Smyth Manufacturing Co., Inc.; Beacon Industries

680 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Smyth Manufacturing Co., Inc .; Beacon Industries and District 26, LL 354, International Associa- tion of Machinists and Aerospace Workers, AFL-CIO. Cases 1-CA-12643, 1-CA-12812, and 1-CA-13497 25 November 1985 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBER DENNIS AND JOHANSEN On 19 February 1980 the National Labor Rela- tions Board issued a Decision and Order ' directing the Respondent, inter alia, to make whole its em- ployees for any loss of earnings resulting from the Respondent's unfair labor practices. On 5 January 1982 the United States Court of Appeals for the Second Circuit entered a consent judgment enforc- ing the Board's Order. A controversy having arisen over the backpay owed under the Board's Order, the Regional Director for Region 1 issued and caused to be served on the parties an original and amended backpay specification . The Respondent filed answers, and a hearing was held before Ad- ministrative Law Judge Walter J. Alprin, who issued the attached supplemental decision on 30 January 1984. The Respondent and the General Counsel filed exceptions and supporting and an- swering briefs. The National Labor Relations Board has delegat- ed 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 to the extent consistent with this Sup- plemental Decision and Order. We affirm the judge's conclusion that our origi- nal Order does not limit the Respondent's backpay liability to employees laid off on or after 30 Sep- tember 1977. Rather, our Order requires the Re- spondent to make whole all employees laid off or terminated as a result of the Respondent's unlawful cessation of manufacturing operations at its Bloom- field, Connecticut plant on 30 September 1977. That includes employees laid off or terminated during September 1977 because of the Respond- ent's anticipated cessation of operations . This con- struction accords with the plain sense of our deci- sion, which is to make whole employees who were the victims of the Respondent 's unfair labor prac- ' 247 NLRB 1139 (1980). tices.2 We also affirm the judge's finding that em- ployees Klinkowski, Bailey, Finch, Pallotta, Von Eisengrein, and Pawlak were laid off in September 1977 because of the Respondent's anticipated cessa- tion of operations at the end of that month, and that they are entitled to backpay for their resulting losses.3 With respect to employee Klinkowski, we find merit in the General Counsel's contention that the Respondent is not relieved of its obligation to make Klinkowski a valid offer of reinstatement and that the Respondent's backpay obligation to Klinkowski should continue to run until such an offer has been made. The Respondent contends that any backpay obligation to Klinkowski was tolled when he told the Board's Regional Office in April 1980 that he would not accept reinstatement with the Respond- ent if it were offered.4 At the time Klinkowski made this statement, he was employed elsewhere, but he subsequently lost that interim job. For the reasons stated in our supplemental decision in Hein- rich Motors, 166 NLRB 783, 785-786 (1967), enfd. 403 F.2d 145, 150 (2d Cir. 1968), we find that, absent a valid offer of reinstatement from the Re- spondent, Klinkowski's statement to the Regional Office did not constitute a waiver of his right to re- instatement and, therefore , did not toll the Re- spondent's backpay liability to Klinkowski. Conse- quently, Klinkowski's backpay will continue to accrue until he receives a valid reinstatement offer from the Respondent.5 The judge found that employee Remus Sitaru should be disallowed certain backpay because of his failure to accept an offer of interim employment 2 In reaching this conclusion, we find it unnecessary to rely on corre- spondence, which the Respondent characterizes as offers to compromise, between the Respondent's prior counsel and the Board's Regional Office. ® We find, however, in agreement with the judge , that employee Ca- varic's layoff on 9 September 1977 was attributable to the temporary nature of his job rather than to the Respondent's unlawful cessation of operations. When Cavaric was recalled on 10 August 1977, he was noti- fied that his job was temporary and that it would probably be completed within 2 months. The General Counsel relies on evidence that Cavaric performed general work unconnected to any particular project, and that he was bumped from his job on 9 September 1977 by a union official. That evidence is insufficient, in our estimation , to establish that Cavaric's job was permanent or that his temporary job was prematurely terminated because of the Respondent's cessation of operations at the end of Septem- ber 4 Klinkowski's statement was made to the Regional Office during its investigation of possible voluntary compliance with the Board's Order. 5 We have modified the judge's recommended Order to clarify that the amount of backpay listed in the backpay specification does not limit the Respondent's backpay obligation. Rather, the Respondent 's obligation continues until the Respondent fully complies with the Board's Order in the underlying unfair labor practice case. See Amshu Associates, 234 NLRB 791, 797 (1978); Stevens Ford, Inc., 271 NLRB 628 (1984). We note, however, that the General Counsel concedes that the backpay period for employees other than Klinkowski ended no later than 11 No- vember 1980, by which time the Respondent had offered reinstatement to all entitled employees except Klinkowski. Interest on the backpay awards will, of course, continue to accrue until full compliance. 277 NLRB No. 66 SMYTH MFG. Co as an experimental machinist with Chandler-Evans in West Hartford, Connecticut, at the end of Feb- ruary 1978. Sitaru testified that he did not accept that job because he had "in mind" a job with Hart- ford Tool and Die. The judge inferred from this testimony that the job at Chandler-Evans was equivalent to Sitaru's prior employment with the Respondent and that Sitaru had incurred a willful loss of interim earnings by failing to accept it. However, the record shows that on 15 March 1978, about 2 weeks after the job offer from Chan- dler-Evans, Sitaru accepted a job as a toolmaker with Hartford Tool and Die, which was substan- tially equivalent in pay to Sitaru's prior employ- ment. In the 2-3/4 years following Sitaru's employ- ment with Hartford Tool and Die, he earned as much or more per quarter than the backpay formu- la calculated that he would have earned with the Respondent in all but 3 quarters. Even in the 3 quarters when he earned less, the difference was comparatively small, ranging from $49 to $148 per quarter. Although the job at Chandler-Evans was offered about 2 weeks before the job at Hartford Tool and Die, we cannot say that Sitaru incurred a willful loss of earnings by electing to accept the second job rather than the first. Indeed, since the record shows nothing about the terms and conditions of employment at Chandler-Evans, it is entirely possi- ble that the job at Hartford Tool and Die paid better or offered more regular hours than the job at Chandler-Evans, and that the net result of accept- ing the second job rather than the first was to reduce the total backpay owing to Sitaru.6 At any rate, we do not believe that delaying employment briefly to secure a job that the employee believes will be preferable constitutes a willful loss of earn- ings. 6 Similarly, we find that Sitaru, who was qualified as a journeyman toolmaker, was justified in focusing his search for interim employment on toolmaker jobs, although he was employed as a machinist at the time of his layoff from the Respondent. It may well be that by seeking and secur- ing toolmakers' work Sitaru reduced the Respondent's total backpay li- ability. At any rate, concentrating his efforts on the search for a toolmak- er's job did not constitute a willful loss of earnings Moreover, we note that although Sitaru answered "yes" when asked if he "only look[ed] for a job as a toolmaker," other portions of his testimony indicate that he sought interim work as both a machinist and a toolmaker We affirm the judge's findings that Sitaru was not required to accept jobs offered him at lower pay or on an undesirable shift, or for which he was not qualified, according to his uncontradicted testimony. In addition, we reject the Respondent's contention that Sitaru's back- pay claim of $148 for the third quarter of 1978 should be disallowed be- cause at the backpay hearing in 1983 Setaru stated, on cross-examination, that "it could be I was out a week or two sick" in the third quarter of 1978. The Respondent made no effort to proffer records from Hartford Tool and Die showing that such an absence in fact occurred; nor did it proffer evidence that any such absence would have exceeded authorized sick leave, or that it would have resulted in a loss of earnings equaling $148 in that quarter, had Sitaru remained in the Respondent's employ 681 The judge also found that Sitaru had intentional- ly concealed his job offer at Chandler-Evans in February 1978 because he failed to mention it in a Regional Office questionnaire in May 1983, and that this concealment was the equivalent of an in- tentional concealment of interim earnings, disquali- fying Sitaru from backpay for the first quarter of 1978. See American Navigation Co., 268 NLRB 426 (1983). We find, on the contrary, that the failure to mention an unaccepted job offer 5 years ago may be attributable to a lapse of memory rather than to a desire to conceal. In any event, since we have found that Sitaru was justified in passing up the Chandler-Evans offer to accept a job at Hartford Tool and Die about 2 weeks later, the failure to mention the earlier offer cannot be equated with an intentional concealment of interim earnings.? Ac- cordingly, we have corrected the judge's calcula- tions of the backpay due Sitaru to restore the im- properly excluded amounts. The judge found that Robert Woods Sr. was en- titled to backpay from the time of his unlawful layoff on 30 September 1977 until he suffered a dis- abling heart attack on 28 March 1978. We affirm, but on somewhat different grounds from those relied on by the judge. Counsel for the Respondent conceded at the backpay hearing that Woods' ill- ness was so serious as to preclude him from testify- ing and disavowed any claim that the Respondent was denied its procedural rights because of its in- ability to examine Woods. Instead, the Respondent called as a witness the supervisory compliance offi- cer from the Board's Regional Office to testify what Woods had told him concerning his search for interim work. The compliance officer testified that he tele- phoned Woods early one evening, about 4 weeks before the backpay hearing, and talked to him for 5 to 7 minutes. In his direct testimony, the compli- ance officer stated that Woods had told him that he "didn't apply" for any jobs following his layoff. On cross-examination, counsel for the Union asked the compliance officer whether he had asked if Woods had gone to any employers seeking to file applica- tions for work. The compliance officer answered: "I don't recall his exact response. My recollection is that what he said was, in essence . . . that he had not gone out searching for work." The compli- ance officer acknowledged, however, that his con- temporaneous notes of his conversation with Woods merely indicated that Woods "didn't apply for jobs" after his layoff. ' The judge's finding that Sitaru was not guilty of an intentional con- cealment of earnings with respect to other jobs that lie was justified in not accepting (see fn 6) is affirmed. 682 DECISIONS OF NATIONAL LABOR RELATIONS BOARD On further cross-examination, the compliance of- ficer testified that Woods had said that he collected unemployment compensation after his layoff. The compliance officer added that he was "not sure," but he "believe[d]" that he had asked Woods "whether he had been sent out on any job inter- views . . . by the unemployment office," and that he "believe[d]" that Woods had said that he had not. The General Counsel thereafter proffered a sworn statement from Woods that she had taken during a personal interview of approximately 1-1/2 hours at Woods' home on 25 May 1983, about a week before the backpay hearing. Woods' affidavit states that from the time of his layoff in September 1977 until his heart attack in March 1978, Woods had gone "around to a number of companies . . . looking for work" and that he specifically remem- bered going to East Granby Machine; B & E Tool in Southwick, Massachusetts; Delta in East Granby; and Gerber in Windsor, Connecticut. The affidavit further states that Woods collected unem- ployment compensation, that the unemployment office arranged two interviews for Woods at the office, and that Woods continued to look for work in the newspapers. Counsel for the Respondent objected to the ad- mission of Woods' affidavit at the hearing on the ground that it was hearsay. After the judge over- ruled that objection, however, the Respondent dropped the argument in its brief to the judge. The Respondent's brief merely urged that the judge, faced with two apparently inconsistent statements from an unavailable witness, should credit the com- pliance officer's recollection and conclude that Woods did not make a reasonably diligent search for interim work. The judge found that Woods' written and sworn statement to the General Counsel should be cred- ited over his oral, unsworn statement, as remem- bered by the compliance officer. Although Woods was not available as a witness, the judge noted that the Respondent could have sought to meet its burden of proof with respect to mitigation of dam- ages by obtaining evidence from the state unem- ployment office and from the employers named in Woods' affidavit. Absent any such evidence, the judge concluded that Woods as a victim of the Re- spondent's unfair labor practice, should be given the benefit of any doubt and his backpay claim upheld. The Respondent, in its exceptions and brief to the Board, now urges that Woods' affidavit should have been excluded from evidence as hearsay be- cause it is self-serving and does not come within any of the hearsay exceptions. On the view we take of this case, it is unnecessary to reach that issue. Assuming arguendo that Woods' written affi- davit is hearsay and that his oral statements, as recollected by the compliance officer, are not, we nonetheless conclude that the Respondent had not met its burden of establishing that Woods incurred a willful loss of earnings by failing to make a rea- sonably diligent search for work.8 The compliance officer's contemporaneous notes of his conversation with Woods merely state that Woods did not "apply" for any jobs after his layoff. That statement is ambiguous since it may refer merely to the filing of a formal application for work. An employee who goes to various em- ployers looking for work may not be permitted to file an employment application if there are no openings. The compliance officer acknowledged that he did not ask Woods for a more specific answer to his question and did not "recall" Woods' "exact response." In these circumstances, we do not regard as sufficiently probative the compliance officer's "recollection," on cross-examination, that what Woods said "in essence . . . was that he had not gone out searching for work," As the judge pointed out, the issue here is not the compliance officer's credibility, but whether his recollection of his brief telephone conversation with Woods ade- quately establishes that Woods did not make a rea- sonably diligent search for work. We note that telephoning an invalid's home in the evening and talking to him for 5 to 7 minutes is unlikely to produce a full or totally reliable account of his ef- forts to find work before his disabling heart attack. Indeed, as noted, the Regional Office did not treat the compliance officer's telephone call as disposi- tive; instead, counsel for the General Counsel went to Woods' home for a personal interview lasting about 1-1/2 hours. It is well settled that the ultimate burden of proof is on a respondent to prove diminution of damages through willful loss of earnings. Mastro Plastics Corp., 136 NLRB 1342, 1346-47 (1962), enfd. 354 F.2d 170 (2d Cir. 1965), cert. denied 384 U.S. 972 (1966); Heinrich Motors, 166 NLRB 783 8 Cf. NLRB v Mastro Plastics Corp, 354 F 2d 170, 179 (2d Cir 1965), cert denied 384 U S 972 (1966), where the Second Circuit stated Even if the testimony here received would be inadmissible hearsay in a civil action we are not prepared to require the Board to exclude it from a backpay hearing. As the discriminatee could not be pro- duced, the Board could accept other evidence which tended to es- tablish the facts Here, the evidence was testimony as to the de- ceased's discussions of his search for alternative work We do not consider it "practicable," as that word is used in Section 10(b) [of the Act], to exclude this relevant testimony Moreover, since the burden of proving lack of a diligent search was on Mastro, we fall to see how the admission of this testimony was prejudicial, As we stated above, the Board can only be expected to make available for the employer's cross-examination such evidence as it may reasonably obtain SMYTH MFG. CO. (1967), enfd. 403 F.2d 145, 148 (2d Cir. 1968). In the present case, backpay claimant Woods was concededly unable to testify. The General Counsel, therefore, proffered an affidavit from Woods in which he named four companies where he had sought work and referred to two employment interviews set up by the unemployment compensa- tion office. Assuming, as the Respondent contends, that Woods' affidavit was hearsay, it nonetheless provided the Respondent with specific information that could have been checked to determine the truth of Woods' assertions concerning his search for interim work. As the judge noted, the Respond- ent elected not to pursue those inquiries and, in- stead, relied solely on the compliance officer's recollection of his brief telephone conversation with Woods. For the reasons stated above we do not believe that the evidence is sufficient to meet the Respondent's burden of proving that Woods did not make a reasonably diligent search for work after he was unlawfully terminated by the Re- spondent. We therefore affirm the judge's allow- ance of Woods' backpay claim.9 An issue is presented concerning the appropriate backpay period for pension contributions. Under the collective-bargaining agreement between the Respondent and the Union that expired in Febru- ary 1977, the Respondent agreed to make weekly pension contributions of $6 for each covered em- ployee to the IAM Pension Fund (the Fund). Fol- lowing expiration of the collective-bargaining agreement, the Respondent continued payments to the Fund through September 1977, when the Re- spondent ceased operations. Thereafter, the Re- spondent sought and secured from the Fund a refund of the Respondent's contributions from Feb- ruary through September 1977, apparently because there was no collective-bargaining agreement in effect during that period. The Respondent signed another collective-bargaining agreement with the Union on 15 March 197910 that provided for pen- sion contributions to the Fund for current employ- ees from 6 February 1977, when the prior agree- merit expired. The Fund, however, would not accept the retroactive contributions that the Re- spondent tendered for the four covered employees then on the payroll and returned the contributions to the Respondent. Thereafter, the Respondent 9 Although we affirm the judge's findings of a willful loss of earnings by employees Earl P. Wilder and Dudley 0 White, we note that White's period of willful idleness ended when he secures suitable interim employ- ment on 16 January 1978 The judge therefore erred in disallowing White's backpay claim thereafter See Laredo Packing Co, 264 NLRB 245, 246-248 (1982), enfd 730 F 2d 405 (5th Cir 1984), Avon Convalescent Centel, 219 NLRB 1210, 1219 (1975), enfd in relevant part 549 F 2d 1080 (6th Cir 1977) 10 The efFective date of the new agreement was 15 March 1979, rather than 5 March 1979, as stated in the judge's decision 683 paid the retroactive pension contributions directly to the four employees and gave them a wage in- crease of 15 cents an hour (or $6 for a 40-hour week), the equivalent of the pension contributions provided for in the collective-bargaining agree- ment.11 On these facts, we find that the payments in lieu of pension contributions that the Respondent made to its current employees in 1979 are the best meas- ure of what the employees still on layoff lost in pension contribution payments as a result of their continuing layoff following the Respondent's un- lawful cessation of operations. Since current em- ployees received payments for pension contribu- tions retroactive to February 1977, and continuing thereafter, we may reasonably infer that the re- maining employees would have received like pay- ments for their pension contributions had they not been laid off or terminated as a result of the Re- spondent's unfair labor practice. See Richard W. Kaase Co., 162 NLRB 1320, 1326 (1967). We there- fore adopt the judge's recommendation that the Respondent be required to recompense employees for pension contributions of $6 per week for each employee from 6 February 1977 until 1 January 1980, when the Respondent and the Union agreed to a profit-sharing program in lieu of their previous pension plan.12 The consent judgment entered by the United States Court of Appeals for the Second Circuit en- forcing the underlying Order in this case provided that the Respondent would furnish the Board's Re- gional Office, on req+glest, information relevant to the issue of determining whether reestablishment of the Respondent's manufacturing operations would "endanger Respondent's continued viability . . . in light of current economic conditions." In the event that agreement could not be reached on whether reestablishment would endanger the Respondent's continued viability, the consent judgment provided for determination of the issue in the backpay pro- ceeding. That issue was litigated in the instant backpay proceeding and the judge concluded that "there is no evidence to contradict Smyth's assess- I I The General Counsel therefore did not seek backpay for the four employees who were recompensed for their pension contributions 12 We find merit in the Respondent's exception to the judge's inclusion of $906 for accrued pension contributions in employee Mullen's backpay, since the judge found that the Respondent had already made Mullen whole for pension contributions by contributing to another plan on Mul- len's behalf. However, we find without merit the Respondent's conten- tion that employees Jorgenson, Mihalick, Tauscher, Vabalas, Michalski, and Perkins are not entitled to backpay for pension contributions after 15 March 1979 because they had secured "suitable jobs" by that date Al- though no backpay for base wages is claimed for these employees after the first quarter of 1979, because they had by then obtained interim em- ployment that paid as well in base wages as their jobs with the Respond- ent, the record does not show that they secured equivalent pension bene- fits with their interim employers 684 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ment that due to technological changes in the market it no longer can compete and that it is unable to achieve reestablishment in light of cur- rent economic conditions." (Sec. III, C, par. 4.) The judge noted, however, that Smyth was sub- contracting some manufacturing operations to fill orders for parts and recommended that the Re- spondent be ordered "forthwith [to] cease and for- ever discontinue subcontracting or assigning to others the manufacture of parts for or on behalf of Smyth Manufacturing Co.," to prevent the Re- spondent from transferring "to other shops for the benefit of Respondent . . . jobs from which [em- ployees] were unlawfully discharged." The judge's recommended Order further provides that if the Respondent complies with the ban on subcontract- ing, "it will not be required to reestablish the man- ufacturing facilities of Smyth Manufacturing Co., Inc. as heretofore Ordered." Although no excep- tion was taken to the recommended ban on subcon- tracting, we conclude that the words "and forever discontinue" are overly broad and should be delet- ed from the remedy . As amended, the Order will proscribe such subcontracting for the indefinite future, but will leave open the possibility of modifi- cation of the proscription should future events prove that warranted. The General Counsel has excepted to the judge's failure to order the Respondent to furnish informa- tion necessary to police compliance with the sub- contracting remedy and specifically requests inclu- sion of the following language: Preserve and, upon request, make available to the Board or its agents, for examination and copying, all invoices, work orders, corre- spondence, ' financial disbursements and other records related to the manufacture , sales and/- or subcontracting of spare parts and bookbind- ing equipment and machinery by and for Smyth Manufacturing, Inc. and Beacon Indus- tries. The Respondent, in its answering brief, states that "[w]hile Respondent sees no need for this ad- ditional language, if it is to be included . . . [it] should . . . be limited as to the time it is to remain in effect and, also to the scope of the remedial order, i.e., subcontracting." Accordingly, the Re- spondent contends that the "applicable language offered by General Counsel should . . . be limited to the following:" [O]ther records relating to the subcontracting or assigning to others the manufacture of parts for or on behalf of Smyth Manufacturing Co., Inc. We find merit both in the General Counsel's re- quest for information necessary to police compli- ance with the subcontracting remedy and in the Respondent's contention that the General Counsel's information request is unduly broad . In our view, the information provision of the Order should track the subcontracting provision and thus should re- quire the Respondent to preserve and furnish to the Board or it agents, on request , for examination and copying, all documents and records related to "subcontracting or assigning to others the manufac- ture of parts for or on behalf of Smyth Manufac- turing Co." We have therefore modified the Order accordingly. With respect to the Respondent's con- tention that there should be a time limitation on the information provision of the Order, we believe that the need for information will continue so long as it is necessary to police compliance with the subcon- tracting remedy. As noted, the subcontracting remedy will remain in effect for the indefinite future, but will be subject to modification at a later date should the parties demonstrate that subsequent events warrant a change. The same is true for the requirement that the Respondent furnish informa- tion necessary to police compliance with the sub- contracting provision. The parties have called to our attention various arithmetical or transcription errors in the amounts of backpay for individual employees set forth in the summary chart in section II,D of the judge's decision and we have corrected the Order accord- ingly.13 Finally, we affirm, for the reasons stated in the judge's decision, his conclusion that interest should be ordered on the backpay awards and that the Re- spondent's laches defense is without merit. ORDER The National Labor Relations Board orders that the Respondent, Smyth Manufacturing Co., Inc., Beacon Industries, Bloomfield and East Hartford, Connecticut, its officers, agents, successors, and as- signs, shall 1. Cease and desist from subcontracting or as- signing to others the manufacture of parts for or on behalf of Smyth Manufacturing Co., Inc., upon which the Respondent will not be required to rees- 19 These corrections are- Cavaric-accrued vacation $618, total $831 Danilla, B. -accrued vacation 0, total $395 Danilla, V.-accrued vacation $413, total $560 Garcia-accrued vacation $142, total $142 Gill-accrued vacation 0, total unchanged Griffin, Albert-total $720 Mullen-accrued pension 0, total $219 Zihal-accrued vacation $282, total $282 SMYTH MFG. CO. tablish the manufacturing facilities of Smyth Manu- facturing Co., Inc., as heretofore ordered. 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Preserve and furnish to the Board or its agents on request, for examination and copying, all documents and records related to subcontracting or assigning to others the manufacture of parts for or on behalf of Smyth Manufacturing Co., Inc. (b) Make whole the following employees by pay- ment to them of the moneys listed below, with in- terest, as provided in the Board's Order in the un- derlying unfair labor practice proceeding as en- forced by the United States Court of Appeals for the Second Circuit, as well as any additional back- pay, plus interest accruing after the backpay hear- ing, until the Respondent fully complies with this Order. MPLOY- EE ASE WAGES PAY FOR LOST HOURS AC- CRUED VACA- TION PAY AC- CRUED PEN- SION PAY- MENTS OTAL Bailey $9,558 $906 $10,464 Boyle, C. $658 658 Boyle, D. $150 330 480 Burks 108 280 388 Burnham 125 541 666 Cavaric 165 618 48 831 Danilla, B. 191 204 395 Danilla, V. 147 413 560 Derench 264 264 Finch 894 906 1,800 Foley 334 334 Garcia 142 142 Gill 230 230 Goodnow 115 297 412 Gordon 1 ,004 316 150 1,470 Griffin, Alan 125 102 227 Griffin, Albert 122 598 720 Griffin, H. 375 375 Jean 214 214 Jorgensen 1,501 336 1,837 King 212 212 Klin- kowski 4,318 115 906 5,339 Leemon 224 224 Marag- nano 115 237 352 Martel 155 579 734 McKinney 140 308 448 Meres- chuck 176 494 670 Michalski 75 204 279 Mihalick 922 230 906 2,058 Mullen 219 219 PAY EMPLOY- BASE FOR EE WAGES LOST HOURS AC- CRUED VACA- TION PAY AC- CR UED PEN- SION PAY- MENTS 685 TOTAL Murdza 140 307 447 Musgrave 190 190 Pallotta 906 906 Pawlak 1,243 906 2,149 Palurszyk 210 210 Perkins 133 205 906 1,244 Richard, E. 153 854 1,007 Richard, F. 264 264 Sitaru 8,106 228 906 9,240 Soza 282 282 Stupcenski 170 467 637 Tauscher 92 230 906 1,228 Tregubow 147 411 558 Vabalas 2,213 215 906 3,334 Vielleux 183 183 Von Eisen- grein 818 906 1,724 White, D. 244 230 816 1,290 White, E. 176 333 509 Wilder 138 138 Wilson 162 123 285 Winters 264 264 Woods 5,081 169 354 5,604 Zaman 282 282 Zihal 282 282 Cathleen F. McCarthy, Esq., for the General Counsel. Edward F. O'Donnell, Esq. and Gary Starr, Esq. (Siegel, O'Connor & Kainen), of Hartford, Connecticut, for the Respondent. James L. Kestell, Esq. (Kestell, Pogue & Dienhart), of Hartford, Connecticut, for the Charging Party. SUPPLEMENTAL DECISION WALTER J. ALPRIN, Administrative Law Judge. This case involves backpay specifications issued February 28, 1983, ammended May 12, 1983, relating to unfair labor practices which occurred in 1977.1 The backpay issue was heard on May 31 and June 1, 1983, at Hartford, Connecticut. 2 Parties filed briefs on July 27, 1983. On the entire record, including my observation of the demeanor of the witnesses, and after considering the briefs of counsel for Respondent and for the General Counsel, I make the following ' All dates are in 1977 unless otherwise indicated . The dates on which charges were filed and complaint issued were not recorded in this pro- ceeding. The judge issued his recommended Decision and Order on August 31, 1979, which was affirmed by the Board on February 19, 1980 at 247 NLRB 1139. The U.S. Court of Appeals for the Second Circuit issued a consent judgment enforcing the Board's Order on January 5, 1982. ' The General Counsel's unopposed motion to correct the transcript, dated July 27, 1983, is granted. 686 DECISIONS OF NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT I. BACKGROUND Smyth Manufacturing Company, Inc. (Smyth), has its principal office and place of business in Bloomfield, Con- necticut, where it formerly engaged in the manufacture, sale, and servicing of bookbinding machinery and parts. It currently limits its operations to the sale of stock and manufactured replacement parts. Beacon Industries (Beacon) has its principal office and place of business in Hartford, Connecticut, where it engages in the manufac- ture, sale, and servicing of winches, aircraft parts, and other tooled metal products. Beacon purchased a con- trolling interest in Smyth in 1976 in a move fostered by their common banker in order to keep Smyth from bank- ruptcy. Beacon and Smyth were found to constitute a joint employer. The judge's order in the underlying proceeding, inter alia, required Respondent to "Reestablish the manufac- turing operations of Smyth Manufacturing Corporation, Inc., at their Bloomfield, Connecticut, plant," with vari- ous make-whole provisions for employees. H. ISSUES AFFECTING BACKPAY A. Effective Date of Board Order 1. Facts The record in this matter to date has used several dif- fering phrases, italicized in the following quotations, to delineate the time frame which Board action was intend- ed to cover. The amended complaint in the underlying proceeding herein alleged that Respondent had ceased manufacturing operations "on or about" September 30. The recommended Order adopted by the Board included a "make whole" provision, requiring Respondent to: Offer to those employees who were laid off and/or terminated as a result of the September 30, 1977 ces- sation of manufacturing operations . . . and make each of them whole for any loss of earnings . . . in the manner provided in the section of this Decision entitled the Remedy. The remedy portion of the decision includes the recom- mendation: that Respondent be ordered to reinstate its manufac- turing operation . . . and to reinstate all employees who were laid off on and after September 30, 1977, because of the cessation of manufacturing operations . .. and to make them whole for any loss... . The amount of backpay will be computed in the manner set forth in F. W. Woolworth Company . .. . The remedy also required Respondent to post a notice to employees to include the following provision: WE WILL offer to the employees who were laid off or terminated as the result of the September 30, 1977 cessation of manufacturing operations . . . full rein- statement . . . and WE WILL make each of them whole for any loss. It was specifically found that as early as September 1, 1977, Smyth had announced its plan to close its plant on September 30, and that all manufacturing employees would be laid off. It also made known that its manufac- turing machines were to be sold to Beacon, that a fore- man was leaving to work for Beacon, and that Beacon had decided to advertise for workmen . Thereafter, on September 9, 1983, employee K1lnkowski was laid off. When Klinkowski complained that his layoff did not follow the seniority roster, he was told to forget about seniority since all the employees would be gone shortly. Employee Cavaric had been laid off in March 1977, prior to any proven intent to close the facility at the end of September. On August 10, 1977, he received a recall letter stating that "we have a job that is temporary, with probable completion within a 2-month period." He worked for 3 weeks on what appeared to him to be gen- eral work not connected to any particular project. He was notified that he would be laid off on September 9, in order to allow another employee , who was a union offi- cial with "super seniority " to "bump" into his job and thereby remain employed. Employees Bailey, Finch, Pallotta, and Von Eisen- grein were laid off the following Friday , September 16, and employee Pawlak on the next Friday , September 23. When asking for a reason Pawlak was told, "Well you see the way things are going" and "you see how the other people were getting laid off." Pawlak was given a letter of recommendation stating that he "is being termi- nated as of September 23, 1977 due to the closing of our manufacturing facilities." 2. Discussion Respondent argues' that the underlying decision and order herein limits the class of those entitled to be made whole to employees laid off "on or after" September 30, and that any other finding or interpretation constitutes an unauthorized relitigation of a matter previously deter- mined. The argument is predicated on the inclusion by the judge of a provision in the remedy portion of his rec- ommended decision, after having found the cessation of operations to have been an unfair labor practice, which would therefore recommend "that Respondent be or- dered . . . to reinstate those employees who were laid off on or after September 30, 1977 . . . and to make them whole." Smyth Mfg. Co., 247 NLRB 1139, 1172 (1980). The amended complaint placed in issue whether Smyth's cessation of operations "on or about" September 30 constituted an unfair labor practice. (Emphasis added.) The decision specifies as Conclusion of Law 9 that Smyth's cessation of operations "on or about Septem- ber 30," was an unfair labor practice . (Id. at 1171.) (Em- phasis added.) The Order of the decision , at paragraph 2(b), required Respondent to offer reinstatement, and to make whole, "those employees who were laid off and/or terminated as a result of the September 30, 1977, cessa- 8 One of Respondent's arguments on this point relates to the admission into evidence of certain correspondence between Respondent 's previous counsel and the Board's compliance officer Without changing the origi- nal ruling of admissibility, it is pointed out that the weight given such evidence was insufficient to include it in the discussion of facts SMYTH MFG. CO. tion." (Emphasis added.) (Id. at 1173.) The Order also required Respondent to post a notice that it would offer reinstatement, and make whole, "employees who were laid off or terminated as the result of the September 30, 1977, cessation." (Emphasis added.) However, the portion of the remedy decision between the Conclusions of Law and the Order, lumps together a recommendation requiring reinstitution of the discontin- ued operations to achieve the status quo ante, on the one hand, and, on the other, a recommendation to require re- instatement and payment of lost wages to "those employ- ees who were laid off on and after September 30, 1977." (Emphasis added.) It is only at this single point that the phrase "on and after" is used. The phrase "on or about" is used in both the amended complaint and in the specific Conclusion of Law thereon, while the phrase "as a result of" was used in both the Order and the required notice. The pertinent issue determined in the prior proceeding was as to the commission of an unfair labor practice. In finding the allegations of the amended complaint to be true the judge found the unfair labor practice took place on or about September 30, and that any employee ad- versely affected as a result of the unfair labor practice is entitled to be made whole. The judge recommended an order which included as the class of employees to be re- instated and made whole, all those laid off as a result of Smyth's unfair labor practice, and repeated the key phrase, as a result of, in the notice to be posted. I find the clear intent of the order was to relate to employees laid off about September 30, as a result of Respondent's unfair labor practice of ceasing operations. The plan to cease operations was announced Septem- ber 1, and those laid off thereafter were the victims of that unfair labor practice even if terminated prior to the final cessation of operations on September 30. The action in laying off Klinkowski on September 9 was a result of the September 30 cessation, and he was told that less senior employees would likewise be terminated shortly. Bailey, Finch, Pallotte, and Von Eisengrein were laid off the following week, also a result of the same unfair labor practice. Pawlak, laid off still another week later, was given a letter attesting to the fact that his layoff of Sep- tember 23 was caused by the closing of the facilities though that act did not take place for another 7 days. These employees were thus clearly discharged as a result of the unfair labor practice. Cavaric was also laid off on September 9. At the time Cavaric was a temporary employee. His temporary re- employment was prior to any evidence of a plan to cease operations and there is no reason to believe that his em ployment would have been continued had operations not ceased, Cavaric therefore is not one of the employees re- quired to be made whole, except for lost hours before March 11, accrued vacation, and, as later discussed, 8 weeks of pension entitlement. B. Refusals of Offers of or Failure to Seek Employment 1. Remus Sitaru a. Facts 687 Sitaru had been employed by Smyth since 1962, most recently as a machinist mechanic. He was laid off on September 30, at which time his wage was $6 per hour, with 3 weeks' paid vacation per year. He registered with the state unemployment office a week after being laid off. During October, November, and December, he phoned, called on, or submitted an application to the fol- lowing, with results as indicated: Colt Firearms, Hartford: No openings Macristy Industries, New Britain Job offered at $4.95 per hour, insurance benefits not as good as Smyth; job refused. Delta Industries, East Granby: No openings Hamilton Standard: No openings Eastern Tool and Die, Newington: No openings Prat & Whitney: No openings After Christmas and to the end of February 1978, Sitaru phoned, called on, or submitted an application to the fol- lowing, with results as indicated. Collins Switch, West Hartford: February, 1978, job toolmaker offered at over $6 per hour. Refused on the basis that Sitaru was unable to perform the work, on small dies and making small scale tools. Dynamic Metal Products Corporation, Manchester: No openings 4-D Tool, West Hartford: No openings Stanadyne, Windsor: Job offered, but refused be- cause it was on the night shift. Windsor Manufacturing, Windsor: No openings.4 Berkin Manufacturing, Bloomfield: No openings Skinner Manufacturing, New Britain: No openings New England Aircraft: No openings At the end of February 1978, Sitaru applied to and was offered a job by Chandler-Evans, at West Hartford. It appears that the job was equivalent to his prior employ- ment, but Sitaru refused it because he "had in mind" a job with Hartford Tool and Die. He applied to Hartford Tool and Die the first week of March, and was hired ef- fective March 15, 1978. On May 11, 1983, Sitaru completed a work search questionnaire at the request of the Board's Compliance Officer. Line 2C called for the names of prospective em- ployers. Line 3 asked, "In addition to the employers listed on 2C, did you visit other employers for work, yes or no." Sitaru indicated the affirmative, and listed Hamil- ton Standard, Mintalux, 4-D Tool, Armoured Metal Cor- 4 Sttaru could testify about these contacts only after referring to "notes" made by him several'days prior to the hearing and 5 years after the events The note as to Windsor Manufacturing contained the same comment as that of Stanadyne, to wit- "Night shift-no." Sitaru testified however that the notation regarding Windsor was in error and that there were no openings. 688 DECISIONS OF NATIONAL LABOR RELATIONS BOARD poration, Chandler-Evans, Pratt & Whitney, Collins Switch, Skenner Manufacturing, Eastern Tool and Die, and Berkin Manufacturing. Line 3B asked, "At which or any of these employers did you file an application?", and Sikaru named Chandler-Evans, Collins Switch, and East- ern Tool and Die. Line 3C asked, "Did any of them listed above offer you a job, yes or no," and Sitaru re- sponded in the negative. His reason for doing so was "I maybe had a mind that the other jobs listed above, they didn't offer me any jobs. That's probably why I put a no there." Sitaru was a qualified operator of various machines, but did not respond to any of the numerous newspaper advertisements placed by Beacon for such employees. In addition, there were other newspaper advertisements for similar employment to which Sitaru did not respond, b. Discussion It has been established that even where "the evidence may leave a question as to whether [the discriminatee] could have been more diligent in seeking other employ- ment, the highest standard of diligence is not required. ... [Citation] Rather, the individual is held `only to rea- sonable exertions in this regard.' [Citation] Finally, it is well settled that any uncertainty in the evidence is to be resolved aginst Respondent as wrongdoer." Inland Empire Meat Co., 255 NLRB 1306, 1308 (1981). Though Sitaru did not exhaust all possible means of finding other employment after having been discriminatorily dis- charged by Respondent his efforts were reasonable. Sitaru did not abuse the Board's processes by failing to report offers of jobs paying less, on less desirable shifts than his prior position with Respondent, or for work he was unable to perform. Those offerings were not the equivalent of the prior position, did not have to be ac- cepted by the discriminatee, and therefore should not have to be reported to the Board. Sitaru did, however, fail to advise the Board, or admit until questioned by Respondent, that he rejected the offer of an equivalent position at Chandler-Evans at the end of February 1978. His representation to the Board that he had not received such an offer from prospective employers to whom he submitted an application was in response to clearly enunciated questions, and the reason he gives for making the false statement is so inadequate that a conclusion of intentional concealment is inescap- able. The Board's current policy is to deny backpay of wages for the full quarter in which a claimant intention- ally conceals earnings from interim employment. Ameri- can Navigation Co., 268 NLRB 426 (1983).5 I find that Sitaru's intentional concealment of the interim offer of equivalent employment is tantamount to an intentional concealment of interim earnings, disqualifying him from backpay of wages for the first quarter of 1978, the amount of $3627. In addition, since Sitaru failed to accept the offer of equivalent employment at the end of February 1978, his claims for backpay for the third quarter of 1979 ($123), as well as all pension benefit entitlements, hereinafter dis- 5 That policy, however, does not extend to the amounts claimed as pension entitlements, hereinafter discussed. cussed, after July 1978 (95 weeks, $570), must also be disallowed. His entire claim is thereby reduced $4468, to the amount of $4634. 2. Dudley O. White a. Facts White was discharged on September 30, and was un- employed until January 1978. Within a week of his dis- charge White applied to the state unemployment office, which did not refer him to employers but which did re- quire that in order to obtain unemployment benefits he make at least three contacts seeking employment. During October, November, and December 1977, White contact- ed three prospective emloyers-two on a single day and the other the following or second following day. He tes- tified that he looked at newspaper want-ads 5 days a week, which was the source of the position he eventually found. On his discharge White was told by his supervisor that he could get a job at Beacon but "probably" would have to take a pay cut as well as losing seniority. At Smyth, White operated a CIM-X machine, which was sold and did not go to Beacon. He was also qualified to operate horizontal and vertical milling machines, for which Beacon advertised positions during the period of his un- employment. There were newspaper advertisements by other employers to which White did not respond. b. Discussion The statement to White by his supervisor at Smyth did not constitute an offer of employment, by Beacon, whether "equivalent" or not, That White never investi- gated the possibility of employment at Beacon, transmit- ted both by his former supervisor and by the newspaper advertisements which, by his own testimony he must have seen, must be considered in terms of whether White conducted a bona fide search for employment. A discriminatee is not required to seek work immedi- ately upon discharge, and the sufficiency of his efforts to mitigate backpay is determined from his efforts during the entire backpay period as a whole. I. T O. Corp. of Bal- timore, 265 NLRB 1322 (1982). In spending 2 days during the 3-month period in contacting prospective em- ployers, however, White did no more than meet mini- mum qualifications for state unemployment benefits. Even crediting White's testimony that he looked at the newspaper advertisements 5 days a week, he made no at- tempt to use the information therein to obtain employ- ment until January 1978, contacting neither Beacon nor any other advertiser to determine details of job openings. I find that White's loss of earnings between discharge and reemployment was willfully incurred, and he is therefore not entitled to lost wages or pension payments after September 30. 3. Robert Woods Sr. a. Facts Woods was discharged September 30, and was eligible for employment until disabled by a heart attack on SMYTH MFG. CO. March 28, 1978. Because of his physical condition and on his doctor's advice, Woods was unable to testify herein. On May 4, 1983, Woods had a phone conversation with the Board's Compliance Officer in which Woods reportedly stated he had made no search for employment following his layoff. On May 25, 1983, however, White gave a sworn statement to the General Counsel stating in part as follows: When I was laid off from Smyth I registered with the Connecticut unemployment office. They did not send me out on interviews but they did arrange for two interviews for me at the unemployment office. .. . From my layoff up to my heart attack in March, 1978 I went around to a number of compa- nies on my own looking for work. I went to East Cranby Machine, B & E. Tool in Southwick, Massa- chusetts, Delta in East Granby and Gerber in Wind- sor, Connecticut. . . . I also went to others whose names I cannot recall . I put in applications at all these places. . .. I also kept looking at the newspa- pers. b. Discussion It is Respondent's position that it has established through the more credible testimony of the Board's Compliance Officer, which was untainted by the pros- pects of a windfall of some $5000, that Woods did not make a reasonably diligent search for work. We are not concerned with the credibility ' of the person reporting the phone conversation, but with the truth of the state- ment made in the phone conversation. We are faced with contradictory statements by `Woods, one oral and uns- worn, and the other in writing and sworn . In the absence of evidence supporting the contrary, the written and sworn statement should be given credence . Though Woods was not available for direct examination, to meet its burden of proof Respondent could have obtained evi- denice from the state unemployment office and from the employers named in the affidavit in order to dispute it. As the matter stands I must give the discriminatee the benefit of any doubt, and find that Woods actively sought employment until the time of his disability. 4. Earl P. Wilder a. Facts Wilder was discharged on September 30 and was un- employed until he was offered and accepted a position at Beacon on March 6, 1978. Within a week of discharge he had applied for state unemployment benefits. Before his employment at Beacon , Wilder applied to one pro- spective employer, looked at newspaper advertisements daily, and spoke to a friend about employment with an- other company. Sometime in March 1978, an officer of Beacon stopped to chat with Wilder in the plant, and inquired what Wilder had been doing during the period of his unem- ployment. The response, given jokingly according to Wilder's testimony, was that he had just "retired back to" his hometown. Wilder was 60 years of age at the 689 time and he testified that he had no intention of retiring at that age. b. Discussion I credit Wilder's testimony that he did not intend to retire at the time of his discharge , and that any comment to such effect to an officer of Respondent was if not sar- casm no more than ironic humor . This does not alter the fact, however, that in over 5 months of unemployment Wilder did no more than look at newspaper advertise- ments, contact one prospective employer, and talk to a friend about another possible employer. I do not find this to constitute a reasonable search for employment, and find that Wilder's loss of earnings between discharge and reemployment was willfully incurred. C. Pension Formula in Backpay Specification 1. Facts In February 1974, Respondent and the Union entered into a collective-bargaining agreement by which Re- spondent contributed $6 per week for covered employees to the International Association of Machinists and Aero- space Workers National Pension Plan (the plan). That agreement terminated in February 1977 but Respondent continued payments through September 30, 1977, when its plant closed. Following certain discussions, the plan refunded to Respondent its contributions from February through September 1977, since there was no agreement in effect for that period calling for such payments. When Respondent signed another collective-bargaining agreement with the Union on March 5, 1979, it included a similar pension contribution provision, calling for retro- active payments for any then present employees actively employed from February 6, 1977, to date. In conform- ance with the retroactive provision payment was ten- dered for four employees-Wilder, Griffin, Perkins, and Wilson. The plan, however, would not accept the retro- active payments , which were returned to Respondent. Effective January 1, 1980, Respondent and the Union agreed to a profit-sharing program in lieu of the fund pension plan. Discriminatees Dion and Mullen had been rehired by Beacon, and given credit in Beacon's profit- sharing plan for time employed at Smyth. On termination of employment in June 1980, Dion received a lump stem payment of $ 1818, and Mullen is fully vested in a balance of $3,931.45. 2. Discussion Respondent argues that it should not be required to in- clude in backpay any retroactive pension payments for the period from February 6 through September 30. It argues that the underlying decision and order only re- quire, in the words of Respondent's brief, "that employ- ees laid off on or after September 30, 1977, be awarded back pay to that date." The fact is that the underlying decision, at sheet 87, ordered Respondent to "Take the following affirmative action to effectuate the policies of the Act. (b) Offer to those employees who were laid off and/or terminated as a result of the September 30, 1977 cessation of manufacturing operations . . . immediate 690 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and full reinstatement . . . and make each of them whole for any loss of earnings." Thus, as previously discussed, payment is not limited to employees terminated Septem- ber 30. Further, the order does not discontinue the make- whole requirement as of that date. Respondent next argues that it should not be liable for pension contributions which it offered to but which were rejected by the plan, and that "if anyone should pay pen- sion contributions to the employees, it is the IAM Plan, not Respondent." This is not correct. As was stated in Rice Lake Creamery Co., 151 NLRB 1113, 1127 (1965), "these contributions, although `wages, ordinarily were not paid to the discriminatees, but went to the insurance carrier as premiums for the pension insurance. This pre- sents the question of whether it is more appropriate, in this backpay proceeding, to require the Respondent to pay the contributions omitted during the backpay period, to the discriminatees." Finding that such payment to dis- criminatees was not punitive to Respondent, and other- wise "reasonable and appropriate," the Board there or- dered the payment to be so made. In the matter at hand it is also reasonable and appropriate to order the pay- ments to the individual discriminatees. It is required to make them whole. The payments will not be accepted by the fund, and leaving the moneys in the hands of Re- spondent would constitute an unjust enrichment. Respondent argues that those employees not entitled to backpay by reason of failure to make a diligent search for employment after discharge are also not entitled to pension benefits. I agree that such a discriminatee cannot logically be said to deserve benefits, whether pension contributions or accrued vacation, for periods after dis- charge when not entitled to basic wages. Such benefits, however, are payable for the time from February 6, 1977, to the date of discharge even for those employees failing to thereafter make reasonable search for employ- ment. It is also true that certain discriminatees became super- visory employees of Beacon and have been given credit for Smyth employment in vesting benefits of the Beacon profit-sharing plan. Discriminatees Dion and Mullen have in this manner already received the benefit of pen- sion payments due them through Respondent's contribu- tion to another plan on their behalf, and do not require further pension benefit payments to be made whole. See Sinclair & Valentine Co., 238 NLRB 754 (1978). D. Specific Payments Due Discriminatees Respondent admits the accuracy of the General Coun- sel's calculations of backpay, as amended before and at the hearing, concerning discriminatees Dion, Foley, Gordon, Griffin, Jorgensen, Mihalick, Mullen, Perkins, Tauscher, Vablas, and Wilson. It also admits the proprie- ty of the formula and the accuracy of the amended speci- fications about wages lost as a result of the reduction in hours by named employees between January 24 and July 24, 1977, and about vacation pay for the period June 21, 1976, to May 31, 1977. Except for the four discriminatees individually discussed above about whether reasonable search for employment was made, Respondent offered no evidence contesting the other amounts set forth in the amended specification, other than pension benefits due. After making adjustments to the claims for lost wages for discriminatees Cavaric, Sitaru, Woods, and Wilder, and adjustments in pension payment entitlements, all as discussed above, I find the amounts due to discriminatees are as follows: Employee Wages Lost Hours Accrued Vacation Accrued Pension Total Bailey 9,558 906 10,464 Boyle, C. 658 658 Boyle, D. 150 330 480 Burks 108 280 388 Burnham 125 541 666 Cavaric 165 681 48 894 Danilla, B. 191 413 204 808 Danilla, V. 147 147 Derench 264 264 Dion 0 Finch 894 906 1,800 Foley 334 334 Gill 230 230 230 Goodnow 115 297 412 Gordon 1,004 316 150 1,470 Griffin, Alan 125 102 227 Griffin, Albert 122 598 820 Griffin, H. 375 375 Jean 214 214 Jorgensen 1,501 336 1,837 King 212 212 Klinkowski 4,318 115 906 5,339 Leemon 224 224 Maragnano 115 237 352 Martel 155 579 734 McKinney 140 308 448 Mereschuk 176 494 670 Michaelski 75 204 279 Mihalick 922 230 906 2,058 Mullen 219 906 1,125 Murdza 140 307 447 Musgrave 190 190 Pallotta 906 906 Pawlack 1,243 906 2,149 Palurszyk 210 210 Perkins 133 205 906 1,244 Richard, E. 153 854 1,007 Richard, F. 264 264 Sitaru 4,208 228 198 4,634 Soza 282 282 Stupcenski 170 467 637 Tauscher 92 230 906 1,228 Tregubow 147 411 558 Vabalas 2,213 215 906 3,334 Vielleux 183 183 Von Eisengrein 818 906 1,724 White, D. 230 204 434 White, E. 176 333 509 Wilder 138 138 Wilson 162 123 285 Winters 264 264 Woods 5,081 169 354 5,604 Zaman 282 282 Zihal 284 284 SMYTH MFG. CO. 691 III. REESTABLISHING THE PLANT A. Pleadings Board Order, and Enforcement Order The amended specifications allege that Respondent has not complied with the Board's Order to reestablish the Smyth Manufacturing Company, Inc., manufacturing fa- cility in Bloomfield, Connecticut, to a level of operation and employment which existed just prior to its Septem- ber 30 unlawful cessation of operations. The underlying decision provides that "We continue to adhere to the well established principle that, in cases involving dis- criminatory conduct, the restoration of the status quo ante is the proper remedy unless the wrongdoer can demonstrate that the normal remedy would endanger its continued viability." The ordering provisions of the deci- sion requires Respondent to "Reestablish the manufactur- ing operations of the Smyth Manufacturing Company, Inc., at their Bloomfield, Connecticut plant." The consent judgment entered in the Second Circuit Court of Appeals on January 5, 1982, ordered Respond- ent to "comply with the Board's Order of February 19, 1980 in all respects." It also ordered Respondent to pro- vide certain information, and ordered that if the Board's Regional Director "and Respondent are unable to agree with respect to whether reestablishment will endanger Respondent's continued viability, or the Respondent's achievement of reestablishment in light of current eco- nomic, conditions" a hearing, on those issues may be had before an administrative law judge pursuant to Board Rules and Regulations . The Order further provided that, "'Nothing in this Order shall be taken to deny Respond- ent the right lawfully to abandon any of its business op- erations at any time in the future for legitimate business reasons, if such action is not taken for the purpose of de- nying to employees rights conferred by the National Labor Relations Act." In its answer to the amended specification on this issue, Respondent stated its position "that to resume the level of operation and employment that existed just prior to September 30, 1977, would be unduly burdensome and endanger the continued viability of the Respondent." B. Economic Factors 1. Financial statements Certified consolidated financial statements of Respond- ent as of December 31, 1980, 1981, and 1982, report, inter alia, the following items: 1980 1981 1982 Net Sales $17,539,500 $19,141,800 $ 16,197,000 Income from operations 909,80D 729, 100 118,900 Net income 1,586,90D 389,500 140,200 Total Assets 14,035,500 13,104,000 10,721,800 Current Assets 8,586,400 8,406,900 6,459,500 Current Liabilities 4,315,600 4,712,900 3,880,000 2. Condition of Smyth Smyth has maintained a semblance of corporate and commercial viability. It identifies its Bloomfield premises and continues telephone service in its own name. It re- tains ownership of extensive equipment, currently uti- lized in the manufacture of winch parts for Beacon. The last time Smyth had an order for an entire book binding machine, assembled from parts on hand and manufac- tured to order, was in 1981, with completion in early 1982. Its current operations consist of supplying replace- ment parts, from existing stock or from parts manufac- tured to order by outside contractors. There is insuffi- cient manufacture of parts to employ a single machinist full time. The change in volume and type of operation is attributed by Respondent's uncontradicted testimony to technological changes in the book binding industry re- sulting in a changed market place in which it cannot compete. Testimony on behalf of Smyth was offered that one Irving Ratzenberg was hired in January 1981 as sales marketing manager, that a promotional budget was pre- pared for- 1982 of over $24,000, that "several" thousands of dollars were expended to no avail, and that having failed to promote orders, Ratzenberg left Smyth in April 1982. Company documents, however, revealed that Rat- zenberg had been hired by Smyth in October 1979 as managing director, and that promotional recommenda- tions for 1982 were virtually identical to those made in 1981. "The Smyth News," a one-sheet, two-page, promo- tional piece for distribution to current and prospective customers, was printed for March, May, and September 1980, March, August, and October 1981, and March and May 1982. The "Promotional Program and Budget Pre- pared for Smyth Manufacturing Company, January 1, 1982-December 31, 1982," prepared by its advertising agency, proposing a budget just over $24,000, begins with the following analysis: Promotional recommendations for Smyth in 1982 will be virtually identical to those made in 1981. The company continues to drift, apparently aimless- ly, without real attempts to penetrate the market or to encourage binderies to consider (or reconsider) Smyth equipment. Very little progress has been made in the R & D area beyond the development of mechanical fixes for existing machinery problems. Under these circumstances, the agency can only recommend a continuation of existing promotional programs to maintain some semblance of market po- sition and recognition for Smyth until a decision is made as to what course the company should pursue. .. . Concerning the "Smyth News," the agency commented that: For the past 1-1/2 years, the Smyth News has been the most productive promotional medium employed by the agency, as issue after issue continues to de- velop requests for further information and additions to the mailing list. 692 DECISIONS OF NATIONAL LABOR RELATIONS BOARD Smyth offered reinstatement to 19 of the discrimina- tees with the offer of a single job, which all 19 refused. All of the original discriminatees have obtained other employment at ' greater compensation, refused reinstate- ment, or have accepted reinstatement only to be later discharged for lack of work. C. Discussion The original Board Order required reestablishment of the manufacturing facility to the "level of operation and employment which existed" at the time of unlawful dis- continuance. The amended specifications herein made the same demand. The circuit court, however, in effect amended that Order by requiring Respondent to reestab- lish only if it does not "endanger Respondent's continued viability," which the Board itself has recognized as a bona fide reason for failure to reestablish.6 The circuit court also added as a condition to reestablishment, that it could be achieved "in light of current economic condi- tions." Respondent has presented evidence which it claims proves that reestablishment would endanger continued viability, and which shows reestablishment to be impossi- ble in light of current economic conditions.' In consider- ing both arguments it must be recalled that the Respond- ent herein is not Smyth alone, but rather the entity "Beacon Industries," of which Smyth is but a single divi- sion. Respondent's consolidated financial statements for 1980 through 1982 indicate a fairly slight variance in net sales compared to a drastic loss, more than 90 percent, in net income. During the same period total assets have de- creased roughly 25 percent, and the excess of current assets over current liabilities has decreased some 40 per- cent. Though income from operations for 1982 was over $16 million, and the excess of current assets over current liabilities over $2.5 million, comparison with prior years does not reflect a healthy position. On the other hand, Respondent has facilities and machinery with which to reestablish operations, has extensive resources, and its only expense would be for labor. As noted in its brief, should orders for equipment not be forthcoming within a reasonable period employees could be laid off, on valid economic grounds, without violating the Board's or the circuit court's orders. Respondent has thereby failed to prove that reestablishment of Smyth's manufacturing op- erations could threaten the viability of Beacon Industries. I do not credit testimony that Smyth attempted to re- establish operations. It is clear that Ratzenberg was hired over a year before the date alleged and was hired as gen- eral manager and not to develop sales. Smyth was told and was aware that its management was aimlessly drift- ing without real attempts to penetrate the market. On the other hand, there is no evidence to contradict Smyth's assessment that due to technological changes in the market it no longer can compete and that it is unable to 6 R & H Masonry Supply, 238 NLRB 1044 fn. 3 (1978), enfd in part 627 F 2d 1013 (1980) ' The evidence submitted on this point relating to attempts to comply with the order to reestablish I accept as being relative to the issue of whether reestablishment is feasible in light of economic conditions, rather than as a separate affirmative defense which Respondent failed to plead. achieve reestablishment in light of current economic con- ditions. Respondent has the right, pursuant to the circuit court's order as well as general provisions of law, to abandon any of its business operations for legitimate busi- ness reasons if such action is not taken for the purpose of denying to employees rights conferred by the Act. Great Chinese American Sewing Co., 227 NLRB 1670 (1977), enfd. 578 F.2d 251 (9th Cir. 1978). However, in order to fill orders for parts not in stock, Smyth currently sub- contracts some manufacturing operations. If the purposes of the Act are to be achieved employees must be pro- tected not only by making them whole for lost wages and benefits, but also by seeing that the manufacturing jobs from which they were unlawfully discharged are not permitted to be transferred to other shops for the benefit of Respondent. It will therefore be recommended that Respondent be ordered to discontinue this subcon- tracting. Lack of willingness to do so could only be in- terpreted as an admission that reestablishment is a viable option, in which case an order to reestablish would be the logical consequence. IV. INTEREST ON BACKPAY Respondent argues that it should not be required to pay interest on backpay awards because of the Board's "delay." The violations here occurred in 1977, but be- cause Respondent exercised its right to an initial hearing, liability was not determined by an administrative law judge until August 31, 1979. Exceptions filed by Re- spondent delayed a final Board Order until February 19, 1980, and Respondent's resistance to enforcement result- ed in the circuit court order not being issued until Janu- ary 5, 1982. Even assuming that the Board was responsible for that delay from 1977 to 1982, which is not the case, the Su- preme Court "has held before that the Board is not re- quired to place the consequences of its own delay, even if inordinate, upon wronged employees, to the benefit of wrong doing employers." NLRB v. J. H. Rutter-Rex Mfg. Co., 396 U.S. 258, 264-265 (1969). Regarding what constitutes an "inordinate" delay, laches was rejected as a defense where 5 years had elapsed between Board Order and backpay specifications. Southeastern Envelope Co., 246 NLRB 423 (1979). The Respondent has been the beneficiary of the re- tained backpay for this period of time. There is no reason why interest on backpay in this matter should inure to its benefit rather than to the benefit of those former employees which it wronged. CONCLUSIONS OF LAW In addition to the conclusions of law of the prior deci- sion, it is concluded that the various employees named herein are entitled to backpay for wages and benefits in the amounts stated. It is further concluded that, in the event Respondent discontinues subcontracting manufac- ture of parts for Smyth, reestablishment of the manufac- turing capabilities of Smyth is not required to comply with the order of the circuit court or to satisfy the pur- poses of the Act. It is further concluded that Respondent SMYTH MFG. CO. is not excused from the payment of interest on backpay awarded. On these findings of fact and conclusions of law and on the entire record, I issue the following recommend- ed8 ORDER The Respondent, Smyth Manufacturing Co., Inc., Bloomfield, Connecticut, and Beacon Industries, East Hartford, Connecticut, shall make the employees named 8 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 693 herein whole by payment to them of the sums herein found to be due to each, together with interest thereon to be computed in the manner prescribed in Florida Steel Corp., 231 NLRB 651 (1977).9 Further, the Respondent shall cease and discontinue subcontracting or assigning to others the manufacture of parts for or on behalf of Smyth Manufacturing Co., Inc., on which it will not be required to reestablish the manu- facturing facilities of Smyth Manufacturing Co., Inc. as ordered. 9 If 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 Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board."