Austin Fire Equipment, LLC

1176 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 360 NLRB No. 131 Austin Fire Equipment, LLC and Road Sprinkler Fitters Local Union No. 669, U.A. AFL–CIO. Case 15–CA–019697 June 25, 2014 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN PEARCE AND MEMBERS MISCIMARRA AND SCHIFFER On May 6, 2013, Administrative Law Judge Margaret G. Brakebusch issued the attached supplemental deci- sion. The Applicant, Austin Fire Equipment, LLC (Aus- tin Fire), filed exceptions and a supporting brief. The General Counsel filed an answering brief. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the supplemental decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings as modified below, and conclusions and to adopt the judge’s recommended Order. The judge found, and we agree, that Austin Fire’s ap- plication for an award of fees and expenses under the Equal Access to Justice Act, 5 U.S.C. Sec. 504(a)(1) (“EAJA”), should be denied because the General Coun- sel’s case was reasonably grounded in fact and law and was substantially justified. I. In the underlying complaint, the General Counsel al- leged, among other things, that Austin Fire violated Sec- tion 8(a)(5) and (1) of the Act when it changed employ- ees’ terms and conditions of employment during the term of an existing collective-bargaining agreement without notifying and bargaining with the Union. The judge found that violation and ordered Austin Fire to make employees whole from the time it made the changes until the contract expired. The Board affirmed. Austin Fire Equipment, LLC, 359 NLRB 37 (2012).1 The complaint also alleged that Austin Fire committed additional bargaining violations after the contract ex- pired. Those issues required determining whether the bargaining relationship between Austin Fire and the Un- ion was governed by Section 8(f) or, rather, Section 9(a) of the Act. If the relationship was governed by 8(f), then Austin Fire was free to terminate the relationship when the collective-bargaining agreement expired and had no 1 Austin Fire’s defense to this allegation was that it repudiated the collective-bargaining agreement at the time it made the changes and the Union’s charge was therefore time barred by Sec. 10(b) of the Act, an argument that the judge correctly rejected. further bargaining obligations to the Union.2 A 9(a) bar- gaining relationship, however, would have continued after the contract expired, along with Austin Fire’s asso- ciated duty to bargain.3 To establish the requisite 9(a) relationship, the General Counsel relied solely upon the parties’ execution of an acknowledgment form that, the General Counsel argued, met all the requirements of Staunton Fuel & Material, 335 NLRB 717 (2001), the Board’s current standard.4 The General Counsel alternatively argued, however, that “a better view of the law” required that Staunton Fuel be at least partially overruled. Under his proposed modifi- cations to Board law, the General Counsel requested that the judge find that the relationship between the parties was governed by Section 8(f) rather than Section 9(a) of the Act.5 The judge rejected the General Counsel’s argument that the acknowledgment form, standing alone, estab- lished a 9(a) relationship under current Board law; con- sequently, he found that the parties’ relationship was governed by Section 8(f).6 The Board affirmed the judge, finding that the acknowledgment language did not satisfy the requirements of Staunton Fuel, 359 NLRB 37.7 On October 26, 2012, Austin Fire filed its EAJA appli- cation for attorneys’ fees and costs. The Board referred the matter to the judge in the underlying case, who found that the application should be denied. Austin Fire now excepts to this denial. 2 See John Deklewa & Sons, 282 NLRB 1375, 1386–1387 (1987), enfd. sub nom. Iron Workers Local 3 v. NLRB, 843 F.2d 770 (3d Cir. 1988), cert. denied 488 U.S. 889 (1988). 3 See Levitz Furniture Co., 333 NLRB 717 (2001). 4 In Staunton Fuel, the Board held that contract language alone will establish a Sec. 9(a) relationship in the construction industry where the language unequivocally indicates (1) that the union requested recogni- tion as majority representative, (2) the employer recognized the union as majority representative, and (3) the employer’s recognition was based on the union’s having shown, or having offered to show, an evidentiary basis of its majority support. See id. at 717. 5 The General Counsel requested that the judge overrule Staunton Fuel to the extent that it holds that contract language alone can estab- lish a 9(a) relationship, precluding examination of whether the union actually had majority status at the time of the recognition. The General Counsel also sought adoption of a new rule of law allowing the Board to look beyond the 10(b) limitations period to determine whether a union actually had majority support at the time it was recognized. We address this aspect of the case below. See fn. 14, infra. 6 The judge went on to examine the General Counsel’s proposed modifications to the law and urge the Board to adopt them. Adminis- trative law judges lack independent authority to change Board law, and the judge’s views are not binding on the Board. See Waco, Inc., 273 NLRB 746, 749 fn. 14 (1984) (“[i]t is for the Board, not the judge, to determine whether [Board] precedent should be varied”). 7 The Board subsequently denied the Union’s motion for reconsid- eration. 359 NLRB 576 (2013). AUSTIN FIRE EQUIPMENT, LLC 1177 II. Under EAJA, a qualifying party who has prevailed in litigation before a Federal government agency is entitled to an award of attorney’s fees and expenses incurred in litigation unless the agency can establish that its position was “substantially justified.” To be substantially justi- fied, the General Counsel’s position must be “justified to a degree that could satisfy a reasonable person” or “justi- fied if a reasonable person could think it correct, that is, if it has a reasonable basis in law and fact.” Pierce v. Underwood, 487 U.S. 552, 566 fn. 2 (1988). See, e.g., Raley’s, 357 NLRB 880, 880–881 (2011). The “substan- tially justified” standard does not require that the General Counsel establish that his decision to litigate was based on a “substantial probability of prevailing.” David Allen Co., 335 NLRB 783, 784 (2001), citing Carmel Furni- ture Corp., 277 NLRB 1105, 1106 (1985). Turning to the present case, as we explain below, the Board had never before examined the precise contractual recognition language at issue here. Our cases make clear, in turn, that in this highly technical corner of labor law, small differences in wording can have large conse- quences. None of our prior decisions automatically de- termined the outcome of this case. Indeed, this case can fairly be said to straddle the line between those decisions in which the Board has found contractual language suffi- cient to establish a 9(a) relationship and cases where par- ticular language was found insufficient. In these circum- stances, we have no difficulty finding, contrary to our dissenting colleague, that the General Counsel was sub- stantially justified in pursuing this litigation.8 “The mere fact that the General Counsel lost or advanced a position contrary to prior precedent does not mean the litigation lacked substantial justification.” Raley’s, supra, 357 NLRB 880, 880. We now turn to the details of the case. The acknowl- edgment form at issue reads as follows: The Employer executing this document below has, on the basis of objective and reliable information, con- firmed that a clear majority of the sprinkler fitters in its employ are members of, and are represented by [the Union] for the purposes of collective bargaining. The Employer therefore unconditionally acknowledges and confirms that [the Union] is the exclusive bargain- ing representative of its sprinkler fitter employees pur- 8 We find it unnecessary, however, to rely on the portions of the judge’s decision finding that the General Counsel was substantially justified in pursuing this case because there were credibility determina- tions to be made. suant to Section 9(a) of the National Labor Relations Act. This language is similar to contractual language found sufficient to establish a 9(a) relationship in two cases decided by the Board before Staunton Fuel. See MFP Fire Protection, 318 NLRB 840 (1995), enfd. 101 F.3d 1341 (10th Cir. 1996), and Triple A Fire Protection, 312 NLRB 1088 (1993), supplemented by 315 NLRB 409 (1994), enfd. 136 F.3d 727 (11th Cir. 1998), cert. denied 525 U.S. 1067 (1999).9 In those cases, the acknowledg- ment forms stated that a majority of employees “have designated, are members of, and are represented by [the union] for purposes of collective bargaining.”10 In addi- tion, the forms stated that the employer “therefore un- conditionally acknowledges and confirms that [the Un- ion] is the exclusive bargaining representative of its [bar- gaining unit employees] pursuant to Section 9(a) of the National Labor Relations Act.” Based on these forms, the Board found that the parties had established a 9(a) relationship. By contrast, in Staunton Fuel, the Board found that a 9(a) relationship was not formed based on contractual language stating, among other things, that the employer “recognized the union as the sole and exclusive collec- tive bargaining agent” for all employees in the defined unit. 335 NLRB at 717. The Board held that, regardless of the parties’ intent, this language was insufficient to establish a 9(a) relationship because it did not state that the employer’s recognition was based on a contempora- neous showing, or offer by the union to show, that the union had majority support. Id. at 720. Staunton Fuel, unlike MFP, Triple A, and this case, did not include additional contractual language stating that the employer expressly acknowledged the union’s Sec- tion 9(a) representative status. But the Staunton Board did offer relevant observations to guide the General Counsel and labor law practitioners. The Board first noted that, although it would not be necessary for con- tract language to expressly reference 9(a), such a refer- ence would indicate that the parties intended to establish 9 The judge’s discussion of these two cases in her supplemental de- cision may be read as characterizing the contractual language at issue in this case as “identical” to the language in MFP and Triple A. The judge correctly noted elsewhere in her decision, however, that the language in MFP and Triple A, while identical in those two cases, was only “sub- stantially similar” to the language in this case. As discussed, the sub- stantial similarity to the language found sufficient in earlier Board decisions to establish a Sec. 9(a) relationship was sufficient here to establish that the General Counsel’s position was based on a reasonable (if ultimately incorrect) interpretation of the relevant documents and the Board’s case law. 10 The italicized language is not included in the acknowledgment signed by Austin Fire. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1178 a 9(a) relationship rather than an 8(f) relationship. By contrast, the Board explained that certain language con- cerning union “membership” and “representation,” with- out more, is insufficient to establish a 9(a) relationship, in part because it was compatible with either an 8(f) or a 9(a) relationship. Id. Since Staunton Fuel, the Board has continued to care- fully analyze contractual language to determine whether an agreement, examined in its entirety, “conclusively notifies the parties that a 9(a) relationship is intended.” Madison Industries, 349 NLRB 1306, 1308 (2007), cit- ing Oklahoma Installation Co., 219 F.3d 1160, 1165 (10th Cir. 2000), denying enf. to 325 NLRB 741 (1998). Applying this approach to the contractual language in the present case, the Board found that the acknowledgment form concerned only employees’ union membership and representation and was insufficient to form a 9(a) rela- tionship under Staunton Fuel, 359 NLRB 37, 37. See also USA Fire Protection, 358 NLRB 1722 (2012), re- consideration denied, 359 NLRB 574 (2013). We nevertheless find, contrary to our dissenting col- league, that the General Counsel’s position was substan- tially justified in the circumstances. It is true that the acknowledgment form signed by Austin Fire lacked the “have designated” language that was present in MFP and Triple A. But the acknowledgment did contain relevant language that was missing in Staunton Fuel, and that suggested the existence of a Section 9(a) relationship: an explicit reference to the parties’ intent to create a Sec- tion 9(a) relationship. Such language was present in MFP and Triple A.11 The Board had never before exam- ined contract language that included an explicit confir- mation by the employer that the parties were forming a 9(a) relationship, but that also only referenced employ- ees’ union membership and representation. In Staunton Fuel, as explained, the Board expressly suggested that the inclusion of an explicit reference to 9(a) could carry significant weight in the analysis. At the least, Staunton Fuel did not determine the precise impact of an explicit reference to 9(a).12 11 Unlike the dissent, we see no indication in Staunton Fuel that the Board intended to overrule MFP and Triple A or to cast doubt on their holdings. Nor did any party here argue that MFP and Triple A were no longer good law. 12 We disagree with our dissenting colleague’s narrow reading of Staunton as saying that contract language stating that a majority of employees have “designated” or “authorized” the union to represent them is essential to Sec. 9(a) status and that its absence is fatal. What the Staunton Board required was language unequivocally indicating that the union requested, and the employer granted, recognition as the majority or 9(a) representative of the unit employees, and that the em- ployer’s recognition was based on the union’s having shown, or having offered to show, evidence of its majority support. Staunton at 719–720. These are the “minimum requirements” referenced by our colleague. In our view, reasonable minds could differ on the ef- fect of such a reference in an otherwise insufficient con- tractual recognition clause.13 No definitive answer was available until the Board had the opportunity to examine the issue in this case, and we find that the General Coun- sel was substantially justified in pursuing this opportuni- ty.14 Our dissenting colleague confuses a losing argument with an unreasonable one. To be clear, we are not assert- ing that the General Counsel’s interpretation of prior cases was correct, nor, given the Board’s ultimate deter- mination, could we do so. But that is no longer the ques- tion before us. See David Allen, supra. We simply find that, given the facts and the Board’s prior case law, a reasonable person could think (albeit wrongly) that the General Counsel’s position was correct. Pierce, supra. We also disagree with our colleague that we err in denying an EAJA recovery because the explicit 9(a) lan- guage in the parties’ acknowledgment form was not the “focus” of the General Counsel’s argument to the judge and the relative importance of the 9(a) language was not discussed in the judge’s or the Board’s initial decisions. Our colleague takes too narrow a view of the General Counsel’s position. At all stages of the litigation, the General Counsel consistently argued that the acknowl- edgment language, as a whole, established a 9(a) rela- tionship pursuant to the requirements of Staunton. Ex- The Board did not hold that the word “designated” or “authorized” is a prerequisite to establishing 9(a) status. Further, our colleague is incor- rect when he suggests that an express reference to 9(a) in the parties’ agreement is immaterial to the inquiry under Staunton. To the contrary, as described, the Staunton Board plainly stated that such a reference, although certainly not determinative, could be a factor pointing toward 9(a) status. 13 Likewise, reasonable minds could differ on the relevance of other factors in determining whether 8(f) or 9(a) relationships are formed. In the initial decision on the merits, then-Member Griffin expressed his view that in states where State law prohibits a collective-bargaining clause requiring union membership (states such as Louisiana, where this case arises), union membership is evidence of support for the union and an employer could appropriately rely on evidence of union mem- bership in certain circumstances not presented here. See 359 NLRB 37, 37 fn. 3. 14 Given its disposition of the case, the Board found it unnecessary to address the General Counsel’s proposal to overrule Staunton Fuel, 359 NLRB 37, 37 fn. 5. While not necessarily providing an independ- ent ground for pursuing this case, it is entirely appropriate for the Gen- eral Counsel to request that the Board revisit and overrule precedent for any number of reasons, including to account for changed circumstances or experience applying the law, or to bring the Board’s precedent more in line with that of reviewing courts. Here, the General Counsel had taken into account the D.C. Circuit’s criticism of the Staunton Fuel standard. See Nova Plumbing, Inc. v. NLRB, 330 F.3d 531, 536–537 (D.C. Cir. 2003). We would not wish to discourage the General Coun- sel from performing his proper role in developing Board law. EAJA is not intended to deter the Agency from bringing forward new theories of the law. See Galloway School Lines, 315 NLRB 473, 473 (1994). AUSTIN FIRE EQUIPMENT, LLC 1179 amining the acknowledgment language as a whole clear- ly includes a consideration of the explicit 9(a) language, and an assertion that the explicit reference to 9(a) con- tributed towards establishing the parties’ 9(a) relation- ship is an intrinsic part of the General Counsel’s argu- ment. The Board did not find the General Counsel’s argument persuasive, but, for the reasons discussed above, we find now that his position was at least substan- tially justified. ORDER The National Labor Relations Board adopts the rec- ommended Order of the administrative law judge and orders that the application of Austin Fire Equipment, LLC, Prairieville, Louisiana, for attorney’s fees and ex- penses under the Equal Access to Justice Act is denied. MEMBER MISCIMARRA, dissenting. Under the Equal Access to Justice Act (EAJA), the Board applies an objective standard when evaluating whether a party is entitled to reimbursement for certain expenses resulting from meritless unfair labor practice charges. An EAJA recovery is appropriate where “a rea- sonable person” would find that the claims were not pur- sued with “substantial justification” at each stage of the proceeding. Galloway School Lines, 315 NLRB 473, 473 (1994) (citing Pierce v. Underwood, 487 U.S. 552, 565 (1988)). The objective nature of this inquiry is important be- cause diligent, hard-working agency representatives sometimes make mistakes that warrant an EAJA recov- ery. Even if the pursuit of a particular claim is well in- tentioned, EAJA provides for a recovery if the claim was not “substantially justified” when reviewed under a rea- sonableness standard. Teamsters Local 741 (A.B.F. Freight), 321 NLRB 886, 889 (1996). I dissent in the instant case because I believe this reasonableness stand- ard warrants a recovery under EAJA. The Board’s decision in Staunton Fuel & Material, 335 NLRB 717, 720 (2001), controls the instant case. Under Staunton, the employer’s actions challenged here—the failure to recognize and bargain with the Un- ion following expiration of the 2007–2010 collective- bargaining agreement—would be lawful if the agreement stated that a majority of the bargaining-unit employees were union “members” or “represented” by the union. Such language would, under Staunton, be deemed con- sistent with a Section 8(f) relationship, which, upon con- tract expiration, could lawfully be abandoned by the em- ployer. Conversely, according to Staunton, the employ- er’s post-expiration abandonment of the relationship would be unlawful if the contract stated that the union had the “support” or “authorization” of a majority of employees because such language would be indicative of a 9(a) relationship. Id.1 In substance, the General Counsel pursued this litiga- tion against the Respondent, Austin Fire Equipment, LLC, based on an argument that the “members” and “represented” language in Austin’s labor contract should, under Staunton, be regarded as equivalent to language stating that a union has the “support” or “authorization” of an employee majority. However, the Staunton ruling rejected this precise argument (as did the Board in its decision on the merits in the instant case).2 Indeed, Staunton even states, as an example, that the “members” and “represented” type of contract language is not equiv- alent to a collective-bargaining agreement provision re- ferring to the union having the “support” of or “authori- zation” from a majority of employees. Specifically, the Board in Staunton held: [T]here is a significant difference between a contractual statement that the union “represents” a majority of unit employees—which would be accurate under either an 8(f) or a 9(a) agreement—and a statement to the effect that, for example, the union “has the support” or “has the authorization” of a majority to represent them. Similarly, a provision stating only that a majority of unit employees “are members” of the union would be consistent with a union security obligation under either an 8(f) or a 9(a) relationship and is therefore insuffi- cient to confirm 9(a) status. To the extent that any of our post-Deklewa cases may be read to imply that an agreement indicating that the union “represents a ma- jority” or has a majority of “members” in the unit, without more, is independently sufficient to establish 9(a) status, those cases are overruled. 1 The particular issue here is whether the Respondent’s bargaining relationship was governed by Section 8(f) of the Act (which would be the case if the contract referred to an employee majority being union “members” or “represented” by the union), or whether the bargaining relationship was governed by Section 9(a) (which would be the case if the contract referred to the union having the “support” of or “authoriza- tion” from an employee majority). It is uncontroverted now—as it was at the beginning of the case—that the Austin contract contains precisely the type of “members” and “represented” language that, under Staun- ton, compels a conclusion that the bargaining relationship was gov- erned by Section 8(f), and the challenged employer actions were lawful. More details regarding relevant facts and the lack of merit in the dis- missed claims are set forth in the decisions rendered previously by the judge and the Board. In Nova Plumbing, Inc. v. NLRB, 330 F.3d 531 (D.C. Cir. 2003), the United States Court of Appeals for the District of Columbia Circuit disagreed with the Board’s analysis in Staunton Fuel and refused to find a 9(a) relationship based solely on contract language. Id. at 536– 537. I do not pass here on the merits of Staunton Fuel or Nova Plumb- ing because the General Counsel’s position would fail to be substantial- ly justified under both standards. 2 See Austin Fire Equipment, LLC, 359 NLRB 37, 37 (2012). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1180 Id. at 720 (citations omitted; emphasis added). In short, the General Counsel here relied on contract language that the Board in Staunton expressly held was not sufficient to establish the violation alleged against Austin. In my view, an EAJA recovery is warranted be- cause a reasonable person could not interpret either Staunton (which is controlling precedent) or Respond- ent’s contract language (which applies here) in any other way. For two reasons, an EAJA award is not rendered inap- propriate by the General Counsel’s reliance on two earli- er cases: Triple A Fire Protection, 312 NLRB 1088 (1993),3 and MFP Fire Protection, 318 NLRB 840 (1995).4 First, the recognition language in those cases stated, in relevant part, that “a clear majority . . . have designated, are members of, and are represented by [the union].” MFP Fire Protection, supra at 841 (emphasis added); Triple A Fire Protection, supra at 1088 (empha- sis added). The phrase “have designated” is synonymous with “authorized.” Staunton teaches that (i) the presence of such a phrase (contained in the MFP Fire Protection and Triple A Fire Protection CBAs) was essential to Sec- tion 9(a) status, and (ii) the absence of such a phrase (as in the Austin CBA) is fatal to Section 9(a) status.5 In this regard, MFP Fire Protection and Triple A Fire Protec- tion reinforce the critical difference between the contract language in Staunton and the language in the instant case. Second, even if the relevant language in MFP Fire Protection and Triple A Fire Protection could reasonably be regarded as supporting the General Counsel’s claims pursued here against Austin (which they do not), Staun- ton explicitly stated that it overruled any prior decision that “may be read to imply that an agreement indicating that the union ‘represents a majority’ or has a majority of ‘members’ in the unit, without more, is independently sufficient to establish 9(a) status.” 335 NLRB at 720. Thus, the General Counsel’s position was squarely con- tradicted by Staunton; it was not reasonably supported by Triple A Fire Protection or MFP Fire Protection; and the latter two decisions—if they provided colorable support for the claims pursued against Austin here—were ex- pressly overruled in Staunton. This warrants an EAJA 3 Supplemented by 315 NLRB 409 (1994), enfd. 136 F.3d 727 (11th Cir. 1998), cert. denied 525 U.S. 1067 (1999). 4 Enfd. 101 F.3d 1341 (10th Cir. 1996). 5 For purposes of Staunton Fuel, supra at 720, a variety of different phrases could be sufficient to unequivocally indicate that the employ- er’s recognition of the union was based on the union’s having shown or offered to show evidence of majority support. Against this standard, the language contained in Austin Fire’s contract—stating that a majori- ty of employees are “members” of and “represented by” the union—is clearly “insufficient to confirm 9(a) status.” Id. recovery because the General Counsel did not have a reasonable legal basis for his theory of the case. See Pierce v. Underwood, 487 U.S. 552, 563–566 (1988). As a final matter, unlike my colleagues, I do not be- lieve the General Counsel’s prosecution of this case can be deemed reasonable based on an additional phrase in the Austin Fire CBA which states the union was a bar- gaining representative “pursuant to Section 9(a) of the [NLRA].” Although this Section 9(a) phrase is now characterized by my colleagues as “relevant language” that ostensibly warranted more than 3 years of unsuc- cessful litigation against the Respondent, this language was never the focus of General Counsel arguments pre- sented either to the judge or to the Board. Likewise, the judge’s decision on the merits quoted the “language . . . in issue in this case” with no reference to the Section 9(a) phrase. 359 NLRB 37, 46. Similarly, the Board’s deci- sion on the merits analyzed the relevant CBA language with no reference to the Section 9(a) phrase. Id. at 37 fn. 5. It is unreasonable to deny an EAJA recovery by in- voking a distinction that the General Counsel never even argued either to the judge or to the Board. And if one considers the merits, the distinction described by my colleagues does not reasonably justify the prosecution of this case against the Respondent. The Board in Staunton squarely addressed the potential effect of explicit Section 9(a) language in a CBA, and the Board in Staunton clear- ly held that the presence or absence of 9(a) language would not be controlling.6 6 The Board in Staunton stated that an explicit reference to Section 9(a) “would indicate that the parties intended to establish a majority rather than an 8(f) relationship.” 335 NLRB at 720 (citation omitted; emphasis added). However, the Board in Staunton stated that “[t]he issue . . . is not simply whether the parties may have intended to change their relationship but whether they succeeded in doing so.” Id. at 720 fn. 17 (emphasis added). Therefore, the Board in Staunton clearly indicated that the existence or nonexistence of a Section 9(a) relation- ship “must be reviewed under the criteria we establish” without regard to whether or not the CBA contained an explicit reference to Section 9(a). Id. (emphasis added). See also Staunton, 335 NLRB at 719 (de- scribing the Board’s criteria as “minimum requirements for what must be stated in a written recognition agreement or contract clause in order for a union to attain 9(a) status solely on the basis of such an agree- ment” (emphasis added)). This contradicts my colleagues’ suggestion that “reasonable minds could differ on the effect of [a Section 9(a)] reference in an otherwise insufficient contractual recognition clause.” It is undisputed that the language at issue here—without regard to the CBA’s reference to Section 9(a)—did not meet the “minimum require- ments” described in Staunton. In fact, earlier in this case, the Board reached precisely the same conclusion, and held that the Austin CBA’s explicit reference to Sec- tion 9(a) made no difference. After the General Counsel’s allegations were decided by the ALJ and the Board, the Union (not the General Counsel) filed a motion for reconsideration arguing in part that “the Acknowledgement’s express reference to Section 9(a) establishes the parties’ intent to form a 9(a) relationship.” 359 NLRB 576, 576 (2013). Far from characterizing the Section 9(a) phrase as relevant language, AUSTIN FIRE EQUIPMENT, LLC 1181 Nor do I believe an EAJA recovery should be denied because the General Counsel argued for a change in the law after “tak[ing] into account the D.C. Circuit’s criti- cism of the Staunton Fuel standard.” The D.C. Circuit’s position, as articulated in Nova Plumbing, Inc. v. NLRB, 330 F.3d 531, 536–537 (D.C. Cir. 2003), is that contract language never converts a Section 8(f) relationship into a Section 9(a) relationship. The D.C. Circuit’s criticism, if taken into account, reinforces the unreasonableness of the litigation against Respondent and bolsters the case for an EAJA recovery.7 I greatly respect the difficult task undertaken by the General Counsel, who, with the support of regional at- torneys throughout the country, processes thousands of unfair labor practice charges each year. It breaks no new ground to recognize that divergent views may exist re- garding the proper interpretation of the Act. This is evi- dent, for example, in many decisions where Board mem- bers disagree or where the Board disagrees with deci- sions by its administrative law judges or the courts. However, we should also recognize those instances— extremely few in number—where claims are contradicted by controlling precedent and have been pursued without reasonable justification. In my view, this is such a case, and EAJA provides for a recovery of expenses by the Respondent. Accordingly, I respectfully dissent. Kevin McClue, Esq., for the Acting General Counsel. Harold Koretzky, Esq., Stephen Rose, Esq., Russell L. Foster, Esq., and Sarah E. Stogner, Esq., for the Respondent. William W. Osborn Jr., Esq. and Natalie C. Mofett, Esq., for the Charging Party. SUPPLEMENTAL DECISION STATEMENT OF THE CASE MARGARET G. BRAKEBUSCH, Administrative Law Judge. On October 26, 2012, Austin Fire Equipment, LLC (the Respond- the Board stated that “Staunton does not suggest that the inclusion of such a reference is conclusive. . . .” Id. (emphasis added). 7 When an EAJA recovery is warranted by an objectively erroneous reading of controlling precedent, it would eviscerate EAJA to deny an EAJA recovery whenever an agency makes an additional argument to change the law, where the General Counsel’s theory of the case relies not on the law as changed, but on extant precedent. The General Coun- sel’s central focus in the instant case, from its inception, was that the Austin CBA created a Section 9(a) relationship applying the Board’s decisions in Staunton and similar cases. Unlike the view expressed by my colleagues, an EAJA recovery here should not “discourage the General Counsel from performing his proper role in developing Board law.” The General Counsel can clearly advocate that the Board modify or overrule Staunton in an appropriate future case (for example, one in which a 9(a) relationship would exist under Staunton, but would not under the D.C. Circuit’s reasoning in Nova Plumbing). The only limi- tation under EAJA is that the General Counsel avoid prosecuting cases based primarily on grounds that are demonstrably lacking in substantial justification. ent) filed an application for attorneys’ fees and costs pursuant to the Equal Access to Justice Act (EAJA). On November 16, 2012, the Acting General Counsel filed a motion to dismiss application for an award of attorney fees and expenses under the Equal Access to Justice Act. On November 16, 2012, Re- spondent filed an amendment to its EAJA Application and on November 20, 2012, Respondent filed a second amendment to its EAJA Application. On December 7, 2012, Respondent filed a Memorandum in Opposition to motion to dismiss EAJA Ap- plication. Attached to the memorandum is a supplemental affi- davit from Respondent’s counsel as well as a request for addi- tional fees and costs since the filing of Respondent’s October 26, 2012 EAJA application. On February 14, 2013, the National Labor Relations Board (the Board) referred the matter to the undersigned for appropri- ate action. On March 7, 2013, the Acting General Counsel filed counsel for Acting General Counsel’s reply to Respond- ent’s memorandum in opposition to motion to dismiss EAJA Application. On April 5, 2013, the Respondent filed Respond- ent’s motion to strike untimely reply brief. On April 8, 2013, the Acting General Counsel filed reply to Respondent’s motion to strike reply brief. On April 25, 2013, Respondent filed Re- spondent’s reply memorandum to support motion to strike un- timely reply brief. A. Preliminary Issues 1. Whether my decision is stayed Counsel for the Acting General Counsel takes the position under Section 102.148(c) that this matter is stayed pending a final disposition of the underlying case. Section 102.148(c) provides that Proceedings for the award of fees, but not the time limit of this section for filing an application for an award, shall be stayed pending final disposition of the adversary adjudication in the event any person seeks reconsideration or review of the decision in that proceeding. I note, however, that under Section 102.143, the Board’s Rules specifically define an “adversary adjudication” to mean “unfair labor practice proceedings pending before the Board on complaint and backpay proceedings pending before the Board on notice of hearing.” On February 7, 2013, the Board denied the Union’s motion for reconsideration; addressing all remain- ing matters before the Board other than Respondent’s applica- tion for attorney’s fees and costs. On February 14, 2013, the Board referred Respondent’s application for attorney’s fees and costs to me for appropriate action. Accordingly, I do not find that my decision in this matter is stayed because of any other matters pending before the Board. 2. Whether the Acting General Counsel’s reply brief and the Respondent’s motion to strike the Acting General Counsel’s reply brief are timely filed a. The Board’s applicable Rules and Regulations Section 102.148 of the Board’s Rules provide that an EAJA applicant has 30 days after the entry of the Board’s final order in a proceeding to file its application for an award of fees and expenses. Upon filing, the application shall be referred by the DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1182 Board to the administrative law judge (ALJ) who heard the adversary adjudication upon which the application is based. Section 102.148 provides that proceedings for the award of fees, but not the time limit of this section for filing an applica- tion for an award, shall be stayed pending final disposition of the adversary adjudication in the event any person seeks recon- sideration or review of the decision in that proceeding. Section 102.150 provides that within 35 days after service of an application, the Acting General Counsel may file an answer to the application. The filing of a motion to dismiss the applica- tion shall stay the time for filing an answer to a date 35 days after issuance of any order denying the motion. Within 21 days after service of any motion to dismiss, the applicant shall file a response thereto. Within 21 days after service of an answer, the applicant may file a reply. b. The parties’ pleadings As outlined above, Respondent’s EAJA application was ini- tially filed on October 26, 2012, and the Acting General Coun- sel filed a motion to dismiss Respondent’s application on No- vember 16, 2012. On November 9, 2012, the Union filed a motion for reconsideration with the Board. On November 16 and 20, 2012, Respondent filed amendments to its EAJA appli- cation. On December 7, 2012, Respondent filed its memoran- dum in opposition to the motion to dismiss with documentation to amend the October 26, 2012 EAJA application. Counsel for the Acting General Counsel asserts that while the document was crafted as a memorandum in opposition to the Acting Gen- eral Counsel’s motion to dismiss, it did not merely respond to the Acting General Counsel’s motion; but included new argu- ments and an exhibit requesting attorney fees that were not requested in its original EAJA application. The new exhibit was a supplemental affidavit by Respondent’s counsel detailing the additional fees and costs since Respondent’s initial filing of its EAJA Application. On February 7, 2013, the Board denied the Union’s motion for reconsideration. On February 14, 2013, the Board referred the EAJA application to me as the administrative law judge who heard the underlying case. On March 7, 2013, the Acting General Counsel filed a reply brief in support of its motion to dismiss Respondent’s EAJA application. On April 5, 2013, Respondent filed a motion to strike the Acting General Coun- sel’s brief that was filed on March 7, 2013. On April 8, 2013, the Acting General Counsel filed a reply to the Respondent’s motion to strike the Acting General Counsel’s brief. c. Respondent’s argument in support of its motion As outlined above, the Board’s Rules provide that the Re- spondent had 21 days to file a response to the Acting General Counsel’s motion to dismiss. Respondent’s memorandum in opposition to the General Counsel’s motion to dismiss com- plied with the time frame required by the Board’s Rules. Re- spondent asserts, however, that the General Counsel’s March 7, 2013 reply to the Respondent’s memorandum in opposition is untimely. Specifically, Respondent argues that the Acting General Counsel was in possession of the Respondent’s opposition to the motion to dismiss since December 7, 2012. Respondent argues that a right to reply is not provided for in the Board’s Rules and Regulations and that the Acting General Counsel should not be permitted to file a reply more than 3 months after receiving Respondent’s opposition when the Rules do not grant a right of reply, and counsel for the Acting General Counsel has failed to timely seek leave for such a filing. On March 6, 2013, counsel for the Acting General Counsel sent a letter to Re- spondent’s counsel entitled “Notice of Intent to File Reply.” Respondent asserts that the Acting General Counsel did not seek leave to file the Reply and thus it should be stricken. d. The Acting General Counsel’s response The Acting General Counsel argues that the EAJA proceed- ings were stayed on November 9, 2012, pending the final dis- position of the Union’s motion for reconsideration filed with the Board. Counsel for the Acting General Counsel further asserts that after counsel for the Acting General Counsel filed the motion to dismiss; Respondent filed three amendments to its EAJA application while the proceedings were stayed. Counsel additionally argues that “because the proceedings were stayed and counsel could not reasonably respond to Respond- ent’s three amendments to its EAJA Application” until the Board ruled on the Union’s motion for reconsideration, counsel for the Acting General Counsel elected to wait until the Board issued its final decision on the motion for reconsideration to file a reply to Respondent’s three amendments to the EAJA appli- cation. Counsel for the Acting General Counsel maintains that under Section 102.150 of the Rules, counsel for the Acting General Counsel had up to 35 days to file its supplement to its motion to dismiss responding to Respondent’s three amendments to its EAJA application. Counsel argues that because its reply brief was filed on March 8, 2013, within 35 days of the Board deny- ing the Union’s motion for reconsideration and also within 35 days of the Board referring the EAJA application to the ALJ, it was timely filed. Counsel for the Acting General Counsel further submits that under Rule 102.150, Respondent has 21 days after service of the reply brief to file a response. Because Respondent’s motion to strike was not filed until April 5, 2013, and 28 days after being served with the reply brief, counsel for the Acting Gen- eral Counsel asserts that Respondent’s motion to strike is un- timely and should be dismissed. e. Analysis of the parties’ ancillary motions Section 102.148 of the Board’s Rules and Regulations spe- cifically provide that an application for an award pursuant to EAJA must be filed with the Board within 30 days of the issu- ance of the decision giving rise to the determination. Section 102.147 clearly delineates what must be included in any appli- cation filed with the Board. Section 102.47(f) requires that an EAJA applicant must provide with its application a detailed exhibit showing the net worth of the applicant and any affili- ates, and the exhibit must provide full disclosure of the appli- cant’s and its affiliates’ assets and liabilities and must be suffi- cient to determine whether the applicant qualifies under the standards of the Rules. Respondent’s October 26, 2012 applica- tion was incomplete and did not comport with the requirements of Section 102.7(f). The only evidence submitted by Respond- ent in support of its status as a party entitled to relief under AUSTIN FIRE EQUIPMENT, LLC 1183 EAJA was a single, one-page affidavit by owner Russell Ritch- ie. The affidavit states that Respondent’s 2011 balance sheet was attached and that Respondent’s net worth “did not exceed $7 million” when the complaint issued on January 31, 2011. Despite Ritchie’s assertions, however, the balance sheet was not attached to the affidavit and there was no other information provided giving the requisite full disclosure of the Respond- ent’s and its affiliates assets and liabilities. On November 16, 2011, Respondent finally submitted a copy of Respondent’s 2011 balance sheet. On November 20, 2012, Respondent filed its second amendment to its application and included an affida- vit signed by Ritchie, asserting that Respondent had no affili- ates or subsidiaries and had not had any affiliates or subsidiar- ies in the past. Thus, it was only after November 20, 2012, that Respondent provided all of the necessary documentation re- quired under Section 102.148; a period of 53 days after the Board’s decision and 23 days after the deadline provided under the Board’s Rules. The Board’s Rules and Regulations contain no provisions that allow for an applicant to amend an applica- tion for an award of attorney’s fees and expenses. While I have no doubt that the balance sheet was inadvert- ently omitted from the initial application on October 26, 2012, the fact remains that it took Respondent until November 20, 2012 to submit a full and complete application that met the requirements of Section 102.148. Furthermore, Respondent additionally amended its EAJA application by augmenting its claim and submitting an additional exhibit on December 7, 2012. Thus, I don’t find that Respondent has a legitimate stand- ing to enforce the time limits of the Board’s Rules with respect to the Acting General Counsel when it has clearly gone beyond the time parameters of the Rules to enhance its original applica- tion. Interestingly, counsel for the Acting General Counsel sub- mits that because the proceedings were stayed by the Union’s motion for reconsideration, counsel could not reasonably re- spond to Respondent’s amendments to its EAJA application until the Board ruled on the Union’s motion for reconsidera- tion. I note, however, that 102.148 also provides that “Proceed- ings for the award of fees, but not the time limit of this section for filing an application for an award, shall be stayed pending final disposition of the adversary adjudication in the event any person seeks reconsideration or review of the decision that proceedings.” Thus, the wording of this section implies that only the initial application for fees and expenses is exempt from the stay that is triggered by a request for reconsideration. Although counsel for the Acting General Counsel argues that a stay was in place as of November 9, 2012, counsel nevertheless filed its motion to dismiss Respondent’s EAJA application on November 16, 2012. In a written submission1 on April 25, 2013, Respondent ar- gues that the counsel for the Acting General Counsel filed its motion to dismiss on November 16, 2012, and during the pen- dency of the stay triggered by the Union’s November 9, 2012 motion for reconsideration. Further Respondent argues that because Section 102.149(a) does not contemplate any right to 1 The request for the submission was granted by me in a conference call with the parties on April 15, 2013. supplement a reply in support of a motion to dismiss, the Act- ing General Counsel’s reply brief in support of his motion to dismiss should be stricken in addition to the dismissal of the Acting General Counsel’s motion to dismiss Respondent’s EAJA application. Respondent does not, however, address the fact that it filed three amendments to its EAJA application fol- lowing the commencement of the stay on November 9, 2012. As discussed above, neither party has fully complied with the full provisions of the Board’s Rules and Regulations with respect to time limits for the EAJA application and the requisite responses. Based on the parties’ various arguments concerning the applicable sections of the Board’s Rules and Regulations, there is certainly a justifiable basis to strictly limit the pleadings requested by the parties. Although both parties have arguably exceeded the parameters contemplated by the Board’s Rules and Regulations, no benefit would be served in applying the Rules in an arbitrarily strict sense. Accordingly, in the interest of fairness to both the Respondent and the Acting General Counsel, and in order to allow the parties an opportunity to make a full and complete record on this issue, I deny Respond- ent’s motion to strike the Acting General Counsel’s reply brief, as well as, the Acting General Counsel’s motion to dismiss Respondent’s motion to strike, and I have fully considered the Respondent’s entire application despite its fragmented submis- sion and untimely amendments, as well as, the Acting General Counsel’s motion to dismiss that was filed on November 16, 2012. On the entire record, including the briefs and motions filed by the Acting General Counsel and the Respondent, I hereby grant the Acting General Counsel’s motion to dismiss the Re- spondent’s application for attorneys’ fees and costs for the rea- sons set forth below. B. Procedural and Factual History On January 31, 2011, the Regional Director for Region 15 of the Board issued a complaint alleging that the Road Sprinkler Fitters Local Union No. 669, U.A., AFL–CIO (Union) had been the exclusive collective-bargaining representative for an identi- fied group of Respondent’s employees (the unit) since July 8, 2008. The complaint alleged that based on the Union’s 9(a) status, the Respondent had failed to continue in effect all the terms and conditions of an agreement; effective from April 1, 2007, to March 31, 2010. The complaint further alleged that Respondent did so without prior notice to the Union and with- out affording the Union an opportunity to bargain with Re- spondent with respect to such conduct and/or the effects of the conduct. The complaint also alleged that since about April 1, 2010, Respondent failed and refused to recognize and bargain with the Union as the exclusive collective-bargaining repre- sentative of the unit employees and on or about July 13, 2010, Respondent withdrew its recognition of the Union as the exclu- sive collective-bargaining representative of the unit. Finally,2 2 On the last day of the hearing in this matter, the Acting General Counsel moved to amend the complaint to further allege that since May 2009, the Respondent had engaged in direct dealing with the employ- ees. I reserved ruling on the motion, giving the parties an opportunity to argue their positions in the posthearing briefs. In its posthearing DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1184 the complaint alleged that since on or about May 5, 2010, the Respondent failed and refused to furnish the Union certain information that is necessary for, and relevant to, the Union’s performance of its duties as the exclusive collective-bargaining representative of the unit. 1. A summary of the underlying facts Russell Ritchie (Ritchie) is the owner and president of Aus- tin Fire Equipment, LLC (Respondent). In June 2007, Ritchie entered into a one-job project agreement with the Union for work to be performed at a jobsite that was approximately 2 to 3 hours away from Respondent’s facility. This first-ever agree- ment with the Union became effective on June 11, 2007, and was established to remain in effect through the completion of the project that was estimated to last approximately 6 months. During the term of the agreement, Respondent agreed to be bound by the 2007–2010 collective-bargaining agreement be- tween National Fire Sprinkler Association, Inc. and the Union. There was no evidence presented that this agreement was a 9(a) agreement3 or anything other than a one-job agreement. In May 2008, Respondent was awarded a contract with Vale- ro Refinery. In order to perform the job, Ritchie needed at least 12 sprinkler fitters for a period of 6 months. Ritchie testified that he told the Union that he would be willing to sign a 1-year agreement in order to obtain referral of the necessary sprinkler fitters. When Ritchie met with the union representatives, he was presented with the National Fire Sprinkler Association (NFSA) agreement that was in effect from April 1, 2007, to March 31, 2010. Ritchie testified that although he reminded the Union that he had discussed only a 1-year agreement, the union representatives told him that his agreement with the Un- ion would have to continue through the entire period designated in the NFSA agreement. On July 8, 2008, Ritchie signed the two-page signatory agreement, agreeing to be bound by all the terms and conditions of the NFSA agreement. At the time that Ritchie signed the signatory agreement, Ritchie also signed a document entitled “Acknowledgment of the Representative Status of Road Sprin- kler Fitters Local Union No. 669, U.A. AFL–CIO” (Acknowl- edgment). The document included the following wording: The Employer executing this document below has, on the ba- sis of objective and reliable information, confirmed that a clear majority of the sprinkler fitters in its employ are mem- bers of, and are represented by Road Sprinklers Fitters Local Union No. 669, U.A., AFL–CIO, for the purposes of collec- tive bargaining. The Employer therefore unconditionally acknowledges and confirms that Local Union 669 is the ex- clusive bargaining representative of its sprinkler fitter em- ployees pursuant To Section 9(a) of the National Labor Rela- tions Board. At the time that Ritchie signed the Acknowledgment, the Union brief, the Acting General Counsel withdrew its motion to amend the complaint. The motion was granted. 3 Under Sec. 9(a) and Sec. 8(a)(5) of the Act, employers are obligat- ed to bargain only with unions that have been “designated or selected for the purposes of collective bargaining by the majority of the employ- ees in a unit appropriate for such purposes.” 29 U.S.C. §159. did not present or offer to present evidence to Respondent that it represented a majority of Respondent’s sprinkler fitters. Prior to May 2009, Respondent followed the terms of the contract for all the sprinkler fitters employed by the Respond- ent. Thereafter, Respondent did not follow all of the terms of the agreement. 2. Acting General Counsel’s complaint On January 31, 2011, the Regional Director for Region 15 of the National Labor Relations Board (the Board) issued a com- plaint against Respondent. The complaint alleged that since July 8, 2008, the Union had been the exclusive collective- bar- gaining representative for Respondent’s sprinkler fitters under Section 9(a) of the Act and that since February 4, 2010, the Respondent failed to continue in effect all of the terms and conditions of the 2007–2010 NFSA agreement. The complaint further alleged that since April 1, 2010, Respondent failed and refused to recognize and bargain with the Union as the exclu- sive collective-bargaining representative of its employees and that on or about July 13, 2010, Respondent withdrew its recog- nition of the Union as the exclusive collective-bargaining rep- resentative of its employees. Finally, the complaint alleged that since about May 5, 2010, the Respondent failed and refused to furnish the Union certain information that is necessary for, and relevant to, the Union’s performance of its duties as the exclu- sive collective-bargaining representative of the bargaining unit employees. C. Prevailing Legal Authority Concerning 9(a) and 8(f) Agreements As an 8(f) agreement is not established by a showing of ma- jority support, there is no presumption of majority status for the signatory union. J & R Tile, 291 NLRB 1034, 1036 (1988). In its decision in John Deklewa & Sons, 282 NLRB 1375, 1377 (1987), enfd. sub nom. Ironworkers Local 3 v. NLRB, 843 F.2d 770 (3d Cir. 1988), the Board held that parties entering into an 8(f) agreement will be required by virtue of Section 8(a)(5) and Section 8(b)(3) to comply with the agreement during its term, in the absence of a Board-conducted election where employees vote to change or reject their bargaining representative. Fol- lowing the expiration of an 8(f) agreement, however, the union enjoys no presumption of majority status and either party may repudiate the 8(f) bargaining relationship. Id at 1377–1378. Thus, the distinction between a union’s representative status under Section 8(f) and under Section 9(a) is significant because an 8(f) relationship may be lawfully terminated by either the union or the employer upon the expiration of their collective- bargaining agreement. Id at 1386–1387. By contrast, a 9(a) relationship and the derivative obligation to bargain continues after the contract expires, unless and until the union is shown to have lost majority support. Levitz Furniture Co. of the Pacific, 333 NLRB 717 (2001). As a general rule, the Board presumes that construction in- dustry bargaining relationships are governed by Section 8(f) of the Act and that the union and the employer intended their rela- tionship to be governed by Section 8(f) rather than Section 9(a). Deklewa at 1386–1387. In Deklewa, the Board explained that a 9(a) relationship could be proven by a showing that a construc- tion industry employer voluntarily recognized a union “based AUSTIN FIRE EQUIPMENT, LLC 1185 on a clear showing of majority support among the unit employ- ees, e.g., a valid card majority.” Id at 1387 fn. 53. In a later decision in J&R Tile, 291 NLRB 1034, 1036 (1988), the Board went on to explain that to establish voluntary recognition, there must be positive evidence that the union unequivocally de- manded recognition as the employees’ 9(a) representative and that the employer unequivocally accepted it as such. In recent years, however, the Board has also held that volun- tary recognition under Section 9(a) may also be established solely by the terms of the collective-bargaining agreement that meets certain minimum requirements. In Staunton Fuel & Material, 335 NLRB 717, 719–720 (2001), the Board held that a recognition agreement or contract provision will be inde- pendently sufficient to establish a union’s 9(a) representation status where the language unequivocally indicates that (1) the union requested recognition as the majority or 9(a) representa- tive of the unit employees; (2) the employer recognized the union as the majority or 9(a) bargaining representative; and (3) the employer’s recognition was based on the union’s having shown, or having offered to show, evidence of its majority support. In its 2007 decision in Madison Industries, 349 NLRB 1306 (2007), the Board again reviewed the parties’ rights and obliga- tions under Section 8(f) and Section 9(a) with respect to con- tract language. The Board held that in determining whether the presumption of an 8(f) status has been rebutted, the Board will first consider whether the agreement, examined in its entirety, conclusively notifies the parties that a 9(a) relationship is in- tended. If it does, the presumption of Section 8(f) has been rebutted. If the parties’ agreement does not do so, the Board considers any relevant extrinsic evidence bearing on the par- ties’ intent as to the nature of their relationship. Id at 1308. D. The ALJ Decision The hearing in this matter was conducted in New Orleans, Louisiana, on June 22 and 23, 2011, and I issued a decision on November 29, 2011. In support of the issued complaint, the Acting General Counsel maintained the position that the Ac- knowledgment language satisfied all the elements of the Staun- ton Fuel & Material test. Based on the record as a whole, in- cluding credible testimony, I found that the Respondent entered into the bargaining agreement with the Union with the intent to be bound by an 8(f) agreement rather than a 9(a) agreement. I also found that Respondent unilaterally changed the terms and conditions of employment of its employees during the term of the collective-bargaining agreement to which Respondent had agreed to be bound. Thus, I found that Respondent violated Section 8(a)(5) of the Act by failing to continue in effect all the terms and conditions of the July 8, 2008 agreement. Because I found that the Respondent and the Union did not enter into a 9(a) agreement, I did not find that the Respondent unlawfully failed to recognize and bargain with the Union after the expiration of the 2007–2010 agreement. Furthermore, be- cause there was no bargaining obligation for Respondent be- yond the expiration of the agreement, I did not find that Re- spondent unlawfully failed and refused to provide the infor- mation requested by the Union in May 2010. E. The Board’s Decision On September 28, 2012, the Board issued a decision, adopt- ing my conclusions that the parties’ bargaining relationship was governed by Section 8(f) rather than Section 9(a) of the Act. The Board found that the parties’ recognition agreement (Ac- knowledgment) does not meet the three-part test set forth in Stanton Fuel & Material (Central Illinois), 335 NLRB 717 (2001), to establish 9(a) status. The Board referenced its con- temporaneous decision in USA Fire Protection, 358 NLRB 1722 (2012), where the Acknowledgment language also fails to demonstrate that the respondent’s recognition of the union was based on majority support among unit employees. The Board explained that in relying on Staunton Fuel & Material, they had also found in USA Fire Protection, that language concerning the employees’ membership and representation by the union, without more, would not establish the parties’ intent to form a 9(a) relationship. The Board further explained that because the Union relies only on the Acknowledgment to support its asser- tion of 9(a) status and does not contend that any other evidence substantiates its position, they agreed with my recommended decision that 9(a) status has not been demonstrated and that the parties’ relationship is governed by Section 8(f). The Board further adopted my recommended decision that Respondent violated Section 8(a)(5) and (1) by failing and refusing to con- tinue in effect all the terms and conditions of the agreement between the National Fire Sprinkler Association, Inc. and the Union until the agreement’s expiration. F. Applicable Legal Standard for Determining EAJA Eligibility EAJA, as specified in Section 102.143 of the Board’s Rules and Regulations, provide that a “respondent in an adversary adjudication who prevails in that proceeding, or in a significant and discrete substantive portion of that proceeding” and who otherwise meets certain eligibility requirements relating to net worth, corporate organization, number of employees, etc. is eligible to seek reimbursement for certain expenses incurred in connection with that proceeding. Section 102.144 further clari- fies that the burden of proof that an award should not be made to an eligible applicant is on the General Counsel, who may avoid an award by showing that the General Counsel’s position in the proceeding was substantially justified. As the Board has found, the General Counsel must establish that he was substan- tially justified at each stage of the proceeding including at the time of the issuance of the complaint, taking the matter through hearing, and filing exceptions (if any) to the judge’s decision. Glesby Wholesale, 340 NLRB 1059, 1060 (2003). In weighing the unique circumstances of each case, a stand- ard of reasonableness will apply. Abell Engineering & Mfg., Inc., 340 NLRB 133, 133 (2003). In defining “substantial justi- fication,” the Board has explained that it does not mean sub- stantial probability of prevailing on the merits, and it is not intended to deter the agency from bringing forward close ques- tions or new theories of law. The Board has looked to the Su- preme Court’s definition of “substantial justification” under EAJA; finding that the justification is to a degree that could satisfy a reasonable person” or having a “reasonable basis both in law and fact.” Galloway School Lines, 315 NLRB 473 (1994) citing Pierce v. Underwood, 487 U.S. 552, 565 (1988). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1186 In Jansen Distributing Co., 291 NLRB 801 fn. 2 (1988), the Board adopted this definition for “substantially justified.” As the Court has noted, an agency’s position is substantially justified when “reasonable people could differ” on whether the action should go forward. Pierce v. Underwood at 563–566. See also Teamsters Local 741, 321 NLRB 886, 889 (1996), where the Board followed Pierce v. Underwood in finding that substantially justified would include “justified to a degree that could satisfy a reasonable person” or “justified if a reasonable person could think it correct.” Although the General Counsel may not prevail in litigation, there is not a presumption that his position was not substantial- ly justified, nor must it be established that the decision to liti- gate was based on a substantial probability of prevailing. Westerman, Inc., 266 NLRB 799 (1983). The General Counsel may carry its burden of proving that its position was substan- tially justified “by showing its position advanced ‘a novel but credible extension or interpretation of the law’.” Timms v. U.S. 742 F. 2d 489, 492 (9th Cir. 1984), quoting Hoang Ha v. Schweiker, 707 F. 2d 1104, 1106 (9th Cir. 1983). G. Respondent’s Argument Citing 5 U.S.C.A. § 504, Respondent asserts that under EAJA, a prevailing party is entitled to recover reasonable attor- neys’ fees and other expenses incurred when the government recovers less than its previous demand from a private party in formal agency adjudication, unless the government’s position was “substantially justified” or if special circumstances make an award unjust. In its application, Respondent asserts that the General Counsel was not substantially justified in pursuing this case while a nearly identical case involving the same Union and acknowledgment language was pending before the Board. Furthermore, Respondent maintains that Respondent acknowl- edged in its amended answer prior to hearing that a Section 8(f) relationship existed, and Respondent offered to settle for the exact outcome decided by the undersigned and by the Board. H. Discussion and Analysis 1. Respondent’s eligibility for EAJA relief a. Respondent’s net worth Section 102.143 of the Board’s Rules provides that the sole owner of an unincorporated business who has a net worth of not more than $7 million, including both personal and business interests and not more than 500 employees meets the eligibility criteria for an award. Respondent asserts that at the time that the complaint issued, Respondent had approximately 78 em- ployees and its net worth was significantly less than $7 million. In support of this assertion, Respondent attached a 1-page affi- davit of its president, Russell Ritchie (Ritchie); stating that Respondent’s net worth did not exceed $7 million when the complaint issued on January 31, 2011. In its application, Re- spondent asserts that a copy of the balance sheet was attached to Ritchie’s affidavit. In responding to Respondent’s EAJA application, Acting the General Counsel asserts that under Sec. 102.147(f) of the Board’s Rules, an applicant must provide with its application a detailed exhibit showing the net worth of the applicant and any affiliates when the adversary adjudicative proceeding was initi- ated. In his motion to dismiss, the Acting General Counsel submits that the requisite exhibit must be sufficient to deter- mine that the applicant qualifies under the standards and that the Respondent has not provided such an exhibit. In the motion to dismiss Respondent’s application, the Acting General Coun- sel asserts that Respondent did not include Respondent’s bal- ance sheet as claimed and that Respondent’s conclusory state- ment that its net worth did not exceed $7 million does not qual- ify as a detailed exhibit as required under Section 102.147 of the Board’s Rules. The Acting General Counsel asserts that for Respondent to establish eligibility for an EAJA award, Re- spondent must submit information consistent with generally accepted accounting principles, together with an affirmation that the reported assets and liabilities are complete and accu- rate. On November 16, 2012, and after receiving the Acting Gen- eral Counsel’s motion to dismiss, Respondent filed an amend- ment to its EAJA application. Respondent acknowledged that it had inadvertently failed to attach the 2011 balance sheet to its original application. Respondent attached a 4-page Independ- ent Accountants’ Review Report dated May 25, 2012. Based on the analysis of the independent accounting firm and the detailed report, it is apparent that Respondent has met the threshold eligibility requirement and has demonstrated that its net worth does not exceed $7million. b. Other criteria for eligibility In his affidavit attached to Respondent’s application for EAJA fees, Ritchie asserts that Respondent had only 78 em- ployees at the time the complaint issued. Counsel for the Acting General Counsel does not dispute Ritchie’s assertion and his claim is consistent with the evidence presented in the underly- ing trial. Respondent has further confirmed that it has no affili- ates. Accordingly, I find that Respondent meets the criteria for an award as set forth in 102.143. 2. Whether the Acting General Counsel was substantially justified Respondent asserts that despite extensive briefing, the legal issue here was quite simple—whether a 1-page document iden- tified as the Acknowledgment and signed by Respondent creat- ed a 9(a) relationship with the Union. Respondent argues that the Board has found that the Acknowledgement, on its face, did not and thus the General Counsel was not substantially justified in pursing this case since, “as a matter of law, the Acknowl- edgment was incapable of supporting a 9(a) relationship.” The Acting General Counsel asserts that the “substantially justified” standard does not raise a presumption that because the government did not prevail in litigating the case, that its position in the matter was not substantially justified. The Act- ing General Counsel submits that the circumstances and the evidence available to the Acting General Counsel at the various junctures of the proceeding support a finding that the govern- ment’s position can be justified even though the Acting General Counsel did not fully prevail in the case. In its application, Respondent asserts a number of bases to support its position that the General Counsel was not justified in pursuing this case. AUSTIN FIRE EQUIPMENT, LLC 1187 a. Respondent’s argument concerning the pendency of a similar case On June 21, 2010, Administrative Law Judge Michael Mar- cionese issued a decision in USA Fire Protection.4 On Septem- ber 28, 2012 and the same day that the Board issued its decision in the instant case, the Board affirmed Judge Marcionese’s decision in 358 NLRB 1722 (2012). In adopting the adminis- trative law judge’s conclusion that the relationship between the union and the employer was governed by Section 8(f) rather than Section 9(a) of the Act, the Board found that the language of their recognition agreement, on which the union exclusively relied, failed to satisfy the 3-part test set forth in Staunton Fuel & Material, Inc, 335 NLRB 717 (2001). Specifically, the Board explained that under Staunton Fuel & Material, the agreement’s statement that a clear majority of the unit members are members of, and are represented by the union was insuffi- cient to show that the employer’s recognition of the union was based on majority support among the unit employees. As in the instant case, the Board found that the employer violated the Act by making unilateral changes in terms and conditions of em- ployment during the terms of the collective-bargaining agree- ment. Respondent argues that the General Counsel was not sub- stantially justified in pursuing the instant case while USA Fire Protection; a nearly identical case involving the same Union and Acknowledgment form, was pending before the Board. Respondent submits that the administrative law judge’s deci- sion in USA Fire Protection issued over a month before the Union filed its charge and the judge’s decision was pending before the Board over 6 months before the underlying com- plaint in this case issued. Respondent asserts that in its pre- hearing and posthearing briefs to me and to the Board, it main- tained that the judge’s decision in USA Fire Protection sup- ported its position that Section 8(f) of the Act governed its rela- tionship with the Union. Respondent contends that the Acting General Counsel was not substantially justified in pursuing this case on facially inva- lid language, especially given that USA Fire Protection was pending Board review. Furthermore, Respondent suggests that the Acting General Counsel “could and should have stayed this proceeding until after the Board issued its decision” in USA Fire Protection. In support of its claim that the Acting General Counsel should have stayed this proceeding until after the Board ruled in USA Protection Fire, Respondent points to the Board’s find- ing in this case that the Acknowledgment failed to meet the 3- part Staunton Fuel & Material test and the Board’s reference to its related explanation in USA Fire Protection. I do not find merit to Respondent’s argument that the Acting General Counsel was required to stay this proceeding until the Board ruled in USA Fire Protection. The circumstances and progression of the USA Fire Protection case did not provide authority for the Acting General Counsel to stay the proceeding in this case. At the time that the complaint issued in this case, there was an administrative law judge decision in USA Fire 4 2010 WL 3285412 based on the complaint in Case 10–CA–38074. Protection that was favorable to the Respondent’s position, and nothing more. The administrative law judge’s decision was simply a recommendation to the Board and established no prec- edent for the Board and served as no authority binding on any other administrative law judge in dealing with similar circum- stances. b. Other factors existing at the time the complaint issued Counsel for the Acting General Counsel asserts that based on the recognition language in the Acknowledgement, there was substantial justification to believe that the Acknowledgement signed on July 8, 2008, satisfied each element of the test set forth by the Board in Staunton Fuel & Material. Counsel points out that in two Board cases decided prior to Staunton Fuel & Material, the Board found substantially similar recognition language in an acknowledgement created a 9(a) relationship with the signatory employers. Triple A Fire Protection, 312 NLRB 1088 (1993); MFP Fire Protection, 318 NLRB 840 (1995). In Triple A Fire Protection, the acknowledgement language included the wording: “The Employer, executing this document below has, on the basis of objective and reliable in- formation, confirmed that a clear majority of the sprinkler fit- ters in its employ have designated, are members of, and are represented by, Road Sprinkler Fitters Local Union 669, U.S., AFL–CIO, for purposes of collective bargaining. The Employ- er therefore unconditionally acknowledges and confirms that Local 669 is the exclusive bargaining representative of its sprinkler fitter employees pursuant to Section 9(a) of the Na- tional Labor Relations Act. “The Board found that by execut- ing the acknowledgement, the employer voluntarily and une- quivocally granted recognition to the union as a 9(a) representa- tive. In its decision, the Board added that it would not at that late date inquire into the union’s showing of majority status. The identical acknowledgement language was in issue in MFP Fire Protection; a case decided by the Board in 1995. The administrative law judge in MFP Fire Protection found that Triple A Fire Protection was controlling and found that the acknowledgement language in issue was sufficient to find that the parties had a 9(a) relationship. The Board adopted the Judge’s decision without additional comment. Thus, at the time that the Acting General Counsel issued its complaint in the instant case, there were two previous Board cases in which identical language had been found sufficient to establish a 9(a) relationship between this union and other em- ployers, even without the union independently proving its ma- jority status. In its decision in Staunton Fuel & Material, the Board further clarified that a written agreement will establish a 9(a) relationship if its language unequivocally indicates that the union requested recognition as majority representative, the employer recognized the union as majority representative, and the employer’s recognition was based on the union’s having shown, or having offered to show, an evidentiary basis of its majority support. Staunton Fuel & Material, 335 NLRB at 717. The Acting General Counsel maintains that based on the recognition language in the Acknowledgment, the General Counsel was substantially justified in believing that the Acknowledgement form that Respondent signed satisfied each DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1188 element of the test set forth in Staunton Fuel & Material. Fur- thermore, the Acting General Counsel argues that the fact that the Union in this case did not make a showing of majority sup- port to Respondent concurrent with the signing of the collec- tive-bargaining agreement did not preclude the Acting General Counsel from being substantially justified in asserting that there was a 9(a) relationship. Citing the Board’s decision in H. Y. Floors & Gambline Painting, 331 NLRB 304 (2000), the Act- ing General Counsel asserts that to establish voluntary recogni- tion pursuant to 9(a) in the construction industry, the Board requires that the union unequivocally demanded recognition as the employees’ 9(a) representative, and that the employer une- quivocally accepted it as such. Thus, the General Counsel as- serts that because the Acknowledgement language could be read in isolation and was not ambiguous, the General Counsel was substantially justified in asserting that the Acknowledge- ment met the 3-part test of Stanton Fuel & Material. c. Credibility and extrinsic evidence In its argument that the Acting General Counsel was not sub- stantially justified in seeking to establish a 9(a) relationship, Respondent argues that there were no credibility determinations for the ALJ to decide. Specifically, Respondent argues that there were no credibility conflicts here that required judicial resolution and that if credited, would constitute a prima facie case and thereby have a reasonable basis in law and fact. Re- spondent’s argument is without merit. For the reasons dis- cussed below, credibility was very much a factor in my reach- ing a conclusion that the parties did not enter into a 9(a) rela- tionship on July 8, 2008. Noting the importance of employees’ statutory rights of self- organization and self-determination, the Board explained in Madison Industries, 349 NLRB 1306, 1309 (2007), that extant Board law requires proof that an agreement “unequivocally demonstrates that the parties intended to be governed by Sec- tion 9(a) before Section 9(a) may be found on the basis of con- tractual language. Id at 1309. In its decision in Madison Indus- tries, the Board found that the judge erred by limiting his anal- ysis solely to the language of a contractual provision to find that the parties had established a 9(a) relationship. The Board pointed out that Staunton Fuel & Material requires an examina- tion of the parties’ entire agreement to determine whether a 9(a) relationship was intended. As the Board pointed out in Staunton Fuel & Material, above at 720 fn. 15, it will continue to consider relevant extrin- sic evidence bearing on the parties’ intent in cases where the contract’s language is not independently dispositive. Further- more, the Board has continued to consider extrinsic evidence of intent when the intent of the parties cannot be determined sole- ly by the examination of the agreement in its entirety. J. T. Thorpe & Son, Inc., 356 NLRB 822, 824 (2011); Allied Me- chanical Services, 351 NLRB 79, 82 (2007). In the instant case, Ritchie testified that when he contacted the Union, he only wanted to enter into an agreement for one year. He contended that although he agreed that he would commit to the NFSA contract that was scheduled for another year and 8 months, he did so because no one told him that the contract was binding beyond the contract period. He also testi- fied that while he did not understand the meaning of the Acknowledgement, he signed it on July 8, 2008, because the union representatives told him that it was required. Union Business Manager William Puhalla confirmed that when the union representatives met with Ritchie on July 8, 2008, Ritchie told them that he had expected to sign an agreement for only a year’s period of time. Union Business Agent Tony Cacioppo also testified that in all four meetings with Ritchie in May, June, and July 2010, Ritchie continued to mention that he would be interested in a project-by-project agreement with the Union. In my decision that issued on November 29, 2011, I made the following conclusions: I find Ritchie’s testimony credible with respect to the circum- stances of his signing the July 8, 2008 agreement. Aside from the fact that Ritchie’s testimony was consistent and plausible, it was essentially uncontroverted. It is apparent from his tes- timony that he sought out the Union to obtain skilled sprinkler fitters to work on the large project that was to begin in 2008. His knowledge of collective-bargaining agreements with the Union was limited to the prior 8(f) agreement that he signed the previous year. I found no credible evidence that Ritchie ever discussed with the Union the possibility of his entering into an agreement that would bind him as a 9(a) employer. Based on Ritchie’s testi- mony as well as that of Union Representative Puhalla, I found that Ritchie continued to seek only a project-by-project agree- ment even when he met with the Union in 2010. In crediting Ritchie, I considered all of the testimony con- cerning the events preceding July 8, 2008, as well as the cir- cumstances of the signing of the agreement on July 8, 2008. I considered the fact that no union representative testified that the Acknowledgement was ever explained to Ritchie or that he was told anything about the significance or the meaning of 9(a) recognition and acknowledgement. I also found it significant that at the time that Ritchie signed the Acknowledgement, the Union did not present or offer to present evidence to Respondent that it represented a majority of Respondent’s sprinkler fitters. The Union did, however, ex- plain that all 14 existing sprinkler fitters would have to be cov- ered by the agreement. Based on that explanation, Ritchie met with his employees and told them that they needed to join the Union if they wanted to continue employment with Respond- ent. Ritchie credibly testified that all of his employees with the exception of one were against joining the Union. Ritchie told them to trust him because it would be a good move for the Company. Thus, when Ritchie signed the agreement, he knew that the Union did not represent a majority of his employees and the Acknowledgement language was not only equivocal, but completely false. Thus, Ritchie signed a document that he knew to be facially false. Accordingly, in crediting Ritchie’s testimony, and after con- sidering the entire record testimony, I found that Respondent entered into the agreement with the Union with the intent to be bound by an 8(f) agreement. I found that there was no record evidence that supported a finding that Ritchie had any intent to enter into a 9(a) relationship with the Union. The only docu- AUSTIN FIRE EQUIPMENT, LLC 1189 ment that referred to a 9(a) relationship was the Acknowledge- ment that was signed without discussion or explanation and which was fallacious on its face. As the Board noted in David Allen Co., 335 NLRB 783 (2001): Credibility issues which are not subject to resolution by the General Counsel in the investigative stage of 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 lit- igation, and thereafter presents evidence which, if credited, would constitute a prima facie case, the General Counsel’s case has a reasonable basis in law and fact and is substantially justified. In a very early decision concerning eligibility for EAJA ex- penses, the Board noted that it was immaterial that the General Counsel may not have established a prima facie case of a viola- tion. The Board went on to explain that where the General Counsel presents evidence which, if credited by the fact finder, 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 102.144(a). Barrett’s Interiors, 272 NLRB 527, 528 (1984). Had I not credited Ritchie’s testimony, I may have conclud- ed that the total record evidence supported a finding that Richie entered into the agreement with the Union with the intention and full understanding that he was initiating a 9(a) relationship with all of the requisite obligations and duties. Because credi- bility and extrinsic evidence were so significant in this case, the Acting General Counsel had a reasonable basis in law and fact and the General Counsel was substantially justified in not only issuing a complaint in this matter, but also in pursuing the complaint allegations throughout these proceedings. d. Whether the General Counsel was substantially justified in rejecting the Respondent’s settlement offer Respondent contends that it made numerous attempts to set- tle this case prior to hearing on the basis of an 8(f) relationship, but the Acting General Counsel refused to consider a settlement short of the Respondent recognizing the Union in a 9(a) rela- tionship. Respondent asserts that it offered to settle for the exact outcome decided by the ALJ and the Board. Respondent contends that its offer to settle should have been accepted by the Acting General Counsel and that the Acting General Coun- sel’s refusal to even consider the Respondent’s offer to settle consistent with the 8(f) result reached by the ALJ and affirmed by the Board was not substantially justified. In support of this assertion Respondent cites the Board’s decision in Charles H. McCauley Associates, Inc., 269 NLRB 791 (1984). I note, however, that in Charles H. McCauley, the Board affirmed the judge’s decision in finding that the respondent’s application for an award of fees under EAJA should be dismissed because the General Counsel’s case was reasonably grounded in fact and law and was substantially justified. In this case, the Fifth Cir- cuit Court of Appeals on appeal agreed with the Board that the respondent unlawfully terminated an employee. In a remand, the Court directed the Board to ascertain whether the respond- ent had made an unconditional offer of reinstatement and whether such offer had been rejected by the employee. In a second hearing, the judge discredited the employee’s testimony and found that the respondent had offered the employee uncon- ditional reinstatement. The Board, in ruling on the EAJA issue, noted that while the General Counsel’s position at the second hearing was rejected, the Board agreed with the judge that the General Counsel properly pursued this matter to a second hear- ing “because the General Counsel cannot himself resolve credi- bility issues.” Thus, it would appear that Charles H. McCauley lends sup- port to the Acting General Counsel’s rejection of Respondent’s offer of settlement prior to the instant hearing. To have accept- ed Respondent’s offer to settle with a remedy based on only an 8(f) agreement, the Acting General Counsel would have had to make a credibility determination that Ritchie signed the Acknowledgement with only the intent to be bound to an 8(f) bargaining agreement. The Acting General Counsel could not have made that credibility determination any better in the in- stant case than the General Counsel could have done so in Charles H. McCauley or any other case in which credibility is a factor in determining whether there is a violation of the Act. In a more recent decision involving the claim for fees under EAJA, the Board noted that it was clearly the judge’s crediting of witnesses and not the General Counsel’s failure to state a prima facie case that led to the judge dismissing the complaint. Tim Foley Plumbing Service, 337 NLRB 328, 329 (2001). In contrast to Respondent’s arguments concerning its offer to settle, counsel for the Acting General Counsel maintains that throughout the entire investigative phase of the unfair labor practice charge, in its answer to the complaint, in its pretrial brief to ALJ, at the trial, and in its posttrial briefs, Respondent argued that in May 2009, it repudiated the collective-bargaining agreement and did not have a 8(f) relationship with the Union after May 2009. The Acting General Counsel further maintains that Respondent never made a settlement offer in writing to the Acting General Counsel. Inasmuch as I have found that the Acting General Counsel was substantially justified in rejecting a settlement offer based solely on an 8(f) agreement, there is no need to address the nature or extent to which any such offer was made by the Re- spondent. CONCLUSIONS OF LAW 1. The Acting General Counsel has met his burden of estab- lishing that his position during all stages of this proceeding was substantially justified on the basis of the administrative record as a whole. 2. In view of my conclusion that the Acting General Coun- sel’s position was substantially justified with regard to the complaint allegation regarding the existence of a 9(a) relation- ship, I need not decide whether the Respondent’s alleged fee amounts are excessive, improper, or lacking sufficient specifici- ty as asserted by the Acting General Counsel in his motion to dismiss. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1190 On these findings and this conclusions of law, and on the en- tire record, I issue the following recommended5 5 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings, conclusions, and recom- mended order here 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 purposes. ORDER IT IS ORDERED that the application for fees and expenses filed by Austin Fire Equipment, LLC, be and it hereby is dismissed.