Kanakis Co., Inc

KANAKIS CO Kanakis Company, Inc and Charles D Franken- field Case 4-CA-12997 March 24, 1989 DECISION AND ORDER REMANDING PROCEEDING BY CHAIRMAN STEPHENS AND MEMBERS JOHANSEN, CRACRAFr, AND HIGGINS On June 27, 1986, Administrative Law Judge Michael 0 Miller issued the attached decision The General Counsel filed exceptions and a supporting brief, and Kanakis Company, Inc, the Respondent, filed a brief in reply to the General Counsel's ex- ceptions The Respondent also filed a motion to dismiss, and the General Counsel filed an opposi- tion to the motion The Board has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge's rulings, findings, and conclusions only to the extent consistent with this Decision and Order i In this case, the judge declined to reinstate a dis missed charge outside the 6-month limitations period of Section 10(b) of the Act, finding no fraudulent concealment even though the Respond- ent's president procured the dismissal of a timely filed charge by giving a perjured affidavit under oath during the Board's investigation We cannot condone such a flagrant abuse of the Board's proc- esses by a respondent seeking to avoid liability under the Act Therefore, we reverse the judge's ruling that prosecution of the complaint against the Respondent is barred by Section 10(b) of the Act The facts are undisputed The Respondent and the Union were parties to a collective bargaining agreement requiring the Respondent to use the Union s hiring hall as its exclusive source for paint ers In November 1981, the Union referred Charg- ing Party Frankenfield to the Respondent He worked for the Respondent as a painter at several jobsites until January 8, 1982, when the Respond- ent's president and owner, Pelekanakis, called him into the office and fired him Pelekanakis told Frankenfield that Union Business Agent Delker had insisted the Respondent fire Frankenfield, threatening not to refer any more painters to the Respondent unless it did so Pelekanakis suggested that Frankenfield call Delker and straighten out the matter ' The case was originally consolidated with Case 4-CB-4460 which was severed and remanded to the Regional Director pursuant to an un published Board Order dated September 18 1986 Accordingly the por tion of the judge s Order relating to Case 4-CB-4460 is no longer out standing 435 On June 4, 1982, Frankenfield filed the charge in this proceeding and gave an affidavit stating the above facts During the investigation, Pelekanakis met with a Board agent and later signed a sworn affidavit, which stated that he had specific econom- ic reasons for laying off Frankenfield and denied that the Union had requested Frankenfield's layoff or that he had told Frankenfield it had 2 On July 19, 1982, the Regional Director dismissed the charge for lack of evidence In 1985, Union Business Agent Delker was tried and convicted in a United States district court of multiple criminal charges involving extortion and fraud The Respondent's president, Pelekanakis, testified at the trial about various times when Delker had extorted money from him During his testimony, Pelekanakis stated under oath that Delker had insisted he fire Frankenfield and con- fessed that he had lied about this incident in his af- fidavit to the Board When Frankenfield learned of this testimony from a February 22, 1985 newspaper article, he requested the Board to reopen this charge On April 17, 1985, the Regional Director reopened the charge for further investigation, on November 13, 1985, he revoked the earlier dismis sal letter, and on November 27, 1985, he issued this complaint At the trial on this complaint, Pelekanakis testi- fied that during the first week of January 1982 none of his painters showed up for work except Frankenfield He testified that, when he asked Delker why, Delker said the problem was Fran- kenfield and told him to fire Frankenfield Accord- ing to Pelekanakis, Delker also threatened that, unless he fired Frankenfield, the Union would not refer any more painters to him and the health and safety of his family and business would be in jeop- ardy Pelekanakis corroborated Frankenfield's testi- mony about their conversation on the day Franken- field was fired and admitted he had no other reason for terminating Frankenfield Finally, Pelekanakis testified that he had denied all this in his Board af- fidavit because Delker had told him not to impli- cate the Union and that he had shown his affidavit to Delker before signing and returning it to the Board The judge found the complaint in this case was barred by Section 10(b) because there had been no fraudulent concealment of the operative facts from the Charging Party, even though the Respondent had presented perjured evidence to the General Counsel to induce dismissal of the charge The 2 On brief the General Counsel represents that during this investiga tion Delker also denied requesting the Respondent to terminate Franken field 293 NLRB No 50 436 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD judge interpreted statements in Ducane Heating Corp 3 and Winer Motors,4 describing examples of special circumstances where the 10(b) period would be tolled, such as fraudulent concealment from a charging party, to require dismissal of the complaint S Neither Ducane nor Winer Motors, however, involved fraudulent concealment Thus, the references to fraud on a charging party in those decisions were clearly dicta Further, before Ducane issued the Board had interpreted the Act as allowing the General Counsel `virtually unlimited" discretion to reinstate dismissed charges outside the 10(b) period,6 so there was no reason for earlier cases to discuss the fraudulent concealment excep tion as it applied to the General Counsel The only reference in Ducane itself even arguably limiting the fraudulent concealment exception to a charging party is contained in language lifted virtually un- changed from Winer Motors, and this limitation is not repeated when fraudulent concealment is dis- cussed later in the Ducane decision Courts that have considered special circum- stances alleged to warrant tolling the 10(b) period have not specifically limited the fraudulent con cealment exception to a charging party 7 One court has applied the fraudulent concealment analysis to a Regional Director's decision to solicit withdrawal of a charge, indicating that, if proven, fraud against the General Counsel could toll the 10(b) period 8 There is no question that the Respondent here perpetrated a fraud against the General Counsel by giving perjured evidence during the investigation with the intent of inducing the General Counsel to dismiss the charge This fraud was carried out by the Respondents highest official and involved the central operative facts being investigated Further, the Respondents fraud succeeded in accomplishing its goal-the dismissal of the charge here 9 Such 3 273 NLRB 1389 1390-1391 ( 1985) enfd mem 785 F 2d 304 (4th Cir 1986) The judge twice inadvertently referred to Ducane Heating Corp as Ducane Motors 4 265 NLRB 1457 1459 (1982) 5 Member Cracraft agrees that fraudulent concealment is a special cir cumstance that warrants tolling the 10(b) limitations period but she does not pass on the statements in Ducane and Winer Motors implying that fraudulent concealment is the only such exception 8 See Ducane supra at 1391 citing California Pacific Signs 233 NLRB 450 (1977) 7 See e g NLRB v Burgess Construction 596 F 2d 378 (9th Cir 1979) cert denied 444 U S 940 ( 1979) speaking only generally of fraudulent concealment from a party 8 In NLRB v Silver Bakery 351 F 2d 37 (1st Cir 1965) the First Cir cuit noted that the Regional Directors decision to recommend withdraw al was based on the Region s inadequate investigation but that the re spondents had in no way contributed to the regional director s mistake Id at 38 The court therefore refused to reinstate the withdrawn charge outside the 10(b) period finding that the Board could not rely upon any misrepresentation misconduct or even silent bad faith on the part of respondents which might have created an estoppel as none had been shown Id at 39 9 Contrary to the suggestion of our dissenting colleague the General Counsels original decision to dismiss the charge in this case was not conduct demonstrates a contempt for the Board's processes that cannot be condoned Refusing to toll the 10(b) period here would simply allow the Re- spondent to profit from its perjury and misconduct in deceiving the Board and encourage others to similarly abuse the Board's processes Further, we are unwilling to penalize the Charging Party by de- priving him of any remedy in this situation where he has complied with the procedural requirements for filing a charge and then supported it with evi- dence that makes out a violation 10 We cannot accept that result We do not permit parties to profit from perjured testimony at hear- ings Instead, we reopen the record to receive newly discovered evidence showing perjury as to a material fact 11 We should do no less here based solely on a credibility determination Not only did the Respondent specifically deny the Charging Party s version of the termination inter view thus creating a credibility conflict with the Charging Party s evi dence but the Respondent also set forth detailed economic reasons for laying off the Charging Party in its false sworn statement As so aptly stated by our dissenting colleague by swearing to these false economic reasons the Respondent thus offered to the General Counsel a nondis crimmatory business reason for its action against the Charging Party Even if the General Counsel had credited the Charging Party s version of the termination interview (or simply left the credibility determination for a hearing as suggested by our dissenting colleague) under Wright Line 251 NLRB 1083 (1980) enfd 662 F 2d 899 (1st Cir 1981) cert denied 455 U S 989 (1982) this still left the question of whether the Re spondent would have laid off the Charging Party regardless of its illegal motive as expressed during the termination interview The General Coun sel may well have decided in reliance on the false economic reasons set forth in the Respondent s perjured affidavit that the Charging Party would have been laid off for economic reasons even in the absence of the Respondents illegal motive Therefore the Respondent s perjury certain ly did conceal operative facts from the General Counsel the absence of any legitimate economic reasons for the Charging Party s layoff Track ing our dissenting colleagues test for fraudulent concealment the Re spondent proffered to the General Counsel false evidence about the eco nomic justification for its layoff (evidence to which the Charging Party was not privy) that seemed inherently trustworthy that was not contra dicted by any other evidence and that dispelled any reasonable basis for proceeding against it This was fraudulent concealment Our dissenting colleagues partial reliance on one provision of Sec 10060 of the Casehandling Manual is misplaced because as noted above the Respondent submitted other evidence in addition to the flat denial of the statement attributed to Pelekanakis Nor do we have access to all the evidence adduced in the investigation and considered by the Regional Director Regional Directors are charged to consider all the evidence ad duced in the investigation in making their decision Indeed the sentence immediately preceding that quoted from Sec 10060 by our dissenting col league states The best indications of truthfulness lie in the probabilities inherent in a given story (as opposed to another story) viewed in the light of the entire pattern of available evidence (Emphasis in original ) Because experience indicates that Casehandling Manual Sec 10060 ap plied in its entirety has served this statute well we see no purpose in second guessing the exercise of prosecutorial discretion in circumstances where admittedly perjured testimony was given by a respondent as part of its defense 10 Our dissenting colleague points out that the Boards investigative processes can be protected by prosecution of Pelekanakis under 18 U S C § 1001 for making false statements to the Board in the course of its inves ligation of this matter However prosecution and even imprisonment of Pelekanakis would be of little comfort to the unlawfully discharged Charging Party in this case who under our dissenting colleagues view would be effectively stripped of his recourse to the Board s remedial processes by Pelekanakis perjury ii Inland Container Corp 273 NLRB 1856 1857 (1985) 274 NLRB 887 (1985) 275 NLRB 378 (1985) Electrical Workers IUE Local 745 Continued KANAKIS CO The reinstatement of this charge does not offend the purpose of Section 10(b), which is to protect respondents from the litigation of stale claims Indeed, here the Respondent's main witness had preserved his recollection by testifying about the events involved only a year before the trial in this case Nowhere in the legislative history of Section 10(b) is there any support for the proposition that a charged party may perjure itself during the investi- gation of an unfair labor practice charge and then, on discovery by the General Counsel of that per- jured testimony, successfully invoke the affirmative defense of Section 10(b) We find that the Respondent's fraud here tolled the 10(b) period Accordingly, we shall reinstate the dismissed charge and remand the case to the judge for a decision on the merits 12 ORDER It is ordered that this proceeding is remanded to the administrative law judge for further action con- sistent with the above IT IS FURTHER ORDERED that the judge shall pre- pare and serve on the parties a supplemental deci sion containing such resolutions, findings, conclu sions, and recommendations as found necessary consistent with this remand Copies of the supple- mental decision shall be served on all parties, after which the provisions of Section 102 46 of the Board's Rules and Regulations shall be applicable CHAIRMAN STEPHENS, dissenting This case presents the important and apparently novel question of whether the General Counsel may invoke the equitable doctrine of fraudulent concealment to toll the running of the limitations period under Section 10(b) despite the fact that the charging party was on notice of unlawful conduct such that the latter would not otherwise be able to avail himself of the tolling rule My colleagues con elude that the General Counsel is entitled to have the limitations period tolled where, as here, the Re gional Director decides not to issue a complaint on the basis of a false statement (contradictory to the charging party's) provided to the Board by the re- spondent during an investigation of a charge Al- though this result has a certain equitable appeal, in the sense it prevents a wrongdoer from benefiting from its own dissembling, I believe that today's de (McGraw Edison) 268 NLRB 308 (1983) enfd 759 F 2d 533 (6th Cir 1985) See also Auto Workers Local 259 (Atherton Cadillac) 276 NLRB 276 (1985) 12 The Respondent contends in its motion that the complaint should be dismissed because of a release signed by Charging Party Frankenfield in a civil action in which the Respondent was a defendant The General Counsel filed an opposition to this motion As this case is being remanded to the judge the judge shall consider the Respondents motion and the General Counsel s opposition on remand 437 cision extends the doctrine of fraudulent conceal ment to an unprecedented, and in my view unwar ranted, extent Accordingly, I dissent from the re fusal to dismiss the complaint I On January 8, 1982, the Respondent's president, Pelekanakis, terminated Charles Frankenfield, the Charging Party, who had been employed as a painter With remarkable candor, Pelekanakis ex plained to Frankenfield that he was forced to do this at the behest of the Union's business agent, who evidently harbored some personal animosity against this employee and who had refused to refer other painters to the Employer as long as it re- tained Frankenfield Coupled with the discharge itself, Pelekanakis' statements to Frankenfield, which were essentially admissions against interest, clearly put the latter on notice as to facts that com- menced the running of the limitations period under Section 10(b) Unquestionably, if Frankenfield had waited more than 6 months beyond January 8 to file with the Board a charge alleging a discrimina- tory discharge under Sections 8(a)(3) and 8(b)(1)(A) and (2), the General Counsel would have been barred from issuing a complaint Con- versely, on the filing of a timely charge, the Gene- al Counsel could have issued a complaint and pro- ceeded to hearing Had an administrative law judge credited Frankenfield's testimony of what he was told by Pelekanakis, the evidence would have been sufficient to support a violation of the Act i As it happened, Frankenfield did file a timely charge Following routine procedure,2 the Region al Office commenced an investigation of the allega tions, including an interview with Pelekanakis He not only agreed to the interview, but also submit ted a sworn statement that Frankenfield was termi- nated because of lack of work This explanation, of course, flatly contradicted the latter's account of Pelekanakis' previous admissions to him Faced with this conflicting evidence, the Region- al Director on July 19, 1982, opted, within his stat- utory discretion, not to prosecute the case 3 How- ' Cf Property Resources Corp Y NLRB 863 F 2d 964 (D C Cir 1988) enfg 285 NLRB 1105 (1987) (Board was entitled to rely on circumstan teal evidence of discriminatory layoffs as against respondent employers mere assertion that it had lawful business reasons for such layoffs) 2 Board s Statements of Procedure Sec 101 4 See also NLRB Case handling Manual (Part One) Unfair Labor Practice Proceedings Secs 10050-10064 3 In this regard it is noteworthy that the Casehandling Manual which of course does not purport to be a statement of law but is intended as a guide of practice and procedure for the Regional Offices states at Sec 10060 (emphasis in the original) In the infrequent case in which (1) applying all relevant principles the Region is unable to resolve credibility and (2) the resolution of the conflict means the difference between dismissal and issuance of complaint a complaint should be issued 438 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD ever, in 1985 Frankenfield brought to the Regional Office's attention the fact that Pelekanakis, in an unrelated, criminal action against the Union's busi- ness agent, had just admitted that 3 years before he had given false statements to the Board regarding Frankenfield's discharge The Regional Office eventually revoked its earlier dismissal letter and issued the complaint on which this case was tried The administrative law judge, however, on the basis of 10(b), recommended dismissal of the com- plaint II Congress added Section 10(b) to the Act in 1947 for a twofold purpose-"to bar litigation over past events `after records have been destroyed, wit- nesses have gone elsewhere, and recollections of the events in question have become dim and con fused,' H R Rep No 245, 80th Cong , 1st Sess , p 40, and of course to stabilize existing bargaining re- lationships "4 Just as the first reason enhances the integrity of the factfinding process, the second ground serves an equally important purpose of es tablishing a sense of repose over disputes among employers, employees, and unions Because, in the main, employment as well as bargaining relation ships tend to be ongoing, Section 10(b) reflects a policy judgment that it is better for these relation ships (and for industrial peace in general) to bring the disputes to a head in fairly short order rather than to have an extended period in which to vindi cate a statutory right 5 Opponents of the amendment complained that the relatively short period of 6 months would "en courage employer unfair labor practices of a kind which cannot be readily detected,"6 such as sur- veillance and espionage, and, indeed, no specific exceptions were included in the statute to cover such situations Yet, in keeping with what the courts have done with respect to other unrestricted limitations statutes, the Board encountered little difficulty in engrafting onto 10(b) a tolling princi- ple that takes into account a charging party's lack of knowledge as to facts constituting a violation 7 This is true especially where the charging party's ignorance can be traced to either the respondent's prevarication or its mute concealment of relevant information 8 Significantly, the common thread 4 Machinists Local 1424 (Bryan Mfg) v NLRB 362 US 411 419 (1960) (footnote omitted) See United Parcel Service v Mitchell 451 U S 56 70-71 fn 7 (1981) (Stewart J concurring in judgment) quoted in part in DelCostello v Teamsters 462 US 151 171 (1983) 6 H R Rep No 245 80th Cong 1st Sess 90 (1947) (minority views) 7 Danzansky Goldberg Memorial Chapels 264 NLRB 840 843 (1982) and cases cited therein 8 See ACF Industries 231 NLRB 83 90-91 (1977) enfd 592 F 2d 422 430-431 (8th Cir 1979) running through the reported case law is that it is the knowledge (or the lack thereof) of the charging party, not that of the General Counsel, that triggers the running and the tolling of the statute 9 Given Frankenfield's knowledge of the relevant facts here, which did prompt him to file a timely charge with the Board, our decisions provide no basis on which to toll Section 10(b) Because the Regional Director, as the agent of the General Counsel, decided to dismiss the charge, notwith standing that his decision was based on an errone- ous resolution of the conflicting testimonial evi- dence, the judge correctly read Winer Motors10 as supporting a dismissal of the complaint III As our institutional experience well confirms, un- lawful discharge cases are frequently the most problematic for the Board, as well as the General Counsel, because their resolution most often turns on whether to believe the charging party's allega- tion of animus or the respondent's assertion of a nondiscriminatory, business justification The Re gional Offices, which ably process literally thou- sands of charges each year within administratively prescribed time guidelines, are expected to resolve these factual conflicts and, to do this, the field in vestigators must make judgments based on an array of factors, including demeanor 11 Yet a critical fact remains that it is the Board that Congress designated as the ul*imate arbiter of not only questions of law but also questions of fact The 1947 amendments are most commonly remem bered for restructuring the Agency so that the Judi cial role of the Board was enhanced while the in- dependent office of the General Counsel was cre- ated to fulfill the prosecutorial role Under this scheme, if the twin purposes of the limitations period-encouraging the prompt filing of claims and providing final repose against not only outdat- ed but also disposed-of claims-are to be achieved, then doubtful cases like the instant one should be submitted to the Board for determination Here there was a reasonable basis for believing that a co- lorable claim existed against the Respondent Only The doctrine of fraudulent concealment does not grant the aggrieved party a license to be oblivious As a principle designed to do equity it must necessarily take into account the actions and inaction of the ag grieved party Thus the tolling effect of the concealment ceases where the aggrieved party either actually discovers or by reasonable diligence could have discovered a factual basis for filing a charge See ACF Indus tries v NLRB supra 592 F 2d at 430-431 and cases cited therein 9 The rare occasion on which fraud practiced on the General Counsel after the filing of a charge might toll the limitations period is discussed infra 10 265 NLRB 1457 (1982) 11 See NLRB Casehandling Manual (Part One) Unfair Labor Practice Proceedings Sec 10060 KANAKIS CO in the crucible of an administrative hearing, where evidence is examined and cross-examined before a neutral factfinder, is the truth most likely to emerge 12 Moreover, it should be noted that Section 10(b) itself is structured in such a way as to give the General Counsel every opportunity to make a thor- ough investigation before disposing of the charge Only the filing and service of the charge are sub- ject to the 6 month limitation 13 Thus, the General Counsel does not confront a statutory deadline that might on occasion pose the dilemma of being forced to cut short an investigation and make a precipitous decision not to file a complaint In such a situation the Board might well be justified in adopting a more lenient standard of equitable toll- ing 14 But given the opportunity of wide investiga- tion, it seems not only fair, but also in keeping with the finality afforded by a limitations statute, that in cases like this one, once an investigation is com pleted, an evaluation of the evidence is made, and the case is closed, the General Counsel should not be allowed so easily to revisit the matter The effect of today's holding on such cases, I fear, is to provide the Regional Office essentially an open-ended option of reassessing its previous credibility determinations It will now be able to dismiss a case where it feels that its ability to mount a successful case against a respondent is im paired by relatively weak, testimonial evidence, safe in the knowledge that it can resurrect the case should it uncover evidence of culpability not previ- ously admitted by the respondent on investigation In my view, however, the fraudulent concealment rule was never intended to provide a second bite because the General Counsel initially believed the wrong witness IV The majority develops two justifications for re- suscitating this case I find neither especially per- suasive 12 See Sec 10(b) which provides in pertinent part that such a pro ceeding shall so far as practicable be conducted in accordance with the rules of evidence applicable in the district courts of the United States 13 The statute of limitations as passed by the House of Representatives in the Taft Hartley legislation had contained a 6 month limit on the issu ance of a complaint as well as a 6-month limit on the filing of the charge H R Rept No 245 80th Cong 1st Sess 40 (1947) reprinted in I Leg Hist 331 (LMRA) However the House and Senate conferees agreed to eliminate the former limitation H R Rept No 510 80th Cong 1st Sess 53 (1947) reprinted in I Leg Hist at 557 14 Cf EEOC Y Gladieux Refinery 631 F Supp 927 935-936 (N D Ind 1986) (in Age Discrimination in Employment Act case in which complaint must be filed within prescribed limit the EEOC can obtain a judicial order tolling the statute where in the course of investigation the agency issued to the employer a valid subpoena duces tecum with which the employer has refused to comply) A 439 My colleagues make a preliminary point that is not so much a legal argument as an observation that the applicable Board and court precedents-in particular, Ducane Heating Corp ,15 Winer Motors,18 NLRB v Burgess Construction, 17 and NLRB v Silver Bakery,' 8-do not foreclose the result here because they do "not specifically [limit] the fraudulent concealment exception to a charging party " With all respect, I think my colleagues give these precedents short shrift It is true that the court in Silver Bakery acknowledged the possibility of reinstating, after the 10(b) period, charges that were dismissed as a result of a respondent's "mis- representation, misconduct, or even silent bad faith "19 But that case cannot be viewed as leaving the door ajar for the majority's position today Given the facts of Silver Bakery, the court simply had no occasion to define the parameters of the fraudulent concealment doctrine Further, contrary to the majority's description, the court's opinion in Burgess Construction did not speak "only generally" on the subject of fraudulent concealment In Burgess, the court upheld the Board's finding that the statute had been tolled until the charging party union discovered the evi- dence of the respondent employer's unlawful con- duct, which the employer had deliberately with- held from the union The court said "If the Union actually knew, or by the exercise of due diligence should have known about the alleged unfair labor practice, the statute would not be tolled "20 The opinion, like other Board precedent cited above, is devoid of any qualifying principle that would war- rant the disregard of a charging party's knowledge in a case such as this one Finally, the majority dismisses as dicta the dis- cussions of fraudulent concealment in Ducane Heat- ing and Winer Motors, even as they relate to a charging party However, I would submit that the analysis of the rule in both cases was neither gratu itous nor fundamentally flawed In both cases, the General Counsel had argued that "newly discov- ered evidence," which called into question the Re gional Director's initial view of the facts at the time of the charge withdrawal (Winer) and charge dismissal (Ducane), justified reviving the matters beyond the 10(b) penod The Board disagreed in Winer, holding that the failure of the respondent to i5 273 NLRB 1389 (1985) enfd mem 785 F 2d 304 (4th Cir 1986) 19 265 NLRB 1457 (1982) i 596 F 2d 378 (9th Cir 1979) 18 351 F 2d 37 (1st Cir 1965) 19 351 F 2d at 39 20 596 F 2d at 383 440 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD confess to a violation during the original investiga- tion could not overcome the charging parties knowledge of the relevant facts surrounding their layoffs, in short, the respondent's statements to the Board agents during their investigation did not constitute fraud as traditionally understood Simi- larly, in Ducane, the Board held that the Region's bare assertion of the discovery of new evidence, the substance of which was never proffered to the administrative law judge, was insufficient to sustain the General Counsel's burden of proving how op- erative facts germane to the alleged violation were concealed from the Regional Office 21 It is true that, unlike Ducane Heating, the Gener al Counsel here has disclosed to the Board what was "newly discovered"-Pelekanakis' admission made during the 1985 criminal proceeding Yet, the substance of his admission was not really new in- formation Moreover, the General Counsel fails to come to grips with the clear implications of Winer Motors For in Winer, just as in this case, the re spondent offered to the General Counsel a nondis criminatory business reason for its action against the charging parties, that the General Counsel sub- sequently decided that the asserted reason might be pretextual was not sufficient to toll 10(b) Neither should it be sufficient in this case, which is less compelling for the General Counsel in light of Pe lekanakis' earlier and open disclosure to Franken- field of the real reason for terminating him B Because, as the foregoing discussion shows, the most directly relevant case law offers no support for overturning the dismissal of the complaint, my colleagues advance a second line of argument that is predicated on analogizing this case to cases in which, after decision, the record is reopened on discovery that testimony was perjured A similar argument might also be made that a refusal to rein- state the case here would be inconsistent with Board precedents holding that the discovery of fraud or perjury will support reopening settlement agreements In the abstract, there is something to be said for cultivating logical consistency in our law It is cer- tainly consonant with notions of fairness and even- handedness Moreover, at first blush it seems to make little sense that the Board's ability to respond to the discovery of fraud or perjury should turn on the particular stage at which the dissembling oc curred, whether it be at the charge stage, during a hearing, or in conjunction with a settlement How- ever, I do not believe that Congress has given the 21 273 NLRB at 1390 1391 Board unrestricted latitude to synchronize the grounds for tolling Section 10(b) with those for granting a new trial or setting aside a settlement With respect to the conduct of our administrative hearings, the Act grants the Board unquestionably broad discretion to reopen a matter 22 Similarly, although there is nothing in the statute that speaks directly to the issue, the Supreme Court long ago confirmed in Wallace Corp v NLRB 23 the broad authority of the Board to set aside a set- tlement agreement where the respondent fails to comply with its terms Thus, Norris Concrete Mate rials24 is but a variation of that rule, fortified by the additional rationale that, where a party having no intent to comply with it enters into a settlement agreement that disposes of a complaint, the misrep- resentation is sufficient not only to nullify the agreement but also to toll the running of Section 10(b) 25 That the Board in Norris also indicated that it would not countenance the respondent's `contempt for the Board and its processes," which as my colleagues suggest may in a sense aptly de scribe Pelekanakis' earlier statements to the Board investigators here, should not be disassociated from the Board's overriding concern for protecting the efficacy of settlements in Board litigation In contrast, as shown above in part II, Congress spoke quite directly on the timeliness of charges And although the Supreme Court in Bryan Mfg, 362 U S at 429 fn 19, did reserve on the issue of fraudulent concealment in the context of Section 10(b), the Court's opinion is nevertheless instruc tive The question in Bryan was whether the Board could entertain beyond the 10(b) period a charge against an illegal bargaining agreement with a mi- nonty union It was urged to the Court that the public character of the statutory right being vindi- cated (employee self-determination) outweighed the competing interest of barring stale claims and that the theory of a continuing violation thus could be adopted to circumscribe Section 10(b) The Court, however, disagreed, observing that the accommo- dation between these competing factors has already been made by Congress " 26 In making that accom- 22 Sec 10(d) provides Until the record in a case shall have been filed in a court as hereinafter provided the Board may at any time upon rea sonable notice and in such manner as it shall deem proper modify or set aside in whole or in part any finding or order made or issued by it See also Sec 10(e) which authorizes the court to grant leave to a party to adduce further evidence before the Board on a showing that such evi dence is material and there were reasonable grounds for the failure to in troduce such evidence earlier 22 323 US 248 (1944) 24 282 NLRB 289 (1986) 25 Cf Ott V Midland Ross Corp 600 F 2d 24 32 (6th Cir 1979) (mis representation in connection with negotiation of consultation agreement that purported to settle age discrimination claim renders agreement void able and may also toll the statute of limitations until defrauded party dis covers or should have discovered misrepresentation) 26362US at 428 KANAKIS CO modation, Congress was not leaving the Board's in vestigatory processes totally without protection against perjury and other fraud Although Section 10(b) may require that the Board give repose to Frankenfield's discrimination claim, protection of the Board s investigatory processes may be achieved by pursuing a course established by Con- gress-recommending criminal prosecution of Pele kanakis under 18 U S C § 100127 27 C Despite my disagreement with the majority, I am not unmindful of the origins of the fraudulent con cealment doctrine As a creature of equity, it does not lend itself to broad pronouncements Rather, its application must turn on the unique facts of a given case 28 I do not rule out the possibility that there may be cases in which the General Counsel should be allowed to toll Section 10(b) where a fraud is perpetrated on her office For example, a different case may be presented where the respondent prof- fers to the General Counsel false evidence (to which the charging party has not been privy) that seems inherently trustworthy, that is not contra- dicted by any other evidence known to the Gener al Counsel or the charging party,29 and that dispels 27 This provision was the basis for the prosecution of a witness who gave false testimony in a Board proceeding US v Krause 507 F 2d 113 (5th Cir 1975) 28 Cf Bowen v City of New York 476 U S 467 479-481 (1986) (equita ble tolling of limitations period upheld as consistent with congressional intent and called for by the facts of the case ) 29 Additional facts however may come to the attention of the General Counsel that would prompt a person in the exercise of reasonable dill gence to pursue a further investigation which if done would likely un cover additional evidence that discredits the respondents defense This obviously would weigh against tolling the statute My colleagues suggest that this case does fall within the hypothetical exception described in the accompanying text in that supposedly more than questions of the credibility of testimony were involved in the original investigation of the charge in the present case However neither the posi tion of the General Counsel nor the record supports this counterargu ment First the General Counsel argues simply that Pelekanakis engaged in fraudulent concealment by proffering perjured testimony about his rea sons for laying off Frankenfield The General Counsel had believed Pele kanakis statement that the layoff was for economic reasons rather than the result of union pressure The Respondents defense thus resembled those found in many of our 8(a)(3) cases in which complaints have issued In some cases after a hearing an employers claims are believed in others they are rejected as pretext and hence the Wright Line defense falls I do not regard a respondents bare assertion of such claims at the investigatory stage of a proceeding to be fraudulent concealment as that concept is generally understood regardless of whether an adminis trative law judge subsequently discredits the claims when the witnesses testify A more apt view of an employer s uncorroborated testimonial de fense may be found in the recent case of Property Resources Corp v NLRB 863 F 2d 964 (D C Cir 1988) in which the question was wheth er union employees were laid off for lawful economic reasons or for un lawful retaliation in response to a dispute over wage increases The court observed (863 F 2d at 968) That an employer testifies that it had business reasons for laying off union members during a head to head clash with the union is not creditable in itself It would be a rare hearing before the National Labor Relations Board in which an employer did not make such a claim To establish that it would have laid off the painters even if the union had backed down and renegotiated the increases Tnboro [the 441 any reasonable basis for proceeding against the re- spondent 30 The resolution of this hypothetical, of course, must await a future concrete case It is enough to conclude that, on the facts of the instant case, I do not believe the General Counsel has made a compelling case for equitable relief from Section 10(b) employer] needed to assemble more than bare assertions or even plausible reasoning it had to furnish proof This it failed to do Thus the evidence relied on by the Board while circumstantial is suffi dent [to sustain the violation] Likewise the Respondent here apparently did not offer adequate proof to the General Counsel or at least none of which the Board is aware for as my colleagues concede we [do not] have access to all of the evi dence adduced in the investigation and considered by the Regional Di rector In short the General Counsel who has the burden in seeking to avoid the 10(b) defense simply has not made a convincing case either le gaily or factually 30 See Equal Access to Justice Act 5 US C § 504 (Supp IV 1986) which allows reasonable attorney fees and costs to be assessed against the Board for the General Counsels prosecution of cases that are without a substantial justification in law and in fact By the same token it would not be appropriate to assess EAJA fees and costs on behalf of a respond ent where the General Counsels case falls simply because the administra tive law judge discredited the prosecution witnesses whom the General Counsel previously had reason to believe Margaret M McGovern Esq for the General Counsel Charles E Shoemaker Jr Esq, of Allentown, Pennsyl vania, for the Respondent Company Stephen C Richman Esq (Markowitz and Richman) of Philadelphia, Pennsylvania for the Respondent Union DECISION STATEMENT OF THE CASE MICHAEL 0 MILLER, Adminstrative Law Judge This case was heard on 31 March 1986 in Bethlehem Penn sylvania based on unfair labor practice charges filed by Charles D Frankenfield an individual on 4 June 1982 and a consolidated complaint issued by the Regional Di rector of Region 4 of the National Labor Relations Board (the Board) on 27 November 1985 The console dated complaint alleges that International Brotherhood of Painters Allied Trades Local 1269 (the Union or Local 1269) violated Section 8(b)(1)(A) and (2) of the National Labor Relations Act (the Act) by causing and attempting to cause Kanakis Company, Inc (the Em ployer or Kanakis) to discriminate against its employees in violation of Section 8(a)(3) of the Act It further al leges that Respondent Employer discriminatorily dis charged Frankenfield in violation of Section 8(a)(3) and (1) of the Act Respondents timely filed answers deny the commission of any unfair labor practices All parties were afforded full opportunity to appear, to examine and cross examine witnesses and to argue orally Briefs, which have been carefully considered, were filed on behalf of the General Counsel and the Re spondents 442 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Based on the entire record, i including my observation of the witnesses and their demeanor, I make the follow ing FINDINGS OF FACT I EMPLOYERS BUSINESS AND THE UNIONS LABOR ORGANIZATION STATUS-PRELIMINARY CONCLUSIONS OF LAW The complaint alleges , and Respondent Employer admits, that the Employer is a Pennsylvania corporation which is engaged in commercial and industrial painting with its principal place of business located in Allentown, Pennsylvania It is further alleged and admitted that, during the past year, in the course and conduct of its business, the Employer performed services outside the Commonwealth of Pennsylvania which were valued in excess of $50,000 I find and conclude that Respondent Employer is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act The complaint alleges, Respondents admits and I find and conclude that Respondent Union is a labor organiza tion within the meaning of Section 2(5) of the Act II THE UNFAIR LABOR PRACTICES A Facts 1 Frankenfield's employment and discharge Since 1981, Respondent Employer has been signatory to a collective bargaining agreement with the Union which establishes the Union as the Employers exclusive source of painters Charles Frankenfield is a painter and had been a member of the Union for more than two dec ades In November 1981, the Union referred Franken field to, and he began his employment with the Employ er He worked on three different jobsites in late Decem ber 1981 and the first week of January 1982, he was a working foreman on Kanakis Fairmont Village jobsite At various time the Employer had between two and six painters on the Fairmont Village job In the first week in January 1982 however he found that his paint ers were failing to show up for work By the end of that week, the only painter reporting for work was Franken field In order to find out what the problem was Em manuel Felekanakis, the Employers president called Robert Delker, the Union s business agent, who ran its hiring hall Delker came out to the Employers office and Pelekanakis asked Delker why the painters were not showing up Delker told him, The problem was Fran kenfield Explaining to Pelekanakis that Frankenfield and his son had vandalized Delker s truck 2 Delker re ferred to Frankenfield as a no good son of a bitch" and told Pelekanakis to fire him Unless he did so Delker said, the Employer would get no painters Further Delker threatened that unless Pelekanakis complied, his i The General Counsels unopposed motion to correct the transcript is granted and made a part of the record 2 There was no evidence other than this hearsay statement that such an act had occurred health and the safety of his family and his business were in jeopardy On 8 January 1982, Frankenfield went to the Employ er s office where Pelekanakis told him that he was being let go, that Delker had insisted that he be fired Pelekan akis repeated Delker's threat that the Employer would get no other painters unless it fired Frankenfield Pele kanakis suggested that Frankenfield call Delker and straighten the matter out After being told that he was discharged, Frankenfield told Pelekanakis that he had plans to run against Delker for the business agent's job in next May s election 3 Pelekanakis admitted to Franken field s son that he fired Frankenfield on Delker s insist ence At hearing, Pelekanakis also admitted that he had no other reason, as of 8 January 1982, to terminate Fran kenfield 4 Over the next few weeks, Frankenfield returned regu larly to the Employer, seeking reemployment He also tried to talk with Delker Both efforts were unsuccessful 2 Charges filed, dismissed, and reopened Frankenfield filed the instant unfair labor practice charges in June 1982 and supported his charges with the same evidence which he gave in this hearing In the course of the investigation, a Board agent interviewed and took an affidavit from Pelekanakis Pelekanakis, however, had spoken first with Delker and had been told by Delker not to implicate the Union in Frankenfield s discharge Pelekanakis even showed Delker his affidavit before signing and returning it to the Board In that affi davit, Pelekanakis falsely denied that the Union had re fused to furnish painters because of Frankenfield that Delker had requested him to lay Frankenfield off, that the Union had anything to do with Frankenfield s termi nation, or that he told Frankenfield that he had been laid off on Delker's request He asserted economic reason for Frankenfield's layoff On 19 July 1982 the Regional Director dismissed Frankenfield s unfair labor practice charges for lack of evidence In 1985 Delker was tried in United States district court on multiple criminal charges including racketeer ing, extortion, conspiracy and fraud In the course of that trial Pelekanakis testified that he had fired Franken field on Delker s insistence and admitted that he had lied in his NLRB affidavit This evidence came to Franken field's attention via a newspaper article dated 22 Febru ary 1985 On 17 April 1985 the Regional Director re opened Frankenfield s charges for further investigations, on 13 November 1985, he revoked the 19 July 1982 dis missal letter and on 27 November 1985 he issued the consolidated complaint 5 3 Frankenfield had told some other painters about these plans while working on another jobsite before he started to work for Kanakis He had taken no formal steps toward this end and there was no evidence es tablishing that either Delker or Pelekanakis knew of his intentions before the discharge * Whether or when Frankenfield would have been laid off for lack of work had he not been discharged on 8 January 1982 is a compliance issue s On 29 April 1985 Delker was found quilty of the criminal charges and sentenced to 35 years in prison He was still in Federal custody at the time of this trial KANAKIS CO B Analysis and Conclusions I Section 10(b) (a) The Employer Respondent Employer, citing Ducane Heating Corp, 273 NLRB 1389 (1985), argues that the complaint against it must be dismissed pursuant to Section 10(b) of the Act This statutory limitations period, it asserts, begins to run when the charging party knows or should have known of the basis for his charge In this case, that knowledge existed from the time Pelekanakis told Frankenfield the reason for his discharge The General Counsel, similarly citing Ducane Heating, argues that the Respondents fraudulent concealment of the operative facts bars oper ation of the limitations period In Ducane Heating, the Board reversed California Pa cific Signs, 233 NLRB 450 (1977), and Winer Motors, 265 NLRB 1457 (1982), to the extent that they were incon sistent with Ducane Motors" and held A dismissed charge may not be reinstated outside the 6 month limitations period of Section 10(b) absent special circumstances in which a respondent fradulently conceals the operative facts underlying the alleged violation Where there is a fraudulent concealment, the limitations period begins to run when the charging party knows or should have known of the concealed facts [273 NLRB at 1390] The Board went on to state [A] respondent has the right under the statute to be assured that absent the existence of a properly served charge on file, it will not be liable for con duct occurring more than 6 months earlier To permit the General Counsel to resurrect either with drawn or dismissed charges is inconsistent with this principle and should be permitted only where a re spondent, in effect forefeits its right to such assur ances by engaging in fraudulent concealment [273 NLRB at 1391 ] In this case, the Employer did not hide from the Charging Party those facts which if proved, would es tablish the violations Rather, together with the Union, it concocted a fradulent defense and denied to the Regional Director that which it had admitted to the Frankenfields Thus, it prevented the Charging Party from convincing the Boards Regional Director that there was sufficient evidence on which to proceed to complaint Is this, then, the kind of fraudulent concealment that tolls a statute of limitations? Harsh as the result unquestionably is, I be lieve that the answer is no In that portion of Winer Motors, supra at 1458-1459, which was not reversed in Ducane Heating, supra the Board noted that the fraudu lent concealment rule 6In those cases a distinction for 10(b) purposes had been drawn be tween dismissed and withdrawn charges with respect to whether they might be reinstated The Board in Ducane Motors eliminated that distinc lion 443 clearly has no application to the case before us where the alleged discriminatees were not ignorant of the alleged violation within the limitations period It is a rare case where a respondent agreed with a charging party's assessment that respondent engaged in conduct violative of the Act Rather, in most cases, respondent denies the misconduct al leged or proffers an explanation, and the General Counsel must decide if the evidence is sufficient to sustain the charging party s position If so, the Gen eral Counsel issues a complaint, if not, [she] dis misses the charge Further, the Board stated, in footnote 12, That the Respondent did not confess to unfair labor practices during the original investigation but, rather, denied the allegations or proferred an eco nomic defense, does not constitute the type of `fraud" warranting reinstitution of a charge in spite of the 6 month limitation of Sec 10(b) The Board law, it appears, draws a distinction between a putative respondents withholding of information from one who would be a charging party, thereby preventing that individual from filing a timely charge, and either withholding information from, or misleading, the Gener al Counsel, thereby causing her to dismiss the charge or solicit its withdrawal Reexamination of this distinction, whether holding' or dicta," is for the Board, not the administrative law judge I am constrained to follow Board law The Board's rule, I would further note, is consistent with the approach to fraudulent concealment as found in other Federal and state jurisdictions Dryco Corp v Firestone Tire & Rubber Co, 386 F Supp 546, 549 (D C Ohio 1980), 51 Am Jur 2d Limitations of Ac tions, § 148, and cases cited there Although not condon ing the misconduct I shall therefore recommend that the charge against Respondent Employer be dismissed 7 (b) The Union A statute of limitations, such as Section 10(b), is a matter of affirmative defense If not pleased it is waived Chicago Roll Forming 167 NLRB 961, 970 (1967) Re spondent Union has not pleaded this defense either in its answer at hearing or in its brief Accordingly I shall treat the CB case on its merits 2 Robert Delker s agency status Although admitting in its answer that Delker was the Union s business agent at the appropriate times Respond ent Union denied that he was its agent The record re flects that Delker was an elected official of the Union and ran its hiring hall In Electrical Workers IBEW Local 453 (National Electrical) 258 NLRB 1427 1428 (1981) the Board stated 7 Although this may seem to encourage respondents to proffer false de fenses if they are willing to risk the penalties for purjury it may also en courage the issuance of complaints consistent with the General Counsel s guidelines and Board law (McCauley Associates 269 NLRB 791 (1984)) in which credibility questions best resolved at hearing have been raised 444 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD The Board regularly finds elected or appointed offs cials of an organization to be agents of that organs zation While the holding of elective office does not mandate a finding of agency per se, such status is persuasive and substantial evidence which will be decisive absent compelling contrary evidence See also Penn Van Express, 274 NLRB 449 (1985) No contrary evidence was offered here, accordingly, I find that Robert Delker was Respondent Union s agent Respondent further argues that the Union was as much a victim of Delker's criminal activities as was Franken field and, as such, should not be held responsible for his activities Also asserted is the contention that Delker s actions were neither authorized nor foreseeable, that those actions were outside the scope of his agency These arguments are without merit In NLRB v George town Dress Corp, 537 F 2d 1239 (1976), the Fourth Cir cult stated that the test of whether a principal is respon sible for the illegal acts of an agent is whether those acts were clearly inappropriate to or unforeseeable in the ac complishment of the authorized result In that case, a union was held responsible for the acts of an in plant or ganizing committee whose members threatened employ ees with a knife, made other death threats, and threat ened to damage employees homes and cars The court held that such acts did not so far exceed the organizing committees authority as to make obvious to the persons coerced that the union would not ratify that conduct Clearly the same can be said here A business agent s demand that an individual be removed from the jobsite as a condition of furnishing other employees does not so far exceed the agent s authority as the person in charge of its hiring hall as to put the employer on notice that the union would not ratify it 3 Union causation and liability The Respondent Union, while not denying that Delker caused Kanakis to discharge Frankenfield, contends that the General Counsel has failed to sustain her burden of establishing that Delker's demand was in any way related to union activities It asserts, therefore that the com plaint must be dismissed The Union s position is without merit Whether Delker caused Frankenfield s discharge because of Frankenfield s stated intention to challenge Delker for the business agent s position because he had damaged Delker s truck or for some unknown reason that action violates Section 8(b)(1)(A) and (2) of the Act Clearly, if Delker had Frankenfield fired because of his intention to seek union office, that action would have been unlawfully motivated Similarly if Delker merely had a personal dispute going with Frankenfield and took his pique out on Frankenfield by way of his employment, that action would violate the law And, if Delker had no reason at all but was merely flexing his muscle, that discharge and the Union s causation of it would have been unlawful As the Board stated in Glaziers Local 558 (PPG Industries), 271 NLRB 583 585 (1984) 8 8 Enf denied 787 F 2d 1406 (10th Cir 1986) The Board presumes that a union acts illegally any time it prevents an employee from being hired or causes an employee to be discharged because by such conduct a union demonstrates its power to affect the employees livelihood in so dramatic a way as to encourage union membership among em ployees A union may, however, rebut his presump tion by evidence of a compelling and overriding character showing that the conduct complained of was referrable to other considerations, lawful in themselves, and wholly unrelated to the exercise of protected employee rights or to other matters with which the Act is concerned Neither of the two reasons alluded to in the record would make Delker s actions lawful and the Union had proffered no other reasons to justify his conduct Ac cordingly I find that by attempting to cause and causing Kanakis to discharge Charles Frankenfield Respondent Union had violated Section 8(b)(1)(A) and (2) CONCLUSIONS OF LAW 1 Respondent Union violated Section 8(b)(1)(A) and (2) by attempting to cause and causing Kanakis Compa ny, Inc to discharge Charles Frankenfield, its employee on or about 8 January 1982 2 The aforesaid unfair labor practice has a close, inti mate, and substantial effect on commerce between the several States and is an unfair labor practice affecting commerce within the meaning of Section 2(2), (6) and (7) of the Act 3 Prosecution of the complaint against Kanakis Com pany Inc in Case 4-CA-12997 is barred by Section 10(b) of the Act THE REMEDY Having found that Respondent Union has violated the Act by certain conduct, I shall recommend that it be re quired to cease and desist from such conduct and post appropriate notices Having found that Respondent Union unlawfully at tempted to cause and caused Kanakis Company Inc to discharge Charles Frankenfield I shall recommend that it be required to made Charles Frankenfield whole for any loss of earnings or other benefits suffered as a result of the discrimination against him by paying to him a sum equal to the amount he would normally have earned from the date of his discharge until he is reinstated by Kanakis Company Inc to his former or a substantially equivalent position or until he obtains or obtained sub stantially equivalent employment elsewhere, less interim earnings 9 The loss of earnings shall be computed in the manner prescribed in F W Woolworth Co 90 NLRB 289 (1950), with interest as prescribed in Florida Steel Corp, 231 NLRB 651 (1977) 10 I shall also recommend that Respondent Union be ordered to notify Kanakis Company Inc the Employer in writing with a copy to 9 Glaziers Local 558 (PPG Industries) supra Sheet Metal Workers Local 355 (Zinsco Electrical) 254 NLRB 773 774 (1981) 10 See generally Isis Plumbing Co 139 NLRB 716 (1962) KANAKIS CO Charles Frankenfield that it has no objection to his em ployment and to request the Employer to reemploy him Further I shall recommend that Respondent Union be required to remove from its files any references to Fran kenfield s unlawful discharge and notify him in writing, that such action has been taken and that the discharge will not be used against him in any way The General Counsel additionally seeks a visitatorial clause to be included in the Order in order to ensure compliance with the Boards Order As defined by the General Counsel, a visitonal [sic] clause permits an agency to examine the books and records of a respond 445 ent and to take statements from its officers and employ ees and others for the purpose of determining or securing compliance with a court s judgment The instant case involves the operation of a hiring hall and the Employ er s requirements for painters over a nearly 4 year period of time Computation of the backpay remedy may there fore be quite complex and the visitatorial clause appears to be appropriate to facilitate compliance Accordingly, I shall recommend inclusion of a visitatorial clause in the remedy and Order [Recommended Order omitted from publication ]