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Sunshine Piping, Inc. and United Association of Journeymen & Apprentices of the Plumbing & Pipefitting Industry of the U.S. & Canada, AFL-CIO, Local Number 366. Case 15–CA–16781
December 31, 2007
DECISION AND ORDER
By Members Liebman, Schaumber, and Kirsanow
On June 30, 2003, Administrative Law Judge Margaret G. Brakebusch issued the attached decision. Thereafter, the General Counsel filed exceptions and a supporting brief, and the Respondent filed an answering brief, a motion to strike portions of the General Counsel’s brief, and cross-exceptions with supporting argument. The General Counsel opposed the Respondent’s motion to strike portions of the General Counsel’s exceptions brief. Subsequently, as will be explained more fully below, the General Counsel filed a motion to reopen the record. This motion was granted. On December 23, 2004, Judge Brakebusch issued the attached supplemental decision upon the reopened record. The Respondent filed exceptions and a supporting brief,1 along with a request for oral argument.2 The General Counsel filed cross-exceptions and a supporting brief.3 The General Counsel and the Respondent each filed answering briefs.
The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.
The Board has considered the decision and supplemental decision in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings,4 and conclusions only to the extent consistent with this decision, and to adopt the judge’s recommended Order as modified.5 Specifically, we adopt the judge’s findings and conclusions as to the substantive allegations of the complaint, as amended at hearing, but we reverse her award of litigation costs to the General Counsel.
i. background
and procedural history
The Respondent, Sunshine Piping, Incorporated, builds pipe used in cooling systems for turbines and electric generating plants. James Scott is the Respondent’s majority owner and is responsible for its day-to-day operations. His son, Kevin Scott, served as the Respondent’s vice president.6 The Respondent hired employee Robert Huggins as a welder on January 16, 2002.7 Huggins, along with a number of other employees, was laid off on March 21 and recalled on June 3. These layoffs were alleged as unlawful in an earlier case. See Sunshine Piping, Inc., 350 NLRB No. 90 (2007) (Sunshine I).8 Huggins testified at the hearing in that case on August 26. After testifying, Huggins received three written warnings and a verbal warning, on August 26, 28, 30, and September 18, respectively, allegedly for poor work performance. The Respondent also gave Huggins a written warning on September 13 and a suspension on September 4, and it ultimately terminated him on September 30, all for allegedly violating a newly implemented attendance policy.
The complaint, as amended at hearing, alleged that the Respondent violated Section 8(a)(1), (3), and (4) by taking these employment actions against Huggins. The complaint also alleged that the Respondent violated Section 8(a)(1) by threatening Huggins on September 4 that the Respondent no longer wanted him employed due to his adverse testimony. Finally, the complaint alleged that from August 30 until the Respondent discharged Huggins on September 30, the Respondent violated Section 8(a)(3) by failing to take action in response to harassment of prounion employees (Huggins was the target of the alleged harassment). The judge denied, as untimely, the General Counsel’s motion to amend the complaint to allege that the Respondent’s implementation of a new, stricter attendance policy on May 6 was in response to the union activity of its employees and thus also violated the Act.
In her original decision issued on June 30, 2003 (Sunshine II), the judge found that the Respondent violated Section 8(a)(1), (3), and (4) by discriminatorily issuing Huggins the performance-based disciplinary warnings, but did not violate the Act by disciplining, suspending, and terminating Huggins under the new attendance policy. Specifically, the judge found that the General Counsel established an initial case under Wright Line9 that animus against Huggins’ protected activity was a motivating factor in the Respondent’s attendance-related actions, but that the Respondent rebutted that case by demonstrating that it would have taken those employment actions against Huggins even absent his protected activity. The judge based this latter finding on both testimony and over 200 documents introduced into evidence by the Respondent purporting to demonstrate that it treated Huggins in accordance with the new attendance policy and that it applied the policy consistently to all employees. The judge dismissed allegations that the Respondent violated Section 8(a)(1) by threatening Huggins that the Respondent no longer wanted him employed and by failing to take action to stop other employees from harassing Huggins.10
On August 25, 2003, the General Counsel filed exceptions and a supporting brief, arguing that the judge (1) improperly denied his motion to amend the complaint to allege, and consequently failed to find, that the Respondent violated Section 8(a)(1) by implementing a stricter attendance policy;11 and (2) wrongly concluded that the Respondent did not violate Section 8(a)(1), (3), and (4) by disciplining and ultimately terminating Huggins for attendance policy violations. Regarding Huggins’ termination, the General Counsel contended that the judge erred in finding that the Respondent did not provide shifting reasons for the discharge.
On September 24, 2003, the Respondent filed an answering brief, a motion to strike portions of the General Counsel’s exceptions brief,12 and limited cross-exceptions. The Respondent contested the judge’s findings that it (1) harbored antiunion animus, and (2) violated Section 8(a)(3) by issuing Huggins the four performance-based warnings. The Respondent stated that its “limited cross-exceptions are filed out of an abundance of caution,” and that it would withdraw its cross-exceptions if the Board denied the General Counsel’s exceptions.13
Shortly before the judge issued her decision, the Charging Party Union, United Association of Journeymen & Apprentices of the Plumbing & Pipefitting Industry of the U.S. & Canada, AFL–CIO, Local Number 366, informed the Region that it had been contacted by one of the Respondent’s former employees, Cynthia Arledge. Arledge, who had testified for the Respondent at the 2003 hearing, had come forward to allege that Scott had altered attendance records to hide the Respondent’s disparate treatment of Huggins. Allegedly fearing retaliation by Scott, Arledge initially refused to provide testimony when subpoenaed. However, Arledge subsequently complied with a federal district court order granting the Region’s application for enforcement of its subpoena, and provided deposition testimony on November 25, 2003.14 On March 1, 2004, the General Counsel filed a motion to reopen the record to allow the submission of this newly discovered evidence; the Respondent opposed this motion. In May 2004, the Board referred the General Counsel’s motion, and the Respondent’s opposition thereto, to the judge, who granted the motion and reopened the record.15 A 6-day supplemental hearing ensued. The judge subsequently issued a supplemental decision, finding that the Respondent also violated Section 8(a)(1), (3), and (4) by disciplining and terminating Huggins for his attendance violations (Sunshine III). Key to the supplemental decision is the judge’s crediting of Arledge’s testimony that the Respondent had altered attendance records to “cover its disparate treatment of Huggins,” and her consequent finding that the Respondent’s attendance records could not be relied upon “as accurate and genuine representations of Respondent’s administration of its attendance policy.” The judge thus “amended” her earlier decision to find that the Respondent had failed to meet its Wright Line rebuttal burden to demonstrate that it would have disciplined and terminated Huggins under the attendance policy even in the absence of his protected activity. In addition, the judge found that the Respondent’s litigation of this case based on documents “knowingly altered . . . in anticipation of litigation” constituted “bad faith” and recommended that the Respondent be ordered to pay the General Counsel’s “costs and expenses incurred in the investigation, preparation, and conduct” of the supplemental hearing under the “bad faith” exception to the American Rule.16 The Respondent filed numerous exceptions, and it vigorously contests the judge’s award of legal fees. The General Counsel filed cross-exceptions.
ii. sunshine ii
The alteration-of-documents allegation that precipitated Sunshine III related only to Huggins’ attendance-related discipline and termination. Before we reach the attendance-related issues (and the judge’s award of litigation costs to the General Counsel), we address the unrelated Sunshine II issues.
For the reasons stated by the judge, we adopt her findings
in Sunshine II that the Respondent harbored antiunion animus and
violated the Act by discriminatorily issuing the performance-based warnings to
Huggins. In adopting the judge’s
findings, we agree that Superintendent Steven Phelps’ comment to Huggins that
Scott “hated [Huggins] being ‘out there’ because he had testified for the
iii. sunshine iii
A. The attendance policy
Scott testified that he decided to implement a new attendance policy, and to take control of attendance himself, because his supervision had let him down. On May 6, the Respondent implemented a new written policy and erased all outstanding attendance infractions. The new policy provides for progressive discipline (verbal warning, written warning, suspension, discharge) for four types of infractions (unexcused absence, tardy, leave early, or timecard discrepancy). Thus, four unexcused infractions of the same type occurring within the applicable calendar period results in discharge. The policy specifies that (1) each incident of excessive absenteeism or tardiness shall be evaluated on a case-by-case basis; (2) absences may be excused when the employee follows call-in procedures and returns to work with supporting documentation, and when prescheduled with prior management approval; (3) where appropriate, the employer will require documentation of authorized reasons; and (4) although calling in does not excuse an unscheduled absence, mitigating and extenuating circumstances may be weighed prior to the imposition of discipline. Scott explained that, even if an employee submitted a request for leave in advance, the request was not automatically granted.
As the judge’s decision discusses, Scott and his son, Kevin, initially reviewed daily compliance with the attendance policy. However, Arledge became involved during the first 6 months to relieve the Scotts from this daily duty. Arledge was charged with obtaining followup information and documentation. Originally, if an employee provided proper documentation to Arledge, an infraction was excused without Scott’s involvement. If, however, Arledge had concerns, she took the issue to Scott for review. Ultimately, the Respondent’s human resources and safety director, John Goldberg, was assigned to administer the policy.
B. The “collateral evidence”
The judge relied primarily on Arledge’s testimony, as corroborated by Phelps, to find that the Respondent had altered its attendance records. The Respondent attacked this testimony by cross-examining Arledge and Phelps concerning drug-related activity and other misconduct while they were employed by the Respondent, and by calling a number of witnesses who testified regarding Arledge’s and Phelps’ use of drugs and/or drug dealing at the workplace, Arledge’s participation in a court-ordered drug rehabilitation program, Phelps’ use of his supervisory position to intimidate and control employees, Phelps’ status as a “lead suspect” in a break-in at the Respondent’s plant, and Arledge’s filing of a workers’ compensation claim. The judge rejected the Respondent’s arguments that this evidence was offered on grounds other than to attack Arledge’s and Phelps’ credibility, or that it was admissible to show bias, motivation, or lack of competency, or to impeach by contradiction.18 As noted above, the judge denied the General Counsel’s motion to strike this “collateral evidence.” She did, however, state that the testimony was irrelevant and that she did not rely on it.
The Respondent excepted, arguing that the judge erred by
failing to consider the evidence concerning Phelps and Arledge to discredit
them on the basis of bias, motivation, incompetency, and/or impeachment by
contradiction. As explained below, we
find that the judge acted properly within her discretion in refusing to
consider this evidence.
For purposes of review, we will treat the judge’s ruling in this regard as substantially equivalent to a ruling excluding the testimony from the record. “Under Section 10(b) of the Act and Section 102.39 of the Board’s Rules and Regulations, the Federal Rules of Evidence [FREs] apply insofar as practicable to unfair labor practice proceedings[.]” J. S. Troup Electric, Inc., 344 NLRB 1009 (2005). Both the courts and the Board review rulings excluding evidence for an abuse of discretion. See, e.g., U.S. v. Harris, 491 F.3d 440, 446–447 (D.C. Cir. 2007); J.S. Troup Electric, supra at 1009–1010.
Under FRE 608(b), the use of “extrinsic” evidence of a
witness’ conduct to impeach the witness is generally prohibited, but inquiry
into specific instances of conduct is allowed on cross-examination if, in the
discretion of the court, such conduct is probative of truthfulness or
untruthfulness. Operating Engineers Local
17 (Hertz Equipment Rental), 335 NLRB 578, 583 fn. 11 (2001); Saddle
West Restaurant, 269 NLRB 1027, 1036 (1984); U.S. v. Tarantino, 846 F.2d 1384, 1406 (D.C. Cir. 1988), cert. denied 488
Preliminarily, the judge could have altogether precluded
the Respondent from cross-examining Phelps and Arledge concerning their
drug-related acts. Courts have
consistently held that such acts are not probative of truthfulness or
untruthfulness. 28 Charles Alan Wright
& Victor James Gold, Federal Practice
and Procedure § 6118, at 107 (1993 & Supp. 2007) (citing cases). The judge allowed the questions, however, and
Arledge and Phelps both denied using or selling drugs in the workplace. Under FRE 608(b), the Respondent had to
accept their denials unless extrinsic evidence tended to show that Phelps and
Arledge were biased or possessed a motive to testify untruthfully. See U.S.
v. Thorn, supra. We find no such
bias or motive. Here, as the judge
found, there is no evidence that Phelps harbored hostility toward the
Respondent for his layoff or for being questioned by authorities.19
As the judge also noted, Arledge had quit her job and contacted the
Under FRE 404(b), evidence of “other crimes, wrongs or
acts” is not admissible to prove character to “show action in conformity
therewith,” but may be admitted as “proof of motive, opportunity, intent,
preparation, plan, knowledge, identity or absence of mistake or accident.” See, e.g., U.S. v. Castillo, 181 F.3d 1129, 1134 (9th Cir. 1999), cert. denied
532 U.S. 965 (2001). To determine
whether such evidence is admissible, courts will consider, among other things,
whether the evidence tends to prove a material point and whether the past act
is similar to the offense charged.
Here, whether Phelps and Arledge previously engaged in drug use and/or dealing was not a material issue in the case. Nor was their alleged misconduct a “crime of dishonesty” (such as forgery) tending to impugn their credibility. See Wright & Gold, supra. Rather, consistent with U.S. v. Cameron, supra, evidence of Phelps’ and Arledge’s prior drug use is not probative of their propensity to lie under oath. The judge did not abuse her discretion by declining to consider it.
The Respondent also relies on the principle of impeachment
by contradiction. Impeachment by
contradiction attempts to show the falsity of specific testimony by introducing
contradictory evidence. U.S. v. Castillo,
supra at 1132. A district court has
broad discretion over whether to admit extrinsic evidence to impeach a witness’
direct-examination testimony, particularly on a matter collateral to the
case. U.S. v. Chu, 5 F.3d 1244,
1249 (9th Cir. 1993), cert. denied 511
Here, as the judge found, Phelps’ and Arledge’s denials of drug use and sale were elicited on cross-examination. Thus, the judge properly declined to rely on the Respondent’s witnesses’ testimony offered to contradict their denials. See, e.g., U.S. v. Antonakeas, 255 F.3d 714, 724 (9th Cir. 2001). Even if Phelps and Arledge had, on direct, volunteered testimony showing drug-related misconduct in the workplace, the judge had broad discretion over whether to admit that evidence, as it concerned a matter collateral to the case. See U.S. v. Chu, supra; Ponderosa Granite Co., 267 NLRB 212, 212 fn. 1 (1983) (ruling that, even if the deputy sheriff’s testimony were to be considered solely as evidence contradicting discriminatee’s testimony on the number of bad check warrants issued against him, it should have been excluded as involving merely a collateral matter).
The Respondent also argues that Phelps’ and Arledge’s
prior drug use should be considered in assessing their ability to recall and
relate events. Prior drug use may be relevant
to a witness’ capacity to observe events.
See
Finally, even assuming that the judge could have considered the collateral evidence under any of the rules and principles discussed above, nothing required her to do so. As noted above, decisions on admissibility are reviewed for an abuse of discretion. As the evidence at issue here involved collateral issues and was not probative of Phelps’ and Arledge’s propensity to testify untruthfully concerning the material issue in this proceeding—alteration of attendance records—we conclude that the judge did not abuse her discretion by declining to rely on this evidence.
C. Altered Documents and Respondent’s Wright Line Burden
The judge outlined various changes that Arledge testified she had made at Scott’s direction to a number of employees’ attendance files. According to Arledge, these changes were made so that the Respondent would not appear biased in its administration of the attendance policy. Phelps testified that he had observed Arledge and Scott reviewing attendance records and had been asked to re-sign some forms. Scott acknowledged that he and Arledge conducted a 6-week review of, and retroactively changed, attendance records,21 but he testified that the changes were necessary to correct errors Arledge had made or to update the records as employees submitted supporting documentation that would excuse their infractions. The judge credited Arledge over Scott, based on her reluctance to testify, Phelps’ corroborating testimony, and Scott’s “motivating . . . concern about going to court.” The judge thus found that the Respondent, anticipating a Board hearing in this matter, “altered, created, and destroyed attendance records” to cover its disparate treatment of Huggins. Having so found, she amended her earlier decision, premised on a lack of disparate treatment, to find that the Respondent failed to meet its Wright Line rebuttal burden of showing that it would have disciplined and discharged Huggins under its attendance policy even in the absence of his union activity and testimony in a Board proceeding. Thus, the judge found that the discipline and discharge violated Section 8(a)(1), (3), and (4).
The Respondent excepts.22 It repeats its argument that any alterations properly corrected mistakes or updated documentation. The Respondent emphasizes that the judge did not find that Huggins’ records or the records of five other employees terminated under the attendance policy were altered. Moreover, the Respondent argues that nothing in the reopened record changes the undisputed fact that Huggins had four unexcused absences, grounds for termination. Thus, the Respondent argues, it met its Wright Line burden.
Preliminarily, we observe that the complicated record in this case is susceptible to multiple interpretations. It is one thing to find that records were altered, another to find that they were altered to hide disparate treatment, and yet another to find that they were altered for the express purpose of hiding discrimination based on Section 7 activity. Crediting Arledge as to the reason for the alterations (to cover disparate treatment) does not, in and of itself, answer the ultimate legal question as to the reason for Huggins’ discipline and termination (whether Scott acted with discriminatory motive based on Huggins’ union activity). Moreover, the Respondent’s evidence offered to rebut a finding of discriminatory motivation also relates to the issue, discussed below, of whether the Respondent engaged in “bad-faith” litigation justifying an award of legal costs to the General Counsel. Thus, further discussion is warranted.
First, although we find no abuse of discretion in the judge’s disregard of “collateral evidence,” the judge denied the General Counsel’s motion to strike that evidence and the General Counsel did not except to the judge’s ruling. Thus, the evidence remains in the record. Based on that and other record evidence, it is difficult to view Phelps’ and Arledge’s testimony uncritically. It is plausible that Phelps was, as witnesses here testified, selling or trading excused absences for drugs, thereby effectively thwarting the Respondent’s new attendance policy, which was designed to address what appears to have been a genuine and widespread attendance problem at the plant.23 If Phelps was doing so, Scott would have had a further reason, in addition to correcting mistakes and updating in light of subsequent documentation, for auditing and correcting the attendance records. Viewed in this light, Scott’s statement, from which the judge inferred unlawful motive, that he audited those records because he knew he would be the one “standing before the judge” is amenable to an innocent interpretation.
Second, Arledge’s attribution of unlawful motive to Scott because he altered documents suffers from her own admissions that (1) she did not necessarily know everything Scott knew, and (2) she and Scott had several “disagreements” over Scott’s application of the attendance policy.24 As to the former, Scott testified that he changed some “unexcused” infractions to “excused” to account for situations where, for example, he had granted an employee prior permission to be late or absent,25 or had sent an employee on an errand. As to the latter, what Arledge viewed as Scott treating employees unfairly under a “buddy system,” Scott apparently viewed as legitimately exercising his discretion, as the written attendance policy allowed, to review extenuating circumstances in deciding whether to excuse an infraction.26 Thus, certain of Arledge’s characterizations of Scott’s review of the records—e.g., “Scott was looking to see whether he liked that excuse, whether that was what’s supposed to be on there,” or Scott was “fixing” a file27—could be interpreted just as the Respondent argues: Scott was correcting mistakes and legitimately exercising permitted discretion under the policy.
The General Counsel’s case is premised on the theory that the Respondent altered documents to hide its discrimination against Huggins, and that Scott perjured himself in Sunshine II when he testified that the Respondent’s records placed in evidence were true and accurate representations of the original documents. But if, as Scott claims, he merely corrected mistakes or updated records as appropriate documentation was provided, it can be argued that his testimony in this regard was not necessarily untruthful.
Moreover, embedded in the General Counsel’s argument are two arguably fallacious assumptions: (1) any alterations to the attendance documents prior to the hearing were wrong and/or inappropriate, and (2) alterations prove unlawful discrimination against Huggins. The first assumption ignores the fact that Scott had discretion under the policy to decide what was and was not excused, and it discounts any possibility that past mistakes or additional documentation may have warranted further exercise of that discretion. Even assuming that some alterations were improper, the second assumption disregards the possibility that such changes may have been made merely to hide the fact that Scott had inconsistently applied the attendance policy to favor his “buddies.” This would show unfairness, but it would not prove discrimination based on Section 7 activity.
On the other hand, and contrary to the Respondent’s argument, the mere fact that Huggins had four unexcused absences does not sustain the Respondent’s Wright Line rebuttal burden. An employer does not carry its burden merely by showing that it had a legitimate basis for taking an adverse employment action; it must persuade that it would have taken the same action even in the absence of protected activity. See, e.g., T&J Trucking Co., 316 NLRB 771 (1995); Hicks Oils & Hicksgas, 293 NLRB 84, 85 (1989), enfd. 942 F.2d 1140 (7th Cir. 1991). The Respondent is well aware of this principle; indeed, that is why it introduced documentary evidence purporting to demonstrate its consistent application of the attendance policy. But the admitted fact that those records were altered obviously throws a wrench into the Respondent’s Wright Line rebuttal case.
Ultimately, the issue is whether the Respondent sustained its burden under Wright Line. The judge found that the General Counsel met his initial burden, and we affirm that finding. The inference of discriminatory motivation stands unless the Respondent rebuts it.28 Respondent sought to rebut it by showing that it acted adversely against Huggins because he violated the attendance policy, which policy was fairly applied to all employees. But it did so with records that were indisputably altered. The judge found, and we agree, that those records cannot be relied upon “as accurate and genuine representations of Respondent’s administration of its attendance policy.” And, without evidence showing how it really administered its attendance policy, and worse, with credited evidence that alterations were made to cover disparate treatment, Respondent necessarily fails to sustain its rebuttal burden. Accordingly, we adopt the judge’s conclusion that her previous determination that the Respondent met its Wright Line rebuttal burden must be reversed.
D. Judge’s award of litigation costs
1. Motion to amend to request special remedies
On the fifth day of a 6-day hearing, and 9 weeks after the Sunshine III hearing commenced, the General Counsel moved to amend the complaint to include a request for special remedies. Specifically, the General Counsel moved to add a request that the Respondent be ordered to pay the General Counsel’s “costs and expenses incurred in the investigation, preparation, and conduct” of the supplemental hearing. The judge granted the motion, rejecting the Respondent’s argument that allowing the amendment would violate the Respondent’s due process rights. The judge stated that although the General Counsel’s timing may have lacked basic courtesy, the issue of whether the Respondent had altered its attendance records had been fully litigated, and the Respondent did not show that it would have defended its case any differently had special remedies been requested earlier. The Respondent excepts to this ruling.
Section 102.17 of the Board’s Rules and Regulations
provides, in pertinent part, that a complaint “may be amended upon such terms
as may be deemed just . . . at the hearing and until the case has been
transferred to the Board . . . , upon motion, by the administrative law judge
designated to conduct the hearing[.]”
The basic requirements of due process with respect to the assessment of
costs, expenses, or attorney fees are notice that such sanctions are being
considered and an opportunity to respond.
Steinert v. Winn Group, Inc., 440 F.3d 1214, 1222 (10th
Cir. 2006). The precise procedural protections
of due process vary, depending on the circumstances, because due process is a
flexible concept unrestricted by any bright-line rules.
Here, before the hearing closed, the Respondent was given notice that the General Counsel was seeking attorneys’ fees.29 It cross-examined those witnesses who testified that documents had been altered, and it opposed the request for litigation costs in its brief. Thus, the Respondent had notice and an opportunity to respond. The Respondent cites numerous cases in which last-minute complaint amendments were refused, but in those cases the amendments sought would have added a new claim or theory, which in turn would have required the defendant to revise its defense.30 The Respondent has not shown that the judge’s decision to grant the amendment prejudiced its ability to mount a defense on the issue of attorneys’ fees or any other issue. Thus, the judge did not abuse her discretion by granting the amendment.
2. Appropriateness of fee award
Summarizing Board precedent concerning the standards to be applied in determining whether an award of litigation costs is warranted, the judge stated that the Board “primarily” grants such an award “only in cases involving frivolous defenses and in cases involving unfair labor practices that are flagrant, aggravated, persistent and pervasive.” The judge further explained, citing Heck’s Inc., 215 NLRB 765, 768 (1974), that a respondent’s defenses will be considered “debatable” rather than “frivolous” if they turn on credibility. The judge observed that “because credibility is paramount in this case, it may be argued that Respondent’s defenses are debatable and thus the award of litigation costs would not be appropriate.” She determined, however, that a “frivolous” versus “debatable” analysis did not address the circumstances of this case. Accordingly, without passing on whether the Respondent’s defenses were “frivolous” or “debatable,” the judge awarded litigation costs to the General Counsel based upon the “bad faith” exception to the American Rule.31 The judge reasoned that this case was reopened because there was “credible evidence that the Respondent knowingly altered its records in anticipation of litigation,” and that such actions reflected bad faith in the conduct of the litigation.32
The Respondent excepts, arguing primarily that the Board has no authority to award litigation costs based upon the “bad faith” exception to the American Rule because that exception is based upon a federal court’s inherent power to punish an abusive litigant—a power the Board lacks.33 Even assuming the Board has such authority, the Respondent also argues that the judge erred by finding that it acted in bad faith. We find merit in the latter argument.34
“The bad faith exception permits an award upon a showing that the claim is entirely without color and has been asserted wantonly, for purposes of harassment or delay, or for other improper reasons. Neither meritlessness alone, nor improper motives alone, will suffice.” Colombrito v. Kelly, 764 F.2d 122, 133 (2d Cir. 1985) (internal quotations and citations omitted); see Frontier Hotel & Casino, 318 NLRB 857 (1995) (finding bad faith where respondent rested its defense on transparently untruthful testimony of witness), enf. granted in part and denied in part sub nom. Unbelievable, Inc. v. NLRB, 118 F.3d 795 (D.C. Cir. 1997).
As stated, the General Counsel seeks an award of costs incurred in investigating, preparing for, and conducting the hearing in Sunshine III. The premise of such an award would be that the Respondent was guilty of bad faith in presenting a defense in Sunshine II based on altered attendance records. As discussed above, those alterations may be variously explained as (1) legitimate corrections, (2) an effort to conceal an unfair but not necessarily unlawful administration of the attendance policy on a “buddy system,” or (3) an effort to conceal unlawful discrimination motivated by Huggins’ protected activity.
As explained above, for the purpose of deciding whether Huggins’ attendance-related discipline and discharge violated the Act, the Respondent’s alteration of documents negates its ability to meet its Wright Line rebuttal burden, i.e., to persuade that it would have taken the same action against Huggins even in the absence of his Section 7 activity. But for purposes of deciding whether the Respondent was guilty of bad faith in presenting a defense based on altered attendance records in Sunshine II, the fact that the alterations are amenable to conflicting explanations is significant. As detailed above, the record raised questions regarding (1) whether documents were appropriately corrected or improperly altered, and (2) if improperly altered, the motive to be ascribed to the alterations. Scott’s account of why he altered attendance records was not devoid of plausibility. Nor was it clear that Scott knowingly testified untruthfully when he said the attendance records were accurate, as he could have meant they were accurate as corrected.35 His testimony certainly was not “transparently untruthful.” See Frontier Hotel & Casino, supra at 861. And as we have also explained, Arledge’s explanation of Scott’s actions was not entirely unproblematic.
In Sunshine III, of course, the judge credited Arledge over Scott that changes were made to hide disparate treatment of Huggins. But that does not mean that, at the time of the Sunshine II hearing, the Respondent acted wantonly or vexatiously in mounting its defense.36 Where the Board has found an award of costs warranted based on bad faith, the offending party’s litigation conduct was knowingly vexatious at the time it was committed.37 Here, by contrast, we cannot say that at the time the Respondent presented its defense in Sunshine II, the only reasonable (as opposed to ultimately credited) explanation for its alteration of attendance records was Arledge’s explanation. And, as noted earlier, even crediting Arledge that alterations were made to hide disparate treatment, that did not foreclose the possibility that disparateness was based on a “buddy system” rather than protected activity. Moreover, the Respondent had sufficient undisputed evidence of Huggins’ absenteeism to make its defense of his termination at least “colorable.” Thus, we cannot conclude that the Respondent’s defense was “entirely without color” and “wantonly asserted.” Colombrito v. Kelly, supra. Accordingly, we reject the judge’s recommended award of litigation costs to the General Counsel.
ORDER
The National Labor Relations Board adopts the recommended
Order of the administrative law judge, as amended by the judge in her supplemental
decision and as modified below, and orders that the Respondent, Sunshine
Piping, Inc.,
1. Substitute the following for paragraph 2(a) and reletter the succeeding paragraphs accordingly:
“(a) Within 14 days from the date of this Order, offer Robert Huggins full reinstatement to his former job or, if that job no longer exists, to a substantially equivalent position, without prejudice to his seniority or any other rights or privileges previously enjoyed.
“(b) Make Robert Huggins whole for any loss of earnings and other benefits suffered as a result of the discrimination against him, in the manner set forth in the remedy section of the judge’s decision.”
2. Delete paragraph 2(f).
3. Substitute the attached notice for that of the administrative law judge.
Dated,
Peter
C. Schaumber,
Member
Peter
N. Kirsanow,
Member
(seal) National Labor Relations Board
Member Liebman, dissenting in part.
In contrast to the majority, I would award the General Counsel the costs incurred in investigating, preparing for, and conducting the hearing in Sunshine III with respect to the unlawful discipline and discharge of employee Robert Huggins.
The majority complicates what should be a simple issue, delving deeply into the plausibility of the Respondent’s defense and of hypothetical motives for its deliberate alteration of attendance records. But there seems to be no question here: (1) that the Respondent altered the records knowing full well that they were relevant to matters before the Board; (2) that the undisclosed (but ultimately uncovered) alteration destroyed the reliability of the records as evidence and necessarily interfered with the Board’s ability to determine the truth; and (3) that the General Counsel was forced to incur costs as a direct result of the Respondent’s actions, which multiplied proceedings before the Board.
Under such circumstances, the Board—in the interest of controlling its own proceedings and preserving their integrity—surely has the inherent authority to award costs. See generally 675 West End Owners Corp., 345 NLRB 324, 326 fn. 11 (2005) (collecting decisions in which Board has awarded litigation costs). Compare Leon v. IDX Systems Corp., 464 F.3d 951, 958-961 (9th Cir. 2006) (discussing inherent authority of federal courts to impose sanctions, including award of attorney’s fees, for spoliation of evidence).
Accordingly, I dissent.
Dated,
Wilma
B. Liebman, Member
National Labor Relations Board
APPENDIX
Notice to Employees
Posted by Order of the
National Labor Relations Board
An Agency of the
The National Labor Relations Board has found that we violated Federal labor law and has ordered us to post and obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
We will not discipline, discharge, or otherwise discriminate against any of you for supporting United Association of Journeymen & Apprentices of the Plumbing & Pipefitting Industry of the U.S. & Canada, AFL–CIO, Local Number 366 or any other union.
We will not in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights set forth above.
We will, within 14 days from the date of the Board’s Order, offer Robert Huggins full reinstatement to his former job or, if that job no longer exists, to a substantially equivalent position, without prejudice to his seniority or any other rights or privileges previously enjoyed.
We will make Robert Huggins whole for any loss of earnings and other benefits resulting from our discrimination against him, less any net interim earnings, plus interest.
We will, within 14 days from the date of the Board’s Order, remove from our files any reference to Robert Huggins’ unlawful discipline and discharge, and we will, within 3 days thereafter, notify him in writing that this has been done and that the discipline and discharge will not be used against him in any way.
Sunshine Piping, Inc.
C. R. Rogers, Esq., for the General Counsel.
Tony B. Griffin, Esq. and
Brett P. Ruzzo, Esq. for
the Respondent.
Greg Boggs, Representative, for the Charging Party.
DECISION
Statement of the Case
Margaret G.
Brakebusch, Administrative Law Judge. The original charge in Case
15–CA–16781 was filed on October 14, 2002[1]
by United Association of Journeymen & Apprentices of the Plumbing &
Pipefitting Industry of the
A hearing on these matters was conducted before me in
Findings of Fact
i. jurisdiction
Respondent has an office and a place of business in
ii. alleged unfair labor practices
A. Issues
After testifying in the Board’s proceeding in Case
15-CA-16530 on August 26, Huggins received a verbal warning and three written
warnings for his work performance on August 26, 28, 30, and September 18,
respectively. Huggins additionally
received a written warning on September 13, a suspension on September 4, and
his termination on September 30 for violations of the attendance policy. General Counsel alleges that all of the
discipline administered to Huggins after August 26 was given because of his
B. Background
Respondent is engaged primarily in the business of building piping used in cooling systems for turbines and electric generating plants. In early June, Respondent employed approximately 68 employees. James Scott is the majority owner of Respondent and is responsible for the day-to-day operation of Respondent, including the formulation and execution of the attendance policy implemented on or about May 6.
Respondent hired Huggins as a welder on January 16. On March 21, Huggins was laid off and then
later recalled on June 3. On May 31, the
Regional Director for Region 15 issued a complaint against Respondent based
upon charges filed by the
C. Complaint Paragraph 7
General Counsel alleges that about September 4, Respondent,
by Superintendent Steven W. Phelps, threatened employees by informing them that
Respondent did not want them to be employed by Respondent because they had
testified against the Respondent. Huggins
testified that approximately a week after the August trial, he had a
conversation with Phelps as they were walking into work. Phelps asks Huggins how things went at the
trial. Huggins replied, “Everything went
okay”. Huggins testified that Phelps made
the statement that “he wished all this would go away and things would go back
to normal”. Huggins also recalled that
Phelps added that Jim Scott hated the fact that he (Huggins) was out there
because he testified for the
D. Complaint Paragraph 8
1. Huggins’ complaints
General Counsel alleges that starting about August 30 and continuing until about September 30, Respondent failed to take action regarding harassment of pro-union employees.
Huggins was the only employee that General Counsel presented in support of this allegation.
Amperage knobs are the knobs or controls that regulate the amount of power used to melt the wire for the weld for both the “tig” and “mig” welding machines. On August 30, Huggins was working on a mig welding machine in the weld-out area in the back of the facility. After rolling carbon steel all morning, Huggins took a break. After he returned from break and resumed welding, he noticed that his mig tip melted away because of the machine’s heat. He checked his welding machine and found that the amperage knob was at a level that was entirely too hot. He also noticed that the control that regulates the wire feed had also been increased. Huggins noticed that the argon gas that is used in the welding process had been turned off as well. Additionally Huggins discovered that the jack stand that holds the pipe for the welding process had been lowered several inches. Huggins testified that when he reported this incident to Supervisor Harry Nelson, Nelson told him that he should check his rolling machine the next time before resuming work. Huggins did not recall whether Nelson said that he would talk with other employees and find out what happened. Huggins confirmed that Nelson was the only supervisor to whom he reported this incident.
Huggins worked on a tig machine on September 20. He described the tig machine as a welding process that uses tungsten to strike an arc on the pipe and to create an arc to melt wire. Huggins recalled that as he began welding, he noticed that what he thought to be the tungsten material uncharacteristically melting away. As it cooled, he examined it more closely and found that it was not tungsten at all, but rather a piece of stainless steel wire made to look like a one-eighth piece of tungsten. He explained that it appeared to be a wire cut to the length of tungsten with the ends ground with points as with tungsten. Huggins went to supervisor Harry Nelson and reported that someone deliberately put the stainless steel into his machine. Huggins recalls that Nelson suggested that someone was trying to play a joke on him and also suggested that he check his rolling machine again before going back to work. Huggins told Nelson that he didn’t think that it was very funny when someone was sabotaging his machine.
Huggins testified that when he went out to his car after work on September 20, he discovered that his door was open and his windshield sun block was missing. He also noticed a balled-up roll of duct tape thrown on his floorboard. The next day he reported the condition of his car to Nelson. Nelson suggested that he needed to lock his car. Huggins explained to Nelson that his car was a 1962 New Yorker and the locks didn’t work. Huggins testified that after that time, he brought a car to work with a functioning lock. Huggins did not recall whether Nelson told him that he would check with other employees and investigate the matter. Huggins confirmed that he did not report this incident to any other supervisor.
Huggins also testified that approximately a week before he
was terminated, he was working in the front of the rolling tables. Ray Adams was the welder who was working
nearest to him. As Huggins was welding,
he received a blast of sparks from behind his head and the sparks entered his
welding shield. Huggins noticed that the
sparks were coming from the grinder in the welding booth used by Adams and
employee Gerald Nelson. Huggins asked
them to throw their sparks in a different direction. Huggins did not recall
that Adams said anything to him, however he recalled that
Supervisor Harry Nelson recalled that Huggins complained
to him about the incidents involving the tungsten and the amperage knobs on his
welding machine. Nelson testified that
he went through the work area and asked other employees what they knew about
these incidents. Nelson recalled that he
went back to Huggins and told him that no one knew anything about these
matters. Employee Gerald Nelson testified that supervisor Harry Nelson came to
him and asked him if he had seen anyone in Huggins’ work area or tampering with
Huggins’ equipment. Supervisor Nelson
also recalled Huggins’ complaints about his car. Nelson recalled that Huggins stated that if
he caught anyone going in his car or messing with anything of his, he would
“beat their fucking ass”. Nelson
testified that he also talked with the other employees about Huggins’ complaints
about the interference with his car. He
went back to Huggins and told him that no one knew anything about what had
happened to his car. When Huggins
complained of the sparks in his welding area, Nelson went to Ray Adams. Nelson testified that while it was not
unusual for sparks to fly in the shop area, he gave
2. Respondent’s treatment of Huggins as compared to other employees
Harry Nelson testified that Respondent did not treat
Huggins any differently than it did any other employee. Employee John David Frye testified that he
had not observed any other employee accommodated as much as Huggins. Employee Ray Adams also testified that he did
not know of any employee who had been accommodated as much as Huggins.
He complained about sparks, that people, when they were grinding sparkswould come over and hit him; he complained about people were messingwith his machines and nobody ever messed with his machines- - I mean, I was right there beside him and I never seen anybody mess with his machines. I just really don’t think he knew what he was doing. I mean, he just kept on and on and on, it just gets to a point you try to tune him out. He complained about everything.
Respondent’s counsel asked if he remembered any other specific complaints and Nelson testified:
He complained about the attendance policy; he complained about people who were harassing. I guess probably it’s easier to say that he didn’t complain about time to go home; that was about the only thing he didn’t complain about.
Respondent presented evidence that upon Huggins’ return from layoff in June, he complained about a number of working conditions in the plant. Upon his return from layoff, Huggins worked in the weld-out area in the back of the facility. Huggins confirmed that while working in that area, he complained about the fumes from the pickling vats. Human Resources and Safety Director John Goldberg testified that when Huggins complained of the fumes, Goldberg ordered respiratory protective equipment for Huggins’ use. Upon receipt of the equipment, it was determined that Huggins would also need a special welding mask to fit with the respiratory equipment. Huggins acknowledged that Goldberg told him that he would try to get him another mask. Before Respondent received the equipment however, Huggins was moved to a different area of the plant to get him away from the fumes. Huggins testified that while working in this same area, he might have mentioned that it was hot, however he had not complained about being hot. Employee John Frye however, recalled that while working in weld-out, Huggins complained about not only the fumes but also the heat. Frye recalled that at one point, Huggins had as many as three fans for his use in weld-out. Scott testified that in addition to placing the fans near Huggins, Respondent also ordered Huggins an air vest, which is designed to provide additional cooling. Scott recalled that other than the complaints about the fumes and the heat, Huggins also complained about his weld-out machine and special modifications were then made to the machine.
Scott testified that Huggins initially worked in the portion of weld-out that was in the left rear of the back of the facility. Because of Huggins’ complaints about the fumes and because it appeared that it might be sometime before Respondent received the additional respiratory equipment, Huggins was moved to the weld-out area on the right side of the back of the building and approximately 40 to 50 feet on the opposite side of the building. The new workstation was near a large door, estimated at 16 by 18 feet. Scott recalled that after moving Huggins to the new location, Huggins complained about wind coming through the door and about the foot traffic in the area. Huggins denied that he complained about the traffic in this location and he testified that he didn’t recall complaining about the wind.
Scott testified that because of Huggins’ continuing complaints in weld-out, he was moved to work at Table 3 in the front of the facility. Huggins admitted that the only reason that he was moved to a workstation at the front of the facility was to accommodate his complaint about the fumes. Huggins recalled that after he began working at the front of the facility there were occasions when a large amount of wind would come threw the doors that were near to his work area. The wind blew out the gas underneath his tig rig and affected his weld. Huggins testified that when this occurred, he simply walked over and closed the open door. He denies that he ever complained to anyone about this problem.
Huggins recalls that while working in the front of the facility, he complained about the worktables being too close. Huggins testified that because of the closeness of the tables, the sparks from Gerald Nelson and Ray Adams’ work area were coming into his area. Huggins complained to Scott about this problem. Huggins testified that in response to his complaint, Scott told him that Ray Adams was a “scum-sucking asshole” for throwing sparks on him because he knew better than to do that. Scott told Huggins if it happened again to just get out of the way and Huggins testified that he did so.
Scott recalled that there had been an occasion when he was walking near Huggins’ workstation and he heard sounds as though things were being thrown about. He testified that he walked up to the welding blind, looked inside, and asked Huggins what was wrong. Scott described Huggins as cursing and stating “Some S.O.B. stole my medicine.” As Huggins explained that he had found his medicine missing when he returned from break, he also added “F’ing Steve Phelps” took his medicine. Scott recalled that he responded “Well, Robert, wait a minute. That’s a heck of an accusation to make. Are you sure?” Huggins replied that he was sure. Scott testified that he had his two-radio with him and he told Huggins that he would get this matter straightened out and would call the authorities. At that point, Huggins told him to wait because he may have left the medicine at home. Scott testified that he told Huggins to check out his medicine that evening and if he still felt that Phelps had stolen his medicine, he should let Scott know the next morning.
Huggins testified that he kept Prevacid in his locker at work. He recalled that one day he discovered that it was missing. Huggins recalled that he told both Harry Nelson and Scott about his missing Prevacid. He told Scott that Phelps was the only person who knew that he kept it in his locker. Huggins recalled that later that same day, Scott came back to him and asked him if he would be willing to provide a written statement and to make a formal complaint as to what happened. Huggins admitted that he declined because he “didn’t want to make a big deal” about it. Huggins acknowledged that Scott may have offered to call the police but he could not recall. He recalled however, that Scott told him to let him know if Huggins could not find the medicine. Admittedly, Huggins never reported back to Scott as to whether he found his medicine. He also recalled that he later told Scott that he needed to go to the doctor to have his prescription refilled.
E. Huggins’ discipline for Work Performance
General Counsel alleges that Huggins received four warnings for his work performance between August 26 and September 18. The record reflects that three of these warnings were given to Huggins within a five-day period. Scott testified that at the time of Huggins’ discharge for violating the attendance policy, he was not in a progression discipline schedule for his work performance. Scott also explained that eventually the performance discipline would result in termination if the numbers continued to grow. He added however, that there were no particular number of disciplinary actions that would trigger a termination as each incident had to be weighed individually.
F. Respondent’s Attendance Policy
Respondent’s Human Resources and Safety Director John Goldberg testified that when Huggins returned from layoff, he and six other employees were given an orientation on June 3. D