Laborers International Union Of North America, Local 270

432 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Laborers International Union of North America, Local 270 and Office and Professional Employ ees Union Local 29, Office and Professional Employees International Union Case 32-CA- 8185(E) October 25 1988 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN AND CRACRAFT On January 26 1988 Administrative Law Judge Jay R Pollack issued the attached supplemental de cision The General Counsel filed exceptions and a supporting brief and the Applicant filed an an swering 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 rulings findings and conclusions only to the extent consist ent with this Supplemental Decision and Order In the underlying decision the judge found that Frances Incardona was a statutory supervisor and therefore recommended dismissal of the complaint allegations that alleged that the Respondent Appli cant violated Section 8(a)(1) and (3) of the Act by interrogating Incardona isolating her from contact with employees changing her work hours and dis charging her for union activities The General Counsel filed no exceptions to the judge s dismissal of the complaint allegations related to Incardona i In his supplemental decision the judge conclud ed that the evidence in the General Counsel s pos session at the time the complaint issued could not establish a prima facie case that Incardona s dis charge violated the Act because Incardona s pre complaint affidavit established her supervisory status Accordingly the judge found that the Gen eral Counsel was not substantially justified in issu ing and proceeding on the complaint allegations concerning Incardona and awarded Equal Access to Justice Act (EAJA)2 fees and expenses 3 i The General Counsel filed exceptions to the judge s dismissal of the complaint allegations related to employee Jill Smith We adopted the Judges dismissal Laborers Local 270 285 NLRB 1026 (1987) 2 5 U S C § 504 (1982) as amended by Pub L 99-80 99 Stat 183 (1985) 8 The judge found that because Laborers International Union of North America Local 270 (Local 270) filed separate annual reports for purposes of the Labor Management Reporting and Disclosure Act of 1959 its net worth should not be aggregated with its International for EAJA eligibil ity purposes citing H R Conf Rep No 99-120 (1985) which criticized the Board s decision in Carpenters Local 1361 (Atchinson Foundation) 272 NLRB 1118 (1984) The General Counsel excepts Because we reverse the judge and find the General Counsel was substantially justified in issu In her exceptions the General Counsel contends that she was substantially justified in issuing the complaint The General Counsel argues that the judge erred in equating what he believed to be easily resolved credibility issues with the absence of such issues and failing to draw reasonable infer ences from the General Counsels evidence We agree During the General Counsels investigation of the charge Incardona gave an affidavit to a Board agent stating I did not have the authority to hire and fire employees however I could make effec tive recommendations that someone be hired or fired The affidavit set out two instances where Incardona interviewed prospective employees and recommended to Valdez that they be hired They were hired after they were interviewed by Valdez The judge relying on these statements reasoned that no prima facie case of unlawful discharge could be established because at the time the Gener al Counsel issued the complaint she knew that In cardona was a supervisor We find the judge erred by failing to look beyond what is essentially a legal conclusion in the affidavit The affidavit as a whole and the file memoranda4 outlining subsequent telephone con versations with Incardona established a factually close question concerning Incardonas supervisory status First Incardonas affidavit established that she was a close friend of Leo Valdez the Respondent s business manager and thus the General Counsel could have reasoned that her opinion of prospec tive employees was sought based on her close rela tionship with Valdez rather than because of her status as a supervisor Second Incardona s affidavit established that she was paid considerably less than other clerical employees and received the same benefits Third in her affidavit Incardona denied that she assigned work or overtime to clerical em ployees 5 Fourth in a telephone conversation with mg and proceeding on the complaint we find it unnecessary to address the judge s discussion of whether the Local s net worth can be aggregat ed with the net worth of its International for purposes of qualifying for an award of fees 4 H R Conf Rep No 99-120 at 13 makes clear that because the sub stantial justification determination is to be made on the basis of the ad ministrative record made during the underlying case EAJA proceedings will not involve additional evidentiary proceedings or additional discov ery of agency files solely for EAJA purposes Nonetheless the General Counsel may decide to disclose agency files in order to meet her burden of proving that the actions in the underlying case were substantially justi fled s In the underlying case the judge found it unnecessary to resolve the conflicting evidence regarding Incardona s authonty to assign work or overtime because he found the credible evidence established that Incar dona effectively recommended the hire and discharge of office employ ees The judge did not however rely solely on the affidavit in making this determination He also relied on testimony of the Respondents wit nesses that Incardona recommended the hiring of five office clericals and the firing of two employees 291 NLRB No 72 LABORERS LOCAL 270 433 a Board agent Incardona denied that she was a su pervisor and related an incident in which she was told she was not the boss and was reprimanded for trying to delegate her work Under the Supreme Court s recent decision in Pierce v Underwood 6 the General Counsel is sub stantially justified if its position was reasonable in both law and fact In view of the above facts 7 we believe that it was reasonable for the General Counsel to infer that Incardona was an employee and not a supervisor We therefore conclude that the General Counsel was substantially justified in issuing the complaint continuing to litigate the case to the close of hearing and filing a posttrial brief with the judge Accordingly we shall deny the Applicants application for an EAJA award substantially justified and that the application seeks an award in excess of reasonably compensable expenses On consideration of the entire record in this supple mental proceeding including the record in the underly ing unfair labor practice case I make the following find ings and conclusions I THE APPLICANT S ELIGIBILITY Section 203(a)(1) of EAJA (5 U S C § 504(a)(1)) pro vides for an award of attorneys fees to a party pre vailing in an adversary adjudication before a Federal agency unless it is shown that the Governments position was substantially justified of that special circum stances make an award of attorney fees unjust In defin ing a party entitled to recover expenses incurred in an administrative proceeding 5 US C § 605(b)(1)(B) which is the applicable subsection of EAJA reads in rel evant part ORDER It is ordered that the application of the Appli cant Laborers International Union of North Amer ica Local 270 San Jose California for an award under the Equal Access to Justice Act is denied B 56 USLW 4806 (June 27 1988) The Supreme Court held that the phrase substantially justified means justified to a degree that could sates fy a reasonable person or reasonable basis both in law and fact The Court found that a sentence in the 1985 House Committee Report H R Conf Rep No 99-120 (1985) which defined substantial justification as more than mere reasonableness was not an authoritative interpretation of what the 1980 statute meant or of what the 1985 Congress intended We also observe that the burden is on the party alleging supervisory status to prove that it in fact exists Commercial Movers 240 NLRI3 288 290 ( 1979) Here the Respondent did not allege Incardona s supervisory status as a defense until the hearing Barbara D Davison Esq for the General Counsel Paul D Supton Esq (Van Bourg Weinberg Roger & Ro senfeld) of San Francisco California for the Appli cant SUPPLEMENTAL DECISION STATEMENT OF THE CASE JAY R POLLACK Administrative Law Judge On Sep tember 27 1987 the Board issued its decision in the above captioned case in which it adopted my findings and conclusions and dismissed the complaint in its entire ty (285 NLRB 1026) On October 22 1987 Laborers International Union of North America Local 270 (the Applicant or the Union) filed the instant application for fees and expenses pursuant to the Equal Access to Jus tice Act Pub L 96-481 94 Stat 2325 (EAJA) and Sec tion 102 143 of the Board s Rules and Regulations On October 23 the Board referred this matter to me for ap propriate action The Applicant seeks legal fees and ex penes in the amount of $9232 as of October 1987 The General Counsel contends in substance that the Appli cant is not eligible under EAJA because its assets must be aggregated with the assets of the Laborers Interns tional Union of North America that the complaint was Party means a party as defined in 5 U S C 551(3) who is (ii) any owner of an unincorporated business or any partnership corporation associa tion unit of local government or organization the net worth of which did not exceed $7 000 000 at the time the adversary adjudication was initiated and which had not more than 500 employees at the time the adversary adjudication was initiated except that an organization described in section 501(c)(3) of the Internal Revenue Code of 1954 (26 U S C 501(c)(3)) exempt from taxation under section 501(a) of such Code or a cooperative association as de fined in section 15(a) of the Agricultural Marketing Act (12 U S C 11410)(a)) may be a party regard less of the net worth of such organization or coop erative association The Applicants records indicate that at the time of the issuance of the instant complaint August 29 1987 it em ployed less than 25 employees and had a net worth of less than $7 million The General Counsel does not dis pute these facts However the General Counsel contends that the assets of the Laborers International Union the Applicants parent organization should be aggregated with those of the Applicant and thereby cause the apple cant to fail to qualify under EAJA In Pacific Coast Metal Trades Council (Foss Launch) 271 NLRB 1165 (1981) relied on by the General Court sel the Board held that aggregation of the net worth of an applicant and another entity is mandated by the Board s Rules whenever an entity is either directly or in directly controlled by or in control of the applicant See also Carpenters Local 1361 (Atchinson Foundation) 272 NLRB 1118 (1984) remanding case to the adminis trative law judge for determination of whether the net worth of a local union should be aggregated with the net worth of its international union In making the 1985 EAJA amendments the House Committee on the Judici ary specifically criticized the Carpenters 1361 case and stated It is the Committees intent that if the local union is considered to be a separate labor organization for the purposes of the Labor Management Reporting and Disclosure Act of 1959 it should be considered to 434 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD be a separate organization for purposes of EAJA as well and the local s entitlement of fees should be determined without regard to the assets and/or employees of the International with which it is affiliated H R Report No 120 99th Cong 1st Sess 17 (1985) See also 99 Cong Rec H R 2378 (June 24 1985) (remarks of Rep Kastenmeier) The Applicant files a separate annual report with the Department of Labor under the Labor Management Re porting and Disclosure Act (LMRDA) of 1959 and is a separate labor organization for purposes of LMRDA Accordingly the clear legislative intent of EAJA is that the Applicant be treated as a separate entity from its parent organization I therefore find that the Applicant is an eligible party under EAJA 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 alleged that the Applicant violated Sec tion 8(a)(1) of the Act by interrogating Frances Incar dona about her union activities and those of other em ployees ' Further the General Counsel alleged that the Applicant violated Section 8(a)(3) and (1) of the Act by isolating Incardona from contact with other employees changing the work hours of its employees and by dis charging Incardona and Smith because of their union ac tivities Finally the complaint sought a bargaining order to remedy the alleged unfair labor practices The Appli cant denied all such allegations It further contended that Incardona was a supervisor within the meaning of the Act and therefore excluded from coverage under the Act Finally the Union contended that no bargaining order could issue based on the union authorization cards obtained by Incardona a statutory supervisor I found in favor of the Union on all its contentions and recom mended that the complaint be dismissed in its entirety The Board affirmed my rulings findings and conclu sions and adopted my recommended Order dismissing the complaint The General Counsel concedes that the Union is a pre vailing party but contends that the issuance of the com plaint was substantially justified 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 The Board has held that the test is one of rea sonableness Where the Government can show that its ' At the trial I dismissed an allegation that the Applicant violated Sec 8(a)(1) through Dolores Valdez the wife of the Union s business manag er Leo Valdez by interrogating Jill Smith about her union activities and those of other employees This allegation was dismissed at the trial be cause the General Counsel had failed to establish that D Valdez was an agent of the Applicant or that the Union was liable for her conduct case had a reasonable basic both in law and fact no award will be made Enerhaul Inc 263 NLRB 890 (1982) revd 710 F 2d 748 (11th Cir 1983) Shellmaker Inc 267 NLRB 20 (1983) After the 1985 amendments to EAJA the Board had held that substantially justified means more than mere reasonableness See e g Lee ward Auto Wreckers 283 NLRB 574 (1987) Painters Local 277 (Polls Wallcovermg) 281 NLRB 890 (1986) In the instant case the General Counsel argues that the issues of whether Incardona was a supervisor and whether Incardona and Smith were discharged by the Union because of their union activities in violation of Section 8(a)(3) of the Act clearly turned on credibility resolutions and inferences drawn from the credible evi dence The Board has held that the General Counsel is substantially justified when evidences if credited by the trier of fact would constitute a prima facie case of un lawful conduct See SME Cement 267 NLRB 763 (1983) Charles H McCauley Associates 269 NLRB 791 793 (1984) In Leeward Auto Wreckers supra at 575 the Board held that the fact that the General Counsels wit ness could not be expected to be credited was irrelevant since it is the trier of fact and not the General Counsel which must determine whether a particular witness testa mony is worthy of belief or should be discounted The Applicant correctly argues that the Regional Di rector knew at the time that he issued the complaint that Incardona was a statutory supervisor and therefore that her discharge could not be violative of the Act During the investigation of the unfair labor practice case Incar dona gave an affidavit to an agent of the Regional Direc tor which stated inter alia I did not have the authority to hire and fire em ployees however I could make effective recommen dations that someone be hired or fired The affidavit further revealed two examples of employ ees hired on Incardona s recommendation At trial the Applicants attorney was able to establish with use of the affidavit that Incardona recommended for hire five office clericals and recommended the discharge of two office clericals Thus on the basis of Incardona s testimony it was established that she was a supervisor within the meaning of the Act and therefore her discharge could not be a violation regardless of whether she was fired for union activities See e g Parker Robb Chevrolet 262 NLRB 402 (1982) Accordingly the General Counsel could not establish a prima facie case regarding Incar dona s discharge based on the evidence in the Govern ment s possession at the time of the issuance of the com plaint The General Counsel argues that I must view Incar dona s testimony in isolation apart from the proffered defense in order to determine whether the General Counsel was substantially justified in issuing the com plaint Assuming arguendo that the General Counsel is correct I still conclude that Incardona s own affidavit established her supervisory status2 and the basis for dis 2 The possession of any one of the authorities specifid in Sec 2(11) is sufficient to place an employee in the supervisory class See e g Ohio Continued LABORERS LOCAL 270 435 missal of the complaint allegations regarding her dis charge The Applicant did not allege that the General Counsel was not substantially justified concerning the complaint allegations regarding Smith The General Counsel estab lished a strong prima facie case regarding Smiths dis charge That case was overcome by the Applicants de fense apparently not available to the General Counsel before trial that Smith would have been discharged even in the absence of her union activities The Unions suc cess in this defense was in part attributable to my credit mg the testimony of its witnesses particularly Leo Valdez the agent who discharged Smith Accordingly I find that the allegations concerning Smith s discharge were substantially justified IV THE APPORTIONMENT OF REASONABLE FEES AND EXPENSES 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 fled as it would contravene the purposes of EAJA to re quire the Government to bear the expense of defending its reasonable positions Matthews v US 713 F 2d 677 684 (11th Cir 1983) Atlas Reporting Service v Aboritz 698 F 2d 193 197 (3d Cir 1983) The Government should only be charged with that portion of the expenses attributable to its unjustifiable positions In the instant case the Applicant seeks fees and ex penses for defending the entire case However as the al legations concerning Smith were substantially justified I shall apportion the reasonable expenses accordingly Ap Power Co v NLRB 176 F 2d 385 387 (6th Cir 1949) Fair Lady 211 NLRB 189 (1974) proximately 75 percent of the record transcript pages are devoted to issues concerning Incardona and only 25 per cent concern Smith Similarly only 25 percent of the Union s brief to the judge concerned Smith and 75 per cent concerned Incardona Accordingly I shall reduce the award to reflect that only 75 percent of the hours claimed by the Applicants attorney are compensable I reject the General Counsels contention that the proper apportionment of fees should be 50 percent The General Counsels argument fails to take into account the allegations of the complaint that failed as a matter of law because Incardona was a supervisor Further the Gener al Counsel had no justification for the complaint allega tions regarding the wife of the Union s business manager In any event precision in this matter is not possible and doubts must be resolved against the wrongdoer responsi ble for the existence of the uncertainty The General Counsel correctly argues that no fees should be allowed for the Unions brief answering the General Counsels ex ceptions because the General Counsel only filed excep tions to the dismissal of Smith s case The award has been reduced accordingly The Applicant seeks attorneys fees at the rate of $135 per hour Section 102 145(b) of the Board s Rules and Regulations sets a maximum of $75 per hour Thus al though I find the rate claimed by the Union s attorney to be reasonable for such services in this community and in this case I am constrained to limit the award to $75 per hour pursuant to Section 102 145(b) See Brandeis School 287 NLRB 836 (1987) Based on the findings and conclusions I shall recom mend that the Applicant be awarded fees and expenses including time spent pursuing its application under EAJA See Tyler Business Services v NLRB 695 F 2d 73 (4th Cir 1982) DeBolt Transfer 271 NLRB 299 (1984) [Recommended Order omitted from publication ]