Barrett'S Contemporary And Scandinavian Interiors

BARRETT'S INTERIORS 527 Contemporary and Scandinavian Interiors, Inc , d/b/a Barrett's Contemporary and Scandinavian Interiors and Local 951, United Food and Com- mercial Workers International Union, AFL- CIO-CLC. Case 7-CA-19717(E) 28 September 1984 DECISION AND ORDER BY MEMBERS ZIMMERMAN, HUNTER, AND DENNIS On 26 June 1984 Administrative Law Judge Rus- sell M King Jr issued the attached supplemental decision The Applicant filed exceptions and a sup- porting brief The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel The Board has considered the decision and the record in light of the exceptions and brief and has decided to affirm the judge's rulings, findings, and conclusions and to adopt the recommended Order ORDER The recommended Order of the administrative law Judge is adopted, and the application of the Applicant, Contemporary and Scandinavian Interi- ors, Inc , d/b/a Barrett's Contemporary and Scan- dinavian Interiors, Okemos, Michigan, for an award under the Equal Access to Justice Act is dismissed SUPPLEMENTAL DECISION (Equal Access to Justice Act) STATEMENT OF THE CASE RUSSELL M KING JR , Administrative Law Judge On June 30, 1983, I issued my initial decision in this case, recommending that the complaint be dismissed Neither party' filed exceptions to that decision and on August 23, 1983, the Board entered an Order adopting the deci- sion as its own On September 21, 1983, the prevailing party, the Employer (or the Applicant) filed an applica- tion for attorney's fees and expenses under the Equal Access to Justice Act (EAJA), 2 and Section 102 143 et seq of the Board's Rules and Regulations On September 27, 1983, the Board entered its order referring the appli- cation to me On October 20, 1983, the General Counsel2 I After the original charge was filed on August 20, 1981, by then exist- ing Local 36, that Local merged with Local 951 (on July 1, 1982), and the successor was Local 951 Whenever the term Local 951 or the Union is used, it refers to both Locals where and when appropriate 2 Pub L 96-481, 94 Stat 2325, 5 U S C § 504 3 The term General Counsel will normally refer to the attorney in the case acting on behalf of the General Counsel of the Board, through the Regional Director filed a motion to dismiss and a supporting memorandum, and on November 1, 1983, the Employer filed a formal response and a supporting memorandum to the motion to dismiss By order dated November 4, 1983, I denied the General Counsel's motion to dismiss On December 4, 1983, the General Counsel filed an answer to the applica- tion and on December 16, 1983, the Applicant filed a re- sponse to that answer Brief Factual Background Based on the Union's original charge, the Regional Di- rector for Region 7 of the Board, on behalf of the Gen- eral Counsel, issued the complaint in this case on Octo- ber 1, 1981 I heard the case in Lansing, Michigan, on October 4 and 5, 1982 The complaint basically alleged that the Employer unlawfully discharged employee-sales- person Madelyn Ricks because of her support for and ac- tivities on behalf of the Union Ricks was hired by the Company on March 30, 1980 She became interested in organizing a union at the Applicant's retail furniture store in April 1981 and conferred with fellow salesper- sons Carol Trinder and Ronald Hays to see if they were interested in a union She then had a friend contact one of the Union's agents and subsequently had union author- ization cards sent to her On April 17, 1981, Ricks ob- tained signed cards from Hays and Trinder while the three were outside in the parking lot of the store Ricks signed her card on April 20, 1981 At that time the store had three salespersons and two employees who worked in the delivery department, Bryan Martin and Phillip Teremi Martin finally signed a union authorization card on May 15 On May 18, the following Monday, Ricks was discharged After Ricks had been discharged, but on the same date, truckdriver Teremi approached Co- Owner Jack McCalley, and informed him of the Union and of the fact that Ricks had been involved The other co-owner was David C Barrett, who claimed that nei- ther he nor McCalley had any knowledge of the union activities at the store until Teremi informed McCalley after Ricks' discharge I in fact found this to be the case and therefore recommended dismissal of the complaint Based on the evidence and testimony, I further found that the reason for Ricks' discharge was her lack of in- terest or enthusiasm, and her declining sales, as the evi- dence reflected Ricks, on the contrary, had testified that she had not lost interest and that her sales did not de- cline On May 23 there was a general sales meeting at the store and there was testimony that at this meeting Co-Owner McCalley remarked that the "troublemaker" was gone McCalley denied using the term "troublemak- er" but conceded that he did mention putting "past prob- lems" behind The General Counsel argued in the case that, among other things, the "small-plant doctrine" applied, and thus knowledge of Ricks' union activities should have been inferred or imputed to management 4 The General Coun- sel further argued that Ricks' testimony regarding her in- terest and sales should have been credited over the testi- 4 Wiese Plow Welding Go, 123 NLRB 616 (1959), Tayko Industries, 214 NLRB 84 (1974), Haynes Industries, 262 NLRB 1092 (1977) 272 NLRB No 82 528 DECISIONS OF NATIONAL LABOR RELATIONS BOARD mony and evidence presented by McCalley, cited the May 15 signing of the union card by driver Martin as a trigger for the discharge, and lastly argued that Ricks' unusual termination bonus was an indication that she was discriminatorily discharged The record was unclear as to exactly where Martin signed his card and where Martin and Ricks were when Ricks collected the card As indicated above, I found that there was no actual knowledge of Ricks' union activities or of any union ac- tivity at the store by both co-owners prior to the dis- charge, and thus found that the "small-plant doctrine" did not apply to the facts of the case 5 Analysis and Conclusions Section 504(a)(1) of EAJA provides that an award shall be made to a prevailing party unless "the position of the agency as a party to the proceeding was substan- tially justified" Congress described "substantially justi- fied" as follows The test of whether or not a government action is substantially justified is essentially one of reason- ableness Where the Government can show that its case had a reasonable basis both in law and in fact, no award will be made 6 Section 102 144(a) of the Board's Rules and Regula- tions places the burden of proof on the General Counsel to show that he was substantially justified in issuing the complaint, and that his position in the proceeding was reasonable in law and fact The Act further provides that the Government should not be held liable where "special circumstances make an award unjust" Congress ex- plained the meaning of this provision as follows This "safety valve" helps to ensure that the Gov- ernment is not deterred from advancing in good faith the novel but credible extensions and interpre- tations of the law that often underline vigorous en- forcement efforts It also gives the court discretion to deny awards where equitable considerations dic- tate an award should not be made 7 Congress further indicated that no adverse inferences were to be drawn from the fact that the Government did not prevail, explaining as follows The standard, however, should not be read to raise a presumption that the government position was not substantially justified, simply because it lost the case Nor, in fact, does the standard require the Government to establish that its decision to litigate was based on a substantial probability of prevail- ing 8 The Board has further held that it is immaterial that the General Counsel may not have established a prima 5 Corn Bros 262 NLRB 320 (1982) 6 S Rep No 96-253 at 6 and 14 (1979) HR Rep No 96-1418 at 10 (1980) 7 S Rep No 96-253, supra at 7 H R Rep 96-1418, supra at 11 8 S Rep No 96-253, supra at 7 HR Rep 96-1418, supra at 11 facie case of a violation 9 But where the General Coun- sel presents evidence which, if credited by the factfinder, would constitute a prima facie case of unlawful conduct, the General Counsel's position has been deemed to be substantially justified within the meaning of Section 102 144(a) 10 Credibility issues which are not subject to resolution by the General Counsel in the investigative stage of a proceeding on the basis of documents or other objective evidence are, in the first instance, the exclusive province of the administrative law judge Accordingly, where the General Counsel is compelled by the existence of a substantial credibility issue to pursue the litigation, and thereafter presents a prima facie case, the General Counsel's case has a reasonable basis in fact and law and is substantially justified The General Counsel's precomplaint investigation re- vealed the following facts and circumstances Ricks was not only the primary but the sole organizer behind the Union She had indicated that her work and performance was at least equal to her fellow employees and she had further related that she received no prior warnings before her discharge She had been discharged on the heels of driver Martin's execution of his union authoriza- tion card and delivery to Ricks Ricks also had received an unusually high termination bonus or severance pay Her termination was swift and abrupt although she had earlier been a fairly close friend of Co-Owner McCalley, having done work in his home on several occasions before she became employed at the store There was only a total of five employees at the store and under the small-plant doctrine knowledge of one's union activities by management need not be shown by direct evidence if the circumstantial evidence is sufficient to justify an in- ference of knowledge Such an inference has been held to be justified because of the abruptness and timing of the discharge, and where it may be shown that it was likely the employer had observed some union activity 12 The General Counsel also had the statement of salesmen Hays that, at a sales meeting 5 days after Ricks' dis- charge, Co-Owner McCalley remarked that the "trouble- maker" was gone Regarding the issue as to whether or not Ricks' per- formance and interest or enthusiasm had declined, and whether or not she had been warned or counseled re- garding the same, I credited Co-Owner McCalley and his evidence over that of Ricks I also found that there was minimal, if any, in-store organizing by Ricks The evidence in this regard consisted only of the possibility that Martin may have handed his union authorization card to Ricks in the store on Friday, May 15, and the further fact that salesmen Hays and Teremi went to Ricks car, which was in the store parking lot, and signed their union authorization cards on April 17 However, in light of the statements, facts, and circum- stances the General Counsel had before him after his in- 9 Enerhaul Inc , 162 NLRB 890 (1982) I ° Jim's Big M 162 NLRB 890 (1982) ii Charles H McCauley Associates, 269 NLRB 791 (1984), where the Board adopted the language of Administrative Law Judge Michael 0 Miller " Tayko Industries, supra at 87 (and cases cited therein) BARRETT'S INTERIORS 529 vestigation and considering the presentation of the same through evidence and testimony in his case-in-chief before me, I find and conclude that the General Counsel was substantially justified in issuing the complaint in this case and I further find and conclude that the General Counsel initially presented a prima facie case 13 Accord- ingly, I shall thus issue the following recommended" " In view of these findings and conclusions, I deem it unnecessary to discuss and rule on the other Issues raised in the application for fees and in the answer to the same filed by the General Counsel ORDER It is ordered that the application for attorney's fees and expenses filed by the Applicant (Employer) pursuant to the Equal Access to Justice Act and the Board's Rules and Regulations be dismissed 14 If no exceptions are filed as provided by Sec 102 46 of the Board s Rules and Regulations the findings conclusions and recommended Order shall as provided in Sec 102 48 of the Rules be adopted by the Board and all objections to them shall be deemed waived for all pur poses \