advised of the Company's inflexible rule that anyone who makes a misrepresentation on his application must be discharged. Davis was first advised of the misrepresentations by Rogers on September 27. They met that day once with Bassett and then a second time when Rogers told Bassett that he was being discharged. Both Rogers and Davis deny that Bassett's discharge had anything to do with his union activity specifically or the union activity in general. They both testified that the discharge was solely because of the Company's inflexible rule to discharge anyone who makes a material misrepresentation on his application. (1976). 224 NLRB 45 (1976); 224 NLRB 587 (1976). and 226 NLRB 123 (1976). 2 The Florida special compensation act apparently allows for recoup- ment of compensation payments where the injured emplo)ee had had a previous injury to the same member and the compan) knec abx)ut it. 655 DECISIONS OF NATIONAL LABOR RELATIONS BOARD B. Analysis and Concluding Findings As presented by the parties, the issue in this case is whether Bassett was in fact discharged for making material misrepresentations on his application, a fact that he readily admitted both at the hearing and to the Respondent during its investigation, or whether such was seized by the Respondent as a pretext to discharge a known union activist in the midst of an organizational campaign. For the reasons hereafter given, I conclude that the Respondent's professed reason for discharging Bassett was a pretext. The true motive involved his union activity specifically and, generally, was to discourage union activity. There can be little doubt of the Respondent's substantial animus toward labor organizations, particularly including the Union. The fact of this animus is more than amply demonstrated in the many Board decisions involving this Respondent and the Charging Party. There is also little question that Bassett was at least a satisfactory if not more than satisfactory employee during his 5-year tenure. Indeed, Rogers testified that the determination to discharge Bassett was made reluctantly because the Company hated to lose such a good employee. The Respondent argues nevertheless that, in order to avoid charges of disparate treatment, it had to enforce against Bassett its inflexible rule of discharging anyone who makes material misrepresentations on his application. Among other alleged facts presented by the Respondent, it is the existence of this inflexible rule that would apply in Bassett's situation that I do not believe. I do not believe that, absent union activity in general or Bassett's union activity specifically, the Company would have discharged a trained and competent crane operator 5 years after the fact just because he failed to list all of his previous employers, or to put the exact dates of his employment on his application, or to state he was a high school graduate. There is no question but that Bassett did make his misrepresentations on his application nor is there any question that at least he thought they were material. In fact, he candidly admitted on cross-examination that he failed to put down many previous employers because he was afraid that, were the Respondent to contact them, he would not be hired. The fact of the misrepresentations or their materiality is not an issue here. The question is whether after a lapse of 5 years these misrepresentations would reasonably be considered so serious as to require discharge in the normal course of the Respondent's business-that is, absent union activity. The question is not, as argued for by the Respondent, whether on finding the misrepresentations it had "good cause" for the discharge. No doubt an employer can discharge an employee for having falsified his employment application. But then, an employer can discharge an employee for any reason or no reason at all-except for his having engaged in union activity. As union activity does not insulate an employee from being discharged for cause, the existence of a traditional "good cause" does not insulate an employer where the discharge in fact is antiunion motivated. In this inquiry, the quality and rationality of the purported cause becomes evidence of the motive. The seriousness of Bassett's offense and the necessity for his discharge rested largely on the testimony of Rogers. It was he who caused investigation of Bassett's application, it was he who confronted Bassett with these matters, and it was he who ultimately took the issue to Bassett's line supervisors; Rogers stated that the union activity was not discussed or involved and that the determination to discharge Bassett rested solely upon the Company's inflexible rule. In this respect as in all other respects where there is a material controversy, I specifically do not credit Rogers. I discredit Rogers for the following reasons: First, his demeanor convinced me that his testimony was not at all times candid or straightforward. Second, and of substantial importance, is his testimony about Bassett's application form. Bassett submitted his application on October 18. On page two of this form, below three of the previous employers there is a notation in ink, "Ref mailed 10/20/71." In the box on the lower left hand corner of the same page entitled "Company Use Only" is a notation, "Refs checked OK." Rogers testified that the "Refs" was, he thought, somebody's initials in the personnel department at the time and that this notation meant that the inquiry on the references had been sent out. This testimony, which was given on direct, and repeated on cross and re-direct examinations, is wholly and completely incredulous. It is obvious that the notation in the box is in fact "Refs" and is not someone's initials. It stands for references. Even if it is hard to read the "Refs," that it is followed by "checked OK" means it is not initials. A notation "(initials) checked OK" absolutely makes no sense. It is obvious that the box notation means that following the mailing of the referenc- es, as indicated above on the form, they checked out to be "OK." In common usage this means that the references were found to be sufficiently satisfactory so as to justify hiring the prospective employee. This notation is so obvious and its meaning so clear that I cannot help but conclude that, in testifying that he had no opinion to the contrary, Rogers was deliberately attempt- ing to mislead me on a material fact-namely, whether the Respondent had waived any discrepancies that might have existed in Bassett's application by checking his references and finding them to be sufficient. The mere fact that Rogers may have been truthful in other respects in his testimony does not negate that in this material respect and others he was unworthy of belief. On its face, the application shows that Bassett's referenc- es were checked. Even though he had given incorrect dates for working for those companies listed and had given incorrect reasons for termination (he said that he had been laid off, when in fact he had been fired on one occasion), nevertheless the Company did check his application and, if those discrepancies were discovered, which they would have been, he was nevertheless hired. In addition, on its face the application shows that Bassett did not in fact list all of his prior jobs. Though a misrepresentation for which he was fired, this fact did not apparently affect the Company's determination to hire him in the first instance. That is, Bassett gave his first job as 656 FLORIDA STEEL CORPORATION being in 1963 at a time when he was 25 years old. There was no accounting for the seven or eight years between this and when he finished high school. Rogers admitted that this was a material misrepresentation on the face of the application. If one believes that the Respondent has an inflexible rule for discharging an employee for such misrepresentations, it follows that the Respondent would not hire someone where such misrepresentations are on the face of the application. If in fact the Respondent had the inflexible rule that Rogers testified to at the time Bassett was hired, which was his testimony, then it follows that Bassett would not have been hired. That he was hired tends to prove that the rule did not exist in 1971, as Rogers stated, nor did it exist in 1976. Since the Company did check Bassett's references before he was hired, this leads me further to conclude that in 1971 such misrepresentations that he may have made were not of sufficient seriousness to preclude hiring him, and would therefore not be of sufficient seriousness to require discharge. The Respondent, however, states that to be consistent it had to discharge Bassett because it had discharged others for making misrepresentations. Thus the Respondent offered into evidence five other personnel folders of employees who had been discharged for this reason. I find on examination of these personnel folders that none of the cases is sufficiently similar to that of Bassett so as to establish that the Respondent does or did in fact have an inflexible rule for discharging one who makes the type of misrepresentations on his application that Bassett did. For instance, Leslie G. Frye was hired on July 27, 1972, and fired on August 1. 1972, for "False information on job application." Immediately following her hire, the Company made telephone checks of the references listed on her application and in one instance found no record of employment. The other reference checked was reported as "bad." The necessity, of course, for correct information on a job application is so the employing company can check the employee's past performance in order to determine whether or not it is worth the company's time and effort to hire and train that employee. Bassett's situation would have been similar to Frye's but for the fact that the Company in fact checked his references and found them to be satisfactory at the time he was hired. If at that time Bassett had been discharged because he had failed to give correct and total information on his application, such would have been reasonable and would have been a case similar to Frye's. That is, the discharge would have had a rational connection generally with the purpose of employment applications. Donald Batchelder was hired on August 16, 1976, and discharged a month later on September 24. He also was discharged for having given false information on his application; namely, he checked that he had never been convicted of a crime when in fact he had been convicted of manslaughter. A further check by the Company also revealed that he had a number of arrests for various crimes. The misrepresentation was different in kind from Bassett's and is clearly distinguishable. Iona G. Henderson was hired on July 7, 1975, and fired a month later on August 7 when it was discovered that in her application she concealed the fart that she had had an accident involving a back injury. Again this was a material fact concealed by the applicant and discovered within a short period after the beginning of her employment. Again the situation is distinguishable from Bassett's. Lonnie Washington was hired on July 19, 1976, and fired about a week later on July 28 when it was discovered that he had failed to put on his application that he had previously worked for the Respondent. Again this was a material misrepresentation discovered during the applica- tion check and is therefore distinguishable from Bassett's case. Finally is the matter of Victor Spivey, who was hired on March 27, 1972, and fired on May 14, 1973, when it was accidentally discovered that a previous employer had terminated him for cause rather than laying him off, and that he had failed to report driving accidents. This is a situation very similar to Bassett's. However, rather than proving the "inflexible" rule, it demonstrates that the Respondent did not always discharge employees simply because they made false statements of material facts on their application forms. Thus, in memos to the Spivey personnel file written by J. L. McLendon (unidentified on the record but from a reading of Spivey's personnel file offered into evidence by Respondent, clearly the manage- ment authority who effected Spivey's discharge): It was felt, Spivey had more than adequate opportu- nity to change the incorrect information furnished by him on his application. I therefore, instructed Driver Foreman, Simons, to terminate Spivey on his return to Tampa traffic. I advised Spivey his termination would have to stand due to his falsification of employment records and failure to correct these records when he was given an opportunity to set the record straight. It is clear from the Company's own records that Spivey was not discharged simply because he had made false statements on his application. Rather, upon being con- fronted with false statements Spivey refused to correct them. This is substantially different from Bassett's situa- tion. Bassett always admitted to the Respondent when confronted that he in fact had made the misrepresentations attributed to him. The point, however, is that rather than showing an inflexible rule to fire employees solely because they make material misrepresentations on their applica- tions, the Spivey case shows that such would not have caused his discharge had he but corrected the false statements when confronted by McLendon. The five discharges relied on do not, in my judgment, establish that the Respondent has had an inflexible rule for discharging long-term employees upon finding that they had made misrepresentations on their applications, where the matter misrepresented would have no particular bearing on their established ability to do the work which they had been doing. An analysis of the evidence furnished by the Respon- dent, my view of Rogers' testimony, and the fact that 657 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Bassett was a competent 5-year employee doing a skilled job lead me to conclude that the fact that Bassett may have made misrepresentations on his employment application was not the reason he was discharged; it was a pretext. As noted above, the Respondent could have discharged Bassett for the reason asserted, any reason, or no reason at all except for his having engaged in union or other protected activity. However, if the asserted reason for discharging an employee is not reasonable then that fact is evidence that the true motive lies elsewhere. "If he (the trier of fact) finds that the stated motive for a discharge is false, he certainly can infer that there is another motive." Shattuck Denn Mining Corporation v. N.L.R.B., 362 F.2d 466, 470 (C.A. 9, 1966). Having concluded that the motive must lie elsewhere I infer from the totality of the record that it was Bassett's union activity in specific and the activity of the Charging Party in general which caused the Respondent to discharge him. In inferring an unlawful motive, I take into consideration not only the Respondent's proclivity for engaging in unfair labor practices of this type and character, but also what appears to be a company policy of committing unfair labor practices. As the Board said in Florida Steel Corporation, 226 NLRB 123, 124(1976): However, Respondent's history of unfair labor practic- es similar to those committed herein, and its recent history of other types of flagrant violations, indicate a course of unlawful conduct taken by Respondent in the service of designs inimical to the collective-bargaining process. [Citations omitted.] I also have taken into consideration the timing of the discharge with the union activity. The election was held in February, objections were filed, and rerun election is now pending scheduling. Within the context of an imminent rerun election, and the reactivation of the organizational campaign in September, the misrepresentations on Bas- sett's application were found and he was discharged. I believe that the Company knew, as indeed it passively admitted, that Bassett was a leading activist on the part of the Union. I also believe that the Company knew of the renewed organizational campaign in mid-September and knew that Bassett was involved. The Respondent makes a point of the fact that Rogers discovered these misrepresentations and had his first conference with Bassett on September 14, the day before the renewed organizational campaign. While I generally discredit Rogers as indicated above, it really makes little difference whether Rogers first met with Bassett on September 14. The fact of the matter is the Respondent knew of Bassett's union activity, there was an organization- al campaign, the Respondent's union animus is amply demonstrated, and he was discharged for pretextual reason. I find that Bassett's union activities specifically and the total context of the organizational campaign in general were the precipitating cause of his discharge. : Respondent offered and I rejected Bassett's timecard of September 14, 1976. to establish that Rogers did in fact meet with Bassett on September 14. There is a notation in ink on the timecard "Met with IR." The card was From the totality of the record I therefore conclude that the Respondent did in fact discharge Bassett because of his activity on behalf of the Union, in violation of Section 8(a)(3) of the Act. REMEDY It having been found that the Respondent has committed the unfair labor practice alleged, I will recommend that it cease and desist therefrom and take certain affirmative action designed to effectuate the policies of the Act. The Respondent will be ordered to offer Donald C. Bassett full reinstatement to his former position of employment or, if that position no longer exists, to a substantially equivalent job, without prejudice to his seniority or other rights and privileges, and to make him whole for any loss of wages or benefits that may have been suffered as a result of the discrimination against him, in accordance with the formula set forth in F W. Woolworth Company, 90 NLRB 289 (1950), and Isis Plumbing & Heating Co., 138 NLRB 716 (1962). The Charging Party and the General Counsel have also requested that the notice be posted companywide because of the Respondent's proclivity for engaging in unfair labor practices of this type and character both at the Tampa facility and others. Such an order will be recommended. Florida Steel Corporation, 224 NLRB 45 (1976). The General Counsel and the Charging Party also request an "inflation factor" be put into the backpay formula. That is, given this Respondent's past history of delaying compliance with backpay orders and noting the inflationary times in which we live whereby the dollar steadily decreases in value, it is requested that when the Respondent finally pays its obligation to Bassett under this order, such payment should reflect the actual dollars that Bassett lost. The Respondent argues that "inflation factor" is simply interest and therefore the question really argued by the General Counsel and the Charging Party is whether the rate of interest as set forth in Isis Plumbing & Heating Co., supra, should be increased. For the following reasons, I will recommend that the Board in this and future cases add an inflation factor to backpay awards in addition to interest as provided for in Isis Plumbing & Heating Co., supra. First, taking into consideration the value of the dollar as a result of inflation has little to do with interest and is in any event a different concept. Thus, in Isis Plumbing & Heating Co., supra at 718, the Board quoted with emphasis the Court of Appeals for the District of Columbia, United States v. Union Drill & Tool Corp., 183 F.2d 998, 999 (C.A.D.C., 1950), "If the obligation is in the nature of a debt it is deemed interest-bearing, because the statutory purpose was to create a debtor-creditor relationship and in equity interest is allowed as a means of compensating a creditor for loss of use of his money." This concept of interest is traditional. One is compensat- ed, not because the value of money changes, but because he forgoes the use of his money. The other side of this is identified by a recordkeeper, but no testimony was offered to show who put that notation on the card or when. I therefore concluded that it did not tend to prove the fact asserted by the Respondent. 658 FLORIDA STEEL CORPORATION that one who borrows is willing to pay for the use of the money borrowed. The money thus earned by the creditor and spent by the debtor is interest. Therefore, interest, generally, and in these backpay matters, specifically, would apply whether the value of the dollar went up, down, or stayed the same. It applies because of the debtor-creditor relationship created. Counsel have directed me to no case in which the Board has considered including an inflation factor in the backpay formula, nor has independent research disclosed any. However, the common law courts for a number of years have considered this matter, generally in the context of awarding future damages. The thinking appears somewhat mixed, with some courts taking the position that adjusting an award of damages to include future inflation is too speculative. E.g., Locklin v. Day-Glo Color Corporation, 429 F.2d 873 (C.A. 7, 1970). The contrary result has been reached in increasingly numerous jurisdictions. Thus, in United States v. English, 521 F.2d 63 (C.A. 9, 1975), the court concluded that predicting inflationary trends may be speculative, but so also are most elements of future damages. The court went on to say: Even in the short time since the cases against consider- ing inflation in making damage awards have been decided, inflation has become a considerably more important factor in our economic lives. Ignoring inflation is, in essence the same as predicting it will not occur, or that its effects will be de minimis. While the administrative convenience of ignoring inflation has some appeal when inflation rates are low, to ignore inflation when the rates are high is to ignore economic reality. [521 F.2d at 75.] The same principle would seem to apply in calculating backpay to discriminatees in cases arising under this Act. To ignore the real loss incurred by the devaluation of the dollar is to ignore an economic reality. And since the backpay would not be calculated until the time of payment, there would be no speculation. Furthermore, by working an inflation factor into the backpay formula, the claimant is simply being made whole. He would receive in dollars only what he lost. He would not get an additional windfall benefit. Conversely, the company who has wronged the employee, by having to make him whole in dollars that he actually lost rather than devalued dollars is not harmed. To the contrary, not to consider an inflation factor in calculating backpay gives the wrongdoing respondent the windfall of paying its obligation in reduced value dollars. This is apart from the use of the money, for which the respondent must pay 6 percent per year. Further, to add in an inflation factor would have the effect of treating all discriminatees, as well as all respon- dents, alike. As it stands now, a respondent who voluntari- ly complies with a backpay order is worse off than the respondent who refuses to comply and upon whom the I Although the CPI is sometimes given for selected cities. the United States Cit) average should be used in order to give uniformity. Russell Motors, Inc.. 198 NLRB 351 (1972). Board has to force compliance, an exercise that often takes months-even years. When such a recalcitrant respondent finally complies he is paying in devalued dollars. His wrong does not cost as much because of the delay. For much this reason the Board changed the method of computing backpay in Woolworth Company, supra. In an analogous situation, the Board has recognized that backpay should include the periodic wage increases an employee might reasonably would have expected to have received. Big Three Industries, Inc., 219 NLRB 881 (1975). It is analogous because the Board is simply attempting to make whole the employee in dollars he would have received but for the discrimination against him. Analogous cases, logic, and economic reality support the position of the General Counsel and the Charging Party that an inflation factor ought to be considered when calculating backpay. It would follow, of course, that in times of deflation the reverse would apply. While predicting future inflation is difficult if not speculative, as the common law courts have noted, supra, calculating past inflation is fairly precise and not difficult. The Consumer Price Index is published monthly by the Bureau of Labor Statistics and is the accepted standard by which the purchasing power of the dollar is calculated. 4 The relative purchasing power between two points in time would be the inflation factor. The CPI is in percentage with 1%7 equalling 100 percent. Thus, for any given period of backpay (normally, quarters under the doctrine of Woolworth) the Consumer Price Index at the beginning would be added to the Consumer Price Index at the end. This result would be divided by two to find the average Consumer Price Index for that period of backpay. This figure would in turn be subtracted from the Consumer Price Index at the time the respondent complies to determine the percentage by which the net backpay amount should be increased to reflect the devalued dollar. By way of example, assume a backpay period includes the third quarter of 1975 (July, August, and September). The CPI at the end of June was 160.6 and at the end of September 163.6.5 The average: (160.6 plus 163.6) divided by 2 = 162.1 (The end of June would be closer to the first of July than the end of July, hence the June figure is used.) Further assume that the net backpay to the claimant for this quarter is $1,000 and that the respondent determined to make payment in January 1977, at which time the CPI was 175.3.6 The net backpay would be $1,000 plus $1,000 x (175.3 percent - 162.1 percent) = $1,132. Thus, the net adjusted backpay would be $1,132 reflecting the devalua- tion of the dollar from the third quarter of 1975 to the time that the respondent made restitution. Then because the respondent had the use of this money, interest at 6 percent would be added. [Recommended Order omitted from publication.] 5 1975 LRYB 588. 6 94 LRR 163. 659