Galloway School Lines

473 315 NLRB No. 60 GALLOWAY SCHOOL LINES 1 308 NLRB 33. 2 Jim’s Big M, 266 NLRB 665 (1983). 3 Laborers Funds of Northern California, 302 NLRB 1031 (1991); Craig & Hamilton Meat Co., 276 NLRB 974 (1985). Galloway School Lines, Inc. and Local 76, Service Employees’ International Union, AFL–CIO. Cases 1–CA–26744(E) and 1–RC–19303 October 31, 1994 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN GOULD AND MEMBERS STEPHENS AND DEVANEY On October 29, 1993, Administrative Law Judge Robert T. Wallace issued the attached supplemental decision. The General Counsel filed exceptions and a supporting brief and the Applicant filed a brief in op- position to the General Counsel’s exceptions. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the supplemental decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions only to the extent consistent with this Sup- plemental Decision and Order. On July 28, 1992, the Board issued its decision in the underlying consolidated unfair labor practice/rep- resentation case,1 adopting the judge’s recommendation to dismiss the complaint allegations in their entirety, to overrule the Petitioner Union’s objections, and to cer- tify the results of the election. Thereafter, the Appli- cant, the Respondent below, filed an application for an award of attorney’s fees and expenses under the Equal Access to Justice Act (EAJA) and Section 102.143 of the Board’s Rules and Regulations. In the instant sup- plemental decision, the judge found neither substantial justification for the General Counsel to have pursued the complaint nor special circumstances precluding an award of fees and expenses to the Applicant. Accord- ingly, he granted the Applicant’s application and awarded it the amount of $37,871. The General Coun- sel disputes the judge’s characterization of his position in the underlying unfair labor practice case as ‘‘not substantially justified,’’ and asserts that its prosecution of the complaint was reasonable and well founded. We find merit in the General Counsel’s contentions and, for the reasons stated below, reverse the judge’s find- ings and deny the application. EAJA, as applied through Section 102.143 of the Board’s Rules and Regulations, provides that a ‘‘re- spondent in an adversary adjudication who prevails in that proceeding, or in a significant and discrete sub- stantive portion of that proceeding’’ and who meets certain eligibility requirements relating to net worth, corporate organization, number of employees, etc., is eligible to seek reimbursement for certain expenses in- curred in connection with that proceeding. Section 102.144 states that a reimbursement of such expenses will be awarded ‘‘unless the position of the General Counsel over which the party has prevailed was sub- stantially justified.’’ To meet this burden, the General Counsel must establish that he was substantially justi- fied at each stage of the proceeding, i.e., at the time of the issuance of the complaint, taking the matter through hearing, and in filing exceptions to the judge’s decision. An examination of the circumstances and evi- dence available to the General Counsel at these junc- tures is required in order to determine whether the General Counsel has carried his burden. In order to determine whether the General Counsel has satisfied this test, it is necessary first to identify what constitutes substantial justification. The Board has stated that substantial justification does not mean substantial probability of prevailing on the merits,2 and that it is not intended to deter the agency from bring- ing forward close questions or new theories of the law.3 The Supreme Court has defined the phrase ‘‘sub- stantial justification’’ under EAJA as ‘‘justified to a degree that could satisfy a reasonable person’’ or hav- ing a ‘‘reasonable basis both in law and fact.’’ Pierce v. Underwood, 487 U.S. 552, 565 (1988). Thus, in weighing the unique circumstances of each case, a standard of reasonableness will apply. In this case, the judge’s analysis of the Applicant’s EAJA claim is as follows: The central and undisputed fact of this case is that the three alleged discriminatees (DelBene, Brown- ing and Hanson) chose to quit their jobs as school bus drivers on short notice at the beginning of a new school year, each offering ‘‘family’’ or ‘‘child care’’ as reasons for their decision. There is no allegation or proof that their resignations were other than voluntary. The judge then reiterated his findings from the under- lying decision that there was a ‘‘paucity of evidence that [the Applicant] knew and/or harbored animus to- ward [the alleged discriminatees]’’ because of ‘‘their minimal involvement in the organizational drive,’’ and determined that the alleged discriminatees’ own con- duct led to their fate with the Applicant. Thus, the judge concluded the General Counsel was not substan- tially justified in its prosecution of the case. We disagree. As explained below, the judge’s analy- sis glosses over two essential points. First, his conclu- sion that there was a ‘‘paucity of evidence’’ showing knowledge of, and animus toward, the alleged discriminatees’ union activities reflects his credibility determinations concerning conflicting trial testimony in the underlying case. Second, his conclusion that the al- 474 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 4 The unemployment benefits issue is described in the underlying decision, 308 NLRB at 36. 5 The judge also specifically rejected the General Counsel’s con- tention that because he filed no exceptions to the initial decision, li- ability for costs incurred subsequent to that time should be dis- allowed. He noted that because the General Counsel did not also move to dismiss the complaint, the door remained open for the Union to file exceptions, thereby eliciting the Applicant’s reply and attendant expenses. Whatever the merits of the judge’s view that the General Counsel should attempt to block efforts of a charging party to except to dismissals of allegations based on its charges, we note that here there likely would have been further proceedings in any event in the related representation case to which the General Counsel was not a party. As indicated above, the Petitioner Union had filed objections to the conduct of the election which were consolidated for hearing with the complaint. Notably, the objections were identical in substance to the alleged unfair labor practices. It should be noted further that the Petitioner Union’s exceptions to the underlying decision related sole- ly to alleged 8(a)(1) critical period conduct (which paralleled its ob- jections) and that the Union was seeking, through its exceptions, to have the results of the election set aside. Inasmuch as the exceptions leged discriminatees’ resignations were voluntary and unaffected by any lawful actions on the part of the Re- spondent rested on inferences from evidence that could reasonably have supported contrary inferences. These points are critical to the decision regarding substantial justification for the General Counsel’s position, since in issuing complaint and proceeding through the trial, the General Counsel was acting without benefit of the judge’s ultimate credibility resolutions and choices among possible inferences. At the time the General Counsel issued complaint, the following was clear: there had been an organizing campaign at the Applicant’s facility; during the critical period the Applicant’s president and its attorney had made statements that could be interpreted as threats of reprisal against union supporters and of the futility of their efforts; and three employees whose prounion sen- timents could reasonably have been known by the Ap- plicant were no longer employed as a result of possible disparate treatment. At that point, the General Counsel was looking at a situation which, if his witnesses were credited, would establish efforts at coercion, antiunion animus, knowledge of union activities, and retaliatory discrimination against prounion employees. Thus, the complaint alleged that the Applicant revealed union antagonism through its own words and that DelBene, Browning, and Hanson each suffered discrimination because of their union support. During the hearing, the judge’s own findings of fact establish that: (1) the Rhode Island Department of Em- ployment Security determined on appeal that DelBene was caused to lose state unemployment benefits pre- maturely4 and was thereafter denied the opportunity to work as a spare driver; (2) Browning was denied her request to have another driver ‘‘cover’’ part of her scheduled run—an accommodation which had been ex- tended to other employees—which resulted in her leav- ing her position, and she was thereafter denied the op- portunity to work as a spare driver; and (3) Hanson was taken off one route and reassigned to one she found less desirable, which resulted in her leaving her job. It is further undisputed that each of these employ- ees had attended a union organizational meeting where they signed authorization cards and, during which, an antiunion employee, Czerkiewicz, attempted to debate the merits of unionization and took notes of what tran- spired. It is also established that Czerkiewicz discussed that meeting with Area Manager DeSouza, the alleged discriminatees’ supervisor. The findings of fact also disclose that Browning’s name appeared on a widely disseminated list identifying members of the organiz- ing committee, that she displayed a union button on her purse, and that she was open in expressing her prounion sentiments. It is further undisputed that Han- son’s picture appeared in a union leaflet which identi- fied her as a supporter, and the judge found that it could be assumed that this leaflet was seen by the Re- spondent. Despite this evidence, the judge nevertheless cred- ited testimony from DeSouza and Czerkiewicz that the alleged discriminatees’ attendance at the organizational meeting was not discussed. Neither did he infer that the Applicant otherwise became aware of these indi- viduals’ preferences either directly or through union literature. In addition, he concluded that the Applicant was under no obligation to accommodate employees’ scheduling preferences, and that business reasons justi- fied its not having reemployed any of the three. Fur- ther, the judge credited the denial of the Applicant’s president that he had stated he would never recognize the Union, and the judge construed certain statements alleged as coercive as being innocuous, i.e., that a ref- erence to ‘‘loyalty’’ had meaning beyond a union/company context and that a reference to possible job loss related to safety rather than union reasons. In short, it was the judge’s credibility findings and infer- ences from the evidence—not undisputed evidence— that led to his dismissing the complaint. Resolving credibility, after hearing and observing all the wit- nesses and weighing the evidence in light of those findings, is precisely within the judge’s purview, not that of the General Counsel. The General Counsel’s role is to proceed to hearing on a reasonable founda- tion that a violation of the Act has occurred. That is what the General Counsel did in this instance. It should also be noted that once the judge’s credibility centered decision was rendered, the General Counsel did not file exceptions. This demonstrates the General Counsel’s understanding that once the factual param- eters had reasonably been drawn in a manner contrary to its theory of violation, and, lacking a reasonable basis for disputing the judge’s resolution, he lacked substantial justification to proceed further.5 475 GALLOWAY SCHOOL LINES were thus grounded in a representation matter, and because EAJA does not extend to representation cases, no award of expenses would have been warranted for that aspect of the proceeding in any event. K & I Transfer & Storage, 277 NLRB 1063 fn. 2 (1985). 1 Through admitted inadvertence, the application contains a claim for 8.5 hours’ work on matters not related to this case. In con- sequence, the total claim is reduced by $637.50. Thus, we find that because the issues of this case could not reasonably have been resolved short of a hearing during which the credibility of witnesses could be assessed, the General Counsel’s position was sub- stantially justified throughout this proceeding. Accord- ingly, we will dismiss the application. ORDER The National Labor Relations Board reverses the recommended Order of the administrative law judge and orders that the application of the Applicant, Gallo- way School Lines, Inc., Chariho, Rhode Island, for at- torney’s fees and expenses under the Equal Access to Justice Act is denied. Thomas J. Morrison, Esq., for the General Counsel. Thomas J. McAndrew and Patricia E. Andrews, Esqs., for the Respondent. Burton E. Rosenthal, Esq. (Segal, Roitman & Coleman), of Boston, Massachusetts, for the Charging Union. SUPPLEMENTAL DECISION [Equal Access to Justice Act] ROBERT T. WALLACE, Administrative Law Judge. In my earlier decision I dismissed the complaint in its entirety, overruled all objections, and certified that the Union had lost the election. The Union, but not the General Counsel, filed exceptions. On July 28, 1992, the Board (308 NLRB 33) af- firmed the decision. The prevailing party (Galloway), on August 27, 1992, filed an application (pursuant to the Equal Access to Justice Act— Pub. L. 96–481, 94 Stat. 2325 and Section 102.143 of the Board’s Rules and Regulations) for an award of fees and ex- penses incurred in its successful defense. On October 20, the General Counsel filed a motion to dismiss; and Galloway re- plied. I denied the motion by order dated February 16, 1993, whereupon the General Counsel, on May 12 opted to file the answer here considered. The EAJA provides for the award of attorney’s fees and other expenses to eligible parties who prevail in litigation be- fore administrative agencies, unless the Government can es- tablish that its position in the litigation was substantially jus- tified or that special circumstances make an award unjust. EAJA, Section 504(a). Congress characterized the ‘‘substan- tially justified’’ standard as one of reasonableness: The test of whether or not a government action is sub- stantially justified is essentially one of reasonableness. Where the government can show that its case had a rea- sonable basis both in law and fact, no award will be made. Congress emphasized that no adverse inferences were to be drawn from the fact that the Government did not prevail in the adversary litigation: The standard, however, should not be read to raise a presumption that the government position was not sub- stantially justified simply because it lost the case. Nor, in fact, does the standard require the government to es- tablish that its decision to litigate was based on a sub- stantial probability of prevailing. As to ‘‘special circumstances’’ which make an award un- just, the committee report explains: This ‘‘safety valve’’ helps to insure that the govern- ment is not deterred from advancing in good faith the novel but credible extensions and interpretations of the law that often underlie vigorous enforcement efforts. It also gives the court discretion to deny awards where equitable considerations dictate an award should not be made. On review of the record in this proceeding, I find no sub- stantial justification for the complaint and no circumstances precluding an award. The central and undisputed fact of this case is that the three alleged discriminatees (Browning, DelBene, and Han- son) chose to quit their jobs as schoolbus drivers on short notice at the beginning of a new school year, each offering ‘‘family’’ or ‘‘child care’’ as reasons for their decision. There is no allegation or proof that their resignations were other than voluntary. Instead, bus operator Galloway is cited for having changed Hanson’s route assignment and for not recalling DelBene and Browning as ‘‘spares,’’ allegedly because they supported unionization. Hanson, however, admittedly did not even men- tion, let alone complain, contemporaneously to the Company about the route change; and, in light of their failure to give adequate notice and a sharply diminished number of bus as- signments available, Gallaway appears to have had ample justification for not using DelBene and Browning as spares. Further, and as found in the initial decision, the three drivers had minimal involvement in the organizational drive; and there was a paucity of evidence that Galloway knew and/or harbored animus toward them because of it. Indeed, in an ef- fort to dissuade Browning from leaving, her supervisor pro- vided the names of several babysitters, conduct hardly con- sistent with any effort to punish union activism. Applicant has provided a detailed breakdown of its fees and expenses, which I find acurate,1 reasonable, and in ac- cord with Section 102.143 et seq. of the Board’s Rules and Regulations. The General Counsel’s contention that costs in- curred subsequent to the initial decision should be disallowed because he chose not to file exceptions is without merit. By not also moving to dismiss, the complaint remained viable and enabled the Union to file exceptions which, in turn, elic- ited applicant’s reply. Accordingly, I find applicant Galloway entitled to reim- bursement of $37,297.25 for fees and expenses incurred in defending this case.