Jack G. BUNCHER, d/b/a The Buncher Company, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, United Steelworkers of America, AFL-CIO, Intervenor.
No. 16638.
United States Court of Appeals Third Circuit.
Argued March 8, 1968. Decided June 27, 1968. Reargued Nov. 25, 1968. On Rehearing Jan. 20, 1969.
405 F.2d 787
Arthur Horowitz, N. L. R. B., Washington, D. C. (Arnold Ordman, Gen. Counsel, Dominick L. Manoli, Associate Gen. Counsel, Marcel Mallet-Prevost, Asst. Gen. Counsel, George B. Driesen, Atty., N. L. R. B., on the brief), for respondent.
Elliott Moore, N. L. R. B., Washington, D. C., for respondent on rehearing.
Before HASTIE, Chief Judge, and BIGGS, KALODNER, FREEDMAN, SEITZ, VAN DUSEN, ALDISERT and STAHL, Circuit Judges.
OPINION ON REHEARING OF THE COURT EN BANC
SEITZ, Circuit Judge.
This is the decision on the Company‘s petition to review and set aside a supplemental backpay order of the National Labor Relations Board and the Board‘s request for its enforcement.
The present dispute arises out of a finding, approved by this court, that the Company had dismissed certain of its employees in violation of the Act. N. L. R. B. v. Buncher, d/b/a The Buncher Company, 316 F.2d 928 (3rd Cir. 1963). The Regional Director thereafter issued a backpay specification and Notice of Hearing formulated in accordance with
“2. The first reduction in force at the Respondent Company‘s Nine Mile Run facility subsequent to March 4, 1960, occurred on May 12, 1960.
“3. Each of the discriminatees was entitled to backpay in accordance with the weekly average hours worked by the employees of Respondent at the Nine Mile Run facility until May 12, 1960.
“4. When there was not sufficient work available at the Nine Mile Run facility after May 12, 1960 for all of the discriminatees and all of the other employees who were employed at the Nine Mile Run facility at the time of the discrimination, an appropriate method of determining each discriminatee‘s entitlement to backpay during the period after May 12, 1960 is:
“(a) By allocating the available jobs at the Nine Mile Run facility among the discriminatees and the aforesaid other employees in accordance with their seniority; and
“(b) Only when sufficient work was not available at the Nine Mile Run facility for a discriminatee, then by allocating the available jobs at all of Respondent‘s locations, namely, Nine Mile Run, Leetsdale and Yard, among the discriminatees and the other employees who were employed at all of said Respondent‘s locations at the time of the discrimination in accordance with their seniority.
“5. The seniority referred to in paragraph 4 above is based on an employee‘s most recent hiring date with Respondent.1”
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The Company filed a response to the specifications in which it challenged the position that seniority was a permissible basis for calculating the backpay. It listed some ten criteria which it indicated were utilized by it to determine whether to retain or re-employ employees. It attached a chart purporting to apply the criteria to the discriminatees, retained employees, and employees first hired during the backpay period. It was admitted, however, that the chart was prepared after the fact on the basis of personal recollections by the Company‘s su-
Thereafter the matter came on for hearing. The Company sought to establish the validity of the chart attached to its response by the testimony of its supervisors. The trial examiner found that no employee was entitled to backpay for the period after May 12, 1960. He so concluded because the backpay claims were based on “seniority“, whereas the Company did not use seniority in effectuating reductions in force. The Board reversed and remanded holding that “an absence of the use of seniority by the Respondent does not render the General Counsel‘s utilization of seniority in this proceeding unreasonable, per se.”
Upon remand the trial examiner first considered the Company‘s evidence in support of its claim that none of the discriminatees would have been rehired after May 12, 1960, because the employees retained or newly hired during that period met the Company‘s employment criteria, and the discriminatees did not. The examiner, after noting that the evaluations were not based on any written records, concluded from his analysis that the Company‘s testimony was “fraught with inconsistencies, internal contradictions, exaggerations and implausibilities“. He noted that the Company‘s sole proprietor, Jack Buncher, had testified that there was nothing seriously wrong with the discriminatees’ work, and that he would rehire them if needed. He also found that the Company trained employees to perform tasks which the discriminatees could have been trained to perform. In the light of these and other findings, the trial examiner decided that “the charted information was contrived for the purpose of denying backpay to the discriminatees“. He therefore rejected the Company‘s evidence and recommended that the Board adopt the specifications of the General Counsel.
The Board affirmed the examiner‘s decision. It pointed out that since the Company‘s “system” had been discredited it was impossible to determine precisely the amount of backpay in any particular case. It held further that to prevent the General Counsel from estimating the pay each discriminatee would have earned because he was unable to establish with certainty that the employees would have been retained would permit the Company to profit from its own wrong. In consequence the Board found that the premises underlying the General Counsel‘s prima facie case were reasonable and directed the petitioner to comply with the examiner‘s recommended order. The proceedings before this court followed.
Where it has been established, as here, that an employer has discharged employees discriminatorily, but it asserts in mitigation of backpay claims that such employees would have been laid off even absent such discrimination, it has the burden of proving that fact. N. L. R. B. v. Mastro Plastics Corp., 354 F.2d 170, 175-176 (2nd Cir. 1965), cert. den. 384 U.S. 972 (1965). The examiner offered and the Company took full advantage of the opportunity to meet its burden of producing credible evidence from which a remedial formula might be adopted by the Examiner to approximate the result in the absence of discrimination.
A chart, prepared after the fact, was introduced into evidence by the Company. It listed numerous non-discriminatory factors and evaluations concerning the employees during the pertinent period, which tended to support the Company‘s contention that none of the discharged employees would have been rehired. It also offered elaborate supporting testimony. The examiner found, and his findings have substantial record support when the record is considered as a whole, that the Company‘s evidence contained so many pervasive infirmities that it was not a reliable basis for deciding the backpay issue. The matter being in this posture, was it arbitrary or unreasonable for the examiner to apply the seniority rule suggested by General Counsel? Admittedly, this Company did not have a formal seniority system. But the record in this case does indicate that
But the Company argues that there is no substantial evidence to support the use of the seniority formula and, further, that its use was in contradiction to other and previous findings of the Board which are said to have substantial evidentiary support. In our view, these contentions fail to give appropriate recognition to the manner in which these proceedings unfolded. Certainly the previous findings of the Board showed that the Company did not have a formal seniority system. But it does not follow that the use of such a factor in molding relief is automatically unreasonable where the Company, though having the burden and given the opportunity, failed to supply credible evidence in support of some other method of approximating the situation absent discrimination. Having in mind that the examiner was seeking an approximation, the remedy is not objectionable merely because it may not be consistent with the work histories, etc., of some of the employees involved. The Company had a full and fair opportunity to make its record in this already protracted proceeding. Since the burden here was on the Company, and since it failed to carry that burden, we think the examiner and the Board properly adopted the seniority device as a rational remedy on this record.
The Company attacks the examiner‘s admittedly rough rule that seven consecutive days or less of interruption in employment was not deemed to constitute a break in seniority. The record showed that employees were often discharged for “cause” and rehired without any economic sanctions. The evidentiary history of this rather “personalized” operation justified some rule to cover this problem. We cannot say on this record that the period adopted was unreasonable.
Finally, we consider the Company‘s contention that the Board erred in concluding that the Company was liable for backpay as to all discriminatees up to May 12, 1960, which was the date of the first economic reduction in force subsequent to the last discriminatory layoff.
The Company urges that the first layoff for economic reasons subsequent to the discriminatory one would have occurred during the week of March 10, 1960, because it was clear by that date that the Company was operating the Nine Mile Run facility efficiently with the reduced work force. From this premise, the Company reasons that, had it then carried thirty-five men rather than the twenty-two actually employed (there being thirteen discriminatees), it would have reduced its work force to twenty-two. This contention contains so many doubtful propositions that we cannot say the Board was unreasonable in rejecting it. First, of course, it suggests the Company would have been aware of the economic feasibility of operating the facility with twenty-two men on March 10, 1960. Considering the nature of the Company‘s operation we do not think that there would have necessarily been such a precise correlation between economic efficiency and the number of employees retained. Another infirmity in the Company‘s contention is its assumption that had there been a reduction in the work force for purely economic reasons the discriminatees would have been among those discharged. In any event, there is no basis for assuming that the discriminatees would not have been transferred to other operations of the Company. When these factors are considered in conjunction with the admittedly objective evidence of an economic reduction in force on May 12, 1960, we think the Board was justified in using that date as the commencement date for inquiry into possible economic justification for the discharge of the discriminatees. We say
We think that, in these circumstances, the Board did not exceed its power in concluding that the Company did not make a showing entitling it to the relief requested with respect to the period prior to May 12, 1960.
We therefore deny the Company‘s petition to review and to set aside the Board‘s order and grant the Board‘s cross-petition to enforce its order.
VAN DUSEN, Circuit Judge (dissenting).
I respectfully dissent from the majority opinion because this record shows that the determination of back pay, based on the seniority system adopted by the General Counsel, is arbitrary and unreasonable under the circumstances and that the substantial award is punitive, rather than remedial, in nature.1
The trial examiners in both the original unfair labor practice case and the present back pay case made detailed findings of the peculiar nature of Buncher‘s business and his employment practices. Buncher operated out of three locations: Nine Mile Run, Leetsdale, and the “Yard.” The business was quite diversified, including scrap reclamation, scrap breaking, construction and leasing of industrial buildings, demolition and salvage of buildings and bridges, steel fabrication, and operation and maintenance of a large river port, including a half-mile long dock with gantry cranes and vessels. Buncher‘s diversification apparently resulted from efforts to avoid sole dependence on the steel industry‘s fluctuating needs for scrap retrieved from slag. He needed men who could perform various jobs at the several locations, jobs ranging from the construction of warehouses and docks to the demolition of buildings and the operation of several complicated machines. The lengthy 1960 Intermediate Report in the unfair labor practice proceeding discussed in great detail Buncher‘s defense that the discharges beginning January 15, 1960, were motivated by economic reasons considered by the employer as early as December 1959 (131 N.L.R.B. at 1456-59). This defense included the argument that discrimination could not be shown from the fact that some men retained had less seniority than those discharged because Buncher used no seniority system. The trial examiner accepted this proposition, but also found that, despite the strong economic defense (131
“It is appreciated that in an economic cutback, selection of men equally competent requires fine decisions, particularly in the absence of a seniority agreement or practice, and the Company‘s business judgment is not to be lightly cast aside and errors in judgment substituted for proof of discrimination. The Company‘s asserted reasons for its selections, however, cannot be considered apart from the considerable evidence indicating discrimination in selection set forth above.”
131 N.L.R.B. at 1460 .
The Board, in its decision of June 30, 1961 (
Not only is there an absence of substantial evidence to support the seniority system used to calculate the back pay, but the sole reliance on such a seniority system (and its “ground rule” that a seven-day layoff would break seniority, but only for purposes of determining seniority up to January 14, 1960) is in contradiction to other and previous findings of two trial examiners concerning Buncher‘s business operation which were based upon substantial evidence in the record as a whole.6
No reason has been shown to justify rejection of the findings of the trial examiner in his Intermediate Report,
At best, the record made at the back pay hearings is incomplete and the case deserves a remand in order to benefit from further testimony. An example of the incompleteness of the testimony to support even the specific findings in the Second Supplemental Decision is evidenced by the finding that “on and after May 12, 1960, Respondent had jobs available at Nine Mile for * * * two shovel operators * * *.” (731a-32a). The only testimony shows that there were two shovels being used on March 10, 1960, but that when the back pay testimony was given in 1965, Mr. Green, the General Manager of Buncher Company, made clear that only one shovel was then, and had been, in operation at that location. Also, he testified that only one shovel was being operated there following May 12, 1960. It is unclear from the testimony whether Buncher ever operated two shovels at the same time at Nine Mile Run after May 12, 1960, but the record makes this seem most unlikely. That fact would be significant for two reasons. First, there were five discriminatees whose job it was to operate the shovel. It is, therefore, necessary to determine which two of the five, if any, would have been retained, absent the discrimination. When the operation was reduced to one shovel, the back pay for one of the operators should be terminated on that date. Sec-
Also, the findings and comments in the Second Supplemental Decision contain references, favorable to General Counsel‘s Backpay Specifications, concerning certain discriminatees but fail to refer to further explanatory or additional testimony of the same witness which points to the opposite conclusion. In the case of John Cindrick, for example, the trial examiner relies on respondent‘s admission that Cindrick was an excellent shovel operator, but fails to consider that the same witness testified that Cindrick refused to go to Leetsdale, “wouldn‘t get his hands dirty with grease,” and would not do any other work.7 I have been unable to find any support in the record for statements in the Second Supplemental Decision such as that Gerald Hinger, a retained employee, had “an admitted lack of proficiency in the jobs in which the Cindricks and Greene concededly excelled * * *.”8
This language of the Supreme Court of the United States appears to apply to the situation presented by this record:
“* * * [T]he Board may [not] apply a remedy it has worked out on the basis of its experience, without regard to circumstances which may make its application to a particular situation oppressive and therefore not calculated to effectuate a policy of the Act.” National Labor Relations Board v. Seven-Up Co., 344 U.S. 344, 349 (1953). See, also, N. L. R. B. v. Ozark Hardwood Company, 282 F.2d 1, 7-8 (8th Cir. 1960).9
The propriety of the determination that petitioner had admitted liability for back pay up to May 12, 1960, seems doubtful if based, as it appears, solely on the ground that Buncher sought to relitigate the unfair labor practice proceeding.10 However, a new Backpay Specification might make this issue moot.11
now relevant, from the National Labor Relations (Wagner) Act.
Kalodner and Aldisert, Circuit Judges, join in this dissent.
Notes
It is noted that the assumption that work similar to that which the four discriminatees possibly eligible for additional back pay had been doing was available at Nine Mile when Buncher rehired them at Leetsdale, appears unsupported by the record. Wytiaz, for example, immediately prior to the discrimination had just been given “the opportunity to start breaking in on some pieces of equipment” at Nine Mile Run following his initial job as a laborer, which laboring job he was given at Leetsdale. Other discriminatee equipment operators (Robert Vinsick and Ronald Loughner) would all have been senior to Wytiaz, making it appear unlikely that this equipment operator job was available for him at Nine Mile Run in September 1962.
“(1) Ability to do the available work, including:
(a) Relative ability to perform the employee‘s regular job; and
(b) Relative ability to peform other jobs in the same plant; and
(c) Relative ability to perform the same job or other jobs in other plants of the Company.
(2) Rate of Pay.
(3) Productivity.
(4) Application to work.
(5) Attitude toward work and willingness to learn.
(6) Ability to learn new skills.
(7) Limitation on availability.
(8) Experience with the Company.
(9) Experience with other employers.
(10) Relative length of service with the Company. Although the Company has no formal system of seniority, and has not laid off or recalled by strict seniority, relative length of service has been and is one factor considered along with the others.”
“The General Counsel introduced into evidence General Counsel‘s Exhibit No. 3 in an attempt to demonstrate that, during a reduction in force in 1957, Respondent ‘basically’ utilized seniority in affecting the reduction at the Nine Mile Run location. This attempt proved abortive. The exhibit shows that 34 employees were employed on the date of the layoff, and 16 of them were separated. Nine of these employees, including a discriminatee, were laid off out of context with their seniority.”
“This language should be construed in harmony with the spirit and remedial purposes of the Act. We do not think that Congress intended to vest in the Board a virtually unlimited discretion to devise punitive measures, and thus to prescribe penalties or fines which the Board may think would effectuate the policies of the Act. We have said that ‘this authority to order affirmative action does not go so far as to confer a punitive jurisdiction enabling the Board to inflict upon the employer any penalty it may choose because he is engaged in unfair labor practices, even though the Board be of the opinion that the policies of the Act might be effectuated by such an order.’ We have said that the power to command affirmative action is remedial, not punitive. Consolidated Edison Co. [of N.Y.] v. National Labor Relations Board, 305 U.S. 197, 235, 236 (1938). See, also, National Labor Relations Board v. Pennsylvania Greyhound Lines, 303 U.S. 261, 267, 268 (1938). We adhere to that construction.”
Again, in the Seven-Up case, supra, the court said 344 U.S. at page 346:
“Section 10(c) of the Taft-Hartley Act, under which the Board made its award, derives unchanged, so far as is
It is noted that the General Counsel‘s Exhibit #14 showed a sharp drop in employment at the Nine Mile Run plant from a 1/7/60 high of 34 to an 8/4/60 low of 15, with a rather consistent number of 22 from 2/25 to 5/12 before the total became 18 or under until December 1960 (with one exception). Similarly, Exhibit #11 showed a drop of the total at all three Buncher operations from a 1/7/60 high of 73 to a 5/10/61 low of 41, with a frequent total of 48 during the period after 5/5/60.