Cheney Contruction, Inc.

CHENEY CONSTRUCTION 349 NLRB No. 54 579 Cheney Construction, Inc. and United Brotherhood of Carpenters and Joiners of America, District Council of Kansas City and Vicinity, Local 918. Case 17–CA–22517 March 22, 2007 SUPPLEMENTAL DECISION AND ORDER BY MEMBERS SCHAUMBER, KIRSANOW, AND WALSH On March 29, 2006, Administrative Law Judge Tho- mas M. Patton issued the attached supplemental decision. The Respondent filed exceptions and a supporting brief. The General Counsel filed an answering brief to the Re- spondent’s exceptions.1 The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions and to adopt the recommended Order.2 ORDER The National Labor Relations Board adopts the rec- ommended Order of the administrative law judge and orders that the Respondent, Cheney Construction, Inc., Manhattan, Kansas, its officers, agents, successors, and assigns, shall satisfy the obligation to make whole the employees named below by paying them the amounts set forth below, with interest to be computed in the manner described in New Horizons for the Retarded, 283 NLRB 1173 (1987), minus tax withholdings required by Federal and State laws. Randy Mumpower $17,707.91 David Randy Johns 19,899.78 Kenneth Fairchild 9,358.85 TOTAL $46,966.54 Stanley D. Williams, Esq., for the General Counsel. Robert C. Johnson, Esq. and R. Anthony Costello, Esq., of Kan- sas City, Missouri, for the Respondent. Michael J. Stapp, Esq., of Kansas City, Kansas, for the Charg- ing Party. 1 There are no exceptions to the judge’s findings regarding discrimi- natee Kenneth Fairchild’s mitigation efforts. 2 Members Schaumber and Kirsanow acknowledge that Dean Gen- eral Contractors, 285 NLRB 573 (1987), represents the current Board standard for deciding how long the discriminatees would have worked for the Respondent if they had not been unlawfully refused hire. They have concerns as to whether that case was correctly decided, however. See, e.g., Construction Products, 346 NLRB 640 fn. 2 (2006); McKee Electric Co., 349 NLRB 463, 466 fn. 14 (2007). For institutional rea- sons, they nevertheless apply that precedent here in adopting the judge’s supplemental decision. SUPPLEMENTAL DECISION STATEMENT OF THE CASE THOMAS M. PATTON, Administrative Law Judge. On Febru- ary 4, 2005, the Board issued its Order adopting the findings and conclusions of Administrative Law Judge Albert A. Metz in the underlying case, Cheney Construction, 344 NLRB 238 (2005). Judge Metz found that Respondent had discriminated against employees Randy Mumpower, David Randy Johns, and Kenneth Fairchild by refusing to consider them for hire and refusing to hire them on August 27, 2003, because of their un- ion affiliation. Judge Metz’ order, adopted by the Board, re- quires that the discriminatees be a made whole. An issue in this compliance proceeding is how long em- ployee-applicants Mumpower, Johns, and Fairchild would have remained employees of Respondent had they not been dis- criminated against. That issue is controlled by the Board’s re- buttable presumption of continuing employment in the con- struction industry, as set forth in Dean General Contractors, 285 NLRB 573 (1987); see also Cobb Mechanical Contractors v. NLRB, 295 F.3d 1370, 1379 (D.C. Cir. 2002), citing Tualatin Electric v. NLRB, 253 F.3d 714, 718 (D.C. Cir. 2001). A compliance specification issued on September 30, 2005. Relying on the presumption of continued employment, the specification calculated gross backpay from the application date of the three discriminatees. The specification calculated gross backpay based on comparable employees for a period ending just before letters offering instatement were issued to the dis- criminatees on July 11, 2005. Respondent’s answer avers that the compliance specification is unreliable and should be rejected as the basis of calculating backpay. Respondent argues that, contrary to the compliance specification, the discriminatees would not have been trans- ferred or reassigned to another job after the completion of the job for which they were denied employment. Respondent also alleges that discriminatees Mumpower and Johns failed to miti- gate their damages. Finally, Respondent posits that willing retention of known union workers after the discriminatees were not hired offsets any backpay owed to the discriminatees. Rejecting the Respondent’s arguments, I find that Respon- dent failed to rebut the presumption of continued employment of Mumpower, Johns, and Fairchild and that the Regional Di- rector adopted a reasonable gross backpay formula to determine an appropriate amount of net backpay owed to the discrimina- tees. I also find that the efforts of Mumpower and Johns to mitigate their damages during the period covered by the com- pliance specification were sufficient. Finally, I find the argu- ment that the subsequent employment of union workers should offset the backpay owed to the discriminatees is untenable. This case was heard in Junction City, Kansas, on January 18, 2006. Based on the entire record, including the Board’s Deci- sion and Order, the briefs of the General Counsel, the Union, and Respondent, testimony of witnesses and my observations of their demeanor, the inherent probabilities and the stipulations of the parties, I make the following DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 580 FINDINGS OF FACT I. ISSUES 1. Was the Regional Director correct in presuming that the discriminatees would have been retained as employees from August 27, 2003, to July 11, 2005, for the purposes of calculat- ing backpay? 2. Was the Regional Director’s method of calculating back- pay reasonable given the circumstances of this case? 3. Did the discriminatees sufficiently mitigate their damages by making reasonable efforts to secure and retain interim em- ployment? 4. Does the retention of carpenters who were discovered to hold union membership after being hired subsequent to the discriminatory activity of the Respondent offset any back paid owed to the discriminatees? II. FACTS A. Methodology Used by the Regional Director The Board summarized the general purpose of compliance proceedings in Cobb Mechanical Contractors, 333 NLRB 1168, 1168 (2001) (Cobb I), as follows: In compliance proceedings, the Board attempts to reconstruct, “as nearly as possible,” the economic life of each claimant and place him in the same financial position he would have enjoyed “but for the illegal discrimination.” Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 194 (1941). Determining what would have happened absent a respondent’s unfair labor prac- tices, however, is often problematic and inexact. Conse- quently, a backpay award “is only an approximation, necessi- tated by the employer’s wrongful conduct.” Bagel Bakers Council of Greater New York v. NLRB, 555 F.2d 304, 305 (2d Cir. 1977). The compliance specification calculations are based on a “Comparable Employee Formula” which is an accepted meth- odology to determine backpay. Performance Friction Corp., 335 NLRB 1117, 1117 (2001), citing NLRB v. S.E. Nichols of Ohio, 704 F.2d 921, 924 (6th Cir.), cert. denied 464 U.S. 914 (1983); NLRB Casehandling Manual (Part Three) Compliance, Section 10532.3. The compliance specification identifies the relevant pay period as beginning on August 27, 2003, the date of the discriminatees’ applications for employment, and ending on July 11, 2005, the date of Respondent’s instatement letters. The comparators identified in the compliance specification were employees either hired or rehired after August 27, 2003, but before July 11, 2005. Carpenters Gnadt, Driscoll, and Gallaugher were the first three new employees classified as carpenters hired within 2 months of August 27, 2003. Employee Gnadt was retained from September 3, 2003, to February 13, 2004, when he volun- tarily resigned. Employee Driscoll was retained from Septem- ber 10 to October 22, 2003, when he was discharged after two consecutive no-shows. Employee Gallaugher was retained from October 9, 2003, to January 20, 2004, when he was laid off. Judge Metz found that while Cheney employed them, both Gnadt and Driscoll were transferred to another job after the project for which they were hired was completed. Cheney Con- struction, supra at 244. Another new carpenter, Earnest, was hired in August 4, 2004, and was retained until June 2005. All other carpenters hired between August 27, 2003, and July 11, 2005, and used as comparators in the compliance specifica- tion were rehires; employees who removed themselves from previous employment with Respondent for whatever reason and then were rehired within the backpay period at issue. The compliance specification details how net backpay was calculated for discriminatees Mumpower, Johns, and Fairchild, computed on a calendar quarter basis. Gross backpay for dis- criminatee Mumpower was based on the comparable earnings of employees Gnadt, Hartenberger, and Brown. Subtracting Mumpower’s interim earnings, Mumpower’s net backpay was determined to be $17,705.91. Gross backpay for discriminate Johns was based on the comparable earnings of employees Driscoll, Gallaugher, Salser, and Earnest. Subtracting John’s interim earnings, John’s net backpay was determined to be $19,899.78 (after stipulating to $228.80 of additional interim income during the compliance proceeding). Gross backpay for discriminate Fairchild was based on the comparable earnings of employee Clark, an employee classified as a laborer, but found by Judge Metz to have also performed carpentry work. He was classified for insurance purposes as a carpentry employee. Subtracting Fairchild’s interim earnings and expenses, Fair- child’s net backpay was determined to be $9,358.85. B. Mitigation of Damages Discriminatees Mumpower, Johns, and Fairchild all reported interim earnings for the period between August 27, 2003, and July 11, 2005. All testified to using the union hiring hall when they were not employed. Between jobs, each of them collected unemployment insurance. Discriminatee Mumpower worked for at least two contract- ing companies in the last quarter of 2003. He worked four different jobs throughout 2004, including one that lasted until October 2005. In addition to the hiring hall, Mumpower testi- fied to acquiring work in 2003 by personally visiting a con- struction site. Discriminatee Johns held jobs from December 2003 to April 2004, from June 2004 to January 2005, and from April to Octo- ber 2005. Johns relied exclusively on the union’s hiring hall from April to June 2004. When not employed in 2005, Johns inquired of former employers about job openings in addition to having his name on the hiring hall list. Discriminatee Fairchild worked for three employers in 2003, including the Carpenters District Council of Kansas City. In 2004, Fairchild held two jobs between January and April, worked a third job in May, and worked two more between Sep- tember and December 2004. In 2005, he worked for two em- ployers between February and May. When out of work, Fair- child registered at union hiring halls in Manhattan, Kansas City, and Topeka, Kansas. He also spoke with a number of job su- perintendents of other construction sites about available work. He never turned down work. C. Retention of Union Carpenters New hires Driscoll and Gnadt, comparators used by both the compliance specification and the Respondent, were union car- CHENEY CONSTRUCTION 581 penters whose union affiliation only became known to Respon- dent after they were hired in early September 2003. Driscoll was willingly retained until he was fired for cause. Gnadt was willingly retained until he voluntarily resigned. III. FURTHER FINDINGS AND CONCLUSIONS In the underlying case, Judge Metz found that the discrimi- natees were due a traditional make-whole remedy of instate- ment and backpay based on what the discriminatees would have earned had they not been discriminated against by the em- ployer. I find the Regional Director’s proposed remedy as de- tailed in the compliance specification to be appropriate. A. The Presumption of Continued Employment Given the particular context of construction industry cases, it is an important remedial consideration in these kinds of dis- putes whether employees would have been terminated upon the completion of a particular project or whether the employer’s practice was to transfer or reassign its workers from project to project. Before Dean, the Board sometimes applied a “precompliance presumption against reinstatement in the construction industry.” Dean, 285 NLRB at 574. This was due to the fact that many construction workers are hired by contractors for jobs of limited duration without any guarantee of employment from one job to the next. In Dean, the Board overruled the presumption that a Re- spondent would have terminated an unlawfully discharged em- ployee upon completion of a project. Id. at 575. The Board noted a strong policy interest against applying what was in effect “a presumption in favor of an adjudicated wrongdoer while seeking to remedy the underlying unfair labor practice committed against the aggrieved employee.” Id. at 574. Not only would such a policy be undesirable given the policies of the Act, but from a preservation of evidence standpoint, the Board stated in Dean that “the likelihood of an employee’s transfer or reassignment is the type of evidence that ordinarily would tend primarily to be in the possession of the respondent employer” and that there was no undue hardship in requiring an employer to maintain such evidence. Id. at 574–575; see also Tualatin Electric, 253 F.3d at 718. In time, this became a rebuttable presumption of continued employment of wrongfully terminated employees in construc- tion industry cases. Tualatin Electric, 253 F.3d at 718. Given that the same policy considerations and principles are just as relevant in salting cases, such as the one at issue, the Dean presumption has been found to have “as much force in cases involving union salts as any other.” Tualatin Electric, 253 F.3d at 718. An employer may rebut the presumption of continued employment by demonstrating that under its “established poli- cies,” an employee would likely not have been transferred upon completion of a job. Id. at 717; see also Dean, above at 575. I find that the Respondent has not met this burden. Respondent argues that the comparators used in the compli- ance specification are inappropriate and that the discriminatees, had they been hired, would not have remained employees up until the time that instatement was ordered. The basis of Re- spondent’s argument is the decrease in carpenters it employed from 15 in late 2003 to 4 in mid-July 2005. Respondent answered the Regional Director’s compliance specification with its own, alternative calculations. Respon- dent’s calculations are based on a similar comparable employee formula; however, they draw from a far narrower pool of com- parators. Contrary to the number of workers used as compara- tors in the compliance specification, Respondent posits that the only appropriate comparators were employees Gnadt, Driscoll, and Gallaugher, the first three new carpenters hired after Au- gust 27, 2003. Respondent contends that rehires should not be included as comparators in calculating the gross backpay for the discriminatees, and that carpenter work was unavailable after January 2004. I disagree. It would be arbitrary to limit comparators for the purpose of determining backpay to the first three hires made within a spe- cific classification. In Cobb Mechanical Contractors, 341 NLRB 1028, 1034 (2006) (Cobb II), the Board adopted an or- der that rejected the reasoning, absent further evidence to the contrary, that a discriminatee would have “followed the same employment patterns as the new hires.” The fact that this is such a questionable assumption leans in favor of the discrimi- natees. Minette Mills, Inc., 316 NLRB 1009, 1011 (1995) (“any ambiguities, doubts, or uncertainties are resolved against . . . the wrongdoer, because an offending respondent is not al- lowed to profit from any uncertainty caused by its discrimina- tion”); see also Cobb I, 333 NLRB at 1168; P*I*E* Nation- wide, 297 NLRB 454, 457 (1989), enfd. in relevant part 923 F.2d 506 (7th Cir. 1991). Given the evidence presented, there is simply no reason to believe that the discriminatees’ hypo- thetical employment with the Respondent would have ended when Gnadt, Driscoll, and Gallaugher’s employment ended, especially when one was discharged for cause, one voluntarily quit, and the other was laid off. Although the number of carpenters employed by Respondent declined during the backpay period, there continued to be work available for carpenters on subsequent jobs. In addition to hir- ing three new carpenters at the beginning of the pay period, Respondent rehired a carpenter in July 2004, hired a new car- penter and rehired another in August 2004, and rehired yet another carpenter in October 2004. The General Counsel ar- gues, and I agree, that the evidence shows that there was work available for carpenters within the backpay period at issue. Additionally, Respondent admitted during the compliance hearing to a preference for rehiring good employees whose work Respondent has been able to observe. Respondent also indicated that he could tell in a short period of time whether a worker was good, and by inference, was worthy of rehiring or transfer. Respondent further testified to a policy of keeping his core employees busy year round, sometimes at Respondent’s own expense. Indeed, Judge Metz found that of the three em- ployees that Respondent argues should be the sole comparators for the discriminatees, two were themselves hired for one pro- ject and then transferred to another while under Respondent’s employment Cheney Construction, above at 6. With the con- tinued availability of work and a policy for retaining or rehiring prior employees, it cannot be assumed, even without the Dean presumption, that the discriminatees would not have been re- DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 582 tained and transferred to perform that work had they been em- ployed in the first place. B. Reasonableness of Compliance Specification’s Backpay Calculation The Board in Cobb I, above at 1168, stated the following about the how to review compliance specifications: The Board’s well-settled policy is that “[a backpay] formula which approximates what discriminates would have earned had they not been discriminated against is acceptable if it is not unreasonable or arbitrary in the circumstances. La Fa- vorita, Inc., 313 NLRB 902 (1994), [enfd. mem. 48 F.3d 1242 (10 Cir. 1995)]. There is nothing in the record that shows the “Comparable Employee Formula” used in the compliance specification to be either “unreasonable or arbitrary.” The compliance formula correctly assumes, under the Dean presumption, that as long as carpenters were being rehired or transferred to other jobs by the employer, there were opportunities for work that could have been filled by the discriminatees had they not been discrimi- nated against. The Regional Director was careful to take into account a number of factors related to the employee comparators when drafting the compliance specification. The compliance specifi- cation did not include Respondent’s six “core” employees as comparators. Nor did it calculate backpay for gaps in compara- tor employment; the period after one comparator quit or was fired and before the next comparator was hired/rehired. No discriminatee was credited with pay when there was no compa- rable employee working. I find that the specification accurately approximates what the discriminatees would have earned had they not been discriminated against. C. Mitigation of Damages In order to qualify for backpay, an employee must make rea- sonable efforts to find interim employment. Midwestern Per- sonnel Services, 346 NLRB 624, 626 (2006). It is settled Board policy that an employee seeking interim work “need only fol- low his regular method for obtaining work.” Id. at 632, citing Tualatin Electric, 331 NLRB 36, 36 (1997) (discriminatees satisfied their obligation to mitigate when they followed their normal pattern of seeking employment through the union’s hiring hall), enfd. 253 F.3d 714 (D.C. Cir. 2001). All three discriminatees held multiple jobs between Septem- ber 2003 and July 2005. They all took advantage of their un- ion’s hiring hall when out of work. Additionally, all three re- ported looking for work themselves using a number of job- finding techniques during the backpay period, from contacting past employers to personally visiting jobsites. There is no showing by the employer that the discriminatees used less than due diligence in trying to find work. To the contrary, the re- cord shows that each discriminatee made an “honest, good faith effort to find interim work.” Midwestern Personnel Services, Inc., above at 632, quoting Chem Fab Corp., 275 NLRB 21, 21 (1985). I find that the discriminatees succeeded in mitigating their damages. D. Retention of Union Carpenters Respondent asserts in its Third Amended Answer to the compliance specification that because new-hires Driscoll and Gnadt were union salts who were nevertheless retained after their affiliation became known, their earnings either off set any backpay due to the discriminatees or constituted a waiver by the union and the discriminatees of any right to backpay in the amount of wages earned by Gnadt or Driscoll. In the alterna- tive, Respondent asserts that Driscoll and Gnadt’s employment constituted a remedial hire and retention that negates any obli- gation by Respondent to pay backpay in the amount of wages earned by Gnadt or Driscoll. These arguments are not ad- dressed in Respondent’s post-hearing brief. I find no reason to sustain these arguments. The liability of Respondent for violating the Act by discriminating against Union employees has already been established by the Board. A finding of a violation is presumptive proof that backpay is owed to the aggrieved party. La Favorita, above at 902. Proof that the Respondent did not repeat its unlawful acts is irrele- vant. REMEDY I find that the compliance specification is a reasonable and appropriate remedy to the Respondent’s unlawful discrimina- tion against employees Randy Mumpower, David Randy Johns, and Kenneth Fairchild. On these findings of fact and conclu- sions of law, and on the entire record, I issue the following recommended1 ORDER It is ordered that the Respondent, Cheney Construction Inc, Manhattan, Kansas, forthwith pay to each of the following per- sons backpay in the amounts set opposite his name, plus inter- est computed in the manner prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987), as required by the Board’s Order of February 4, 2005: Randy Mumpower $17,707.91 David Randy Johns $19,899.78 Kenneth Fairchild $9,358.85 1 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed waived for all pur- poses.