December 12, Inc.

DECEMBER 12, INC. December 12, Inc.; December 12,, Inc. of Nevada and Harold Alexander. Case 31-CA-12661 18 December 1986 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND STEPHENS On 11 August 1986 Administrative Law Judge Earldean V. S. Robbins issued the attached supple- mental decision. The Respondent filed 'exceptions and a supporting brief, and the General Counsel filed limited exceptions and a supporting brief. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the supplemental deci- sion and the record in light of the exceptions and briefs and has decided to affirm the judge's rul- ings,' findings, P and conclusions and to adopt the recommended Supplemental Order as modified. ORDER The National Labor Relations Board adopts the recommended Supplemental Order of the adminis- trative law judge as modified below and orders that the Respondent, December 12, Inc.; December 12, Inc. of Nevada, Los Angeles, California, its of- ficers, agents, successors, and assigns, shall jointly and severally pay Harold Alexander as specified in the Order as modified. Insert the following as the second sentence of the Order. "The Respondent will also place Harold Alexan- der on a preferential hiring list in the event the Re- spondent hires a percussionist in the future." 1 The Respondent renews its motion, denied at trial by the judge, to dismiss this case because the Respondent was denied pretrial discovery. The Board does not allow the taking of depositions to provide discovery in ordinary circumstances . See Flite Ceief, Inc., 258 NLRB 1124 (1981), affd. 696 F.2d 1003 (9th Cir. 1982). The Respondent has failed to estab- lish that it has been prejudiced by any denial of discovery in this pro- ceeding. In this connection, we note that the Respondent's counsel intro- duced into evidence a written stipulation of the testimony of union offi- cer Dick Gabriel who was unavailable for the hearing . Further, concern- ing records that discriminatee Harold Alexander kept regarding his inter- im income and search for employment, the General Counsel turned over these documents to the Respondent's counsel during the hearing , and the hearing was recessed briefly to permit him to review the records. Al- though he reiterated that pretrial discovery should have been permitted, counsel did not request more time to review the documents and did not request a continuance, but rather chose to proceed with the hearing. 8 The Respondent has excepted to some of the judge 's credibility find- ings. The Board's established policy is not to- overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect . Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings. 475 Bernard T. Hopkins, Esq., for the General Counsel. Ivan M. Hoffman, Esq., of- Los Angeles, California, for the Respondent. SUPPLEMENTAL DECISION EARLDEAN V. S. RoBBINS, Administrative Law Judge. On 30 November 1984, the National Labor Relations Board (the Board) entered its Decision and Order in this matter? in which it directed December 12, Inc. (the ,Re- spondent) to offer to Harold E. Alexander immediate and full reinstatement to his former job or, if that job no longer exists, to a substantially equivalent job, without prejudice to his seniority and other rights and privileges; and make him-whole for any loss of earnings and other benefits suffered as a result of his unlawful discharge on 30 September 1982, with interest on lost earnings. On 30 August 1985, the United States Court of Ap- peals for the Ninth Circuit (the Court) entered its judg- ment (the judgment) enforcing the Board's Order. Re- spondent, having failed and refused to make whole Alex- ander, and having failed and-refused to reinstate him; and a controversy having arisen over the reinstatement of Al- exander and the amount of backpay due under the terms of the judgment and the Order, the Regional Director for Region 31 of the Board issued a backpay specifica- tion and notice of hearing alleging the backpay due under the Board's Order, as enforced by the court's judgment, for the period of time from 1 October 1982 through 14 September 1985 (reserving for further deter- mination Respondent's backpay obligation to the discri- minatee for all periods after ' 14 September 1985), to which Respondent filed a timely answer that was there- after amended. The matter was heard before me in Los Angeles, California, on 8 April 1986. Posttrial briefs were filed by the General Counsel and the Respondent. The principal issues raised by the pleadings are: 1. Whether Alexander's job has been lawfully eliminat- ed so as to relieve- Respondent of its obligation to rein- state him. 2. Whether Alexander incurred a willful loss of interim earnings. 3. Whether Respondent is obligated to make Alexan- der whole for medical insurance payments made, on his behalf, by his mother. 4. Whether Respondent is liable for compensation due Alexander for television and/or videotape performances by Respondent's band and for reuses of any videotape performances (residuals) and for AFM-EPW Trust Fund (pension) contributions. 5. Whether Respondent granted members of the band a general wage increase effective 24 February 1984. On the entire record,2 including my observation of the demeanor of the witnesses, and after due consideration of the briefs filed by the parties, I make the following 273 NLRB 1 (1984). 2 On 10 July 1986, I reopened the record herein for the limited pur- pose of receiving a stipulation of the parties as to the exact dates of ter- mination of all band members, singers , and other road personnel terminat- ed subsequent to Alexander's discharge. That stipulation and the support- ing payroll records attached thereto are received into evidence as it. Exhs. 1(a) through (e), and the record is reclosed. 282 NLRB No. 77 476 DECISIONS OF NATIONAL LABOR RELATIONS BOARD FINDINGS OF FACT 1. THE REINSTATEMENT ISSUE Respondent contends that Alexander's job no longer exists and that no substantially equivalent position exists. It is undisputed that Alexander worked for Respondent as a percussionist and that there has been no percussion- ist in Respondent's band since his discharge . The only time a percussionist has been used has been during en- gagements when the house orchestra had a percussionist. Respondent's principal, Dionne Warwick, Respondent's bookkeeper, Marie Byars, and Jerome Sklar, a certified public accountant used by Respondent, testified and doc- umentary evidence establishes that both before and during the alleged backpay period, Respondent has expe- rienced significant financial problems resulting from tax liabilities owed to the Internal Revenue Service and the California Franchise Tax Board, which required the in- stitution of certain economies in order to pay 'the tax li- ability. To this end, according to Respondent's witnesses, certain personnel were terminated. In the underlying unfair labor `practice proceeding herein, the judge rejected Respondent's argument that Alexander's discharge was motivated by these economic difficulties and found that his discharge was unlawfully motivated, based on remarks made by Warwick that "the Union stuff ... had to go," and that Alexander could find himself on a plane home if he did not "drop" his in- sistence that musicians in Respondent's employ be paid union scale; and other indications of Warwick's resent- ment of Alexander's activities in this regard. Neverthe- less, Respondent still argues that Warwick made the de- cision not to replace Alexander on 1 October 1982 for valid creative and economic reasons; and therefore, be- cause the job of percussionist is no longer in existence, Respondent is not obligated to reinstate Alexander nor liable for any backpay: f find this argument totally without merit. The, court enforced the Board's Order adopting the judge's finding that Alexander was discharged on 30 September 1982 be- cause of his union activities and not for the economic and creative reasons asserted by Respondent. In the ab- sence of persuasive evidence that something occurred during the ensuing 24 hours to legitimize these alleged creative'and economic decisions; I find that Respondent has failed to establish that the position of percussionist was eliminated on 1 October 1982 for lawful reasons. However, this does not necessarily preclude a finding that, at some later time, the position was lawfully elimi- nated. Essentially, Warwick testified that her basic band has always been a rhythm section-piano, keyboard, guitar, bass, and drums. Her guitarist has accompanied her from the very ` beginning, 25 years ago. Approximately '19 years ago, her accompaniment was expanded to a four- piece rhythm section-piano , bass, drums, and guitar. In the midseventies she added a keyboard instrument and background `singers. This complement did not change until 1980,, when she hired Alexander. According to Warwick, Alexander was hired because she decided her new show would include an extensive medley of Earth, Wind, and Fire3 music and from other sources that had a primitive, percussive sound. A percussionist was neces- sary to recreate that sound. Although Respondent is correct that creative deci- sions-those based on artistic taste-in the music indus- try are entitled to be accorded the same legitimacy as the more mundane decisions made in other industries, it is clear that such decisions are highly subjective. Thus, once an unlawful motivation for a discharge has been found, it may be difficult to establish that a decision to eliminate a job for allegedly creative, artistic reasons is free from the taint of the original unlawful motivation. Because any uncertainty that arises from the essential subjective nature of the decision is a direct result of Re- spondent's unlawful action, it is proper to resolve the question in favor of the discriminatee and not the wrong- doer. Here, however, there is some evidence that tends to support Respondent's contention that Alexander's job would have been eliminated for economic reasons even in the absence of Respondent's unlawful conduct. Thus, in addition to certain other reductions in personnel costs, by 14 November 1983, Respondent had discharged its 'road manager and all three of the background singers, thereby reducing Warwick's musical accompaniment to a basic rhythm section.4 There is no evidence, or conten- tion, that these discharges were made for any reason other than the economic one asserted by Respondent. Considering that Respondent had employed background singers for several years before a percussionist was hired, I do not find it unreasonable to conclude that, at least by 14 November 1983, the percussionist position would have been eliminated. Any uncertainty as to exactly when, prior to 14 November 1983, the position would have been eliminated is resolved against Respondent. Ac- cordingly, I find that if Respondent had not discharged Alexander for unlawful reasons on 30 September 1982, it subsequently would have laid him off for lawful reasons on 14 November 1983, at the time Respondent's band was reduced to a basic rhythm section. I, therefore, find that backpay is tolled as of that date and that Alexander is not entitled to immediate reinstatement. However, I shall recommend that he be placed on a preferential hiring list in the event Respondent hires a percussionist in the future. II. THE MITIGATION OF DAMAGES ISSUE It is well established that an employer may mitigate his backpay liability by establishing that a discriminatee "willfully incurred" loss by a "clearly unjustifiable refus- al to -take desirable new employment." Phelps Dodge Corp. P. NLRB, 313 U.S. 177, 199-200 (1941). However, this is an affirmative defense and the employer has the burden of proving facts that would mitigate its liability. NLRB v. Mooney Aircraft, Inc., 366 F.2d 809, 813 (5th Cir. 1966); NLRB Y. Miami Coca-Cola Bottling Co., 360 F.2d 569, 575 (5th Cir. 1966); NLRB v. Brown & Root, a A vocal group whose sound is basically primitive and percussive. 4 One background singer was terminated on 17 June and the other two background singers and the road manager were terminated on 14 Novem- ber 1983. DECEMBER 12, INC. Inc., 311 F.2d 447 (8th Cir. 1963). That- burden is not niet by evidence of lack of employee's success in obtaining interim employment or of low interim earnings . Rather, the respondent must affirmatively establish that the em- ployee neglected to make reasonable efforts to find inter- im work. NLRB v. Miami Coca-Cola Bottling Co., supra at 575-576. Further, a discriminatee is held "only to rea- sonable exertions in this regard, not the highest standard of diligence." NLRB v. Arduini Mfg. Co., 394 F.2d 420, 422-423 (1st Cir. 1968). Also, a discriminatee's obligation to mitigate damages does not require success in a search for interim employment, it only requires an honest, good- faith effort. NLRB v. Cashman Auto Co., 223 F.2d 832, 836 (1st Cir. 1955). The employee's skills and qualifica- tions, age, and the labor conditions in the area ,are,factors to be considered in determining the reasonableness of this effort. Mastro Plastics Corp., 136 NLRB 1342, 1359 (1962). Respondent offers several reasons in support of its contention that Alexander did not diligently seek interim employment: (1) He did not utilize the Union's referral service nor the Musicians' {Contact Service , a private or- ganization that obtains work for musicians in Los Ange- les; (2) the compliance forms completed by Alexander show he failed to actively make- daily, contact with pro- spective sources of employment; (3) his failure to seek work through employment agencies; (4) his inability to explain "satisfactorily" the source of various deposits to his bank account; and (5) the totality of these reasons in- dicate that Alexander "planned and schemed to keep himself idle while ' making the appearance, the pretense, of looking for work, so that he could make [Respondent] pay for his leisure." Essentially, Respondent argues that Alexander failed to exert a minimum, good-faith, diligent effort to even look for work. However, the evidence adduced on the record is insuf- ficient to meet Respondent's burden of proof in this regard. Thus, although Barry Squires, the union repre- sentative who handles the Union's referral service, testi- fied that the service does exist, there is no evidence to establish, as contended by Respondent, that it is the prin- cipal, or a principal, source of employment in the indus- try or that its existence was widely known in the indus- try. I credit Alexander's testimony that he had no knowl- edge of the service, and his uncontradicted testimony that his principal source for obtaining employment in the past had always been to contact people in the industry, to make it known that he is available for work, and to keep himself in the minds of other performers. He also testified that he went to the state unemployment agencies many times seeking work and that he did consult want ads. Further, although Squires testified that there have been jobs for percussionists in the last 5-1/2 years, no testimony was adduced either as to the number of jobs available nor the length of these jobs. There was also no evidence adduced to refute Alexander's testimony that work is generally procured in the industry through con- tacts. Respondent produced no evidence to show there were jobs available that would have been offered to Al- exander or that he rejected any job offers . Rather, Re- 477 spotldent relied on its cross-examination of Alexander and the nonspecific testimony of Squires. This is insufficient to meet Respondent's burden of proof that Alexander did not diligently seek work during the backpay period. An employee who has been discri- minatorily discharged need not instantly seek new em- ployment. Saginaw Aggregates, 198 NLRB 598 (1972). Nor will a backpay claimant be found to have incurred a willful loss in earnings merely because the search for in- terim employment was not made in each and every quar- ter of the backpay period. Rather, as the Board stated in Cornwell Co., 171 NLRB 342, 343 (1968), "The entire backpay period must be scrutinized to determine whether throughout that period there was, in.,the light of all sur- rounding circumstances, a reasonably continuing search such as to foreclose a fording of willful loss." ,See also, Firestone Synthetic Fibers Co., 207 NLRB 810, 812 (1973); Southern Household Products Co., 203 NLRB 881 (1973). Employees are not' automatically disqualified from back- pay because of their, poor recordkeeping, uncertainty as to memory, or even exaggeration. ' Patrick Izzi Trucking Co., 162 NLRB 242, 245 (1966). Further a good-faith search for employment does not necessitate that the em- ployee spend all of every day searching for employment. Laidlaw Corp., 207 NLRB 591, 603 (1973), enfd. 507 F.2d 1381(7th Cir. 1974), cert. denied 422 U.S. 1042 (1972). American Medical Insurance Co., 235 NLRB 1417, 1419- 1422 (1978). Similarly, Respondent's cross-examination of Alexan- der as to the source of his bank deposits is insufficient to establish, as claimed by Respondent, that Alexander had unreported interim earnings. Alexander testified that he withdrew approximately $38,000 from a'n investment ac- count, borrowed money from various lines of credit, and from his mother. -Respondent's contention is based on mere speculation, and there is no evidence in the record to establish Alexander had unreported interim' earnings. Based on the foregoing, I ford that Respondent has failed to establish that Alexander did not make a diligent search for employment during the backpay period or that he had unreported interim earnings. Alexander testi- fied that certain expenses claimed by him related to tele- phone conversations with respect to this proceeding. The General Counsel concedes, and I ford, that these ex- penses are not properly claimable.5 III. MEDICAL INSURANCE PREMIUMS The parties stipulated that the medical insurance pay- ments shown on Appendix C of the backpay specifica- tion were made on behalf of the discriminatee by his mother, but Respondent reserved - the right to argue whether Respondent had any liability in this regard absent evidence that the discriminates had reimbursed his mother or is obligated to do so. However, Respondent did not pursue this argument in its brief. Even assuming that the insurance premium payments were a gift from Alexander's mother, 'they constituted a collateral benefit 5 It appears that, prior to 1984, ' these were local calls for which no amounts were claimed. Therefore, disallowance of such telephone ex- penses does not affect the amount of expenses incurred during the back- pay period. 478 DECISIONS OF NATIONAL LABOR RELATIONS BOARD that is not deductible as an offset against Alexander's claim for loss benefits. Medlin Industries, 261 NLRB 1329, 1337 (1982). IV. SUPPLEMENTAL INCOME, AFM-EPW TRUST FUND (PENSION) CONTRIBUTIONS, AND THE ALLEGED WAGE INCREASE Respondents deny that they are liable for payments for any television and/or videotape performances or reuses or residuals thereof or for any AFM-EPW trust fund contributions in that Respondent has not signed any agreement with the American Federation of Musicians that require it to pay such sums. The backpay specifica- tion alleges, and the judge found in the underlying -unfair labor practice case, that the musicians enter into standard AF of M "personal 'service" contracts with the radio and television producers, rather than Respondent, with re- spect to their wages and fringe benefits . Indeed, the judge found it was Alexander's insistence that the musi- cians be paid wages and ' fringe benefits in accordance with AF of M scale that was a motivating factor in his discharge. Because the television and/or videotape per- formances and the reuse and residual payments related thereto were an incident of Alexander's employ, and the trust fund contributions were a benefit related to'his em- ployment, Respondent is obligated to pay such amounts. It is immaterial that Respondent is not party to a con- tract with AF of M. NLRB v .'Carpenters Local 1913, 531 F.2d 424 (9th Cir. 1976). I do not reach the issue of the alleged 1984 wage in- crease because I have found above that the backpay period ended on 14 November 1983. Conclusions Based on the foregoing and the entire record, it is found: a. Alexander's backpay period commenced 30 Septem- ber 1982 and ended 14 November 1983, the date that the road manager and the last of Respondent's background singers were laid off. b. During his backpay period, Alexander had interim earnings as set forth in the backpay specification. c. Alexander is entitled to backpay in the amounts set forth below for that portion of the backpay period up to, and including, the third quarter of 1983, plus an amount, to be determined, for the fourth quarter of 1983.6 6 Because the record does not contain information sufficient to deter- mine what portion of the gross backpay expenses and interim earnings in the fourth quarter of 1983 was incurred prior to and including 14 No- vember 1983, the amount of backpay due Alexander for that quarter is left for determination by the Regional Director. Backpay is computed as alleged in the backpay specification with modifications for the fourth quarter of 1983, to be determined by the Regional Director to reflect my finding that the backpay period ended on 14 November 1983. Backpay computations through the third quarter of 1983 are set forth in the appen- dices. DECEMBER 12, INC. Yr./Qtr Qtr. Net Qtr. Pension Medical Insurance Backpay Payment Premium 1982/4 .................. $7,409.01 $205.98 $217.87 1983/1 .................. 8,257.30 116.60 341.58 1983/2 .................. 10,462.99 77.73 ' 290.34 1983/3 .................. 5,495.65 61.53 290.34 On the foregoing findings of fact, and the entire record, and pursuant to Section 10(c) of the Act, I issue the following recommended' T 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 479 ORDER The Respondent, December 12, Inc.; December 12, Inc. of Nevada," Los Angeles, California, their officers, agents, successors, and assigns, shall jointly and severally make Harold Alexander whole by payment to him of the amounts set forth above and in the Appendices, and the amount, to be determined by the Regional Director, for the fourth quarter of 1983, plus interest accrued to the date of payment pursuant to Florida Steel Corp., 231 NLRB 651 (1977). Board and all objections to them shall be deemed waived for all pur- poses. S In the answer to the backpay specification , as amended at the supple- mental hearing herein, Respondent and December 12, Inc . of Nevada admit that they constitute a single-integrated business enterprise and are a single employer within the meaning of the Act. 480 DECISIONS OF NATIONAL LABOR RELATIONS BOARD APPENDIX A 1 2 3 4 5 6 7 8 9 Calendar Days or Weeks Calendar Quarter Calendar Quarter Calendar Calendar Quarter Calendar Quarter Total Net Quarter Per Calendar Quarter Rate of Pay Gross Interim Quarter Expenses Net I n Net Backpay Backpay Earnings Earnin gs Backpay 11 Days ............... $200.00/Day 4th Qtr ................ 3 Weeks .............. 900.00/Week (1) 5 Days(TV).. 416.43/Day $7,474.78 $249.20 $183.43 $65.77 $7,409.01 1982 ..................... (2) 1 312.32/Reuse Reuse(TV). (3) 1 Day(TV).... 180.31/Day 19 Days ............... 200.00/Day 1st Qtr ................. 1 Day .................. 300.00/Day 3 Weeks .............. 900.00/Week...... 8,257.30 0 0 0 8,257.30 0 1983 ..................... (4) 2 312.32/Reuse Reuse(TV). (5) 2 Days(TV).. 416.43/Day 2d Qtr ................. 50 Days............... 200.00/Day (6) 1 Day(TV) 10,971.68 ............. 707.50 198.81 508.69 10,462.99 and 555.25/Day 1983 ..................... (7) 1 Day(TV).... 416.43/Day 3d Qtr ................. 16 Days............... 200.00/Day 2 Weeks .............. 900.00/Week 5,683.68 326.00 137.97 188.03 5,495.65 1983 ..................... (8) 1 Day(TV).... 683.68/Day 4th Qtr. 1 1 1 1 1 1 1 1983 ......................... ......................... 1 To be determined by the Regional Director. DECEMBER 12, INC. APPENDIX B 481 1 2 3 4 5 6 7 Television and Videotape Days Rate of Gross Earnings Pension Calendar Quarter Total Net Calendar Quarter and Reuses Per Calendar Pa Pay for TV, Rate Pension Pension Quarter Videotape, (Percent) Payment Payment and Reuses 4th Qtr ........................................... 5 Days......, ..................................... $416.43 1 Day ............................................. 180.31 $2,574.78 8 $205.98 11982 ................................................ 1 Reuse ......................................... 312.32 ]1st Qtr............................................ 2 Days................................ ............ 416.43 1,457.50 8 116.60 11983 ................................................ 2Reuse .......................................... 312.32 2d Qtr........ ..................................... 1-Day............................................. 555.25 1 Day ............................................. 416.43 917.68 8 77.73 1983 3d Qtr. 1 Day ............................................. 683.68 683.68 9 61.53 983 ................................................... 4th Qtr. 1 .... 1,186.88 1 9 1 1 To be determined by the Regional Director. APPENDIX C.-MEDICAL INSURANCE PREMIUMS APPENDIX C.-MEDICAL INSURANCE PREMIUMS- Continued 1 Calendar Qtr. 1982: 3d Qtr ................................ ..... 1983: 1st, Qtr .............................. ..... 2d Qtr. .......................................... 2 Calendar Qtr. Payment $217.87 341.58 290.34 3 Total Payment 1 1 Calendar Qtr. 3d Qtr.... ...................................... 4th Qtr......................................... 2 Calendar Qtr. Payment 290.34 1 1 To be determined by the Regional Director. 3 Total Payment