Random Acquisitions, LLC

RANDOM ACQUISITIONS, LLC 567 359 NLRB No. 55 Random Acquisitions, LLC and Sherrie Cvetnich. Case 07–CA–052473 January 28, 2013 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN PEARCE AND MEMBERS GRIFFIN AND BLOCK On August 2, 2011, the National Labor Relations Board issued a Decision and Order in this proceeding,1 finding that the Respondent violated Section 8(a)(1) of the National Labor Relations Act by discharging em- ployees Sherrie Cvetnich, Teresa Burge, and Eric Cvet- nich on October 16, 2009. The Board ordered the Re- spondent to offer reinstatement to Sherrie Cvetnich, Te- resa Burge, and Eric Cvetnich and to make them whole for any loss of earnings or other benefits they may have suffered as a result of the unlawful discharges. On March 16, 2012,2 the United States Court of Appeals for the Sixth Circuit issued its judgment enforcing the Board’s Decision and Order. On June 29, based on noncompliance with the Board’s order as enforced, the Regional Director for Region 7 issued a compliance specification and notice of hearing, alleging the amounts due and notifying the Respondent of its obligation to file a timely answer complying with the Board’s Rules and Regulations. On July 18, the Re- spondent filed an answer to the compliance specification. By a letter dated July 19, the Acting Regional Attorney for Region 7 notified the Respondent that its answer did not satisfy the specificity requirements set forth in Sec- tion 102.56(b) of the Board’s Rules and Regulations and stated that failure to file an appropriate amended answer by July 26 would prompt a motion for summary and/or default judgment. In particular, the Acting Regional At- torney advised that the Respondent’s answer provided only general denials “without further explanation or al- ternate calculations.” Having received no response from the Respondent, counsel for the Acting General Counsel, by letter dated July 26, reiterated the request for an amended answer and extended the filing deadline to Au- gust 2. The Respondent did not file an amended answer. On August 13, the Acting General Counsel moved for partial summary judgment. The Acting General Counsel contends that the Respondent’s answer failed to comport with the specificity requirements of Section 102.56(b) because it offered only a general denial of the gross backpay allegations set forth in paragraphs 6 and 7 of the compliance specification. On August 15, the Board is- sued an order transferring the proceeding to the Board 1 Random Acquisitions, LLC, 357 NLRB 303 (2011). 2 All dates are in 2012, unless otherwise noted. and a Notice to Show Cause why the Acting General Counsel’s motion should not be granted. The Respondent did not file a response to the Notice to Show Cause. On the entire record, the National Labor Relations Board makes the following Ruling on Motion for Partial Summary Judgment Sections 102.56(b) and (c) of the Board’s Rules and Regulations states: (b) Contents of answer to specification. The answer shall specifically admit, deny, or explain each and eve- ry allegation of the specification, unless the respondent is without knowledge, in which case the respondent shall so state, such statement operating as a denial. Denials shall fairly meet the substance of the allega- tions of the specification at issue. When a respondent intends to deny only a part of an allegation, the re- spondent shall specify so much of it as is true and shall deny only the remainder. As to all matters within the knowledge of the respondent, including but not limited to the various factors entering into the computation of gross backpay, a general denial shall not suffice. As to such matters, if the respondent disputes either the accu- racy of the figures in the specification or the premises on which they are based, the answer shall specifically state the basis for such disagreement, setting forth in detail the respondent’s position as to the applicable premises and furnishing the appropriate supporting fig- ures. (c) Effect of failure to answer or to plead specifically and in detail to backpay allegations of specification. If the respondent fails to file any answer to the specifica- tion within the time prescribed by this section, the Board may, either with or without taking evidence in support of the allegations of the specification and with- out further notice to the respondent, find the specifica- tion to be true and enter such order as may be appropri- ate. If the respondent files an answer to the specifica- tion but fails to deny any allegation of the specification in the manner required by paragraph (b) of this section, and the failure so to deny is not adequately explained, such allegation shall be deemed to be admitted to be true, and may be so found by the Board without the taking of evidence supporting such allegation, and the respondent shall be precluded from introducing any ev- idence controverting the allegation. Paragraph 6(a) of the compliance specification alleges, inter alia, rates of pay, hours customarily worked, a backpay period of October 16, 2009, to about June 23, 2012, and a resulting gross backpay amount for discrimi- natee Sherrie Cvetnich. Paragraphs 6(b) and (c) include 568 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD similar allegations for discriminatees Eric Cvetnich and Teresa Burge, respectively.3 Paragraph 7 alleges net backpay amounts due each discriminatee and the total amount of the Respondent’s net backpay obligation for the period covered by the compliance specification. The Respondent’s answers to paragraphs 64 and 7 state that it is “[w]ithout knowledge and therefore Respondent demands strict proof.” In addition, the answers affirma- tively allege that the Respondent has no employee posi- tions with which to offer reinstatement, that it is without employees or income, and that its sole asset is a building located in Battle Creek, Michigan. The Acting General Counsel submits that he is entitled to partial summary judgment on the gross backpay allegations in paragraphs 6 and 7 because the Respondent’s answers to those alle- gations do not comply with the specificity requirements of Section 102.56(b) of the Board’s Rules.5 We agree with the Acting General Counsel and find that the Respondent’s answers to paragraphs 6 and 7 fail to comport with Section 102.56(b). The answers to both paragraphs merely recite that the Respondent is “[w]ithout knowledge and therefore Respondent de- mands strict proof.” Under Section 102.56(b), an asser- tion that a respondent is without knowledge of an allega- tion operates as a denial and must meet the specificity requirements of the rule. The rate of pay and customary hours worked by each discriminatee is information that is within the knowledge of the Respondent and available from its own records. See, e.g., Mining Specialists, Inc., 330 NLRB 99, 101 (1999). The Respondent, however, offers no explanation for its asserted lack of knowledge regarding these matters. In addition, it takes no position on the gross backpay calculations in the compliance specification or the premises on which they are based, and fails to provide alternate figures or premises regard- ing the amount of gross backpay owed to the discrimi- natees. See SRC Painting, LLC, 356 NLRB No. 74, slip op. at 2 (2011) (not reported in bound volumes). Be- cause the Respondent had knowledge of and access to the relevant data, its answers to paragraphs 6 and 7 are insufficient to meet the specificity requirements of Sec- 3 Pars. 6(a), (b), and (c) also allege interim earnings and net backpay amounts for the discriminatees. The Acting General Counsel does not seek partial summary judgment as to these amounts. 4 The Respondent combines its answer to pars. 6(a) through (c) into a single paragraph. 5 Par. 7 does not allege gross backpay amounts. As stated above, it alleges net backpay amounts. Obviously, however, those net amounts are based on the gross backpay amounts alleged in par. 6. Thus, we construe the Acting General Counsel’s motion with respect to par. 7 as seeking partial summary judgment on the net backpay amounts alleged in that paragraph only to the extent of precluding the Respondent from contesting the gross backpay component of those amounts. tion 102.56(b). See United States Service Industries, 325 NLRB 485, 486 (1998). Notably, these deficiencies oc- curred despite numerous notifications from the Region advising the Respondent of its obligations under Section 102.56(b) and the need to further explain its answers. In addition to its purported lack of knowledge regard- ing the gross backpay allegations in paragraphs 6 and 7 of the compliance specification, the Respondent affirma- tively alleges that it has no employee positions with which to offer reinstatement, that it is a real estate hold- ing company without employees or income, and that its sole asset is a building located in Battle Creek, Michigan. Although not entirely clear, the Respondent appears to contend (1) that the discriminatees are not entitled to reinstatement and backpay because the Respondent has no available employee positions, and (2) that the discrim- inatees are not entitled to backpay because the Respond- ent has no income with which to pay them. To the extent the Respondent makes such contentions, we find that neither is sufficient to warrant denying the Acting Gen- eral Counsel’s motion. The Respondent’s assertions that it has no employees or employee positions do not warrant denial of the Act- ing General Counsel’s motion. As stated, paragraphs 6 and 7 of the compliance specification involve a backpay period of October 16, 2009, to about June 23, 2012. It is clear that, as of October 16, 2009, the date on which the Board found that the Respondent unlawfully discharged the discriminatees, the Respondent had employees and employee positions. The Respondent’s answer supplies no date or dates when it purportedly eliminated those positions, nor does it explain the reason or reasons for such elimination. See Demi’s Leather Corp., 333 NLRB 89, 90 (2001). Even assuming the Respondent eliminat- ed its employee positions at some point after the unfair labor practice hearing, it was nonetheless obligated to provide alternative gross backpay calculations for the period of time before the positions were eliminated. See id. The Respondent has failed to do so. As to the Respondent’s claim that it lacks income and assets (other than a building), the Respondent’s financial resources have no bearing on the question of the calcula- tion of gross backpay due to the discriminatees for the period of October 16, 2009, to June 23, 2012. What is relevant now is the amount due, not the Respondent’s ability to pay. See Diversified Enterprises, 358 NLRB 433, 434 (2012). Therefore, the Respondent’s financial situation is not a basis for denying the Acting General Counsel’s motion. See E.L.C. Electric, Inc., 348 NLRB 301, 302 fn. 6 (2006). Based on the foregoing, we find that the Respondent has failed to deny the gross backpay allegations in para- RANDOM ACQUISITIONS, LLC 569 graphs 6 and 7 of the compliance specification in the manner prescribed by the Board’s Rules and has not ade- quately explained its failure to do so. We therefore grant the Acting General Counsel’s Motion for Partial Sum- mary Judgment on the gross backpay allegations in those paragraphs of the compliance specification.6 ORDER IT IS ORDERED that the Acting General Counsel’s Mo- tion for Partial Summary Judgment is granted as to the 6 We note that the effect of our ruling is that the Respondent is pre- cluded, at any subsequent compliance hearing, from disputing any of the factors entering into the gross backpay computations, including the duration of the backpay period from October 16, 2009, to June 23, 2012. gross backpay allegations in paragraphs 6 and 7 of the compliance specification, and that those allegations are deemed to be true. IT IS FURTHER ORDERED that this proceeding is re- manded to the Regional Director for Region 7 for the purpose of arranging a hearing before an administrative law judge limited to taking evidence concerning the amounts of interim earnings and net backpay involved in paragraphs 6 and 7 and to the remaining paragraphs of the compliance specification as to which summary judg- ment is not granted.