Leeward Auto Wreckers, Inc.

574 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Leeward Auto Wreckers, Inc. and United Steelwork- ers.of America, AFL-CIO, CLC. Case 37-CA- 1969(E) 7 April 1987 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND BABSON On 9 April 1985 Administrative Law Judge Jay R. Pollack issued the attached supplemental deci- sion. The General Counsel filed exceptions and a supporting brief, and the Applicant filed cross-ex- ceptions, a supporting brief, and a brief in answer to the General Counsel's exceptions." 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 rulings, findings,2 and conclusions only to the extent con- sistent with this Supplemental Decision and Order. In his initial decision in this case, the judge rec- ommended the dismissal of the complaint allega- tions which alleged that the Respondent-Applicant had violated Section 8(a)(5) and (1) of the Act by failing to notify the Union of its decision to lay off all unit employees in May 1982, and by thereafter assigning nonunit employees to perform the bar- gaining unit work and subcontracting out such work without giving notice to, or bargaining with, the Union.3 On the question of the lack of layoff notification, the judge found that the Respondent- Applicant had provided the Union with proper notice as required under the contract. The judge also found that the Respondent-Applicant's unilat- eral decision to subcontract out the bargaining unit i The Applicant also filed a "Seventh Motion to Amend EAJA Appli- cation for Fees and Expenses," and a motion, with accompanying memo- randum, to augment the record to include an exhibit attached to its answer to the General Counsel's exceptions, and to correct its answering brief. In view of our decision, we find it unnecessary to rule on the Ap- phcant's motions. 2 The General Counsel asserts, in essence, that the judge's findings of fact and conclusions of law, particularly in regard to the Applicant's net worth statement, are the result of bias . After a careful examination of the entire record, we are satisfied that the General Counsel's assertion is without merit. In view of the finding herein that the General Counsel was substantial- ly justified in issuing the complaint and continuing to litigate the underly- ing unfair labor practice proceeding through the filing of a posttrial brief to the judge, we find it unnecessary to pass on the General Counsel's contention that the Applicant failed to comply with the Board's Rules and Regulations in its application for fees and expenses. a The judge, however, found merit to the complaint allegation that the Respondent-Applicant violated Sec. 8(aXS) and (1) of the Act when it bargained directly with an employee, rather than with his Union, over the employee's terms and conditions of employment, and issued an order directing it to cease and desist from engaging in such conduct. work and to assign such work to nonunit employ- ees was not unlawful under the Board's holding in Westinghouse Electric Corp., 150 NLRB 1576 (1965).4 No exceptions were filed to the judge's de- cision and it was_ subsequently adopted by the Board in an unpublished order dated 13 December 1983. The Applicant then filed the instant application for an award of attorney's fees and expenses under the Equal Access to Justice Act (EAJA) and, fol- lowing an evidentiary hearing, the judge issued the attached supplemental decision. In that decision, the judge found, and we agree, that the General Counsel was substantially justified in issuing the complaint and proceeding to hearing in this case.5 The record in this regard reveals that following the filing of the charge by the Union, the General Counsel obtained information from union officials and employees, in the form of affidavits and writ- ten statements, which supported its assertion that the Applicant unilaterally laid off all bargaining unit employees, subcontracted out the bargaining unit work, assigned unit work to nonunit employ- ees, and negotiated directly with an employee, in- stead of with the Union, concerning his terms and conditions of employment, in an attempt to under- mine the Union's representative status and to estab- lish a nonunion shop. Following receipt of the Union's evidence, the General Counsel sought to obtain a statement of position from the Applicant concerning the above allegations and, with this in mind, met with its president and owner, Sakae Fujimoto, and its labor consultant, Michael McGuire. Although it was af- forded a full and fair opportunity to fully state its position and to provide the General Counsel with any and all evidence it had in support thereof or which might otherwise have a bearing on the issues raised by the charge, the Applicant provided the General Counsel only with an affidavit from Fuji- moto responding solely to the "direct dealing" alle- gation, and did not provide a written statement of its position concerning the other allegations despite promising to do so. Instead, the Applicant, through 4 The Board in the Westinghouse case held that an employer's failure to notify and bargain with a union over such a decision will not violate the Act if the employer can show that its decision (1) was motivated solely by economic considerations, (2) comported with its customary business operations, (3) did not vary significantly in kind or degree from an estab- lished past practice, (4) had no demonstrable adverse impact on unit em- ployees, and (5) the union had an opportunity to bargain over the deci- sion in prior bargaining sessions. The judge found that the Applicant's decision in this case satisfied all the above criteria 5 We believe that Congress, in reviewing the Equal Access to Justice Act, 5 U.S C. § 504 ( 1982), as amended by Pub L No 99-80, 99 Stat. 183 (Aug. 5, 1985), did not alter, but merely clarified the definition of "substantially justified." "Substantially justified" means more than "mere reasonableness." H.R. Regs. 99-120, p. 9. 283 NLRB No. 85 LEEWARD AUTO WRECKERS McGuire, orally expressed its belief that its unilat- eral decision to subcontract out the 'unit work and to assign nonunit employees to perform that work was not unlawful because its contract with the Union did not prohibit it from doing so and be- cause, in its view, the Union waived its right to object to its actions by failing to obtain, during recent contract negotiations, a restriction on that conduct in the contract. However, at no time during the precomplaint investigation did the Ap- plicant assert, or present evidence to show, that the Union was properly notified of the layoff before it went into effect, and that its unilateral decision to subcontract out the bargaining unit work and to have unit work performed by nonunit employees during the layoff was motivated by economic con- siderations, accorded with its usual method of op- erations, and was consistent with an established past practice. As the judge correctly notes, that evidence, which the Applicant had in its possession prior to the hearing, was withheld from the Gener- al Counsel during the investigation and not pro- duced until the Applicant presented its rebuttal ' evi- dence on the fourth day of hearing. In view of the Applicant's apparent failure to cooperate fully with the General Counsel's investigation of the case, the General Counsel had no alternative but to rely on the limited information obtained during that inves- tigation in determining whether or not to issue a complaint. On the basis of that information, it 'was not unreasonable for the General Counsel to infer that the Applicant's -conduct, as described in the charge, was unlawful. For this reason and as previ- ously stated, we conclude, in agreement with the judge,' that the General - Counsel was substantially justified in issuing the complaint and in proceeding to a hearing in this case. However, we do not agree with the judge that the General Counsel was required to stop prosecut- ing the case after the Applicant, produced evidence on the fourth day which demonstrated that it had a past practice of subcontracting and of assigning nonunit employees to perform unit work during layoffs, that the Union had acquiesced in` that prac- tice, and that its actions in this regard were moti- vated solely by economic considerations. Although the introduction of that evidence clearly had' the effect of weakening the Government's case against the Applicant, the General Counsel was, neverthe- less under no obligation to withdraw its, case at that point since the General Counsel could not have known, prior to the issuance of the judge's decision, what, if any, weight he would give to the Applicant's documentary evidence and the testimo- ny of its witnesses vis-a-vis that produced by the 575 General Counsels More importantly, the judge's finding that the Applicant had a valid , defense under the Board's Westinghouse decision was not based solely on the documentary evidence pro- duced by the Applicant on the fourth day but rather rested also on his decision to resolve certain conflicts in testimony in the Applicant's favor.? For example, in concluding that the Applicant's as- signment of unit work to nonunit employees, after laying off all unit employees, was consistent with an established past practice, the judge found it nec- essary to reject Fujimoto's testimony that such as- signments of work occurred only when unit em- ployees were unavailable to perform such work due to absenteeism. In rejecting Fujimoto's testimo- ny in this regard, the judge was also implicitly re- jecting the testimony of Union Representative Sid Lampley and employee Kevin Kekahuna that was corroborative of Fujimoto's testimony on this issue. Clearly, had such testimony been credited,, it would have been supportive of the General Counsel's po- sitionn on this crucial question. Likewise, the judge's finding, that the Union had been afforded an op- portunity to bargain over the Applicant's decision to subcontract out bargaining unit work and to assign such work to nonunit employees, was based in part on his crediting Fujimoto's and McGuire's testimony over Lampley's testimony on this issue. The- judge's comment, that no reasonable attorney could have expected to prevail on this issue on the basis of Lampley's testimony, has no relevance 'here since it is the trier of fact, and not the General Counsel, which must determine whether a particu- lar witness' testimony is worthy of belief or should be discounted. In view of the above facts, we conclude that the General Counsel was substantially justified in con- tinuing to litigate the case to the close of hearing and in filing a posttrial brief with the judge. Ac- cordingly, we shall dismiss the Applicant's applica- tion for an EAJA award. ORDER It is ordered that the application of the Appli- cant, Leeward' Auto Wreckers, Inc., Honolulu, Hawaii, for an award under the Equal Access to Justice Act is dismissed. 6 In this regard we note that following the close of the General Coun- sel's case-in-chief, the Applicant moved for dismissal of the complaint. The judge, however, denied the motion and, in doing so, expressed his reservation only concerning the merits of the "direct dealing" allegation which, as noted, he found to be meritorious. ' The Board has denied EAJA awards in cases when credibility resolu- tions were necessary for a determination of the issues raised by a com- plaint. Barrett's Interiors, 272 NLRB 527 (1984); WE Cement, Inc., 267 NLRB 763 (1983). 576 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Alan D. Longman, Esq. and Marcie B. Axelrad, Esq., for the General Counsel. Jared H. Jossem, Esq. and Perry W. Confalone, Esq. (Tor- kildson, Katz Jossem, Fonseca & Moore), of Honolulu, Hawaii, for the Applicant. SUPPLEMENTAL DECISION (Equal Access to Justice Act) JAY R. POLLACK, Administrative Law Judge. I heard this case under the Equal Access to Justice Act, Pub. L. 96-481, 94 Stat. 2325 (EAJA) and Section 102.43 of the Board's Rules and Regulations in trial at - Honolulu, Hawaii, on November 27- and 28, 1984. The case arose as follows: On November 10, 1983, I issued a decision in which I concluded that Leeward Auto Wreckers, Inc. (the Re- spondent and the Applicant) had violated Section 8(a)(5) and (1) of the National Labor Relations Act (the Act), by bargaining directly with an employee concerning wages, benefits,' and other conditions of employment, and bypassing United Steelworkers of America, AFL-CIO, CLC (the Union) as the exclusive bargaining representa- tive. More importantly, I dismissed the central allega- tions of the complaint that the Applicant had: (a) unilat- erally laid off bargaining unit employees without prior notice to or bargaining with the Union; (b) unilaterally transferred work to supervisors and other nonbargaining unit employees without prior notice to or bargaining with the Union; and (c) unilaterally subcontracted out bargaining unit work without prior notice to or bargain- ing with the Union. No exceptions were filed to my deci- sion and, on December 13, 1983, the Board issued an un- published order adopting my findings and conclusions. Thereafter, on January 12, 1984, the Applicant filed with the Board an Application for fees and expenses pur- suant to the Equal Access to Justice Act, Pub. L. 96- 481, 94 Stat. 2325, and Section 102.43 of the Board's Rules and Regulations, and a motion to withhold confi- dential financial information from public disclosure. On January 15 the Board referred this matter to me for ap- propriate action. The Applicant seeks-legal fees and ex- penses in the amount of $47,040.28, as of March 27, 1985. The General Counsel contends, in substance, that the Applicant is not an eligible party under EAJA; that the Applicant is not a prevailing party; that the position of the General Counsel was substantially justified; that spe- cial circumstances make the granting of an award unjust; and that the fees and expenses claimed are in excess of what could reasonably be awarded in this case. On consideration of the entire record in this supple- mental proceeding, including the record in the underly- ing unfair labor practice case, and the briefs of the par- ties, I make the following findings and conclusions. 1. THE APPLICANT'S ELIGIBILITY Section 504 of EAJA limits eligibility to, inter alia, a corporation, partnership, association, or organization whose net worth did not exceed $5 million and who had no more than 500 employees at the time the adversary adjudication was initiated." Section 102.43(g) of the Board's Rules and Regulations provides: (g) The net worth and number of employees of the applicant and all of its affiliates shall be aggre- gated to determine eligibility. Any individual, cor- poration, or other entity that directly or indirectly controls or owns a majority of the voting shares or other interest of the applicant, or any corporation or other entity of which the applicant directly or in- directly owns or controls a majority of the voting shares or other interest, will be considered an affili- ate for purposes of this part, unless such treatment would be unjust and contrary to the purposes of the Equal Access to Justice' Act (94 Stat. 2325) in light of the actual relationship between the affiliated enti- ties. In addition, financial relationships of the appli- cant other than those described in this paragraph may constitute special circumstances that would make an award unjust. The Applicant's records indicate that at the time of the issuance of the instant complaint, January 31, 1983, it employed less than 15 employees and had a net worth of less than $ 1 million.2 The record reveals that during the normal course of its business the Applicant delivered, without charge, certain auto parts to Ace Towing Serv- ice, a business owned and operated by Hisako Fujimoto, wife of Sakae Fujimoto, the Applicant's president and sole stockholder. However, neither the Applicant nor Sakae Fujimoto owns voting shares or any other interest in Ace Towing Service, and neither Ace Towing Service nor H. Fujimoto owns voting shares or any other inter- est in the Applicant.3 The amount of moneys involved with the auto parts given by the Applicant to Ace Towing Service would not affect the Applicant's eligibil- ity under EAJA. In any event, the combined net worth of the Fujimotos, and all their businesses, Ace Towing Service, Leeward Auto Wreckers, and Fujimoto Truck- ing, falls far below the EAJA eligibility standards. Ac- cordingly, I find that the Applicant is an eligible party under EAJA. The Applicant contends that it is "engaged in a highly competitive business in which it must bid for contracts from the County of Honolulu but that public disclosure of [its] confidential financial position could undermine [its] capacity to compete for work." The General Coun- sel asserts that the Applicant "has failed to show that public disclosure is not required in the public interest." Based on the evidence of the Applicant's financial posi- tion already in the underlying, unfair labor practice case, the competitive nature of the Applicant's business, and the fact that the Applicant falls so deeply below the' eli- " See Sec. 102 43(c)(5) of the Board's Rules and Regulations. 2 The Applicant's net worth was arrived at by using the cost of acqui- sition rather than the depreciated value of assets listed in the net„worth exhibit See W. C. McQuaide, Inc., 270 NLRB 1197 (1984); Stucco Stone Products, 270 NLRB 1195 (1984) a Although an evidentiary hearing was conducted pursuant to a re- quest by the General Counsel, the General Counsel did not seek to liti- gate its allegations that Ace Towing Service was an affiliate of the Apph- cant or to litigate any other aspect of the Applicant's EAJA eligibility. LEEWARD AUTO WRECKERS gibility requirements, I find that further disclosure is not required in the public interest. I, therefore, grant the Ap- plicant's motion to withhold from public disclosure the net worth exhibit filed with the application. However, I note that the granting of this motion is not determinative of the availability of the documents under the Freedom of Information Act. See Section 102.147(g)(2) of the Board's Rules. II. PREVAILING PARTY Under Section 102.143(b) of the Board' s Rules, a pre- vailing party is a respondent in an unfair labor practice case "who prevails in that proceeding, or in a significant and discrete substantive portion of that proceeding, and who otherwise meets the eligibility requirements" for an award under EAJA. The complaint, as amended, alleged in substance that the Applicant violated Section 8(a)(5) of the Act and, de- rivatively, Section 8(a)(1) by engaging in the following conduct: (1) about May 1, 1982, laying off bargaining unit employees without prior notice to or bargaining with the Union; (2) about July 1, 1982, transferring bar- gaining unit work to supervisors and nonbargaining 'unit employees, without prior notice to or bargaining with the Union; (3) about June `1, 1982, subcontracting out bargaining unit work without prior notice to or bargain- ing with the Union; and (4) about October 4, 1982, di- rectly dealing with an employee concerning rates of pay and other conditions of employment and, in that manner, bypassing the Union as the exclusive bargaining repre- sentative. As stated earlier, I dismissed the first three allegations and found a violation with respect to the fourth. The first three allegations, if found meritorious, would have required a remedy of reinstatement and backpay for at least some bargaining unit employees. During the unfair labor practice hearing, the parties engaged in good-faith negotiations in an attempt to settle the case. However, negotiations broke down over cost items. The General Counsel succeeded in proving only one separate and dis- tinct allegation. That allegation, direct dealing, did not involve an economic remedy but solely the posting of a notice. It was clearly not the central issue in the case and ranked last in significance of the issues presented. The central issues in the case involved the alleged uni- lateral use of subcontractors and supervisors to perform bargaining unit work. The Applicant prevailed on these issues as well as the issue of the alleged unilateral layoff. Comparing the allegations of the complaint with the result obtained by the Applicant, I find the General Counsel's argument that the Applicant was not a prevail- ing party to be without merit. The. General Counsel's contention that because I found a violation of Section 8(a)(5) the Applicant did not pre- vail in a significant and 'discrete substantive portion of the proceeding is at odds with the express language of the Board's Rules. The Board's Rules are designed to prevent the Government from including in a valid com- plaint additional allegations that' are not substantially jus- tified. The position urged by the General Counsel would permit the Government to throw into a complaint any and all allegations involving the same section of the Act 577 without justification and still escape the provisions of EAJA. The Board's Rules are designed, in accordance with EAJA, to require substantial justification for each significant and discrete substantive portion of the com- plaint. Of course, there are times when allegations are so entwined that they cannot be subjected to separate analy- sis under EAJA. However, that clearly is not the case here. The General Counsel relies on the unreported case of Okeh Caterers, JD-(SF)-34-83, to support his argument that the Applicant was not a prevailing party. First,' the case has no precedential value because no exceptions were filed and thus the Board adopted pro forma the judge's decision. Second, the facts are so clearly distin- guishable that the case is of no value in the instant pro- ceeding. In Okeh Caterers, Administrative Law Judge Jerrold Shapiro, in dismissing an EAJA claim involving an allegation that an employer illegally solicited em- plyees' grievances, noted that the solicitation allegation was "part and parcel" of a further meritorious allegation that the employer had illegally interrogated employees. Thus, Judge Shapiro reasoned, "it was necessary for Re- spondent to . . . defend against this allegation of illegal interrogation" and he found that "it would be inequitable to award Respondent expenses for litigating the solicita- tion of grievances allegation even if the General Counsel had no reasonable basis in law for including it in the complaint." In the instant case, the layoff, transfer of bargaining work, and subcontracting .were not part and parcel of the direct dealing allegation. If the General Counsel only alleged the meritorious direct dealing allegation, the Ap- plicant would not have had to defend the other allega- tions. Moreover, 1 ,have no doubt that the case would have settled if only the direct dealing allegation had been alleged. , To defend the direct dealing case, the Applicant would have had to cross-examine one General Counsel witness and offer testimony of one of its own witnesses. Such a trial would have lasted less than 1 day. To liti- gate the three central allegations of the complaint re- quired 6 days of trial (4 full and 2 partial days of trial). In addition to an increase in the number of witnesses, there was a necessity for documentary evidence not re- quired for ' litigation of the direct dealing violation. Fur- ther, there would have been no monetary risk to the Ap- plicant if only the' direct dealing violation had been al- leged. The direct dealing allegation might have been part and parcel of the central allegations (layoff, subcontract- ing, and supervisory performance of work) but the re- verse is not true. The central allegations were not part and parcel of the direct dealing allegation and the Gen- eral Counsel needed separate and distinct justification for their inclusion in the complaint. III. SUBSTANTIAL JUSTIFICATION EAJA provides that an administrative agency award to a prevailing party certain expenses incurred in connec- tion with an adversary adjudication , unless the agency finds the position of the Government is "substantially justified." Although EAJA, is silent on the meaning of the "substantially justified" standard, the Board has held 578 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD the test is one of reasonableness. When the Government can show that its case had a reasonable basis both in law and fact, no award will be made. Enerhaul, Inc., 263 NLRB 890 (1982), revd. 71,0 F.2d 748 (11th Cir. 1983); Shellmaker, Inc,, 267 NLRB 20 (1983). The Government is not required to establish that its decision to litigate was based on a substantial probability of prevailing. Wolf Street Supermarket, 266 NLRB 665 fn. 1 (1983); Hamel Forest Products, 270 , NLRB 1078 (1984). EAJA was not intended to stifle the -reasonable regulatory effects of Federal agencies. Wyandotte Savings Bank v. NLRB, 682 F.2d 119, 120 (6th Cir. 1982). Similarly, EAJA was not intended to deter the Government from advancing in good faith a close question of law or fact. Shellmaker, supra;, Derickson Co., 270 NLRB 516 (1984). Further, EAJA was not intended to foreclose the Government from exploring novel or close questions of law. Thus, EAJA provides that the Government should not be held liable where "special circumstances make the award unjust." The legislative, history of EAJA explains the purpose of the "safety valve" of special circumstances. This "safety valve" helps to ensure that the Gov- ernment is not . deterred from advancing in good faith the novel` but credible extensions and interpre- tations of the law that often gives the courts discre- tion to deny awards where equitable considerations dictate an award should not be made. [S. Rep. 96- 253, 96 Cong., 1st Sess. at 6; H. Rep. 96-1418, 96 Cong., 2d Sess. 11, reprinted in 1980 U.S. Code Cong. & Ad. News 4984, 4990.] The Board has utilized' a case-by-case approach in ana- lyzing EAJA cases. It has interpreted the reasonableness standards in - such a manner as to not interfere with, the General Counsel's vigorous enforcement of the labor laws. Shellmaker, supra, and Derickson Co., supra (close questions of law and fact); Iowa Parcel Service, 266 NLRB 392 (1983) (a novel but credible extension and in- terpretation of the law); Charles H. McCauley Associates, 269 NLRB 791 (1984) (a credibility question which was ultimately decided against the General Counsel); and International Maintenance Systems, 267 NLRB 1136 (1983) (failure of the applicant to cooperate in the pre- complaint investigation).- Since October 1, 1981, the Board has granted an award in only one EAJA case, Debdlt Transfer, 271 NLRB 299 (1984). In that case, the General- Counsel's position was characterized as "betting on a long shot." In the instant case, the General Counsel argues that his "decision, to- issue complaint and proceed to trial fall well within permissible standards for government action." The General Counsel argues that the Applicant's suc- cessful defense regarding its past practice of subcontract- ing and using supervisors to perform bargaining unit work "was not `developed' nor even apparent until well into trial. [The Applicant] failed to raise the defense at any, stage of the investigation, pre-trial period or in the pleadings." Thus, the, General Counsel argues that "the Regional Director was justified in issuing complaint and going to, trial based on the facts available to him prior to the hearing." The Applicant argues that the General Counsel was on notice that the issues of subcontracting and management performance of unit work were. fully negotiated during contract negotiations and that the, Union failed to exact a concession on those matters. Further, the Applicant argues that the General Counsel was on notice that a prior history of subcontracting and management per- formance of unit work existed on the ground that the bargaining that took place revealed the past practices and that such bargaining would not have occurred in the absence of such past practices. The Applicant argues that "General Counsel cannot argue- substantial justification `based on the facts available to him prior to the hearing' ... where [the Applicant] put the General Counsel on notice that the Union adamantly sought to prohibit, by contracted amendment, subcontracting and management performance of unit work, and where the General Coun- sel's own agents were aware of those matters and dis- charged the General Counsel's case." The Applicant presented evidence that prior to the is- suance of the underlying complaint, it cooperated with the Regional Director's investigation of the underlying unfair labor practice charge. According to Michael McGuire, a labor consultant who represented the Appli- cant during the times material to the complaint allega- tion, he informed the Board investigator "that there could be no refusal to bargain violation regarding trans- fer of bargaining unit work because the Union conceded those issues during our negotiations." The General Coun- sel presented evidence from the investigator, that McGuire had urged the following defenses: (1) that there was no prohibition against subcontracting in the contract executed by the parties; (2) that there was no clause in the contract that prohibited managerial employees from performing unit work; (3) that the issue of the subcon- tracting and management, personnel performing unit work was presented to the Union and that the Union waived any right to claim a violation of the Act because the contract did not prohibit such practices; and (4) that the Board should defer to the grievance and arbitration processes of the bargaining agreement under its Collyer doctrine.4 - Apparently, McGuire did not inform the investigator that,the Applicant had a past practice of subcontracting and using management personnel to perform unit work nor did McGuire present any evidence of such past prac- tices, That evidence was not offered in the record until the fourth day of trial.5 The legal principles which controlled the outcome of the instant case came from the Board's decision in Wes- tinghouse Electric, Corp., 150 NLRB 1574 (1965). In Wes- tinghouse, the Board, in holding that an employer did not violate Section 8(a)(5) and (1) by failing to notify and consult with the, union before subcontracting work, stated at 1576- 4 Collyer Insulated Mire, 192 NLRB 837 (1971). G Jared Jossem, the Applicant's trial attorney, testified that he did not see the canceled checks showing such past practices until the second day of trial. LEEWARD AUTO WRECKERS Thus, it is wrong to assume that, in the absence of an existing contractual issue, it is a per se unfair labor practice in all situations for an employer to let out unit work without consulting the unit bargain- ing representative. As the Supreme Court has indi- cated in broader context, even where a subject of mandatory bargaining is involved, there may be "circumstances which the Board could or should accept to excuse or justify unilateral action." In Westinghouse, the Board based its dismissal on these factors: Consistency with past practices and normal method of operation, absence of a demonstrated adverse effect on the unit employees, and ability of the union to have negotiated about this type of practice during past negotiations. See New Orleans Board of Trade, 125 NLRB 1258, 1259 (1965). The facts and reasoning that caused me to dismiss the General Counsel's allegations were as follows: The Re- spondent, motivated solely by economic concerns, laid off its entire work force. Respondent had insufficient current assets to meet its current liabilities. Moreover, its customer, Hawaiian Western Steel, also laid off its em- ployees and ceased purchasing from Respondent. Al- though nonunit personnel performed work for Respond- ent, none of these persons were paid and there is insuffi- cient evidence that there existed a sufficient amount of work to permit the recall of any employees. During the four periods of layoff in 1981, Respondent's managerial and nonunit employees performed bargaining unit work. Although none of the 1981 layoffs involved a complete shutdown, managerial employees did perform work usu- ally performed by unit employees. Also during the 1981 . layoffs, subcontractors, independent contractors, nonunit employees, and employees hauled cars for Respondent on a piece rate basis. Thus, Respondent's transfer of the work to nonunit personnel and independent contractors was consistent with its past practice and normal method of operation. Further,, the evidence reveals that the Union had knowledge' of such past practices as it specifi- cally demanded that 'such practices cease. The Union proposed contract language to end these practices, but faced a staunch refusal, by Respondent. Finally, the Union reluctantly conceded to Respondent's position and withdrew its contract' proposals. Thus, the evidence es- tablishes that the Union had an opportunity to bargain about the performance of bargaining unit work by non- unit personnel and acceded to Respondent's demand to continue its past practices. Respondent's, unilateral ac- tions initially had no adverse impact on the unit employ- ees. It was the economic layoff and not the transfer of work that caused the employees to lose work opportuni- ties. However, at some later stage there apparently would have been sufficient work to allow the 'recall of some employees but for the transfer of work. However, this effect of Respondent's action differs only in degree from what took place during, the layoffs in 1981. The Union had its opportunity to bargain in January 1982 to prevent such a recurrence but acceded to Respondent's position. It appeared to me that the General Counsel was seeking by way of this complaint that which the Union was unable to obtain in negotiations. Under all of these 579 circumstances, I found that the Applicant had not violat- ed Section 8(a)(5) and (1) of the Act, as alleged in the complaint. See Rochester Telephone Corp., 1190 NLRB 161, 164 (1974); see also General Electric Co., 240 NLRB 703, 708 (1979). I found the case relied on by the General Counsel to be inapposite: Talbert Mfg. Co., 264 NLRB 1051 (1982); Garland Distributing Co., 234 NLRB 1275 (1978); and Whitehead Bros. Co., 263 NLRB 895 (1982). In the Tal- bert case, the foremen performed production work during a layoff, which work was of a type and extent they had not previously done. Further, the employer and union had bargained about the question of foremen doing bargaining unit work and had reached tentative agree- ment on a proposal that would have prohibited foremen from doing the work they did during the layoff. In the Garland case, the transfer of work to a nonunit employee violated an express provision of the existing collective- bargaining agreement. In Whitehead Bros., the subcon- tracting of work was inconsistent with past practice and the union had no opportunity to bargain about the sub- ject in prior negotiations. As discussed above, the facts of the instant case required a determination that no viola- tion of the Act had been established. I found that the General Counsel had not sustained his burden of proof regarding the layoff allegation for the following reasons: Uncontradicted evidence reveals that Respondent gave notice of the layoff to the Union steward. Such notice comported' with the contract require- ment that notice of large scale layoffs be given to the Union Unit Committee.6 Although the contract required 30-day notice, the General Counsel failed to establish that the notice was less than 30 days or otherwise was insufficient to give the Union a rea- sonable opportunity to bargain over Respondent's decision. Moreover, the undisputed evidence of- fered by Respondent reveals that in May, shortly after the layoffs, Respondent discussed these matters with Union Representative John Rusen. Rusen agreed to contact Respondent over possible accom- modations to allow Respondent to recall the em- ployees. However, Rusen did not further pursue the matter. In any event, the General Counsel has failed to establish that Respondent did not give the Union an adequate opportunity to bargain over the layoff or the effects of the layoff, as alleged in the com. plaint. Accordingly, I shall recommend that this al- legation of the complaint be dismissed. 6 The General Counsel argues that Respondent did not prove that the Union steward was part of the Union Unit Committee. Obviously, the General Counsel has the burdens of proof reversed. Based on the record before me, it was clear that the Applicant had a valid defense. Thus, the General Coun- sel argues that his complaint was substantially justified "based on the information in possession at the time" the complaint issued. Based on the lenient standard used by the Board, the instant complaint would be found by the Board to be substantially justified when issued. However, 580 DECISIONS OF THE NATIONAL' LABOR RELATIONS BOARD during the litigation it become apparent that the- Appli- cant had a valid defense and the complaint was ground- less about the allegations at issue. Notwithstanding the existence of a controlling defense, the General Counsel continued to pursue this litigation. In Spencer v. NLRB, 712 F.2d '539- (D.C. Cir. 1983), the United States Court of Appeals for the District of Columbia Circuit in discussing the Government's obliga- tion to accede to the other party as soon as it becomes apparent that its litigation stance is not substantially justi- fied, stated: It seems clear that, if the government does not immediately accede to the plantiff's demand, but in- stead initially opposes his claims and then at some later stage (e.g., in a pre-trial settlement) surrenders, the United States will be liable for attorneys' fees regardless of which theory is applied. Under such circumstances, not only will the government have acted unreasonably, but it will have adopted (at least briefly) a litigation position lacking substantial justification. For strong indications of Congress' intent that fees be awarded under these circum- stances, see H.R.Rep. No. 1418, supra note 20, at 11; S.Rep. No. 253, supra note 20, at 7. But see Alspach v. District Director Of Internal ' Revenue, -527 F.Supp. at 229 (finding the litigation position of the IRS to have, been "substantially justified" when it initially resisted a clearly meritorious suit to enjoin it from collecting a tax, but surrendered 1 month after it had located and reviewed the taxpayer's file). The only question open to serious dispute is whether the governmentshould be obligated to pay fees when it surrenders at the very outset of litigation. [Id., at 555-556 fn. 58]. The Court of Appeals for the Second Circuit in Envi- ronment Defense Fund v. Watt, 722 F.2d 1081, 1086 (2d Cir. 1983), agreed with the District of Columbia Circuit's view in Spencer v. NLRB: We' find it incumbent upon the government to aban- don its opposition to the other party as soon as it becomes apparent that its litigation stance is not substantially justified. See Ellis v. United States, 711 F.2d 1571, 1576-1577 (Fed. Cir. 1983).6 6 We would thus agree with the analysis of the government's litigation position in Operating Eng'rs Local Union No. 3 Y. Bohn, 541 F.Supp. 486 (D. Utah 1982). In that case, plaintiffs sued to enjoin performance of work under a road construction contract which stated incorrect wage rates. Nine days later, defendants agreed to modify the contract, and a formal modification was ap- proved the following month . On grounds that "[o]nce the action was filed, the government acted almost immediately to concede all the substantive relief plaintiff sought," id. at 496, the court found the government's litigation position to be substantially justified. We do not, as discussed supra, express any view on that court's inter- pretations of the-word "position." In Tyler Business Services v. NLRB, 695 F.2d 73, 75-76 (4th: Cir. 1982), the United States Court of Appeals for the - Fourth Circuit in applying EAJA to proceedings both on- the agency level and on judicial review stated: The House report on the Act states that in regard to review of agency adjudications, the government must "make a positive showing that its position and actions during the course of the proceedings- were sub- stantially justified."9 The report states this standard should also apply in reviewing the government's position in judicial proceedings. 1 ° For -example, the government's preliminary decision to institute an administrative proceeding may not justify an award of attorney's fees. This circumstance, however, would not preclude an award, if at 'subsequent stages of the administrative process or upon judicial review it appears that the government's position at these levels of litigation was not substantially justi- fied. 9 H.R. Rep. No. 1418, 96th Cong., 2d Sess. 13 (1980), reprinted in 1980 U.S Code Cong & Ad. News 4992 (Emphasis added). io See id. at 18, reprinted in 1990 U.S. Code Cong. & Ad. News 4997. The Tyler case was cited with approval by the United States Court of Appeals for the Fifth Circuit in Natchez Coca-Cola Bottling 'Co. v. NLRB, 750 F.2d 1350 at 1352 (5th Cir. 1985). - The General Counsel contends that the Board has re- jected the view of the circuit courts and that I am bound by the Board's decision unless and until reversed by the United States Supreme, Court. The General Counsel cites International Maintenance supra, for this proposition. However, the International Maintenance case simply did not address the issue presented here. In International Maintenance, the administrative law judge held that the General Counsel was substantially justified in issuing the unfair labor practice complaint because there existed a close question of law and fact concerning the superviso- ry status of an employee and because the General Coun- sel had proffered prima facie evidence regarding the al- leged discriminatory discharge -of two employees. The judge further recommended a rule that failure to cooper- ate fully in the investigatory stages of an unfair labor practice case would be per se sufficient to deny an appli- cation under the "special circumstances" safety valve. The Board, however, expressly declined to enact such a rule: Nor do we find it appropriate to enact a rule, as suggested by the administrative law judge, that would automatically bar an applicant from receiv- ing benefits under the Equal Access to Justice Act for failing to cooperate in the investigatory stages of an unfair labor practice proceeding. [Id. at 1136 fn. 2] The issue presented here, whether the Government must abandon its position when it becomes apparent that its position is not substantially justified,, was never dis- cussed by -.either the administrative law judge or the Board in the International Maintenance case. As a last resort, -the General Counsel argues in his posthearing brief that had I resolved credibility disputes in his favor he would have prevailed and thus, he was substantially justified under Board law. It is true under LEEWARD AUTO WRECKERS Board cases the General Counsel has avoided EAJA awards when credibility resolutions were ultimately de- cided against the General Counsel. See, e.g., SME Cement, 267 NLRB 763 (1983); Barrett's Interiors, 272 NLRB 527 (1984). However, that portion of the instant case that involved a credibility resolution, the testimony of Sid Lampley, union representative, on which the Gen- eral Counsel attempts to rely, was a dispute which no reasonable attorney could expect to be resolved in the General Counsel's favor.6 Sid Lampley,, the General Counsel's witness, had no bargaining notes, and no expla- nation for 'the resolution of the bargaining impasse. All Lampley did was deny the testimony of the Applicant's witnesses, but was unable to offer any affirmative evi- dence of what occurred. Under these circumstances, the testimony of Respondent's witnesses, buttressed by bar- gaining notes, had to prevail over Lampley's testimony. More importantly, based on the record evidence, the General Counsel would not have prevailed even if Lam- pley's vague testimony had been credited. The Applicant did not need to prove that the Union waived its right to bargain over these changes but only that the Union had an opportunity to do so. The General Counsel's wit- nesses admitted that the Union attempted to obtain lan- guage prohibiting such practices and did not obtain the desired contract language. - IV. SPECIAL CIRCUMSTANCES The General Counsel contends that because Respond- ent failed to bring pivotal facts to his attention during the precomplaint investigation under the "special circum- stances" safety valve no award should be granted. During the EAJA proceedings; the Applicant estab- lished that following the close of the unfair labor prac- tice hearing, the Applicant's trial attorney wrote the Acting Regional Director attempting to settle the case. In this letter, dated July 21, 1983, the attorney set forth the weakness of the General Counsel's case and prepared a settlement that reflected those matters. On August 25 the Regional Attorney wrote a reply in which he stated that the Applicant should have made its evidence avail- able prior to the issuance of complaint. He further indi- cated that the proposed settlement was acceptable to the Regional Office but would not be approved without the Union's concurrence. Notwithstanding the evidence disclosed at trial, and the review of this matter by the Regional Attorney, the General Counsel continued to prosecute the case. As previously noted, the Board in International Main- tenance declined to enact a rule that an applicant failed to cooperate in the investigative stages of an unfair labor practice proceeding be automatically barred from an s My credibility resolution reads as follows: The above recitation of facts is based on the credited testimony of McGuire and Fujimoto Although Lampley denies such an exchange toolk place, he could give no other explanation for the breakoff in negotiations or the subsequent change resulting in a contract. Fur- ther, Lampley had only a vague recollection of the negotiations and no notes from which to refresh his memory. McGuire was a much more reliable witness regarding negotiations and' had bargaining notes which he used to refresh his memory. Finally, admissions in the testimony of Alensonorin [Union president] corroborate McGuire's version of these events. 581 award under EAJA. However, the failure of the employ- er in International Maintenance to offer certain evidence in the investigation of that case affected the denial of an EAJA award. In that case the General Counsel was sub- stantially justified in proceeding to complaint and trial based on the evidence of the charging party. In Dan- zansky-Goldberg Chapels, 272 NLRB 903, 906 (1984), the judge emphasized the importance of the Respondent's cooperation, commenting that: It is that cooperation that has made some of the issues raised by the EAJA application so close. The issues in this proceeding would have been much easier to resolve-in the General Counsel's favor- if during the General Counsel's investigation of the charges, the Company had withheld information from him regarding the basis for its behavior. It is not inconsistent with the policies of EAJA to dis- allow costs for expenses incurred because the respond- ent-applicant did not cooperate in the precomplaint in- vestigation. It is reasonable to assume that the govern- ment would not have prosecuted the case if it had known litigation would be unsuccessful. Thus, it follows that a respondent-applicant should not be rewarded for costs that it incurred solely as a result of its own litiga- tion strategy, i.e., choosing to go to litigation rather than cooperating in the investigation. However, a respondent- applicant's failure to cooperate or failure to fully cooper- ate in the investigation does not absolve the Government of all responsibility. The Government must still be sub- stantially justified at all stages of the proceeding, i.e., the Government must withdraw its opposition, to the, re- spondent-applicant when the Government's position clearly becomes frivolous, unreasonable, or groundless. Thus, the Board cases of International Maintenance and Danzansky-Goldberg are reconcilable with the court cases of Spencer v. NLRB, ED.F. v. Watt, and Tyler Business Services The issue becomes whether the Government should be assessed costs ab initio because it did not withdraw im- mediately or whether costs should accrue as of the day it became clear that the Government's position ' was frivo- lous, unreasonable, or groundless. In my view, the best policy would be to commence costs as of the day it became clear that Government's position was groundless, if the Government did not withdraw within a reasonable period of time. If the Government withdrew within a reasonable period of time, no costs should be'assessed. It is reasonable to allow the Government some time to carefully consider the evidence and make a reasoned de- termination about whether to withdraw or proceed. If the Government withdraws within a reasonable period of time, the costs seem attributable to the respondent-appli- cant's failure to cooperate in the investigation rather than the Government's litigation position. However, if the Government continues to proceed it is no longer justified and should be billed for costs. Assessing costs ab initio would not in my view encourage proper governmental action any better than assessing costs as of the day it became clear that the Government's position was no longer substantially justified. To award costs ab initio 582 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD would, however, encourage respondent-applicants not to cooperate in the investigation. In the instant case, I am not willing to infer that the Government would have prosecuted the case even if it was aware of the respond- ent-applicant's defense prior to trial . Finally, the rule proposed herein, in my view, would encourage a re- spondent to attempt good faith settlement negotiations, in which its defenses may be revealed, rather than waiting to present them at trial. I believe the special circumstances doctrine aids the General Counsel to the extent that costs should not be assessed until it became clear , during the trial, that the Government's position was no longer justified . Special circumstances, however, do not absolve the General Counsel from costs for continuing to prosecute the case and filing - a posttrial brief, after it became clear that the Government's position was frivolous, unreasonable, or groundless. To the extent that my decision appears in conflict with that of the courts in Spencer Y. NLRB and E.D.F. v. Watt, I note that both those decisions dealt - with the question of an applicant that had to sue the Government in order to obtain certain relief. Here the Government sued the applicant in part because the applicant did not make-the Government aware of its defense until some- time during the litigation. Thus neither Spencer nor Watt presented the issue of what effect the applicant's failure to cooperate in the precomplaint investigation should have on an award under EAJA. For the reasons ex- pressed above, I find that granting an award from the date that it became clear the Government's position was no longer justified is consistent with the rationale of the Spencer and Watt cases, i.e., to award prevailing private parties the fees they incurred in combatting unreasonable arguments advanced by- the Government, while denying fees incurred in defeating substantial arguments. Cf. Goldhaber v. Foley, 698 F.2d 193, 197 (3d Cir. 1983) (holding that EAJA must be interpreted so as to charge the Government with that portion of the expenses attrib- utable to its unjustifiable positions). See also Ellis v. U.S., supra at 1576. - V. THE ISSUES TO WHICH THE APPLICANT DID NOT PREVAIL The General Counsel alleges that the award should be reduced because the Applicant did not prevail concern- ing the direct dealing ' allegation. Further, the General Counsel seeks to reduce any award because the Appli- cant was unsuccessful in urging certain defenses that were applicable to both the successful and unsuccessful portions of the case.' An applicant may not be compensated under EAJA for fees and expenses incurred in litigating matters in which the Government's position was substantially justi- fied, as-it would contravene the purposes of EAJA to re- quire the Government to bear the expense of defending its 'reasonable positions . Matthews v. U.S., 713 F.2d 677, 684 (11th Cir. 1983); Goldhaber v. Foley, supra. In Hensley v. Eckerhart, 461 U.S. 424, 435-436 (1983), the United States Supreme Court addressed the question of whether a partially prevailing plaintiff may recover fees for time spent on unsuccessful claim s. The Court held that the Congressional intent to limit awards, under the Civil Rights Attorney's Fees Awards Act of 1979, 42 U.S.C. § 1988,7 to prevailing parties, requires that unre- lated claims be treated as if they had been raised in sepa- rate lawsuits, and therefore no fee may be awarded for services on the unsuccessful claims. In situations where a lawsuit cannot be viewed as a series of discrete claims, however, the -court "should focus on the significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation." A plaintiff's attorney who obtains "excellent results " is enti- tled to a "fully compensatory fee." This normally will in- clude all hours expended in the litigation and should not be reduced "simply because the plaintiff failed to prevail on every contention raised in the lawsuit." Further the Court stated: There is no precise rule or formula for making these determinations. "The district court may attempt to identify specific hours that should be eliminated, or it may simply reduce t-he amount to account for the limited success. The court necessarily has discretion in making this equitable judgment. This discretion, however, must be exercised in light of the consider- ations we have identified. [Id. at 436-437.1 Applying the Hensley principles to this case, the Appli- cant is clearly not entitled to fees for time spent on the direct dealing allegation on which it was unsuccessful. The Applicant has reduced its claim for an award by a factor of 10 percent to account for this portion of the case. The trial time expended on this issue occurred prior to the time for which I am granting the award , i.e., prior to the date at trial on which - the Applicant's exculpatory evidence was offered. In view of this fact and the rela- tively small amount of time devoted at trial (and, there- fore, in the transcript) and the brief to this allegation, the 10-percent reduction appears reasonable. The Applicant denied jurisdiction in its answer 'to the complaint. The Applicant's defense as to jurisdiction ex- tended the time necessary for trial . However, that oc- curred prior to the period for which an award is being granted. Therefore, no further reduction in the award is necessary. The Applicant unsuccessfully urged that the case be deferred pursuant to the Board's policy enunciated in Collyer Insulated Wire, supra. The Applicant's Collyer de- fense was unsuccessful. That defense was applicable to both the prevailing and unprevailing allegations of the complaint. It would have been a valid defense to the al- legations on which the Applicant prevailed. It was not valid regard the allegation on which the Applicant did not prevail. However, if only the direct dealing charge was alleged against the Applicant, it is highly, probable the Collyer defense would not have been raised. It was not unreasonable for the, Applicant to raise the Collyer defense with regard to the allegations on which it pre- ' Although the case involved the Civil Rights Attorney's Fees Awards Act, the Court said that the standards established are "generally applica- ble" to any case where Congress has authorized an award of fees to a prevailing party. See fn. 7 LEEWARD AUTO WRECKERS 583 vailed. If the direct dealing allegations had not been in- cluded in this case, or if the direct dealing allegation had not been sustained, deferral to arbitration would have been a meritorious defense. Further, considering the Ap- plicant's high degree of success, the award of fees should not be diminished because of a defense reasonably assert- ed, but not responsible for the ultimate successful out- come of the case. Thus, I will not reduce the award based on the Applicant's failure to prevail on its Collyer defense. VI. REASONABLE FEES AND EXPENSES Pursuant to Section 102.145(c) of the Board's Rules, the judge shall consider the following factors in deter- mining the reasonableness of fees: (1) If the attorney, agent, or expert witness is in prac- tice, his or her customary fees for similar services or, if an employee of the applicant, the fully allocated cost of the services. (2) The prevailing rate for similar services in the com- munity in which the attorney, agent, or expert witness ordinarily performs services. (3) The time actually spent in the representation of the applicant. (4) The time reasonably spent in light of the difficulty or complexity of the issues in the adversary adjudication proceeding, The customary fees of Jared Jossem, the Applicant's lead attorney and trial attorney was $125 per hour. Jos- sem's time was computed at $75 per hour for purposes of the EAJA application pursuant to the Board's Rules. The customary fee for Perry Confalone, a law clerk and now an attorney, was computed at $65, an hour and later $75 an hour. The rates billed for the attorneys appear to conform to the prevailing rates in Honolulu, Hawaii, where they practice. The Applicant has submitted records establishing the actual time spent in the underly- ing proceeding and in the EAJA prosecution. The Gen- eral Counsel takes issue with the reasonableness of, the time and expenses. The Applicant seeks total fees and expenses of $47,040.28.8 That amount is a result of the deduction of certain fees attributable to the unsuccessful defense of the direct dealing allegation (on which the General Counsel prevailed) and certain charges attributable to a law clerk. Further, the application was amended at various times to include additional time spent in prosecuting the applica- tion. a. The General Counsel contends that the Applicant's claim of 10-1/4 hours for, trial preparation should be re- duced to 8 hours, apparently o'n the ground that the Ap- plicant called only three witnesses to 'testify. This ap- proach does not take into account the quality and nature of trial preparation. Further, in view of the importance of the case to the Applicant-a monetary remedial order most likely would have forced the Applicant out of busi- ness-the amount of time spent on trial preparation does not appear unreasonable. b. The General Counsel contends that the time allotted for a trial day should be limited to 1 hour in excess of 8 As of March 27, 1985. actual' court time. I do not find any basis for so reducing the award. It appears reasonable that in excess of actual trial the Applicant's attorney would spend time review- ing the day's proceedings with his client and preparing for the next day. Sessions with clients and witnesses before and after the actual court time for that day appear to be reasonable and necessary. c. The General Counsel contends that the time claimed for brief writing is excessive. The brief was researched and written by a law clerk and the General Counsel con- tends that extra time was taken because of the clerk's in- experience. I find some merit in this contention. Further, the trial attorney apparently did not give the' law clerk the -benefit of his pretrial research. The General Counsel further argues that the Appli- cant's manner of preparing the' posttrial brief increased costs. The Applicant did not purchase a copy of the trial transcript (saving in excess of $1000) and utilized the General Counsel's copy of the transcript. This approach required more extensive notes, and therefore more time, than if the Applicant had purchased its own copy of the transcript, - However overall, the Applicant decreased rather than increased the cost of the brief by not pur- chasing a copy of the transcript. The General Counsel cannot be heard to complain about this departure from the standard procedure which inured to his benefit. In sum, because the trial attorney did not give the law clerk the benefit of his prior research and because the law clerk was inexperienced, I have _ reduced the claim for preparing-the brief by 20 percent. See Kutska V. Cali- fornia State College, 564 F.2d 108 (3d Cir. 1977); Action on Smoking v. CAB, 724 F.2d 211 (D.C. Cir. 1984). The Government need not pay for the law clerk's learning experience. Further, the attorney for Applicant admitted that on occasion time spent by a new attorney or clerk is written off the client's bill as "education." My reduction of the claim is similar to such action by the law firm. d. The General' Counsel contends that the Applicant should be awarded only 4 hours at $50 per hour for prosecuting the instant application. I find that argument to be totally without merit. The Application is entitled to a reasonable award for costs in presenting its EAJA claim. Further, the prolonged nature of this litigation was caused by the General Counsel.9 The hearing was at the request of the General Counsel, who resisted all at- tempts to narrow the scope of the hearing or to resolve matters without a hearing. The Applicant could not abandon its application but rather had to respond to the General Counsel's motion. It would be unjust to deny an award for such action, I note that the General Counsel has no deterrent in EAJA for prolonging the litigation and delaying the award. There is no provision in EAJA. for interest or any other sanction if the Government delays. Interest 9 For example, after the General Counsel's motion to dismiss the appli- cation was denied, the General Counsel filed two mo"for reconsider- ation. Second, the General Counsel refused the Applib'atit's offer to cor- rect an alleged error in service Third, the General Coun'sel' requested a hearing but refused to follow the rules for such a request even after being so ordered by the judge. Fourth, the General Counsel has requested time extentions for the filing of papers and briefs amounting to 9 weeks. 584 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD does not run until there is a judgment against the Gov- ernment. Thus, it appears to be in the General Counsel's interest to delay these proceedings . At least the General Counsel's conduct in this case strongly suggests such an approach. It is the Applicant, not the General Counsel, who has been prejudiced by the delay. It would further unjustly penalize the Applicant to impose the arbitrary and unreasonable limits on the EAJA award proposed by the General Counsel. As the 'United States Court of Appeals for the Third Circuit in Bagby v. Beal, 606 F.2d 411 (3d Cir. 1979) stated: If an attorney is required to spend time litigating his fee claim, yet not be compensated for that time, the attorney's effective rate for all the hours expended on the case will be correspondingly decreased. [Quoting Prandini v. National Tea Co., 585 F.2d 47, 53 (3d Cir. 1978).] e. The General Counsel contends that since no excep- tions were filed by any party, the Applicant should not be entitled to fees for work performed after my decision. However, it appears to me that time spent reviewing the decision with the client and efforts made to convince the General Counsel not to appeal the decision , are reason- able expenses related to the litigation . Contrary to the General Counsel, I do not find such to be "make work" claims. f. The General Counsel objects to the referral of the EAJA case to the same administrative law judge that dismissed the underlying complaint allegations . Section 102.148(b) 'of the Board's Rules mandates that an applica- tion be referred by the Board to the judge who heard the adversary adjudication on which the application is based. That rule is in accord with EAJA, which requires the application be submitted to the "adjudicative officer of that agency." 5 U.S.C. § 504(a)(1) and (2). The pur- pose of referral to the same judge who heard the case is that he or she is more alert to the merits of the applica- tion with respect to such issues as partially prevailing parties, substantial justification and reasonableness of time and expenses to various aspects of the litigation. The General Counsel expressly denied that he wanted to disqualify the judge. In any event, to the extent that the General Counsel's objection is viewed as an attempt to disqualify the judge, the General Counsel did not comply with the Board's Rules for requesting disqualification of a judge. Section 102.37 of the Board's Rules; see also Top Form Mills, 273 NLRB 1246 fn. 1 (1984). g. The General Counsel further objects to my limiting of the EAJA hearing to, specific issues. Section 102.153 of the Board's Rules attempts to avoid prolonged EAJA proceedings by providing that "An evidentiary hearing shall be held only where necessary for resolution of ma- terial lissues of fact." Further the Board's `Rule provides that: A request that the administrative law judge order further proceedings shall specifically identify the disputed issues and the evidence sought to be ad- duced, and shall explain why the additional pro- ceedings are necessary to resolve the issues. In the light of the,Board's Rules the General Counsel cannot complain that the evidentiary hearing was limited by his own failure to make a specific request to litigate further matters. h. The General Counsel's other arguments are specious and not worthy of further consideration. VII. THE APPLICANT'S REQUEST FOR AN ADDITIONAL AWARD The Applicant seeks an additional award to compen- sate for the delay in this proceeding caused by the Gen- eral Counsel. See National Ass. of Concerned Vets v. Sec- retary of Defense; 675 F.2d 1319 at 1335 (D.C. Cir. 1982). The additional award-, requested represents 11 percent simple interest of the original fee award . However, as mentioned earlier, EAJA does not provide for prejudg- ment interest. Further, as an exception to sovereign im- munity, EAJA has been strictly construed. See Monark Boat Co., 262 NLRB,994 (1982), affd. 708 F.2d 1322 (8th Cir. 1983). Accordingly, no interest payment will be awarded. -However, the General Counsel's conduct in prolonging these EAJA proceedings as well as in the un- derlying litigation10 has been considered and has in effect, resulted in an award greater than would be nor- mally granted in a case of this nature. Based on the above findings and conclusions, I shall recommend that the Applicant be ' awarded fees and ex- penses, including time spent pursuing recovery of its ap- plication under EAJA:11 [Recommended Order for dismissal omitted from pub- lication.] 10 The General Counsel prolonged the underlying litigation by inad- vertently failing to comply with Sec. 102.118 of the Board's Rules in not submitting to the Applicant's trial attorney all the statements of one of his witnesses and by attempting to litigate matters dismissed from the case by the Regional Director. Further, during settlement discussions of the underlying case, the General Counsel urged the Applicant to bypass its own attorney and negotiate a settlement with the Union. 11 All outstanding motions inconsistent with this recommended Order are denied.