Chem Fab Corp.

CHEM FAB CORP Chem Fab , Corporation and United Steelworkers of America, AFL-CIO, CLC. Cases 26-CA-8421 and 26-CA-8421-2 8 April 1985 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSO ^NAND MEMBERS E4=it3 HUNTER AND 1JENNIS ,On 24 October 1984 Administrative Law Judge Richard J. Linton issued the attached supplemental decision. The Respo1dent filed exceptions and the General Counsel filed an answering brief in support of the judge's decision. The Board has considered the supplemental deci- sion and the record in light of the exceptions and brief and has decided to affirm the judge's rulings, findings, and conclusions and to adopt the recom- mended Order. J ORDER "The' National Labor Relations Board adopts the recommended Order of the administrative law judge and orders that the Respondent, Chem Fab Corporation, Hot Springs, Arkansas, its officers, agents, successors, and assigns,-shall take the action set forth in the Order. ' Chairman Dotson and Member Hunter note that they did not partici- pate in the underlying case (257 NLRB 996 (1981); enfd 691 F 2d 1252 (8th Cir 1982)) SUPPLEMENTAL DECISION STATEMENT OF THE CASE RICHARD J. LINTON, Administrative .Law Judge. This backpay proceeding was tried before me in Hot Springs, Arkansas, on July 18-19, 1984, pursuant to the April 9, 1984 backpay specification (BPS) issued by the Regional Director for Region 26 of the National Labor Relations Board on behalf of the Board. On August 26; 1981, the Board issued its Decision and Order' directing Chem Fab Corporation (Respondent or Chem Fab) to reinstate John L. Stephens and John C. Stewart and to-make them whole, with interest, for any lost earnings' because of their unlawful discharge by Re- spondent on April 23 and 24, 1980, respectively., On No- vember 1, 1982, the United States Court of Appeals for the Eighth Circuit issued its judgment enforcing in full the Board's Order.2 ' When the parties 'could not -agree on; the amount of backpay due Stephens and Stewart, the Regional Direc- i 257 NLRB 996 (1981) 2 691 F 2d 1252 (1982) 21 tor3 issued the BPS alleging the amounts of backpay due under the Board's order.4 Specifically, the Regional Di- rector alleges that Respondent must pay Stephens $34,045, plus interest, and Stewart $21,321, plus interest. Respondent's general position is that Stephens would have been laid off in February 1981, and not recalled, and that he therefore is entitled to no backpay after Feb- ruary 1981 Chem Fab argues that the gross backpay for- mula incorrectly includes semiannual merit increases for both Stephens and Stewart, and avers that they should be denied backpay for times it contends each incurred a willful loss of earnings On the entire record, and from my observation of the witnesses and their demeanor, and after considering the briefs filed on behalf of the General Counsel and the Re- spondent, I make the following FINDINGS OF FACT I. APPLICABLE LEGAL PRINCIPLES The applicable legal principles are well settled by nu- merous cases. In summary they are as follows: First, in a backpay proceeding the General Counsel has the burden of showing the amount of gross backpay due. Second, - the burden of establishing facts which would reduce the amount of gross backpay, such as interim earnings or a willful loss of interim earnings, falls on the Respondent. Third, if the discriminatees incurred any reasonable and necessary expenses in earning interim income, it is the General Counsel's burden to establish the amounts of those expenses. Although it is the Respondent's burden to establish the discriminatees' interim earnings, if any, it is the General Counsel's voluntary policy to assist in gathering informa- tion on this topic and including that data in the BPS. 3 NLRB Casehandling• Manual, Burden of Proof, Secs. 10656.6 and 10737.2 (1984). Respecting the gross backpay formula , it is further well established that any formula which approximates what the discriminatees would have earned had they not been discriminated against is acceptable if it is not unrea- sonable or arbitrary in the circumstances. Moreover, any doubts, uncertainties, or ambiguities are resolved against the Respondent who is the wrongdoer. Laborers Local 38 (Hancock-Northwest, J. V.), 268 NLRB 167 (1983). Concerning Respondent's burden to demonstrate af- firmatively that the discriminatees failed to make reason- able efforts to find interim work, it is well established that the discriminatees are held only to a reasonable, as- sertion in this regard and not to a standard of the highest diligence. Nor is success the measure of the 'sufficiency of the discriminatees' search for interim employment, for the law requires only an honest and good-faith effort. And in determining the reasonableness of this effort, the discriminatees' skills,' experience,' qualifications, age, and the labor conditions in the 'area are factors to, be consid- 3 The Regional Director is also referred to herein as the General Counsel * The backpay period for each is nearly identical For Stephens it begins 4-23-80 and ends 2-3-84, and for Stewart it runs from 4-24-80 to 2-3-84 275 NLRB No. 6 22 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ered., Laredo Packing Co., 271 NLRB 553 (1983); Labor- ers Local 38, supra. 11. THE EVIDENCE A. The Gross Backpay Formula The issue on the gross backpay formula is whether the discriminatees would have received semiannual merit raises of 25 cents per hour. Thomas H. Smith Jr. was the Board agent who han- dled the compliance investigation of this case. At the time of his testimony, Smith had become Resident Offi- cer of the Board's Office in Little Rock, Arkansas.5 He has had extensive experience in calculating backpay in unfair labor practice cases. Smith visited Respondent's Hot Springs facility in late March 1983. During his in- vestigation there, Smith examined company records and conferred with Respondent's counsel, Robert C. D. McDonald. . - Smith testified that he arrived at the 25-cent-an-hour pay increase- based on his examination of Respondent's records for employees in classifications similar to those of Stephens and Stewart plus the pay increase history of, Stephens and Stewart. He described the 25 cents as a median figure. Although he found some raises being granted at intervals of 2 to 3 months, Smith determined. from .the records that a reasonable period was 6 months for the pay increases. Moreover, Smith credibly testified that during this March 1983 visit his information as to the pay increases was confirmed when Attorney McDonald told -him that -if Stewart were still employed he would have been earning between $5 50 and $6-per hour. This range is consistent with Smith's determination and the rate and formula set forth in the BPS. Moreover, Vice President Loren Furnas admitted that across-the- board pay increases of 25 cents per hour, were granted in January 1980, 1981, and 1984.6 - McDonald denies Smith's assertion regarding the pay range Stewart would have been in had he been on the payroll in March 1983. According to McDonald, he told Smith that the range was what other employees at the Chem Mill were earning. However, as Smith explained in his testimony, he already had the records for the cur- rent employees and a report on their pay rates would have been a redundancy. As Smith's version is the more logical, and based particularly on Smith's superior de- meanor, I credit him rather than McDonald. Accordingly, I find that the General 'Counsel carried his burden in establishing the gross backpay formula. B. The Mitigation Issues 1. Layoff and recall as to Stephens • Respondent contends that Stephens not only would have been laid off on February •13, 1981, but also that he 5 References to the transcript of testimony are to volume and page 6 In Respondent's 4-25-84 answer to the BPS, it fails to give Stephens and Stewart credit for any of these plantwide pay raises in setting forth its version of the correct gross backpay computation for each would not have been recalled by the close of his back- pay period.7 The General Counsel concedes in appendix A of the BPS that Stephens would have been laid off from No- vember 5, 1982, through January 10, 1983, but contends that backpay is due for the balance of the backpay period. Resident Officer Smith testified that at the beginning of his March 1983 investigative visit at Respondent's Hot Springs plant, e''Attorney^McD'o'nald `infoimedl him' that Stephens and Stewart would have been laid off. Smith inquired about the basis for that position, and McDonald explained that layoffs were by job classification seniority. Smith denies that McDonald qualified this by saying that seniority was not strictly followed.and that the needs of the employer controlled. McDonald testified that he told Smith that seniority was only one of several factors con- sidered in determining who would be retained in a layoff. Smith testified that he was certain about McDon- ald's statement because he knew it would be an issue in computing the BPS, that he wrote it-down, and - that such standard is incorporated into the BPS calculations. Thus, Smith testified that as to Stephens, who had been second in seniority. in the handformer classification, he simply ascertained who had succeeded - Stephens in second position. That person was Otis Hildreth. After re- viewing the records, Smith determined that Hildreth had been laid off from November 5, 1982, to January 10, 1983. In his own testimony, Attorney McDonald 'specifically referred to the explanation of Respondent's layoff policy as given at the hearing by Vice President Furnas as what he, McDonald, told Smith.9 Furnas testified the first item considered on layoffs and recalls is seniority, with the second item being job quali- fications. He defined the latter as meaning versatility. He testified that employees generally are laid off by depart- ment, and he generally selects the least senior as the first one to be laid off where versatility is equal . Finally, he explained that seniority • is defined as plant - seniority within the department. Furnas testified that Respondent had to lay off various employees beginning in February,. 1981 and. continuing into 1982, and that Stephens would have been selected for layoff in February 1981 and not later than November 1982. According to Furnas, Stephens would have been laid off rather than either Otis Hildreth-or Pat White and that Carl Sheets would have been-recalled before Ste- phens. The basis for these selections would have been 7 Respondent apparently abandoned its contention that Stewart would have been laid off, - for it offered no evidence t6 support the affirmative allegation in its answer - Chem Fab actually has two plants in Hot Spnngs •One is on - Central Street, and the second, known as the Chem Mill, is on Nevada Street Vice President Furnas has his office at the former , although he visits in both plants daily Presumably the main office and records are at -the Cen- tral Street, location, and that apparently is where Smith visited in March 1983 9 Thus, McDonald testified, "I clearly told him that layoffs were con= ducted according to senionty , job performance, and duty performance and other factors as outlined by Mr Furnas all being equal " - - CHEM' FAB CORP that each of these three, according to Furnas, was more versatile than Stephens. Hired in May 1978, Stephens had more plant seniority than either Sheets or White but less than Hildreth (R. Exh. 3a). However, Stephens had more seniority in the Hydro department than any of the other three. Furnas testified that a handformer is classified with the hydro equipment, and that the term is synonymous with machine operator. Indeed, Furnas seems to include the terms-.of hydi-o,ihandformer; imachine, operator, and, fab processor as interchangeable for job functions within the same department. The department, it appears, is the fab- rication department, or division, which is under the di- rection of Supervisor Ronald E. Smith. Otis Hildreth credibly testified that Fabrication Super- visor Ronald Smith told employees at the time of the November 1982 layoffs that employees were being laid off by labor grade. In response to a leading question Hil- dreth testified that this meant they were laid off by job classification seniority. I find the latter response to be confusing, as is'some of the evidence on this point. Hildreth's testimony is that Supervisor Smith said that the layoff would be by labor grade. It was Hildreth who then added, in his testimony, that the highest grade stays. The diistiiiction make"s` a' difference, for Respondent uti- lizes a system in which labor grade 1 is the highest paid and labor grade 7 is the lowest paid (R. Exh. 4). Vice President Furnas testified that in previous year's Chem Fab did not utilize labor grades. A machine operator was classified as such without- a labor grade.' Beginning around July 1981 to January 1982, however, Chem Fab assigned labor grades to its job classifications. I find that Hildreth, confused by the reverse nature of the system, simply equated the lower paying jobs with the' lower grade numbers. Thus, I find that Supervisor Smith, as described by -Hildreth, laid off the higher grades first. These would be the employee's earning the least money. The system used by Supervisor Smith does not neces- sarily coincide with one based, on seniority. Although most of those in the lower paying grades may have had less seniority (and experience) than the employees in the higher paying grades, such is not a required condition of industrial life. For a variety of reasons, there can be em- ployees with more seniority, whether plant, department, or job classification, holding the lower paying jobs than some of those in positions of higher pay. 'Under Supervisor. Smith's system, the onus of the layoff fell first on the employees holding lower pay grades. In effect, that. was a layoff by job classification within a department. However, the selection criterion was the grade (pay rate), not seniority. By contrast, the system described by Vice .President Furnas, although also departmentwide, utilizes the selec- tion criterion of job classification by plant seniority.- Thus, Furnas testified `that if management decided that the fabrication , department needed to lay off, five ma- chine operators; the Company would select first those with the least plant seniority, versatility being equal.1 10 Furnas testified that this system, with its emphasis on versatility, has been in effect at Chem Fab since the beginning of the Company 23 Of course, that system is different from one in which em-' ployees are selected based-on the time they have served in the particular job classification' The system described by Furnas strikes a balance be- tween two important considerations, seniority and job importance. When layoffs are strictly by plant seniority, the more senior employee, whatever his job classifica- tion, remains. A company may desperately need welders, but because a laborer has more plant seniority,' the welder would have to go. To avoid this problem, and to balance the dual interests, at least some firms utilize lay- offs by job classification with selection in accordance with plant seniority. See, for example, Gulf States Mfg. v. NLRB, 704 F.2d 1390 (5th Cir. 1983), and Louisiana Dock Co., JD-(ATL)-101-83, slip op. at fns. 55 and 57 (pending before the Board). By thus giving some defer- ence to plant seniority, an employer -avoids an equally bad situation which could result under layoff by job clas-' sification seniority alone. Thus, a layoff based strictly on job classification seniority could sacrifice an employee with 25 years of overall -service who, although a first class welder, has 2 days' -less service as • a first class welder than .a retained employee whose plant seniority totals no more than 4 or 5 years. Resident Officer Smith testified without contradiction that Attorney McDonald informed him at the time of Smith's investigative visit in late March. 1983 that Re- spondent' had no written layoff policy. Vice.President Furnas likewise testified-that there was no written policy for layoffs and recalls. Furnas apparently understood the question to be directed-to the layoff period in issue, for moments later he corrected any misimpression on this topic by identifying an 18-page document (including at- tachments) of Chem Fab's "Employee' Classification. and Wage Scale and Introduction to Chem Fab." (R. Exh. 4.) Furnas testified that,although the document" t was pre- pared in February 198212 it was not implemented until November or December 1983. The document, Respond- ent's Exhibit 4, is not relied on by either party and was received for the limited purpose of clarifying or shedding' light on the testimony by virtue of its detailed provisions. I have relied on it as the source of the information that the lower labor grades earn the higher., pay rates 13 The seniority provisions of the document are consistent with the description given by Furnas of Chem Fab's policy. Thus, labor grades are. not mentioned as part of the layoff or recall procedure. Notwithstanding the testimony of Furnas concerning Respondent's policy, I credit Hildreth, who testified with 11 The document is written in a fashion resembling a collective-bar- gaining agreement For example , art I is for "Purpose" (harmony, 'effi- ciency, and, "equitable adjustments of complaints which may arise be- tween the Company or any employee) " Art II, "Recognition," provides that there shall be no discrimination by Chem Fab based on race, creed, sex, age, or national origin (although nothing is said about union activi- ties) Art III has four sections for "Management Rights " Art X pertains to "seniority" and contains detailed provisions 12 The document is dated as "February 24, 1982, Revised January 10, 1984 " ' 13 That system is the reverse of the Federal Government's general schedule in which pay increases as the grade number increases 24 DECISIONS OF NATIONAL LABOR RELATIONS BOARD a persuasive demeanor, that Supervisor Smith laid off employees by labor grades.14 Stephens, of course, had been fired before Respondent assigned labor grades around the last half of 1981. At the time of his November 5, 1982 layoff, Hildreth was classi- fied as-a "Fab Processor" grade 5 earning $6 an hour (G.C. Exh. 3a).1 s The BPS sets Stephens' hourly pay rate at $6.20 for the fourth quarter of 1982. That is only slightly more than Hildreth's $6. _ Presumably that would place Ste- phens in either the same labor grade as Hildreth, or pos- sibly labor grade 4, using the pay rate as a.guide. As earlier discussed, Board Agent Smith testified that he used job classification/departmental seniority in deter- mining when and for how long Stephens would have been laid off. However, as Hildreth had-plant seniority over Stephens, it appears that Board Agent Smith actual- ly used strict job classification seniority, for he testified that Stephens would have been second in seniority in the same classification held by Hildreth.16 Before concluding the discussion as to -Stephens' layoff, reference should be made to Respondent's evi- dence that Stephens would have been laid off earlier ,in 1982 and employees Hildreth, Pat White, and, possibly, Carl Sheets" retained because Stephens was less versa- tile than the others. Testifying in support of this conten- tion were Vice President Furnas, Supervisor Ronald Smith, and leadperson Danny Larsen. Each of the three testified with an unsatisfactory demeanor, and I do not believe any of them on this topic. By contrast, Stephens persuasively testified that he is good at any work he un- dertakes after he has done it once or twice. Moreover, it already has been determined in the underlying case that Stephens is an "excellent" employee. 257 NLRB 996 at 1007 (1981). - - - What actually would have happened had Stephens not been unlawfully terminated is rather uncertain. Respond- ent, as the wrongdoer, is not permitted- to profit by the uncertainties it created. As Respondent has not demon- strated to a certainty the precise period that Stephens would have been laid off, and as Board Agent Smith's determination is a rational approximation, I reject Re- spondent's contentions that the General Counsel erred respecting the 2-month period the BPS assigned Ste- phens-to layoff status." 14 Supervisor Smith did not address the subject of the layoff in his own testimony ' . 15 If the classification and Iob'grade schedule of R Exh-4 had been in effect, Hildreth, to correspond to a grade 5, would-have been classified as a sheetmetal machine operator and material processor for a "Fabricator, Processor & Helper"'is rated at labor grades 6 and 7 (R. Exh 4 at 8) 16 Smith testified that the position title is actually handformer The person first in seniority in the classification is leadperson Danny Larsen according to data. Chem Fab furnished Board Agent Smith in March ' . 1983 (G C. Exh 10) , 17 Sheets was not even hired until 5-8-80, a date subsequent to Ste- phens' termination (R Exh 3a) 18 Hildreth was recalled to the deburr section where he worked about a month before being returned to his prelayoff position Stephens also had worked in the deburr section and had experienced no problems there . 2. Willful loss of earnings- There is a great deal of evidence in the record con- cerning the efforts of Stephens and Stewart to find work. Following their unlawful discharges, they began search- ing immediately' for work. They applied for work at many different employers.' 9 As the record reflects, and the BPS credits, they were successful on occasion but unsuccessful at other times. I find that each made an honest good-faith effort in this respect. - Respondent faults Stephens because in February 1982 he quit a position after working 2 months in the laundry at Colonial Nursing Home in Hot Springs. His' work consisted of washing the soiled bed linen of the elderly and disabled patients. He had to wash the linen by hand. He quit because he no longer could stand the work. Ste- phens' action in leaving that work was not unreasonable in view of the type of work he did at Chem Fab, the pay difference, and in light of his subsequent efforts to find work.20 Respondent contends that Stewart should have sought work at a police department or as a security guard be- cause he had received such training in the, military (Br. 2). In fact, Stewart did apply for security work, although he never applied for police work because his military training was more akin to guard duty Respondent of- fered no evidence of any such jobs that were-available to Stewart In conclusion, I find that Respondent has failed to carry its burden of establishing that either Stephens or Stewart incurred a willful loss of earnings. CONCLUSIONS OF LAW 1. The gross backpay formulas utilized by: the General Counsel for John L. Stephens and John C. Stewart are rational and appropriate. - 2. Chem Fab has failed to establish that either John L. Stephens or John C. Stewart incurred a willful loss of earnings during their respective backpay periods. On these findings of fact, conclusions of law, and on the entire record, I issue the following2l ORDER The Respondent, Chem ;Fab, Hot Springs, Arkansas,- its officers, agents, successors, and assigns, shall make whole John L. Stephens and John C. Stewart paying to, each the sum shown below, plus interest as prescribed in Florida Steel Corp., 231 NLRB 651 (1977), less tax with- holdings required by law: John L. Stephens $34,045 John C. Stewart $21,321 19 Stephens sought employment from some 85 or more different em- ployers He also made numerous visits to the Arkansas unemployment office Stewart went to at least 39 firms seeking work plus his numerous visits to the Arkansas unemployment office 20 The day after he left Colonial Nursing Home he found temporary work parking cars at the horse race track 21 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