Consolidated Freightways

CONSOLIDATED FREIGHTWAYS 771 Consolidated Freightways and Charles Hennessey. Case 33-CA-4364 July 29, 1988 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND BABSON On January 5, 1981, the Board issued a Decision and Order 1 finding that the Respondent has dis- charged Charles Hennessey in violation of Section 8(a)(1) of the National Labor Relations Act. There- after, the Respondent filed a petition for review and the Board filed a cross-application for enforce- ment with the United States Court of Appeals for the District of Columbia. On December 11, 1981 , the court remanded the case to the Board to reconsider requiring the Re- spondent to reinstate Hennessey with backpay.2 The court held that the Board has failed to consid- er the significance of Hennessey 's motives for re- fusing reinstatement. On March 23, 1982, the Board notified the par- ties that it had decided to accept the court's remand and that they could file a statement of posi- tion. Statements have been filed by the General Counsel and the Respondent. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. The Board has considered the decision of the court in light of the statements of position and makes the following findings: The background facts, as more fully set out in the judge's decision, may be briefly summarized. The Respondent discharged employee Hennessey for his refusal to drive a tractor-trailer. Based on credited testimony, the judge concluded that Hennessey refused to operate the tractor because it was dangerous and was in violation of safety stat- utes. Further, the judge found that under the col- lective-bargaining agreement, Hennessey's refusal constituted protected concerted activity for the purposes of mutual aid and protection and his ter- mination was in violation of Section 8(a)(1). Approximately three weeks after his discharge, Hennessey filed a grievance, which was arbitrated pursuant to the collective-bargaining agreement. The arbitrator awarded Hennessey his former job back with full seniority and paid up health and welfare and benefits, but no backpay. The award also ordered that a final warning letter be placed in Hennessey's personnel file. The day the arbitration award was announced, the Respondent offered Hennessey reinstatement on its terms. Hennessey rejected the offer. The judge found that the Respondent's offer of reinstatement made in accordance with the arbitra- tion award was not valid because the award re- quired that a warning letter be placed in Hennes- sey's file. The judge, therefore, ordered the Re- spondent to offer Hennessey reinstatement with backpay. The Respondent excepted, contending that its offer of reinstatement was adequate because neither the warning letter nor the lack of backpay made the offer conditional. In adopting the judge's deci- sion, the Board, to clarify any ambiguity, stated that the refusal to include accrued backpay in the otherwise valid offer of reinstatement does not render the offer invalid. In support of its argument that the warning letter did not make the offer invalid , the Respondent sub- mits that at the time the Respondent's offer was made, Hennessey was not aware that the offer was conditioned on a warning letter being placed in his file.3 Rather, according to Hennessey's undisputed testimony, his rejection was based on the failure of the reinstatement offer to include backpay. The Re- spondent contends that because Hennessey did not view the warning letter as an impediment to his return to work, the presence of the warning letter should not void an otherwise valid offer of rein- statement. The Board agreed with the judge that the Re- spondent's offer of reinstatement was invalid be- cause placing the warning letter in Hennessey's personnel file as a prerequisite to his reinstatement rendered the offer conditional and therefore inad- equate. On remand, the court has instructed us to explain our rationale for not inquiring into the reasons Hennessey rejected the Respondent's offer and to reconcile our position with Research Designing Service, 141 NLRB 211 (1963); L. Ronney & Sons Furniture Mfg. Co., 97 NLRB 891 (1951), enfd. as modified 206 F.2d 730 (9th Cir. 1953), cert. denied 346 U.S. 937 (1954), and the line of cases holding that the Board will look to the reason the discri- minatee rejects an offer of reinstatement to deter- mine if the offer is valid. Initially, it is clear that the reinstatement obliga- tion is satisfied only by a valid offer of reinstate- ment. As stated in Lipman Bros., 164 NLRB 850 1253 NLRB 988 (1982). 8 669 F.2d 790 ( 1981). 8 We note that Hennessey was present during the arbitral proceedings. Hennessey however.testified that he had no recollection of being told about the condition. 290 NLRB No. 85 772 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD (1967), "An employer's offer of reinstatement must be firm, clear, and unconditional." Until such time as a valid offer of reinstatement has been made the discriminatee does not have to make a choice. Lyman Steel Co., 246 NLRB 712 (1979); Heinrich Motors, 166 NLRB 783 (1967), enfd. 403 F.2d 145 (2d Cir. 1968); Leeding Sales Co., 155 NLRB 755 (1965). As stated in Craw & Sons; 244 NLRB 241 (1979): However, where the offer of reinstatement has been conditional and has not satisfied the Board's and the; court's order of reinstatement, the discriminatees are under no obligation to reply to or to accept such conditional offer of reinstatement. See also W. C. McQuaide, Inc., 239 NLRB 671 (1978), enfd. 617 F.2d 349 (3d Cir. 1980); Murray Products, 228 NLRB 268 (1977), enfd. 584 F.2d 934 (9th Cir. 1978). In the instant case, the offer made by the Re- spondent was clearly conditional on its face. Hennessey was offered reinstatement pursuant to the arbitrator's award, which required that a warn- ing letter be placed in his file. This clearly renders the offer invalid because "a Board order for rein- statement of a discriminatee is designed to place that individual in the same position the individual would have been in had there not been discrimina- tion against him." Craw & Son, above at 242. The placement of the warning letter in Hennessey's per- sonnel file would not have returned him to the po- sition he occupied before the discrimination against him. Instead, he could return to work only under the threat of the letter of warning. This condition made the offer of reinstatement by the Respondent invalid.4 Hennessey was under no obligation to re- spond to the offer and we will not look into his motivation or reasons for his refusal. We will not allow a discriminatee's response to an offer invalid on its face to "retroactively validate [an offer] which [was] deficient when made." Murray Prod- ucts, 584 F.2d at 942. If, and only if, an offer of re- instatement is fully valid on its face, then an exami- nation of a discriminatee's reasons for declining the offer must be undertaken. 4 In fording the offer was invalid on its face , it is appropriate to focus on the terms of the offer as required by the arbitration award . Thus, it is not relevant that Hennessey could not recall being informed of the condi- tion at the time the arbitration award was announced. As explained below, in our discussion of the issue whether the arbi- trator's award could properly be deferred to, the letter of warning itself constitutes an interference with Sec. 7 rights. This is so because it operates as a penalty for the exercise of the right to invoke the protections of a collective-bargaining agreement. See NLRB v. City Disposal Systems, 465 U.S. 822 (1984). It can hardly be contended that a reinstatement offer that includes what amounts to an independ- ent violation of the Act is a valid offer. Those cases cited by the court, i.e., Research De- signing Service and L. Ronney, supra, are distin- guishable from the instant case. In Research Design- ing, the judge found that certain offers of reinstate- ment were invalid because it became apparent after several employees accepted the employer's offers and began working that the offers were in effect conditioned on their working as new employees in- sofar as seniority and vacation pay were con- cerned. Because these proved invalid, the judge not only gave a remedy to the employees who had ac- cepted reinstatement, but also declined to cut off the backpay of two other employees who had re- fused reinstatement offers at the outset for reasons unrelated to the invalid conditions. 141 NLRB at 230. The Board reversed concerning the two em- ployees, holding that their refusal of reinstatement for reasons other than the invalid conditions war- ranted terminating the respondent's liability for re- instatement and backpay when the offers were re- fused. Id. at 216-217. Although the Board spoke in terms of the two employees' lack of awareness of the invalid conditions, the reinstatement offer, when made, apparently had no invalid conditions attached-unlike the circumstance in the present case, in which reinstatement was expressly pre- mised on the terms of the arbitration award, and which contains the invalid condition.5 Regarding L. Ronney, we cannot determine, from the Board's decision, whether the offer of re- instatement (to employee Clinton) was valid on its face. The decision speaks of a letter sent to Clin- ton, but does not reveal whether it contained the invalid condition (a requirement that the reinstated employee join an illegally assisted union). 97 NLRB at 892 . In any event, assuming in arguing that L. Ronney indicates that the Board will exam- ine a discriminatee's reasons for declining a rein- statement offer even when the only offer made is invalid on its face, we overrule it and other similar cases6 and adhere to the rule of Craw & Son, supra, 5 Hribar Trucking, 166 NLRB 745, 756 fn. 19 (1967), modified on other grounds 406 F.2d 854 (7th Cir. 1969); Eastern Die Co., 142 NLRB 601 (1963), enfd. 340 F.2d 607 (1st Cir. 1965), cert. denied 381 U.S. 951 (1965); and Ekco Products Co., 117 NLRB 137 (1957), cited by the court in remanding this case, follow the analysis of Research Designing. In our view, critical to all four cases is the fact that the respondents made facial- ly valid offers of reinstatement. The Board looked to the discriminatees' reasons for rejecting those offers to distinguish employees who never learned that illegal conditions were attached to the offer on implementa- tion from employees who tested the facially valid offers only to discover that they were not, in fact, valid . The Board tolled backpay for the former, who never uncovered the unlawful conditions, but not the latter. 6 See, e.g., Atlantic Maintenance Co., 134 NLRB 1328, 1329 (1961), enfd. 305 F.2d 604 (3d Cir. 1962), in which the Board found an unlawful- ly conditioned offer of reinstatement did not toll backpay , but noted, in dictum, that it had not been clearly established that the discriminatees would have rejected a valid offer of employment. CONSOLIDATED FREIGHTWAYS that a reinstatement offer invalid on its face obvi- ates the obligations on the part of a discriminatee to respond and that a discriminatee's refusal of the offer, on whatever ground, will not relieve the re- spondent employer of its obligation to make a valid offer in order to toll the running of backpay. Our requirement that an employer must first extend a facially valid offer of reinstatement before we examine a discriminatee's reasons for declining the offer is fully consistent with the purposes and policies of the Act. The reason is clear; it is the Respondent who acted unlawfully in discharging Hennessey. The equities of the situation fall with Hennessey, the wrongfully discharged employee. It is thus incumbent on the Respondent to extend to the injured employee a facially valid offer of rein- statement before the burden shifts to the injured employee to accept or reject the offer. Anything short of this is inconsistent with the statutory policy that a transgressor should bear the burden of the consequences stemming from its illegal acts. See Sheet Metal Workers Local 355 (Zinsco Electri- cal Products), 254 NLRB 773 (1981), enfd. in part, remanded in part 716 F.2d 1249 (9th Cir. 1983).' Because, as noted above, we would require that a discriminates respond to a facially valid offer and, in those circumstances, would place on him the burden of showing that any refusal of the offer was based on invalid conditions that came to his atten- tion, we believe that our overall policy respecting responses to reinstatement offers establishes a proper balance between the vindication of Section 7 rights and a discriminatee's duty to mitigate dam- ages. In footnote 15 of its decision , the court indicated that it need not reach the issue whether the Re- spondent's good-faith reliance on the arbitrator's award was sufficient, in itself, to toll its backpay li- ability. The court noted that resolution of this issue depends on whether the Board could properly fur- ther the strong national policy in favor of private settlement of labor disputes without abdicating its responsibility to remedy violations of national labor law. The Board has established under Spielberg Mfg. Co., 112 NLRB 1080 (1955), Olin Corp., 268 NLRB 573 (1984), and their progeny, a policy of 7 In urging that an unlawfully discharge employee's motive for reject- ing an offer of reinstatement should be examined , the Respondent argues that the Board has done so in the past . In support of this petition, the Respondent, in its brief, relies on Alcan Cable West, 214 NLRB 236 (1974). Although it is correct that the judge, in his decision in Alcan, ex- amined the unlawfully discharged employee's reason for rejecting the em- ployer's offer of reinstatement, the Board did not rely on that finding. Rather, the Board found that the employee in question was never offered substantially equivalent employment . Thus, contrary to what the Re- spondent portrays as the Board's holding in Alcan, the Board clearly did not rely on the judge's examination of the discharged employee's reason for rejecting the offer of reinstatement. Alcan, 214 NLRB at 237 fn. 3. 773 deferring to a decision of an arbitrator when (1) the unfair labor practice was presented and consid- ered by the arbitrator; (2) the arbitral proceedings were fair and regular; (3) all parties agreed to be bound; and (4) the decision is not repugnant to the purposes and policies of the Act. The judge in his decision found that the award "fails to remedy the alleged unfair labor practices so as to warrant the Board's deference to such Board. Thus, the Board found here that the arbitrator's award was repugnant to the Act and deferral was not appropriate. If we nonetheless find that the Re- spondent's backpay obligation was tolled because it complied with the repugnant award , we would, in substantial effect, be deferring to the award. Certainly, there may be circumstances that the Board will defer to an arbitrator's award that does not include the same remedy as the Board would require to remedy an unfair labor practice.8 To defer here to the arbitrator 's remedy however, would permit the Respondent to discipline an em- ployee for activity found by us and the arbitrator to be protected; clearly not an "interpretation con- sistent with Board policy."9 In any event, in this case we have an arbitrator's award that did not warrant deferral . Accordingly, to determine whether the Respondent in these cir- cumstances has tolled its backpay obligation, it is proper to judge the Respondent's offer by the standard the Board normally uses. An award to which deferral was not warranted is completely void. Here again, the offer was conditional on its face and thus was not a valid offer to reinstatement. Therefore, the burden of the loss must fall on the Respondent rather than the unlawfully discharged employee. See Safeway Trails, Inc., 233 NLRB 1078 (1977), enfd. 641 F.2d 930 (D.C. Cir. 1979), cert. denied 103 LRRM 2668 (1980). Therefore, as Hennessey did not receive, as we require, a facially valid offer of reinstatement, he is entitled to full backpay as set forth in the remedy section of our original decision." o a See, e.g., Combustion Engineering, 272 NLRB 215 (1984). There the Board noted, "The arbitrator's remedy, though perhaps different from what the Board would have ordered de novo, is reasonably based and is susceptible to an interpretation consistent with Board policy." Id. at 217. 9 Hypothetically, suppose an arbitrator awarded an employee reinstate- ment on the condition that the employee not engage in any protected concerted activities? The award would clearly be repugnant to the Act. Surely, an employer's reliance on an offer of reinstatement made pursuant to such an award could not serve to toll an employer's backpay obliga- tion. 10 In fn. 16 of its remand, the court noted the Board's willingness in Abilities & Goodwill, Inc., 241 NLRB 327 fn. 5 (1979), and Marlene Indus- tries Corp., 255 NLRB 1446, 1449 fn. 12 (1981), to consider whether an employee would have rejected a valid offer even in the absence of such an offer. Both cases treat the backpay and reinstatement rights of dis- Continued 774 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD charged strikers Abilities & Goodwill, overruling precedent, determined that discriminatorily discharged strikers should be treated as other dis- chargees, running the backpay period from the date of the discharge to the date of the respondent's valid offer of reinstatement without requiring the strikers to request reinstatement. In recognition of their status as strik- ers prior to their discharge, the Board expressly observed that the re- spondent could reduce or avoid its backpay liability by establishing that the discriminatee would not have accepted the offer if made, or by any other evidence demonstrating a willful loss of earnings . Although partici- pation in an unfair labor practice strike does not automatically defeat the right to backpay, it can affect the amount recoverable if the employer can sustain the burden of showing willful loss in that the strike hampered the efforts of the discriminatee to mitigate damages by seeking new em- ployment. Bon Hennings Logging Co., 132 NLRB 97, 99 (1961), enfd. 308 F.2d 548, 558 (9th Cir. 1962); Re-Rich Mfg. Corp., 120 NLRB 503, 505 (1958), enfd. 276 F.2d 451 (2d Cir. 1960). The willful loss of earning doc- trine, available in all backpay determinations, ensures that only actual ORDER The National Labor Relations Board affirms its Decision and Order at 243 NLRB 988 and orders that the Respondent, Consolidated Freightways, Peru, Illinois, its officers, agents, successors, and assigns, shall take the action set forth in the Order. losses are compensated. Phelps Dodge Corp v. NLRB, 313 U.S. 177, 197 (1941). To the extent these cases also allow an inquiry into a discharged striker's desire for reinstatement prior to receipt of a valid offer, the Board, we think, may properly differentiate in its treatment of backpay between discriminatees whose rights were violated while they were on the job and discriminatees who were withholding their services at the time of their discriminatory discharge.