351 NLRB No. 006;9/27/07;Painting Co.;09-CA-33482

NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes.

The Painting Company and Tri-State Building & Construction Trades Council, affiliated with National Building & Construction Trades Department, AFL–CIO–CLC. Cases 9–CA–33482, 9–CA–33665–1–2, 9–CA–33674, and 9–CA–33723–1–2

September 27, 2007

SUPPLEMENTAL DECISION AND ORDER REMANDING IN PART

By Chairman Battista and Members Liebman
and Schuamber

On March 23, 2000, the Board issued a Decision and Order finding that the Respondent, among other things, had violated Section 8(a)(1) and (3) of the Act by discharging certain employees, including Charles Crisp, Warren Hull, Robert Meade, and Mark Pratt. The Order directed the Respondent to make these employees whole for their losses. On February 6, 2002, the United States Court of Appeals for the Sixth Circuit enforced the Board’s Order.1

On January 16, 2003, the Regional Director issued a compliance specification setting forth the amount of backpay due the claimants. A hearing on the specification took place on May 19–20, 2003, before Administrative Law Judge Joseph Gontram. On September 8, 2003, Judge Gontram issued the attached supplemental decision adopting the Region’s compliance specification, as modified by the parties’ posthearing joint stipulation.2 The Respondent filed exceptions and a supporting brief, the General Counsel filed an answering brief, and the Respondent filed a reply 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, and conclusions3 only to the extent consistent with this Decision and Order.4

Background

The primary issue in this compliance proceeding is the reasonableness of the gross backpay calculation for discriminatees Charles Crisp, Warren Hull, Robert Meade, and Mark Pratt. The Respondent is a painting contractor based in the Columbus, Ohio area. The Respondent typically employs painters for specific jobs, rather than on a permanent basis. A small number of painters remain with the Respondent over various periods of time and are transferred or reassigned from job to job. Most of the Respondent’s painters work on more than one job for the Respondent in a given year.

The discriminatees began working for the Respondent on a painting job in Franklin Furnace, Ohio, on December 4, 1995. The Respondent discharged them on January 2, 1996. The backpay period ran from the date of discharge (January 2, 1996) to the valid offer of reinstatement on April 1, 2002.5 Because the backpay period lasted for more than 5 years, and because few of the Respondent’s painters worked for the Respondent throughout those years, the compliance officer extrapolated yearly earnings for the discriminates by looking to the actual annual earnings of the Respondent’s painters, most of whom worked less than a full calendar year. The compliance officer first divided each painter’s actual earnings for the year by the number of calendar days the painter worked to arrive at an average daily wage. This daily average was multiplied by 365 to arrive at a yearly wage. The yearly wages for all painters were then totaled, and that figure was divided by the number of painters to arrive at an average yearly wage. The average yearly wage was deemed to represent the lost earnings for the discriminatees for that year.

The judge adopted the Region’s gross backpay formula, finding it to be reliable and accurate. For the reasons stated below, we disagree and conclude that the gross backpay calculation was not reasonable. Accordingly, we reverse the judge’s findings and recompute the amount of backpay so that it more closely approximates the amount the discriminatees would have earned had they not been unlawfully discharged.6

Analysis

Both the Board and the courts have applied a broad standard of reasonableness in assessing methods for calculating gross backpay. Any formula that approximates the amount the discriminatees would have earned absent the discrimination is acceptable if not unreasonable or arbitrary under the circumstances. La Favorita, Inc., 313 NLRB 902, 903 (1994), enfd. mem. 48 F.3d 1232 (10th Cir. 1995). The Board is required only to adopt a formula that will reasonably approximate the amount due; it need not find the exact amount. NLRB v. Overseas Motors, 818 F.2d 517, 521 (6th Cir. 1987), citing NLRB v. Brown & Root, Inc., 311 F.2d 447, 452 (8th Cir. 1963). Notwithstanding this leeway, “the objective is to reconstruct as accurately as possible what employment and earnings the discriminatee would have had during the backpay period had there been no unlawful action.” Performance Friction Corp., 335 NLRB 1117 (2001), citing American Mfg. Co. of Texas, 167 NLRB 520 (1967); CHM Section 10540.1. Where the employment of the work force as a whole is “intermittent, the fact of intermittency must be taken into account unless there is something in the record which justifies a finding that, for some reason, the employee involved would not have been affected by the fluctuations that affected the group as a whole.” NLRB v. Ironworkers Local 378, 532 F.2d 1241, 1243–1244 (9th Cir. 1976) (rejecting compliance specification that treated discriminatee as comparable to elite group of steadily employed ironworkers absent sufficient justification), on remand 227 NLRB 692 (1977), supplemented by 262 NLRB 421 (1982). “It is the General Counsel’s burden to establish gross backpay amounts that are reasonable, not arbitrary.” Parts Depot, Inc., 348 NLRB No. 9, slip op. at 2 (2006). Here, the General Counsel failed to establish that the Region’s backpay calculation is reasonable.

The Region’s backpay formula is unreasonable because very few painters worked the equivalent of a full year for the Respondent in any given calendar year, yet the specification assumes that to be the standard. The Respondent’s evidence shows that, between 1996 and 2001, the Respondent employed 350 painters for various periods of time. Only a handful of those painters—between 5–12 painters in a given year—worked what could reasonably be characterized as a full year for the Respondent. Over the entire 6-year period, the average annual number of days worked by painters was just 91 workdays, ranging from an average of 63 workdays in 1996 to an average of 130 workdays in 2001. The majority of Respondent’s work force did not work the average number of workdays in the year. Consequently, the Region’s calculations do not yield “a close approximation” of the employment and earnings the discriminatees would have had during the backpay period.

Absent some evidence to suggest that a given discriminatee would have exceeded the average number of workdays each year, the most accurate method for determining the amount of backpay due is to assume that each discriminatee would have worked the annual average number of workdays and earned the same annual wages as the average painter employed by the Respondent during that year. We will further presume that the average number of workdays for a given year would have been worked during one or two consecutive quarters.7 It is also reasonable to assume that 65 workdays (13 weeks times 5 days) represents the number of workdays in a full calendar quarter.8

We will now recalculate backpay for Crisp, Meade, and Pratt pursuant to our revised formula. To compute net backpay, we subtract the interim earnings of each discriminatee. Specifically, for the years 1996 and 2002, when the average number of workdays was respectively 63 and 65, we subtract interim earnings for one full quarter.9 In 2001, when the average number of workdays was 130 days, the offset is two full quarters. In the other years, when there are more than 65 workdays but less than 130 workdays, the offset amount equals one full quarter plus a percentage of the discriminatee’s quarterly interim earnings.10 Applying this formula, we find that the net backpay amounts due the discriminatees are as follows: Charles Crisp–$36,430; Robert Meade–1,727; and Mark Pratt—$25,365. Appendix A sets out the complete backpay calculations for each discriminatee.11

ORDER

The National Labor Relations Board orders that the Respondent, The Painting Company, Plain City, Ohio, its officers, agents, successors, and assigns, shall make whole the following discriminatees by paying them the following amounts, with interest as set forth in New Horizons for the Retarded, 283 NLRB 1173 (1987).

David Dunn $168

Rena Lawson $168

Charles Crisp $36,430

Robert Meade $1,727

Mark Pratt $25,365

It is further ordered that the issue of backpay due discriminatee Warren Hull shall be severed and remanded to the Regional Director to further investigate Hull’s whereabouts, resolve the backpay issue relating to him pursuant to the terms of this Supplemental Decision, and to take further appropriate action.

Dated, Washington, D.C. September 27 , 2007

Robert J. Battista,	Chairman


Wilma B. Liebman,	Member


Peter C. Schaumber,	Member

(Seal) National Labor Relations Board

Appendix A

Charles Crisp

Year	Workdays & Offset	Avg. Annual Earn.	Crisp-Q. Interim Earn.	Net Backpay
1996	63-1Q	$7584	$4425	$3159
1997	75-1Q +11% (10¸91)	$8266	$3581 (3226 X 1.11)	$4685
1998	90-1Q +27% (25¸91)	$10,539	$5657 (4454 X 1.27)	$4882
1999	79-1Q +15% (14¸91)	$10,148	$3696 (3214 X 1.15)	$6452
2000	107-1Q +46% (42¸91)	$13,676	$8087 (5539 X1.46)	$5589
2001	130-2Q	$17,407	$14,448 (7224 X 2)	$2959
2002	65-1Q	$8704	0	$8704
TOTAL				$36,430

Mark Pratt

Year	Workdays & Offset	Avg. Annual Earn.	Pratt-Q. Interim Earn.	Net Backpay
1996	63-1Q	$7584	$4743	$2841
1997	75-1Q +11% (10¸91)	$8266	$3875 (3491 X 1.11)	$4391
1998	90-1Q +27% (25¸91)	$10,539	$4459 (3511 X 1.27)	$6080
1999	79-1Q +15% (14¸91)	$10,148	$5874 (5108 X 1.15)	$4274
2000	107-1Q +46% (42¸91)	$13,676	$7618 (5218 X1.46)	$6058
2001	130-2Q	$17,407	$19,232 (9616 X 2)	$0
2002	65-1Q	$8704	6983	$1721
TOTAL				$25,365

Robert Meade

Year	Workdays & Offset	Avg. Annual Earn.	Meade-Q. Interim Earn.	Net Backpay
1996	63-1Q	$7584	$5857	$1727
1997	75-1Q +11% (10¸91)	$8266	$12,460 (11,225 X 1.11)	$0
1998	90-1Q +27% (25¸91)	$10,539	$13,958 (11,012 X 1.27)	$0
1999	79-1Q +15% (14¸91)	$10,148	$18,132 (15,767 X 1.15)	$0
2000	107-1Q +46% (42¸91)	$13,676	$20,379 (13,958 X1.46)	$0
2001	130-2Q	$17,407	$27,608 (13,804 X 2)	$0
2002	65-1Q	$8704	$11,973	$0
TOTAL				$1727

On the entire record, including my observation of the demeanor of the witnesses, and after considering the briefs filed by the General Counsel and the Respondent, I make the following

Findings of Fact

i. the underlying unfair labor practices case

The Respondent is a painting contractor headquartered in Plain City, Ohio. It is wholly owned by three brothers: Jeff, David, and Terry Asman. TPC generally employs about 30 painters, although its work force fluctuates between 10 and 50 painters. Crisp, Hull, Meade, and Pratt started working for TPC at its Franklin Furnace job on December 4, 1995, as journeyman painters. The Respondent notified them on January 2, 1996 that they were fired, and their last day of employment with TPC was December 29, 1995. The Board affirmed the finding and conclusion of the Administrative Law Judge that they were discharged in violation of the Act, and it ordered TPC to offer them reinstatement and make them whole.

In his decision, the administrative law judge found that the Respondent presented “a demonstrably false explanation for the termination of the employment of four employees [the discriminatees herein] who actively supported the Union.” The judge specifically discredited David Asman’s testimony that the discriminatees were discharged because they were substandard workers who were not well suited for the Franklin Furnace job. 330 NLRB at 1011. The judge also found that the Respondent did not have a policy of replacing current employees based on seniority.

The Board’s Order in this case directs the Respondent to offer the discriminatees full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent jobs, and to make the discriminatees whole for any loss of earnings and other benefits, computed on a quarterly basis from the date of discharge to the date of a proper offer of reinstatement. 330 NLRB at 1014–1015.

ii. general counsel’s backpay calculation

Jon Grove, compliance officer for Region 9 of the Board, computed the backpay and described the bases for his calculations. The data he used in making his computations were obtained from the Respondent’s records. The computations themselves are reflected in the appendices to the compliance specification.[2] The compliance officer used a backpay period of January 2, 1996, to April 1, 2002. The backpay calculations are based on Formula Two of the Board’s Casehandling Manual-Compliance Proceedings, § 10532.3, which uses the earnings of comparable employees to calculate the lost earnings of discriminatees. The Respondent agrees that Formula Two is the correct method of calculating the backpay in this case.

Because the backpay period lasted for more than 5 years, and because few of the Respondent’s painters worked for the Respondent throughout those years, the compliance officer extrapolated yearly earnings from the actual earnings of the painters who did not work a full calendar year. (The actual annual earnings were used for all painters who worked a full calendar year. For the years 1996 through 2001, there were 5, 5, 8, 6, 8, and 12 painters, respectively, who worked the entire year.) The method by which such yearly earnings were extrapolated was as follows: each applicable employee’s actual earnings were divided by the number of days the employee worked to arrive at an average daily wage. This daily average was multiplied by 365 to arrive at a yearly wage. The yearly wages for all painters were then added, and divided by the number of painters, to arrive at an average yearly wage.[3]

The compliance officer checked the reliability of his extrapolation method by comparing the average actual wages of the painters who worked a full year against the extrapolated wages for the other painters. In 1996, the average actual wages of the painters who worked a full year was $35,348. The extrapolated wages for the employees who worked less than a full year was $34,409. This comparison shows that the extrapolated wages were sufficiently close to the actual wages to be reliable. Moreover, because the extrapolated wages were less than the actual wages, the extrapolation method likely benefited the Respondent by reducing the average wage on which backpay was calculated.

The Respondent objects to this calculation method and maintains that the earnings of the Respondent’s painters should not be extrapolated to calculate backpay, but that only actual, unextrapolated earnings should be used. The actual, unextrapolated wages of its painters was much less than the yearly earnings calculated under the extrapolation method. For example, the actual average earnings of the Respondent’s painters for 1996 was $7583, whereas their extrapolated earnings were $34,409. The obvious explanation for this difference is that most of the Respondent’s painters worked for the Respondent for much less than a full year. But the compliance officer calculated lost wages for the full years of 1996 to 2001, plus the first quarter of 2002. Where a discriminatee has been denied earnings for a full year, one does not calculate his lost earnings based on 2 or 3 months of work, but on 12 months of work. And in determining a discriminatee’s lost earnings for a full year, it is proper and necessary to use the earnings and the extrapolated earnings of comparable employees for the full year.

Similar reasoning would apply to any period of time for which backpay is being calculated. Thus, if only one quarter of a year were involved, one would not use as comparative earnings the wages of employees who worked for only 1 month. The earnings of such employees could either be excluded from the calculations or, if there were many such employees, the properly comparable earnings would be extrapolated to arrive at yearly earnings and then reduced to quarterly earnings.

In the present case, many of the Respondent’s painters worked for periods substantially less than 1 year. Accordingly, it was proper to include the wages of these employees and to extrapolate the wages these employees would have earned if they had worked for the entire year. In the alternative, the compliance officer could have excluded all painters who worked for periods of less than 1 year and used, instead, only the actual earnings of painters who worked for each full year. As noted above, this would have resulted in a higher backpay obligation, something the Respondent does not seek and the General Counsel does not advocate. However, it would not be proper to adopt the Respondent’s argument and to use directly, without extrapolation, the earnings of workers who worked 1, 2, and 3 months as comparable absolute earnings for backpay periods greatly exceeding 1, 2, and 3 months. To use a trite but applicable phrase, the Respondent’s contention would compare apples with oranges. The General Counsel’s method compares apples with apples.

The Respondent also contends that even if the calculation of backpay were to include extrapolated yearly wages, a multiplier of 260 rather than 365 should be used because its painters did not often work weekends and the former figure excludes all weekends. Nevertheless, the Respondent’s painters did work some weekends, and to exclude all weekends from the calculation would lead to the same, possible imprecision as the inclusion of all weekends. The Respondent has not demonstrated that a multiplier of 260 would lead to a more reliable figure than a multiplier of 365. In the end, the reliability and accuracy of the extrapolation method used by the government is demonstrated, as noted above, by the closely comparable amounts between the actual and the extrapolated earnings.

The Respondent’s objection to the government’s backpay calculation is primarily based on its objection to the backpay period of approximately 5–1/2 years. Recognizing this helps to explain the inapt comparisons asserted by the Respondent. For example, the Respondent’s contention that actual, rather than extrapolated, earnings of its painters is the proper measure for backpay might be defensible if, but only if, the Respondent also proves that the discriminatees would have worked the same amount of time as the average time worked by its other painters. Accordingly, I will now turn to the calculation of the backpay period.

iii. the backpay period

The parties agree that the backpay period begins on January 2, 1996. The question is, when does the backpay period end?

By identical letters dated July 3, 2000, the Respondent advised each of the discriminatees, “The Painting Company currently has positions available for painters as advertised in the Columbus Dispatch and the Orlando Sentinel newspapers. If you are interested in employment with The Painting Company, please respond by phone. . . by fax. . . or by mail. . . . Your response is requested by July 7, 2000 and 5:00 p.m. as we will be filling these positions as soon as possible.”[4]

Although the letters to these discriminatees were dated July 3, the envelopes bear postmarks of July 5. Pratt testified that he received the letter on July 5, and that he telephoned the Respondent on the date he received the letter, which was also the date the letter directed him to call the Respondent. (Pratt was apparently confused about this date because the letter directed him to call the Respondent no later than July 7.) As soon as Pratt received the letter, he telephoned the Respondent and talked to David Asman. He asked Asman what he would be paid, and Asman told him between $7 and $8 an hour. Pratt then asked if Asman had any prevailing wage jobs. Asman replied yes, but they were full and he could not offer Pratt a job at the prevailing wage. The Respondent had paid Pratt and the other discriminatees $19.12 an hour on the job from which they had been unlawfully fired in 1996.[5]

David Asman testified that his telephone conversation with Pratt occurred on July 17, 2000, and that in this telephone conversation, he offered to pay Pratt $14.50 per hour, which was allegedly consistent with what the Respondent was paying on its jobs at the time. I do not credit this testimony because I find that Asman was confused about the date of the conversation and what letter the conversation was in response to. The Respondent was paying its painters $14.50 per hour in 2001,[6] not in 2000 when the conversation allegedly occurred. In fact, the Respondent did offer to pay Pratt and the other discriminatees $14.50 per hour in its 2002 letter to them. But since the Respondent’s own records show that it was not paying its painters this hourly wage in 2000, I find that Asman was not credible when he testified that on July 17, 2000, he offered to pay Pratt $14.50 per hour.

Charles Crisp received his letter on July 8, 2000. The deadline set forth in the letter for contacting the Respondent had already passed by the time he received the letter. Accordingly, he did not contact the Respondent after he received it.

By identical letters dated April 1, 2002, the Respondent offered to reinstate each of the discriminatees to their former jobs as journeyman painters.[7] As noted above, these letters listed a starting wage of $14.50 per hour, the existing average wage paid to its painters.[8] The letters listed a specific job to which the discriminatees would be assigned, and they were allowed a reasonable time of 30 days within which to respond.

The Respondent contends that backpay should end at the conclusion of, or shortly after, the job from which the discriminatees were fired, the Franklin Furnace job, because the discriminatees would not have been transferred to any of the Respondent’s other jobs. The Franklin Furnace job ended on March 17, 1996, and the Respondent contends that there was no likelihood that the discriminatees would have been transferred or reassigned after the conclusion of that first and only job they worked for the Respondent.[9]

a. Transfer or reassignment

The Respondent has a permanent core of painters who remain with the Respondent over various periods of time and who are transferred or reassigned from job to job. There are a large number of transfers and a large number of painters who transfer to different jobs. For example, on December 31, 1995, there were 34 painters, excluding the discriminatees, working for the Respondent.[10] During 1996, the Respondent transferred 29 of these painters to other jobs from the job on which each of the painters started.[11] Moreover, the Respondent transferred these painters 174 times in 1996, an average of 6 transfers per painter.

On the other hand, about 5 painters, representing about 5 percent of the Respondent’s work force in 1996, worked the entire year, and these painters were generally from the Columbus-Central Ohio area.[12] These numbers remained the same in 1997. In 1998, 8 painters, representing 12.3 percent of the Respondent’s work force; in 1999, 6 painters, or 6.7 percent of the Respondent’s work force; in 2000, 8 painters, or 8.5 percent of the Respondent’s work force; and in 2001, 12 painters, or 16.2 percent of the Respondent’s work force, worked the entire year.

Just as all of the Respondent’s painters frequently transfer to other jobs of the Respondent, the painters who worked on the Franklin Furnace job also transferred with regularity. There were 19 painters who worked on the Franklin Furnace job, excluding the discriminatees, and 11 of these painters transferred to other jobs of the Respondent. All of these painters were transferred to the Respondent’s other jobs after the termination of the Franklin Furnace job, and there were three painters who each were transferred to more than 20 jobs.[13]

If one of the Respondent’s painters becomes unemployed for any reason, the Respondent does not contact that painter when another job for which the painter is qualified becomes available. Rather, in order for that painter to be rehired, the painter is generally required to contact the Respondent. When the Respondent recruits painters for any job, it primarily advertises in the Columbus Dispatch newspaper. While this recruitment practice did not limit the number or residences of the painters who were eligible to work for the Respondent, it did result in most of the Respondent’s painters being from the