This аpplication, petition, and cross-application represent the latest chapter in the
I.
PTE first hired Clement in September 1983 to work as an extra board driver
Clement spent most of the next four years searching for a job. He did manage to find some interim employment, but he was unable to hold a position for more than a few months. In particular, he was discharged by Aurora Fast Freight (“Aurora”) after only three and one-half months. Subsequent to that termination he received a letter, signed by Aurora’s president, whiсh provided in relevant part:
On July 10, 1985, you were instructed to return to Milwaukee with tractor Number 3. You refused to take that tractor and proceeded to take a tractor that you knew had mechanical problems. On the trip back to Milwaukee you broke down for five hours. If you had returned with the tractor you were instructed to take we would not have had the cost of the breakdown as well as the delay of the freight.
We cannot afford to have people not doing what they are instructed to do. You are hereby discharged effective July 11, 1985.
In the meantime, PTE negotiated a settlement with the Board. In exchange for the Board withdrawing its application for enforcement, PTE agreed to post the Board’s notice and, on July 8, 1987, reinstated Clement to his former position. The Board and PTE also entered into a stipulation whereby PTE reserved its right to a hearing to determine the amount of Clement’s back pay.
Clement returned to PTE’s employ only a few months before the company transferred its break bulk facility
The distance between Franklin and Chicago was short (sixty-nine miles) and the drive was often arduous (traffic jams were quite common, and the trip normally took at least one hour and forty-five minutes). Extra board drivers, on the other hand, were paid by the mile, not the hour; they preferred longer trips with minimal traffic. Thus, it is not surprising that even a single Franklin-Chicago assignment was viewed
As complaints increased and tempers flared, union representative Frank Busalac-chi had a telephone conversation with Michael Crowley, PTE’s labor relations representative. Busalacchi confronted Crowley with the complaints concerning third trips to Chicago. In response to Crowley’s adamant insistence that extrа board drivers had to make the trips because PTE had to move the freight, Busalacchi argued, “[I]f the guys are fatigued, they just ain’t going to go.” Crowley answered, “I don’t have a problem with that,”
The Busalacchi-Crowley conversation underwent a transformation as its content was relayed; the drivers came to understand the oral agreement in a manner quite different than Busalacchi. They interpreted the agreement to mean that third trips to Chicago were in the driver’s discretion, and that they could reject such dispatches with impunity. Indeed, some of the drivers, including Clеment, rejected third trips in the upcoming months and did not always give a reason for the decision. PTE, however, took no action against these drivers.
PTE did pursue its right to dispute the Board’s calculation of Clement’s back pay. At a hearing on April 21, 1988, PTE argued that Clement’s discharge from Aurora constituted a “willful loss of earnings” that would reduce the total amount of back pay sought by the Board. See Mastro Plastics Corp.,
The other drivers at the Franklin terminal were well aware of Clement’s back pay hearing, and a significant number discussed the proceeding with him. In particular, they discussed the testimony of Larry Scarbrough, PTE’s line transportation manager. Clement told his coworkers that Scarbrough had failed to produce subpoenaed documents and had answered questions about that failure by stating “I don’t know.” For whatever reason, Scarb-rough’s performance at the hearing became the subject of widespread derision among the drivers, who began to answer his questions by stating “I don’t know” in a manner that mocked Scarbrough’s slight southern accent.
The underlying tensions created by the taunting and the drivers’ interpretation of the Busalacchi-Crowley oral agreement came to a head on July 18, 1988. As Clement was completing his paperwork for a shift in which he had already completed two Franklin-Chicago runs, Scarbrough assigned him a third trip to Chicago. Clement, in rejecting the assignment, exhorted: “Larry, you know that we are only required to do two trips. A third trip is up to the driver if he wants to do it or not. I have done my two for the day and I am going home.” After Clement continued to refuse the assignment, Scarbrough issued two warnings in rapid succession and fired him.
After a hearing on September 1 and 2, 1988, the AU essentially found that the testimony of Clement and his coworkers was credible whereas the testimony of PTE’s witnesses was incredible. She concluded that Clement’s discharge violated sections 8(a)(1) and 8(a)(3) of the Act, 29 U.S.C. §§ 158(a)(1), (3), because Clement had been discharged for reasonably and in good faith invoking a right rooted in a collective bargaining аgreement. She also noted that Scarbrough “felt uncomfortable if not humiliated” by his role in Clement’s back pay hearing and that the widespread
The Board modified this conclusion, but only slightly. In finding an unlawful motive for purposes of section 8(a)(4), the Board disclaimed reliance on Scarbrough’s testimony at the back pay hearing (the testimony that had made him “uncomfortable if not humiliated”). The Bоard did rely, however, on the drivers’ taunting of Scarb-rough. This piece of evidence, the Board concluded, established a prima facie case of P*I*E’s continued motivation to retaliate against Clement for his use of the Board’s remedial processes. The Board filed an application for enforcement on July 27, 1989, and P*I*E thereafter submitted arguments in opposition.
The Board also negated P*I*E’s earlier victory in Clement’s back pay hearing. After viewing the evidence, the Board assigned less weight to the Aurora discharge letter and concluded that P*I*E had not established a “willful loss of earnings.” P*I*E filed a petition for review under 29 U.S.C. § 160(f) on January 31, 1990, and the Board filed a cross-application for enforcemеnt on March 13, 1990. After filing, the petition, cross-application, and application were consolidated for oral argument.
After oral argument, P*I*E changed its name to Olympia Holding Corporation and filed for Chapter 11 reorganization. In bringing this turn of events to our attention, P*PE cited 11 U.S.C. § 362(a) and hinted that it operated as a stay on the continuation of these proceedings. We hold that the automatic stay provisions of the bankruptcy code do not affect this proceeding and conclude that the Board’s cross-application for enforcement should be granted and that the Board’s application for enforcement should be granted in part and denied in part.
II.
A. The Effect ofP*I*E’s Chapter 11 Petition
On the filing of a petition for reorganization under Chapter 11, section 362(a) automatically operates to stay “the commencement or continuation ... of a judicial ... proceeding against the debtor.” 11 U.S.C. § 362(a)(1). But the broad sweep of section 362(a) is tempered by section 362(b), which states:
The filing of a petition ... does not operate as a stay—
(4) under subsection (a)(1) of this section, of the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit’s police or regulatory power;
(5) under subsection (a)(2) of this section, of the enforcement of a judgment, other than a money judgment, obtained in an action or proceeding by a governmental unit to enforce such governmental unit’s police or regulatory рower; ....
11 U.S.C. §§ 362(b)(4), (5). Additionally, the legislative history pertinent to section 362(b) notes:
Paragraph (4) excepts commencement or continuation of actions and proceedings by governmental units to enforce police or regulatory powers. Thus, where a governmental unit is suing a debtor to prevent or stop violation of fraud, environmental protection, consumer protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation of such a law, the action or proceeding is not stayed under the automatic stay. Paragraph (5) makes clear that the exception extends to permit an injunction and enforcement of an injunction, and to permit thе entry of a money judgment, but does not extend to permit enforcement of a money judgment.
H.R. Rep. No. 595, 95th Cong., 2d Sess. 343, reprinted in 1978 U.S. Code Cong. & Admin.News 5963, 6299; see also S. Rep. No. 989, 95th Cong., 2d Sess. 52, reprinted in
The applicability of the automatic stay provision is a question of law within the competence of the judiciary. NLRB v. Edward Cooper Painting, Inc.,
It should come as no surprise, then, that we now elevate the dicta in Shippers Interstate to the level of a holding. The analysis is basic: section 362(b)(4) excepts a governmental unit enforcing a police or regulatory power and section 362(b)(5) excepts a governmental unit enforcing a judgment other than a money judgment. It is beyond dispute that the Board is a governmental unit. Moreover, the Act empowers the Board “to prevent any person from engaging in any unfair labor practice ... affecting commerce” — a clear indication that the Board is enforcing a police or regulatory power. 29 U.S.C. § 160(a); see also NLRB v. Industrial Union of Marine & Shipbldg. Workers,
B. Issues Arising From Clement’s 1983 Discharge — The Back Pay Award
P*I*E’s petition for review of the Board’s back pay award raises only one issue: “Whether a discharge for insubordination from interim employment constitutes a willful loss of earnings justifying a continuing offset of a back pay award under the National Labor Relations Act?” More specifically, P*I*E argues that Clement’s discharge from Aurora constituted a willful loss of earnings that would mitigate P*I*E’s back pay liability. This argument, in turn, hinges upon the factual determination of whether Clement’s discharge from Aurora constituted a discharge for gross misconduct.
The AU attached significant weight to the Aurora discharge letter, but the Board did not. The Board was dubious because “the statements in the letter of discharge were not made under oath, the declarant did not appear at the hearing and thus was not subject to cross-examination, and the statements were not made to an agent of a witness. Nor do the allegations in the letter of discharge contain any other circumstantial indication of trustworthiness.” The Board then rejected this portion of the AU’s recommendation, concluding that “the Aurora letter of discharge is nothing more than what it appears to be, namely, an interim employer's self-serving and unexamined assertions as to why it discharged Clement.”
P*I*E’s argument in opposition to the Board’s order places a great deal of emphasis on the fact thаt the discharge letter, which was arguably hearsay, was admitted without objection. In placing such emphasis, however, P*I*E confuses admissibility with reliability. This is not a case where the Board refused to consider a piece of evidence on the ground that it was hearsay (even though it had been admitted without objection). On the contrary, this is a case where the Board considered a piece of evidence but accorded it little weight.
The fact that the Board plainly considered the discharge letter diminishes the likelihood of success for PTE’s argument that the Board’s order is not supported by “substantial evidence on the record considered as a whole.” See 29 U.S.C. § 160(e). This standard of review does not allow us to dabble in fаct-finding, and we may not displace reasonable determinations simply because we would have come to a different conclusion if we reviewed the case de novo. NLRB v. United Ins. Co.,
Here, after the Board determined the gross amount of back pay due Clement, PTE had the burden of producing evidence to mitigate its back pay liability.
C. Issues Arising From Clement’s 1988 Discharge
P*I*E raises only three issues with respect to the Board’s order concerning Clement’s secоnd discharge. First,. P*I*E argues that Clement’s discharge does not violate section 8(a)(3) of the Act, 29 U.S.C. § 158(a)(3) because Clement was not involved in “concerted activity” when he refused a third dispatch. Second, P*I*E argues that the Board erred by failing to conclude that Scarbrough would have fired Clement regardless of any unlawful motive that the Board might have established. Third, P*I*E argues that the Board did not establish a violation of section 8(a)(4) of the Act, 29 U.S.C. § 158(a)(4), by substantial evidence. We take each of these arguments in turn.
1. Section 8(a)(3)
In making its determination on section 8(a)(3) liability, the Board relied on its longstanding rule in Interboro Contractors, Inc.,
In reaching the conclusion that Clement's invocation of the Busalacchi-Crowley agreement constituted “concerted activity,” the AU found that Clement’s activity was in accord with the test spelled out in NLRB v. City Disposal Sys., Inc.,
P*I*E challenges the first and last of the AU’s (and subsequently the Board’s) conclusions. First, it disputes the finding that Clement’s complaint was reasonably based on a collective bargaining agreement. Noting that Clement’s alleged collective bargaining right has no basis outside of the oral agreement between Busalacchi and Crowley, P*I*E proceeds to attack Clement’s understanding of that agreement. P*I*E admits that Busalacchi and Crowley had a conversation and that some sort of
The flaw with P*I*E’s argument lies in the fact that it equates reasonableness with correctness. Though incorrect, however, an employee’s understanding of the collective bargaining agreement may nevertheless be reasonable. As the Court noted in City Disposal, “[t]he rationale of the Interboro doctrine compels the conclusion that an honest and reasonable invocation of a collectively bargained right constitutes concerted activity, regardless of whether the employee turns out to have been correct in his belief that his right was violated.” City Disposal,
Our analysis must therefore concentrate on Clement’s subjective understanding; it does not matter that Clement's state of mind did not comport with P*I*E’s understanding. Here, the telephone conversation between Busalacchi and Crowley gave rise to some form of oral agreement. Clement quite clearly believed, on the basis of statements made by other drivers and two union officials, that this agreement allowed him to reject, at his option, a third Franklin-Chieago assignment. He even went so far as to stake his employment on that belief. Moreover, Clement was not alone — four other drivers testified that they, too, had learned of such an agreement, had rejected third trips to Chicago, had not stated a reason, and had not been reprimanded. And as further support, P*I*E neither cross-examined the drivers on these points nor called witnesses to rebut the drivers’ assertions.
P*I*E- also disputes the conclusion as to the third prong of City Disposal — that Clement communicated the basis of his complaint in a “reasonably clear” manner. Specifically, P*I*E argues that Clement never made specific mention of the oral agreement during his verbal exchange with Scarbrough. The City Disposal analysis does not require magic words, however; an employee need not say, “I am invoking my
In a rendition of facts that P*I*E did not cross-examine (and largely corroborated), Clement testified that he told Scarbrough, “Larry, you know that we are only required to do two trips. A third trip is up to the driver if he wants to do it or not.” This statement, in combination with the reasonable inference that Scarbrough must have known of the drivers’ practice of summarily refusing third trips because he spent long hours in the Franklin terminal, constituted substantial evidence that the basis of Clement’s complaint was “reasonably clear” to Scarbrough.
In addition to arguing that the Board erred in concluding that Clement engaged in concerted activity, P*I*E also argues that it produced dispositive proof that Clement would have been terminated absent the protected activity. See NLRB v. Transportation Mgmt. Corp.,
2. Section 8(a)(4)
In order tо find P*I*E liable under section 8(a)(4), the Board must conclude that P*I*E discharged Clement because he participated in a specific type of activity, namely, “because he has filed charges or given testimony under” the Act. 29 U.S.C. § 158(a)(4). As the Board concedes, its findings in this regard, particularly its finding of motive, are questions of fact reviewed under the “substantial evidence” standard. See also Northern Wire Corp. v. NLRB,
The cornerstone of the Board’s finding of motive is its inference as to Scarbrough’s mental state. We fail to see, however, how the Board can conclude that Scarbrough’s reaction to the taunting evidenсes a continued unlawful animus. Admittedly, Scarb-rough may not have taken a “sticks and stones” attitude to the drivers’ teasing. And prior Board cases, as approved by this court, establish that evidence of animus
The Board fails to explain its sleight of hand, and its reasoning is far from self-evident. Certainly, Clement’s hearing was a but for cause of the taunting; it was Scarbrough’s testimony at Clement’s hearing, after all, that became the subject of the drivers’ jokes. It does not logically follow, however, that an activity becomes union activity me'rely because a Board hearing was its but for cause or because it was performed by union members. If a union member had punched Scarbrough as he was leaving Clement’s hearing, then we could not automatically say that the punch constituted union activity. Yet that is essentially what the Board has done here. The Board established a retaliatory motivation, but it does not appear to be the type of motivation that has relevance to section 8(a)(4) violations.
In view of our strong doubts concerning the Board’s use of the evidence concerning Scarbrough’s mental state, we cannot say that the Board’s determination of motive finds adequate support in the record. See Stokely-Van Camp, Inc. v. NLRB,
In its brief before this court, the Board’s counsel argues that other findings, some of which the Board made and others of which the Board might have made, support a finding of unlawful motivation.
“The Board’s appellate counsel cannot fill in the holes in the agency’s decision; stated in another manner, it is the Board’s order, not its petition for enforcement, that is the subject of our review.” Indianapolis Mack,
III.
To recap, we find no merit in P*I*E’s assertion that the Board did not adequately consider the Aurora discharge letter. Accordingly, P*I*E’s Petition for Review (No. 90-1265) is Denied and the Board’s Cross-Application for Enforcement (No. 90-1579) is Granted. We remind the Board, however, that we are only entering, and not enforcing, a money judgment. As to the Board order arising out of Clement’s second discharge, we similarly find no merit in most of P*I*E’s arguments. We do find merit, however, in P*I*E’s assertion that the Board’s finding of liability under seсtion 8(a)(4) is not supported by substantial evidence- on the record as a whole. Accordingly, the Board’s Application for Enforcement (No. 89-2585) is Granted in Part and Denied in Part.
Notes
. An “extra board” driver is an over-the-road driver who is assigned different routes based upon seniority and fluctuations in the flow of freight. Another type of over-the-road driver, the bid driver, is assigned to drive one particular route according to a set schedule.
. A break bulk facility is a terminal operation that receives freight from various satellite facilities and other inbound break bulk facilities. Employees at the break bulk facility unload this freight, break it down and sort it, and then reload it to a designated trailer for hauling to its ultimate designation.
.See 49 C.F.R. §§ 395.3(a)(1), (2) (after an eight-hоur rest break, drivers may work a shift of up to 15 hours, 10 hours of which may be spent driving).
. Crowley’s acquiescence to this demand was not surprising; the collective bargaining agreement already gave drivers the right to reject an assignment on the basis of fatigue.
. The Board acknowledges that it cannot enforce any judgment through the normal legal processes and recognizes that its only remedy for collection is through the bankruptcy court.
. P*I*E devotes a substantial portion of its briefs to the legal argument that gross misconduct, if proven, would establish a willful loss of earnings. The purpose of this argument is unclear, for the Board did not base its decision on the ground that gross misconduct could not constitute a willful loss of earnings. On the contrary, thе Board recognized that “discharge
. The fact that the Board disagrees with the ALJ does not change the standard of review. Universal Camera Corp. v. NLRB,
. We read the Board’s order as concluding that P*I*E’s evidence did not establish even a prima facie case, and therefore do not reach P*I*E’s argument that a prima facie showing would satisfy its burden.
. Oddly, P*I*E does not contest the Board’s finding of liability under section 8(a)(1). Accordingly, the Board’s order with respect to these issues is enforced. U.S. Marine Corp.,
In comparing the oral agreement to the National Master Freight Agreement, the Central States Over-the-Road Motor Freight Supplemental Agreement, and the other written agreements that govern employer-employee relations at the Franklin terminal, P*I*E suggests that the oral agreement cannot legitimately be included under the rubric of “collective bargaining agreement." This suggestion is not well taken, however. As the Supreme Court noted in City Disposal, '"Collective bargaining is a continuing process. Among other things, it involves day-today adjustments in the contract and other working rules, resolution of new problems not covered by existing agreements, and the protection of employee rights already secured by contract.’ ” City Disposal,
. Crowley died shortly before the ALJ’s hearing.
. Now, before this court, P*I*E challenges the сredibility of the drivers’ testimony, arguing that they had a vested interest in broadly interpreting the terms of the Busalacchi-Crowley agreement. The AU, however, generally found the drivers' testimony to be credible, and we are hard pressed to overrule that determination in the absence of exceptional circumstances. Roadmaster Corp. v. NLRB,
. In its reply brief before this court, P*I*E raised the argument that Clement's conduct, even if "concerted,” was not "protected.” City Disposal,
. At a hearing on Clement's second discharge grievance before the Union-management State Area Committee, Clement read a prepared statement that began, "I had been a road driver for P.I.E. Nationwide since ... 1983.” A P*I*E representative clarified this statement by noting that Clement's employment had not been continuous because he had been discharged in 1983. This reference, the AU found, violated "the spirit if not the letter” оf a prior Board order stating that "evidence of ... [Clement's 1983] discharge will not be used as a basis for future personnel actions against him.”
. Specifically, the Board cites Town & Country,
. This conclusion is appropriate for at least three reasons. The first is structural integrity. See NLRB v. Metropolitan Life Ins. Co.,
. As a practical matter, this portion may be quite small. P*I*E treats the conclusion that section 8(a)(4) has been violated as an alternative basis for the Board's order and has not argued that the relief is inappropriate if we conclude that the Board is only partially (as opposed to completely) incorrect.