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,
KSM Industries,
Inc. and United Steel, Paper and
Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers
International Union Local 2-779, AFL–CIO.
Cases 30–CA–13762,
30–CA–14008, and 30–CA–14101
March 26, 2009
SUPPLEMENTAL DECISION
AND ORDER
By Chairman Liebman and Member
Schaumber
On September 27, 2007,
Administrative Law Judge David I. Goldman issued the attached supplemental decision. The General Counsel, the Respondent, and the
The National Labor
Relations Board1 has considered the supplemental decision and the record in light of the
exceptions2
and briefs, and has decided to affirm the judge’s rulings, findings,3 and conclusions as modified below and
to adopt his recommended Order as modified and set forth in full below.
The issues in this
compliance-stage proceeding center on backpay owed to unfair labor practice
strikers who were unlawfully denied recall by the Respondent or whose recall
was unlawfully delayed,4
including whether certain strikers abandoned their employment with the Respondent,5 the appropriateness of the General Counsel’s
method for determining order of recall and, accordingly, starting dates for individual
strikers’ accrual of backpay, and the sufficiency of strikers’ efforts to mitigate
backpay.6
We agree with the judge’s decision in all respects for the reasons he
stated, except as explained herein.
1. In affirming the judge’s
finding that striker Jesus Rodriguez did not abandon employment, we rely on Alaska Pulp Corp.,7
and the following analysis. After
receiving the strikers’ unconditional offer to return to work, the Respondent
mailed each striker a questionnaire asking whether the employee “wish[ed] to be
considered for future recall to KSM Industries.” Rodriguez marked “no” and signed the questionnaire
under a legend that read, “I understand that a ‘NO’ choice voluntarily terminates
my employment with KSM Industries.” The
Respondent contends that Rodriguez’ response terminated his employment.
We disagree. The recall-interest questionnaire was not an
offer of reinstatement. In Alaska Pulp, the Board stated that it
has consistently discounted
statements, prior to a valid offer of reinstatement, indicating a lack of
interest in returning to work. Such
statements are not a reliable indicator of an employee’s intention to accept
reinstatement, because they may reflect only a momentary state of mind and an
employee might reconsider if faced with a valid offer.
326 NLRB at 527. We adhere to this rule with respect to Rodriguez,
notwithstanding the above-quoted legend on the Respondent’s questionnaire. We cannot say that Rodriguez would have
responded the same way to an actual reinstatement offer; indeed, he ultimately
returned to KSM. Rodriguez’ testimony
that he answered “no” because he liked his interim employment better at the
time does not definitively establish that he would have declined recall had a
valid offer been extended to him. It is
reasonable to surmise, rather, that Rodriguez preferred a bird in the hand (his
interim job) to a bird in the bush (the unoffered option of reinstatement).
We also base our finding as
to Rodriguez on policy concerns. When
the strikers unconditionally offered to return, the Respondent’s legal
obligation was to offer them immediate reinstatement or, for strikers permanently
replaced before the strike became an unfair labor practice strike, to place
them on a preferential hiring list and reinstate them before any other
employees are hired or on the departure of their replacements. See Sunol
Valley Golf Club, 310 NLRB 357, 371 (1993), enfd. sub nom. Invaldi v. NLRB, 48 F.3d 444 (9th Cir.
1995). The Respondent did not meet that
obligation. To eliminate the cost of
that failure by tolling the Respondent’s backpay would wrongly tend to encourage
employers who might consider similarly evading their legal duties toward
returning unfair labor practice strikers.
2. The Respondent excepted
to the judge’s finding that striker Hans Eusch engaged in a sufficient search
for interim employment during his backpay period. We find merit to the exception as it concerns
Eusch’s mitigation efforts during the last 6 months of 1998. During the third quarter of 1998, Eusch
applied for one job, and he did not apply for interim employment at all during
the fourth quarter of that year. The
Board requires that a discriminatee make a good-faith effort to mitigate loss of
income by engaging in a reasonably diligent search for substantially equivalent
interim employment. Moran Printing, 330 NLRB 376 (1999); Flannery Motors, Inc., 330 NLRB 994, 996 (2000). “‘A discriminatee is not due backpay for any
period within the backpay period during which it is determined that he or she
failed to make a reasonable effort to mitigate.’” St. George Warehouse, supra, 351 NLRB at 963 (quoting NLRB
Casehandling Manual (Part Three) Compliance, Section 10558.1 (2007)). Eusch’s search for work during the second
half of 1998, when he applied for only one job, was inconsistent with the
foregoing requirements, and we find that he willfully incurred a loss of
income. Thus, we shall deny Eusch
backpay for the third and fourth quarters of 1998, modifying the judge’s Order
accordingly.8
ORDER
The National Labor
Relations Board orders that the Respondent, KSM Industries, Inc., Germantown,
Wisconsin, its officers, agents, successors, and assigns, shall make whole the individuals named below by paying them
the amounts set forth adjacent to their names, plus interest computed in the
manner prescribed in New Horizons for the Retarded, 283 NLRB 1173
(1987), accrued to the date of payment, minus tax withholdings required by
Federal and State law:
Anthony
H. Bannenberg $14,110.10
Michael
R. Bartelt
1,661.31
Dennis
M. Benke
6,527.49
Paul W.
Bojar 0.00
Jeffrey
J. Cadeau
211.85
Darryl
G. Campbell
716.25
John F.
Casetta
212.16
Orin E.
Christensen 1,761.33
Thomas
Cooper 6,085.65
Allen
M. Curtis 44,568.11
Jason
R. Day
0.00
Roger
R. Day
5.00
Hans R.
Eusch 22,019.52
Raymond
J. Fairbanks
0.00
Robert
A. Graf 23,393.24
Robert
C. Green 457.77
Francisco
Guerrero 110.69
Manuel
Guerrero 34.50
Paul J.
Gutjahr 218.05
Roger
J. Gutjahr
0.00
Randy
A. Habram
0.00
Robert
J. Hanrahan 5,311.44
Randall
H. Henning 4,599.01
Michael
S. Herbst
0.00
Jerome
Hoover
0.00
Brandon
Hottenstein 11,127.75
Donald
D. Hottenstein
0.00
Ronald
L. Hottenstein
0.00
Norbert
John Jahn 847.94
Laverne
L. Jung 3,944.33
James
C. Kollenbroich 7,392.17
Harold
S. Koslo 2,110.80
Gaylord
E. Krahn
0.00
James
Kranz
0.00
Arthur
L. Kreis 446.49
David
J. Krull 2,598.64
Richard
J. Kuhlenbeck 31,841.01
Roger
R. Malchow 11,900.63
James
W. Malson 16,358.58
Jeffrey
J. Mutz
0.00
Charles
J. Peltier 2,810.90
William
J. Peltier 1,462.67
Alan K.
Resch 16,455.91
Mark W.
Rettler 1,869.98
Jesus
Rodriguez 4,474.02
David
W. Rosbeck 342.16
James
C. Roskopf 2,534.04
Gordon
John Sabel 50,981.66
Jason
Sanger
0.00
Anthony
D. Schmitt
0.00
Leroy
Schmitt Jr. 763.44
David
Schneidervin
0.00
Michael
A. Servi 4,318.25
Mark A.
Snyder
0.00
Roger J.
Stern 14,124.03
Williams
L. Stiggers
0.00
Gerardo
Villarreal
0.00
Douglas
Wiedeman 48,386.66
Michael
Lee Zwieg 431.13
Total: $383,461.11
Dated,
Wilma
B. Liebman,
Chairman
Peter C. Schaumber, Member
(seal) National
Labor Relations Board
Christal
J. Key, Esq., of
Kevin J. Kinney, Esq., Timothy C. Kamin, Esq., Emily R. Anderson, Esq. (Krukowski & Costello, S.C.), of Milwaukee, Wisconsin, for the Respondent.
Marianne
Goldstein Robbins, Esq., Jill Hartley, Esq. (Previant, Goldberg, Uelmen, Gratz,
Miller &
SUPPLEMENTAL DECISION
Statement of the Case
David I. Goldman, Administrative Law Judge. These cases arise out
of a labor dispute that began in 1997 between KSM Industries Inc. (KSM) and its
employees’ union, the United Paperworkers Union Local 7779 (Union).1
After the parties’ collective-bargaining agreement expired December 31,
1996, the
The compliance
specification in these cases was tried before me in
Summary of Issues
This compliance
matter concerns KSM’s liability for its failure to reinstate strikers upon the
KSM does not
challenge, and therefore effectively concedes, certain facets of the General
Counsel’s compliance specification. For
the very most part, the “numbers,” i.e., the measure of increases to pay
occurring during the backpay period, comparable earnings that serve as a basis
for lost hours, the legitimacy of expenses, and the amount of recoverable
medical expenses and costs are not in dispute.
The areas of dispute between the parties may be categorized into four general
areas, each of which contains a variety of issues.
A. Discriminatees
that KSM contends abandoned employment.
KSM challenges the General Counsel’s position that 11 employees who
resigned employment during or after the strike, but before being offered
reinstatement, did so under circumstances that fail to show that they intended
to permanently sever their employment.
According to the General Counsel, these employees resigned in order to
obtain 401(k) retirement funds held by the Employer, and/or in the case of two
employees, to receive vacation pay, and in the case of some of the employees
these motivations were exacerbated by KSM’s failure to reinstate the employees
at the end of the strike. According to
the General Counsel, under applicable Board law these employees’ resignations
do not disqualify them for reinstatement and do not toll their backpay. The Respondent, on the other hand, contends
that these employees severed employment by their resignation, abandoned their
employment, and therefore were not entitled to any (or in some cases, any
further accrual of) backpay and reinstatement.
In challenging the compliance specification in this regard, the
Respondent attempts to show that each disputed individual abandoned employment
and also asserts more general legal and equitable challenges to the General
Counsel’s contentions. In addition, the
parties dispute whether one employee’s negative response to a KSM questionnaire
asking employees about their interest in returning to work demonstrates an
abandonment of employment.
B. The
reinstatement process. All parties accept
that due to the presence of “protected strike replacements” and due to a decline
in production-related work opportunities, at the strike’s conclusion KSM was
not immediately required to reinstate all of the former strikers.5
At the same time, all parties agree that KSM did not reinstate as many
former strikers as soon as it should have.
In other words, KSM agrees with the General Counsel that it is liable,
to some extent, for reinstatement-related issues. This shared understanding notwithstanding,
KSM and the General Counsel offer competing accounts of the number of available
positions at given times and these competing accounts, of course, result in competing
conclusions as to when employees should have been offered reinstatement and the
amount of backpay owed. KSM specifically
challenges the General Counsel’s allegations regarding availability of work for
particular unreinstated strikers in certain departments in its facility. In addition, KSM disputes the compliance
specification’s underlying premise that employees for whom there was no
immediate vacancy at the strike’s conclusion should have been recalled to
available positions within their pre-strike department classification in order
of their plant-wide seniority. KSM
contends that the more appropriate order of recall was the one KSM utilized of
recalling unreinstated employees, by department classification, based on whom
KSM believed to be the more qualified eligible employee. Finally, the parties dispute the adequacy and
consequences of reinstatement offers made to two former strikers.
C. General
gross backpay issues. KSM challenges
the General Counsel’s allegations regarding certain general “across the board” gross
backpay calculations. These include the
General Counsel’s position that the obligation to pay backpay and the duty to
reinstate employees to available positions began concurrently with the
unconditional offer to return to work on
D. Mitigation
and offset issues. The parties also
dispute a variety of issues related to discriminatees’ duty to mitigate their
damages. These issues include KSM’s
challenge to the efforts of certain individual employees to seek and maintain
interim employment, and in one instance, KSM’s assertion that a discriminatee
concealed interim earnings. In addition,
based on testimony at the hearing regarding interim employment and mitigation
efforts, there are some miscellaneous changes to the backpay figures for
certain discriminatees urged by the General Counsel and/or the Respondent. Finally, the Respondent disputes the extent
of the offset for interim retirement benefits received or available to
discriminatees.
Summary of Board Compliance Precedent
and Conclusions on Undisputed Issues
A finding by the
Board that an unfair labor practice was committed is presumptive proof that some backpay is owed.
Minette Mills, Inc., 316 NLRB
1009, 1010–1011 (1995); Arlington Hotel
Co., 287 NLRB 851, 855 (1987), enfd. in part. 876 F.2d 678 (8th Cir. 1989);
NLRB v. Mastro Plastics Corp., 354
F.2d. 170, 178 (2nd Cir. 1965), cert. denied, 384 U.S. 972 (1966). The General Counsel’s burden in a backpay
proceeding is limited to showing the gross backpay due each discriminatee. J.H.
Rutter Rex Mfg. Co. v. NLRB, 473 F.2d 223, 230–231 (5th Cir.) cert. denied,
414 U.S. 822 (1973). The General Counsel
has discretion in selecting a formula that will closely approximate
backpay. He has the burden of establishing
only that the gross backpay amounts contained in a compliance specification are
reasonable and not an arbitrary approximation.
Performance Friction Corp.,
335 NLRB 1117 (2001); Mastell Trailer
Corp., 273 NLRB 1190 (1984). Any
formula which approximates what the discriminatees would have earned had they
not been discriminated against is acceptable if not unreasonable or arbitrary
in the circumstances. La Favorita, Inc., 313 NLRB 902, 903
(1994), enfd. mem. 48 F.3d 1232 (10th Cir. 1995). Once the gross backpay amounts are established,
the burden shifts to the employer to establish facts that would negate or
mitigate its liability. United States Can Co., 328 NLRB 334, 337
(1999), enfd. 254 F.3d 626 (7th Cir. 2001); Mastro
Plastics, supra. Thus, in
challenging the General Counsel’s calculations, the burden is on the employer
who committed the unfair labor practice to establish facts that reduce the
amount due for gross backpay. Atlantic Limousine, 328 NLRB 257, 258
(1999), enfd. 243 F.3d 711 (3d Cir. 2001); Florida
Tile Co., 310 NLRB 609 (1993), enfd. 19 F.3d 36 (11th Cir. 1994). Any uncertainty about how much backpay should
be awarded to a discriminatee is resolved in his or her favor and against the
respondent whose violation caused the uncertainty. Alaska
Pulp Corp., 326 NLRB 522 (1998), enfd. in part, 231 F.3d 1156 (9th Cir.
2000). Intermountain Rural Electric Ass’n, 317 NLRB 588, 590–591 (1995),
enfd. mem. 83 F.3d 432 (10th Cir. 1996).
“This does not
mean, however, that the Board will always approve the General Counsel’s backpay
formula even if it is reasonably designed to arrive at the approximate amount
of backpay due.” Alaska Pulp Corp., 326 NLRB at 523.
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. American Mfg. Co. of
Upon
consideration of the General Counsel’s compliance specification, I find that as
to those portions of the compliance specification that are unchallenged by the Respondent, the General Counsel has met his
initial burden of establishing the reasonableness of the gross backpay amounts
contained in the compliance specification.
The testimony of the Region’s compliance officer, Richard Neuman, was
thorough, well organized, and cogently presented. For the most part, I accept with only minimal
further discussion (sometimes necessary as background to a disputed issue) the
methods and calculations of the compliance specification to the extent unchallenged
by the Respondent. I now turn to the
issues raised by the Respondent regarding the General Counsel’s compliance
specification.
Analysis of Contested Issues
A. Employees that KSM contends abandoned employment prior to recall
1. Resigning employees
With regard to
11 discriminatees who the General Counsel alleges are entitled to backpay, the
evidence demonstrates that they resigned their employment either during the
strike (in the case of 5 of the employees) or after the strike ended but before
the Respondent offered them reinstatement (in the case of 6 of the
employees). In the compliance specification,
the General Counsel contends that these employees’ resignations did not
terminate their right to backpay or reinstatement as they resigned for the
purpose of obtaining their funds from the KSM-maintained 401(k) plan and/or to
receive vacation pay, and (in the case of certain of the employees resigning
after the strike) because of KSM’s unlawful failure to offer timely
recall. Respondent contends that with
their resignation these employees abandoned their employment and lost their
right to reinstatement. As to those
employees who resigned during the strike, the Respondent contends no backpay is
owing. As to those who resigned after
the strike ended and after the General Counsel contends they should have been
recalled, the Respondent contends that the resignations tolled the accrual of
any further backpay if any was owed as of the date of resignation.
There is a
fairly well developed body of Board precedent concerning the issue of employee
resignations during or after a strike.
It is part and parcel of a larger body of precedent concerning the
showing necessary to demonstrate that a striker has abandoned employment, and
therefore need not be offered reinstatement.
An employer is not required to offer
reinstatement to strikers who have abandoned their employment. In order to
establish abandonment of employment, however, an employer must present
“‘unequivocal evidence of intent to permanently sever [the striker’s]
employment relationship.’”
L.B.&B Associates,
Inc., 346 NLRB 1025, 1029
(2006) (quoting, Harowe Servo Controls,
250 NLRB 958, 964 (1980) (quoting S &
M Mfg. Co., 165 NLRB 663 (1967))); Augusta Bakery Corp., 298 NLRB 58
(1990), enfd. 957 F.2d 1467 (7th Cir. 1992); Medite of New Mexico, Inc., 316 NLRB 629 (1995). It is the Respondent’s burden to rebut the
presumption that employees did not intend to abandon their employment with
KSM. Marchese
Metal Industries, Inc., 313 NLRB 1022 fn. 1 (1994). Of particular significance to the issues
posed in this case, “[t]he Board has consistently held that a striker’s resignation
in order to accept another job or to obtain pension funds will not of itself be
evidence of abandonment of the struck job.
Rather, the board will examine the relevant circumstances to determine
whether the striker has expressed an unequivocal intention not to return to his
former job.” Alaska Pulp Corp., 326 NLRB at 524 (footnote omitted). As the Board explained in S & M Mfg. Co., supra at 663–664, in
reasoning applicable to resignations undertaken in order to obtain access to retirement
funds as well as in order to secure other employment,
“the resignations of these employees was
a prerequisite to securing even interim employment elsewhere. This does not establish, however, that these
employees had necessarily made a decision permanently to terminate their
employment should they subsequently be offered reemployment. In these circumstances
and absent any other evidence of a permanent employment termination, we find
that mere submission of their ‘resignations’ did not constitute an unequivocal
abandonment of their status as strikers or of their right to further employment
with the Respondent.”
In cases where
an employee has resigned, in considering whether the employer has demonstrated “unequivocal
evidence of intent to permanently sever” (Harowe,
supra), the Board has considered a range of “relevant circumstances,” including
evidence that the striker resigned because it was the only way to obtain money
from a retirement or benefits fund, whether the employee told the employer that
he had found other work (Medite,
supra), whether the striker expressed an economic need to obtain the
contributions, and whether the striker abandoned the strike following the resignation. (Rose
Printing, supra).6
In this case,
the 401(k) plan at issue was the product of negotiations for the1994 collective-bargaining
agreement. During those negotiations,
the parties agreed to the establishment of a KSM-sponsored 401(k) retirement
plan. The plan replaced a profitsharing
plan and funds from the profitsharing plan were placed in employees’ 401(k)
accounts. The plan provided for employee
participant contributions, composed of salary deferred contributions, and a 25
percent employer matching contribution up to a total employer contribution of
between $400 and $500 per year of the contract. The
parties’ 1994 collective-bargaining agreement provided for the establishment of
the plan and specified the employee and employer contribution levels. By all evidence other features of the plan
were unilaterally determined by KSM working with its third-party benefits
advisors. The plan set forth specified
methods for a participant employee to obtain funds from the plan. Retirement at age 65, or disability entitled
a participant to receive his account balance.
Participants who were age 59 ½ years of age could withdraw their salary
deferred contributions. For nondisabled
participants under age 59 ½ there were only limited distribution options. One was to terminate employment, at which
point the employee could receive the salary deferred and vested portion of the
employer contributions. The plan also
provided that participant employees could withdraw the salary deferred portion
of their account based on a verifiable “immediate and heavy financial need of a
participant.” However, these “hardship
withdrawals” were limited to distributions on account of four necessities:
medical expenses, the purchase of a principal residence, payment of post-secondary
tuition and related fees, and the need to prevent foreclosure or eviction from
a principal residence, and then only for the amount justified by the qualifying
hardship. Hardship withdrawals came at a
cost. They were considered “early
withdrawals” subject to a 20 percent federal tax and an early withdrawal
penalty. Unlike some 401(k) plans, this
one did not permit participants to take loans from the plan. This 401(k) plan, with the described
withdrawal options remained in effect after expiration of the labor agreement
and throughout the strike and relevant poststrike period.
As part of the
Government’s contention, the General Counsel argues that the Respondent, and specifically,
David Oechsner, currently KSM’s president, and a top manager before during and
after the strike, engaged in a course of conduct designed to encourage strikers
to abandon employment and waive reinstatement.
According to the General Counsel, Oechsner induced employees to resign
to obtain 401(k) funds as a means of removing strikers from employment. Oechsner had primary responsibility at the
facility for, among other things, the administration of benefits plans such as
the 401(k) plan. Attendant to this,
argues the General Counsel, Oechsner rigidly enforced the restrictions on
hardship withdrawals from the plan so that employees would be more likely to
terminate in order to receive 401(k) funds.
General Counsel argues that prior to the strike, and after the strike
with regard to nonstrikers, requests for hardship withdrawals were granted
without as much regard for whether the reason for the request met the plan
rules and without the same vetting of documentation in support of the request
that Oechsner utilized once the strike began.
The General Counsel further contends that Oechsner purposely failed to
inform employees seeking funds about the possibility of a hardship withdrawal
and also misled employees by telling them that they had to resign in order to
receive earned vacation pay. In sum, the
General Counsel contends that Oechsner’s actions essentially preclude KSM from
establishing that strikers resigning to obtain 401(k) or vacation funds
intended to abandon their employment and permanently sever.
The evidence
does offer some support for some of the General Counsel’s contentions, but I
think General Counsel overstates both the fact and the legal consequences of
Oechsner’s dealings with employees. It
is hard to miss, in multiple employees’ accounting of their discussions with
Oechsner about obtaining their 401(k) funds, the consistent alacrity with which
Oechsner suggested that they would need to resign in order to obtain their
funds. Clearly, a resignation suited the
Respondent just fine. Having said that
the evidence does not support a claim that Oechsner misrepresented the terms of
the 401(k) plan or the options available to strikers who sought to withdraw
money from their 401(k) accounts. The record
does not contain a single instance in which I conclude that during or after the
strike Oechsner intentionally misled an employee regarding rights under the
401(k) plan.7 The General Counsel points to employee Hanrahan’s
ability to obtain a hardship withdrawal in the spring of 1996, in the amount of
$6720.68, based on documentation showing a failure to pay property taxes—with
no threat of foreclosure or eviction—and based on oral representations that his
mother’s family in Greece needed money for medical expenses, the responsibility
for which had been assumed by Hanrahan.
The evidence suggests that Hanrahan approached Oechsner in January 1996
about a hardship withdrawal. Oechsner
testified that the plan was new to KSM—”We had been in it for barely two years
and had only, you know, a small handful of . . . requests to that point so I wasn’t
clear on it”—so he sent the withdrawal request forms and an explanatory letter
to Emjay, the company then administering the plan for KSM. The forms Oechsner sent Emjay indicated that
the withdrawal request was for medical expenses. Ultimately Emjay approved the request but
before the money was paid KSM switched benefits administrators and began using
Strong Retirement Plan Services. New
Strong forms, signed by Hanrahan on May 31, 1996, were submitted to Strong,
this time listing avoidance of eviction or foreclosure as the basis for the
hardship withdrawal. This request
resulted in the $6720.68 distribution to Hanrahan, which represented the entire
employee portion of his account.
Oechsner
admitted that during the strike, employees were required to provide
documentation supporting the reason for the withdrawal request and that the
request did not exceed the amount needed for the qualifying hardship. That was not the case with Hanrahan prior to
the strike. I do not believe Hanrahan would have received his hardship
withdrawal, based on the documentation provided in 1996, during or after the
strike.8
This evidence is
relevant, although not, in my view, dispositive of anything. First of all, I accept Oechsner’s testimony
that in 1996 the plan was new and KSM was still learning how to deal with
hardship requests. Moreover, as
discussed supra, in determining whether an employer has met its burden of proving
an employees’ expression of an unequivocal intent not to return to his former
employment, the Board looks to conduct reflecting the employee’s motivations
and intent, not the employer’s. In
considering whether an employee who has tendered a resignation has expressed an
unequivocal intent not to return, the inquiry is no different. Obviously, the limitation of options for
employees under financial strain, such as the possibility of a hardship withdrawal,
factors into the consideration of the motive for an employee’s resignation, and
whether it is part of an otherwise demonstrated unequivocal intention not to return
to his former employment. As does the
dangling, if not encouragement, of the resignation option as a way to obtain
401(k) funds. Having said that, I think
that the evidence falls short of that necessary to show that any of the strikers
who resigned employment would have received hardship withdrawals, under the
same circumstances, even prior to the strike.
In addition, the evidence, which is essentially confined to showing that
Hanrahan received a hardship withdrawal in 1996 that would not have been
allowed during the strike, is inadequate to demonstrate a change in terms and
conditions, discriminatorily motivated or otherwise, for strikers seeking a
hardship withdrawal during and after the strike. At trial, and on brief, the Respondent
stressed the necessity for Oechsner as benefits administrator to follow the
plan rules and relevant federal regulations in his administration of the
plan. That is his obligation, and if,
prestrike, a more relaxed attitude prevailed (demonstrated in only one
circumstance) I am unable, on this record,
to find that employees have been discriminated against because the Respondent
began following the plan’s rules concerning the provision of hardship
withdrawals. But what must, in sum, be
viewed a highlighting and encouragement of the resignation option to inquiring
strikers is obvious, and is relevant to assessing the intentions and
motivations of strikers who resigned.
I think that KSM’s
treatment of vacation pay for striking employees must also be considered. My conclusion is somewhat different on that
score. Resigning for vacation pay was a
less significant alleged motive for resignation (except in the case of one or
two alleged discriminatees) but there was considerable evidence provided at
trial related to the issue of whether KSM was illegitimately denying strikers
vacation pay. I am unprepared to rule
(and need not do so) on whether the Respondent was, as it claims, correctly
applying the vacation pay provisions of the expired labor agreement, but I do
think the evidence shows two things: (1) that Oechsner’s explanation at trial
of the application of the vacation pay provisions was consistent and coherent
(if somewhat complicated), and (2) he followed this understanding of the
vacation pay policies, except in a
couple of instances where his desire to encourage employees to resign prompted
him to tell two employees that they had to resign in order to obtain vacation
pay. As discussed herein, it is clear to
me that, as part of KSM’s interest in encouraging employees to resign, Oechsner
did condition receipt of Mark Rettler and Robert Hanrahan’s vacation pay on
their resignation, in violation of KSM’s own understanding of the vacation pay
provisions. This does reveal an unseemly
aspect to Oechsner’s dealings with employees.
Again, however, while it factors into my assessment of employees’
intentions when they resigned, it is not dispositive of any issue and does not
preclude the Respondent from demonstrating an intent to abandon employment by
any employee.
At this point, I
turn to the evidence regarding the individuals who resigned employment but who
the General Counsel alleges continued accruing backpay and reinstatement after
the resignation.
a. Resignations during the strike
i. Anthony Bannenberg
In February
1997, striker Anthony Bannenberg wrote to KSM because he was having “some
financial difficulties and I needed to—I wanted to try to get my 401K out.” KSM sent Bannenberg a distribution form that
he filled out and sent back to KSM.9 KSM responded with a letter from Oechsner to
Bannenberg, dated February 21, 1997. On
February 21, 1997, Oechsner called Bannenberg at his interim employer, Performance
Products. According to Bannenberg,
Oechsner “told me that I would also, in order to sign off on my 401K, I would
have to put in a quit slip. I would have
to quit the company.” Bannenberg told
Oechsner “that if that’s what I have to do, then I have no choice because I
need the money.” Thereafter, Bannenberg
received a letter from Oechsner, dated February 21, 1997, returning the distribution
forms so that his wife’s signature could be notarized but also confirming that “as
I explained in our phone conversation today, I will also require a written
statement from you confirming your voluntary termination from employment at KSM
Industries.” Subsequently, Bannenberg
sent in the notarized form, accompanied by a note, dated February 27, 1997,
stating that he was “resigning my position at KSM Industries as of the moment
you read these words.” Bannenberg
received a distribution check dated March 6, 1997 from Strong in the amount of
$5,111.00.
Bannenberg
testified that “I wouldn’t have quit if I wasn’t put in the position to do so
because I needed this money, otherwise I would have never signed a quit slip.”10
When he resigned he was earning less money at his interim employer than
he had at KSM. He continued to picket
with the strikers until June 1997, notwithstanding his interim employment.11 In November 1997, Bannenberg obtained a copy
of an October 16, 1997 letter sent by KSM to each employee listed as a nonresigned
striker after the
Respondent
suggested through questioning at trial that Bannenberg marked the “Termination
of Employment” box on the distribution request paperwork when he originally
sent the form in and before Oechsner told him he had to quit. According to the Respondent, this bolsters
its contention that Bannenberg intended to sever employment even before being
told by Oechsner that he would have to quit in order to receive any 401(k)
funds. Without regard to what it would
mean if Bannenberg had preemptively marked the reason for his distribution
request as a termination of employment, the difficulty with the Respondent’s
argument is that Bannenberg, who I found a creditable witness, straightforward
and direct in demeanor, repeatedly denied that he had filled out that portion
of the form, and his testimony on
this point was not disputed. Notably,
Oechsner, who obviously did fill out portions of the form (he initialed it in
one place), received the form from Bannenberg and would have been situated to
testify that he received the form from Bannenberg with the Termination of
Employment already marked by Bannenberg.
Oechsner did not do so, nor did he deny the implication of Bannenberg’s
testimony, that the mark beside the Termination of Employment box was Oechsner’s.12
Respondent has
produced no evidence of an unequivocal intention by Bannenberg not to return to
his job at KSM. I credit Bannenberg’s
contention that he resigned in order to obtain 401(k) funds. I credit his unrebutted assertion that he
told Oechsner this when he agreed to resign.
There is no other evidence that Bannenberg “expressed an unequivocal
intention not to return to his job.” He
was earning less money at his interim employer at the time he resigned, and the
employer has made no showing that he preferred that job. He continued to picket after the resignation,
thus showing continued interest in and concern with the future terms and
conditions of employment at KSM.13 Perhaps most telling, in November 1997
Bannenberg took it upon himself to forward to KSM a copy of the questionnaire
sent to employees and affirmatively indicated his desire to return to his
former job. This is the opposite of
abandonment.14 I find that KSM has failed to carry its
burden of demonstrating that Bannenberg abandoned his employment when he
resigned from KSM.
ii. Mark Snyder
Mark Snyder was
a striker who worked for KSM as a shear operator at the time of the
strike. In 1997 he “fell behind on
bills.” He got a “temporary job” and
also called KSM in early April 1997 in order to “withdraw my 401(k) money.” According to Snyder’s credited (and
essentially uncontroverted) account of the conversation, he asked Oechsner
about receiving his 401(k) funds and Oechsner responded, “[o[h, are you quitting?” Snyder testified that he told Oechsner that
he did not want to quit, and also told him that he needed the money. Oechsner testified that Snyder asked about
obtaining a loan but that Oechsner told him that the plan did not permit
loans. Snyder testified that Oechsner
did not mention the possibility of a hardship withdrawal, but he also testified
that he did not tell Oechsner any of the reasons he needed the money.15
Oechsner told Snyder that “if he received my letter of resignation he
would then forward me the paperwork to receive my 401K.” Snyder prepared and sent the resignation to
KSM by letter dated April 2, 1997. The
letter included a request for the “rollover forms for 401(k)” and his accrued
vacation pay.16
Snyder testified
that he resigned from KSM in April 1997 “[b]ecause I needed all the money I
could get at the time” and testified that he “cashed out” his 401(k) money “as
soon as he got it.” However, he did not
send in the distribution forms he received from Oechsner until mid-July, a 3
month delay in submitting the forms that he was specifically asked about but
could not explain.17
At the time he
resigned, Snyder was earning $4.80 less per hour at the job he had taken at
Hartford Finishing after the strike began.
In his
discussion with Oechsner he did not tell Oechsner he was working
elsewhere. Once Snyder resigned, he
ceased picketing activity.
The evidence
pertaining to Snyder does not present as overwhelming a case as Bannenberg. However, Respondent bears the burden of “present[ing]
unequivocal evidence that [Snyder] intended to sever his employment relationship
with Respondent when [he] sought and obtained his money from the 401(k) plan” (Medite, supra) and the evidence is far
from unequivocal in this regard. Snyder
was an articulate and intelligent witness and gave every indication of honestly
testifying. I credit his stated
motivation for resigning as being the only means to obtain 401(k) money. Notably, the undisputed account of his
conversation with Oechsner is consistent with this asserted motive: Oechsner, not Snyder, first raised the
prospect of quitting when Snyder called to inquire about obtaining his 401(k)
money and Snyder told Oechsner that he did not want to quit, and also told him
that he needed the money. I note that Snyder’s
letter asked for a “rollover” form, but that is the same form used to request a
cash distribution and that is what he took.
Oechsner did not recall any discussion of a rollover and, by itself, the
use of the term to request the forms is not particularly meaningful. Obviously, the delay in submitting the distribution
forms after the resignation could be construed as an indication that the
resignation was motivated by something other than financial pressure, but that
is not necessarily (or more to the point, unequivocally) the case. Financial insecurities may well have driven
Snyder to resign, but with ready access to the money assured he may have found
other sources of funds or delayed payments for 3 months before liquidating the
401(k). There is no requirement that an
employee resign destitute in order to be adjudged to have resigned while still
being ready to return to his former employer.
It is true that Snyder ceased picketing after resigning, but this factor
must be balanced against others, such as the fact that Snyder was earning
considerably less money at his interim employer at the time he resigned and did
not convey to KSM that he was working elsewhere, or that he did not want to
return to work. At the time of the resignation
Snyder’s compensation was nearly 1/3 less than his KSM compensation, and there
is no evidence at all that at the time of the resignation he knew, or was on
track, or otherwise had reason to think that in the long run this job would be
a better one than KSM. In sum, the evidence
might well be judged mixed, and equivocal, but Respondent has failed to show
unequivocal evidence of Snyder’s intent to abandon his employment at the time
he resigned. I find that KSM has failed
to carry its burden of demonstrating that Snyder abandoned his employment at
the time he resigned from KSM.
iii. Mark Rettler
Mark Rettler was
a striker who had worked at KSM since 1988.
At the time of the strike he worked in the shear department. During the strike, on or about April 10,
1997, Rettler contacted Oechsner. He
testified that he was “falling behind on bills and at the time I needed
money. So I called and I asked for my
vacation pay that I had coming towards me.”
Rettler’s undisputed testimony was that he told Oechsner that “I needed
the money to catch up on bills. I’d
borrowed some money from my in-laws to catch up on my mortgage.” Oechsner “informed me that for me to receive
my vacation pay, that I would have to send him a letter saying that I’d resign
my job.” The next day, Rettler wrote
such a letter, stating his wish “to terminate my employment effective immediately”
and adding, “[p]lease issue all vacation pay due to me as soon as possible.” Subsequently, Rettler received his vacation
pay, which according to notes handwritten at the bottom on Rettler’s typed
resignation letter, presumably by Oechsner,
equaled 88 hours of pay at his hourly rate, paid out on April 14.18
It is
significant that Oechsner did not dispute Rettler’s account in any way. As I have said, Oechsner was a careful, and
generally honest witness, and the result of those two attributes is that Oechsner’s
silence on a subject is telling. That is
particularly true here because Rettler’s testimony specifically undercuts
Respondent’s assertion that no employee was required to resign to obtain vacation pay.19
Based on his years of service, Rettler would have qualified for 120
hours on the last anniversary of his employment, September 11, 1996. The evidence indicates he was paid out 88
hours on April 14, suggesting that at some point between September 11 and the
beginning of the strike Rettler took 4 days (32 hours) of vacation. But under Oechsner’s interpretation of the
vacation plan, Rettler should have been able to simply ask and receive any
vacation earned as of his last anniversary date. The undisputed evidence is that Oechsner, in
violation of his own understanding of the vacation pay policies, required
Rettler to resign in order to receive vacation pay owed to him. There was, indeed, an overriding policy at
this time by KSM to encourage employees to resign.
Rettler
testified that when he called Oechsner in April 1997 he had not wanted to
resign, and would not have if Oechsner had not told him he needed to resign to
obtain his vacation pay. After
resigning, Rettler continued to picket for a month or two. At the time of his resignation he was working
at Performance Mold Products earning $3.00 an hour less than he had at KSM,
although he did not share his employment situation with Oechsner.
Rettler’s
testimony at trial that he only resigned to obtain his vacation pay is
corroborated by the undisputed evidence that he informed Oechsner when he resigned
that he was calling Oechsner because he “needed money” and was seeking vacation
pay. I believe Rettler would not have
resigned if he had not been misled by Oechsner who erroneously told him that he
had to resign in order to receive his vacation pay. By itself, this is enough to establish that
Rettler did not intend to abandon his job when he resigned. See, MCC
Pacific Valves, 244 NLRB 931 (1979) (finding 8(a)(3) violation and, most
pertinently, ordering reinstatement and backpay where employee required to sign
termination slip in order to receive already earned vacation pay). “Any uncertainty in this regard” must be held
“against the Respondent, the wrongdoer, here.”
Alaska Pulp, supra at 525.
But even
independent of the fact that Oechsner misled Rettler into resigning, Respondent
has failed to prove that Rettler abandoned his job when he resigned. Respondent points out that Rettler left his
401(k) funds with KSM until 2004, but the record does not reveal how much was
in his 401(k) or that the 3 weeks of vacation pay was insufficient to
ameliorate his immediate need for extra cash, so this cannot be said to prove
much. Rettler’s interim employment paid
significantly less than his KSM job, which obviously cuts against the
contention that he had lost interest in returning to his former employment. His picketing continued for a period of time
after the resignation which suggests that at the time of the resignation he had
not lost interest in the future terms and conditions at KSM. That he resigned only to obtain the funds
Oechsner conditioned on a resignation is evidenced by his credited account of
his discussion with Oechsner. Respondent
has failed to prove that Rettler abandoned his job when he resigned.
iv. Alan Resch
Alan Resch
worked as a Finisher A when the strike began.
He testified that during the strike “[w]e were having hardships with the
mortgage and other bills that were due,” including “my health insurance.” After the strike began he and his wife and
children were not covered by health insurance.
Resch attempted to make a hardship withdrawal from his 401(k) account. He contacted Strong and received the appropriate
forms, completed them, and with a cover letter dated February 18, 1997, mailed
them to KSM. Although his forms, correctly,
sought a hardship withdrawal, Resch’s cover letter referenced a request for a “hardship
loan.”
Oechsner
responded in a February 21, 1997 letter that returned the forms for his wife’s
signature. Oechsner’s letter explained
that the signature must be notarized and suggested some ways obtain a notarized
signature. Oechsner also wrote that “Federal
Law requires documentation supporting both the reason for the hardship
withdrawal and the amount requested.
Hardship withdrawals are limited to the amount necessary to meet the
financial hardship.” Finally, noting
Resch’s reference in his cover letter to a “hardship loan,” Oechsner emphasized
that the 401(k) plan had no provision for loans and that funds withdrawn
through a hardship withdrawal “are considered early withdrawals and are subject
to both a 20% federal tax and a 10% early withdrawal penalty. In addition future participation in the plan
must be suspended for a period of 12 months.”
The letter closed by asking Resch to “[p]lease call if you have any
questions.”
The next day
Resch called Oechsner. He explained to
Oechsner the reasons he wanted to take the money out of the 401(k), chiefly, in
order to pay for medical insurance premiums to cover him and his family. Oechsner told Resch that “[i]t just couldn’t
be done. . . . [I]f it was for a medical
emergency then it could possibly be done, but not for just paying the premiums.” Resch also discussed needing money for
mortgage payments. Oechsner said that
could not be done unless the house was going in foreclosure, and that Resch “would
have to bring foreclosure . . . papers up to him to review and then he would
decide whether or not he would release the money.” Resch asked, Oechsner, “well isn’t there any
other way [of] going about getting the money out of there for the purposes that
I needed it for.” Oechsner told Resch
that “the only way I could do that is if I was—quit.” Resch told Oechsner he did not want to quit,
but Oechsner told him that this “was the only way I could get the money.”20
The next day
Resch called Strong and discussed the matter with a Strong employee, Steve
LaFore. He told Resch he did not see a
problem with a hardship withdrawal in order to make mortgage payments and
health insurance payments. Resch then
called Oechsner and told him what Strong had said. Oechsner suggested setting up a three-way
call with Strong, and the three (Steve LaFore from Strong, Resch, and Oechsner)
spoke the following day. However, in
this conversation, the Strong representative told Resch that it was up to the
plan administrator, Oechsner, whether or not the funds could be released.
At around this
same time these conversations were taking place (although the record is not
clear on the exact dates) Oechsner was in written and oral conversation with
Strong seeking clarification on the rules governing hardship distributions. Based on fax markings (See GC 44 and 45)
between February 21 and 26, 1997, Oechsner and Strong Funds exchanged faxes in
response to Oechsner’s inquiries. These
exchanges were not specifically motivated by Resch’s distribution request, but
his was the most recent since the strike that raised questions Oechsner was
unsure how to answer. However, at least
one question raised by Oechsner surely was prompted by Resch. Oechsner specifically sought from Strong “documentation
to support position on payment of health insurance premiums.”
In testimony
Oechsner denied that Strong counseled that payment of health insurance premiums
could be a basis for a medical expense hardship distribution. As a legal matter, it is clear that they can,
and the materials Strong sent Oechsner on February 26 quote the applicable
Internal Revenue Service Code section to that effect.21
However, Oechsner, convincingly, to my mind, testified that he did not
understand the rule that way and that Steve LaFore did nothing to correct his
confusion.22 Oechsner continued his discussions with
Strong regarding questions he had about hardship distributions and, going up
the chain of command at Strong, later learned from Strong vice-president John
Persa that payment of health insurance premiums was, indeed, grounds for a
hardship distribution. Before learning
this from Persa, Oechsner wrote to Resch, in a letter dated March 4, 1997,
attaching some pages from the plan document and from the Internal Revenue Code
governing 401(k) plans. The letter
stated that:
“Based on IRS rules and advice from
Strong Funds I have concluded that payment of your medical premiums would not
qualify as a basis for hardship withdrawal.
However, payment of documented medical expenses would qualify provided
all other provisions contained within the above-reference materials are
satisfied, such as ‘The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant…’” (emphasis in
original).
Oechsner’s
letter also stated that “[h]ardship withdrawals for the purpose of making
mortgage payments, the hardship reason you provided Steve LaFore of Strong
Funds, is not allowed. If however, the
withdrawal is to prevent foreclosure I would require documentation from the
lending institution substantiating both the claim and the amount required.”
Next, hoping to
find another way to pay some of his bills, Resch wrote to KSM on March 29
requesting vacation pay for the period April 7 through 25.
Oechsner’s
response came by letter dated April 9 and advised “of two recent developments
that concern you.” First, Oechsner
stated, without further explanation that “I am unable to comply with your
request for vacation pay starting April 7 and running through April 25, 1997.” Second, Oechsner referenced his March 4
letter and stated that “I was informed by Strong Funds on Tuesday April 8,
1997, that their original interpretation of our plan was in error and that
withdrawal for the purpose of making health insurance premium payments is indeed
valid.” Oechsner’s letter indicated to
Resch that if he was interested in exercising a COBRA option to enroll in the
KSM insurance plan, KSM would arrange for Resch’s reinstatement in the plan,
even though the 60-day COBRA election period had passed, but he would have to “bring
the account current” by paying the monthly premium for each month back to January.23
Resch testified
that this last requirement dissuaded him from taking a medical expense
withdrawal from his 401(k) for the purpose of enrolling in the KSM health care
plan. In addition, a medical expense withdrawal
would not permit him access to the 401(k) funds for house payment and other
bills beyond anything necessary for medical expenses and premiums. Instead, by letter dated April 17, Resch
wrote Oechsner and announced he was terminating his employment with KSM. Resch testified that he took this step “[m]ainly
because my obligations for bills and what not were starting to overwhelm and I
had to do something to take care of these bills.” At the same time (and probably in the same
envelope), Resch submitted a completed 401(k) distribution request form seeking
distribution of his entire vested 401(k) account. Resch testified that he would have preferred
not to resign his employment “but it was the only way to get the money for the
things I needed it for.”
After resigning
in April 1997, Resch continued to picket, although to a lesser extent. He stopped receiving strike benefits from the
In October 1997,
Resch obtained one of the KSM return-to-work questionnaires that KSM sent directly
to employees who were not listed as resigned.
Resch obtained the form from James Malson, the local union
president. He completed the form,
indicated that he wanted to be considered for recall, and gave the form to
Malson. Across the bottom of the form
the words “Terminated employment due to financial hardships” were
handwritten. A stamp on the letter
indicates that KSM received it on October 25, 1997.24
As alluded to,
supra, I accept Oechsner’s contention that he did not intentionally mislead Resch
with regard to the ability to take a hardship withdrawal to pay health insurance
premiums. Nevertheless, Resch was misled
by Oechsner from February through April, and during this period, while Oechsner
was denying Resch the right to take a medical expense 401(k) withdrawal,
Oechsner raised with Resch the prospect of resigning his employment in order to
provide access to the 401(k) funds. The
record shows an individual searching for ways to avoid resigning. That Resch ultimately succumbed to this suggestion
is consistent with Resch’s assertion that financial hardship motivated his
actions. Of course, by the time he
resigned he knew that he was eligible for a medical expense withdrawal. Respondent contends that the real reason
Resch ultimately opted for resignation instead of a hardship withdrawal is that
he had obtained other employment in April and was therefore ready to
permanently sever from KSM. That is
plausible, but hardly proven. Other evidence
cuts against it. For one thing, an
equally plausible point is that while Resch waited weeks and weeks for Oechsner
and KSM to figure out that he was eligible for a hardship withdrawal his bills
mounted even further. A resignation
provided access to more money in the 401(k) and with no restrictions as to what
he did with it. In addition, his new job
was temporary at the time, paid significantly less than KSM, and Resch did not
discuss other work with Oechsner, and said nothing to indicate abandonment of
employment to Oechsner. Also, like
Bannenberg, Resch sent word to KSM when the strike ended that he wanted to be
reinstated by completing KSM’s
questionnaire in October 1997. All of
this rebuts Respondent’s theory that when he resigned he was abandoning his
employment. The fact that Resch stopped
taking strike pay from the
v. Robert Hanrahan
Robert Hanrahan
worked for KSM for about 10 years and worked in the paint department at the
time of the strike. As discussed, supra,
he had previously withdrawn all available money from his 401(k) through a May
1996 hardship withdrawal. In April 1997
Hanrahan was behind on his mortgage and received correspondence from attorneys
for his home loan mortgage company threatening him with foreclosure. Hanrahan called Oechsner to talk to him about
obtaining additional money from the 401(k), and he told Oechsner about the
threat of foreclosure.25 Oechsner told Hanrahan that “the only way he
would be able to approve any money out of my 401(k) is if I quit.” Hanrahan asked Oechsner if he was sure there
was no other way “without quitting my job because I really didn’t want to do
that.” But Oechsner told him “that’s the
only way you’re going to get your money.”
Hanrahan asked him whether he could obtain some of his vacation, as he
believed he had 120 hours due him. Hanrahan
testified that Oechsner said that “if I quit he’d send me the money but that
was the only way he would give me the money.”
Hanrahan talked things over with his wife and they decided that “we had
no choice, that we had to—we couldn’t get thrown out of the house so I decided
to write a letter to Mr. Oechsner because he told me he needed it in writing
when I talked to him on the phone. So I
wrote a letter resigning from KSM Industries.”
The letter stated:
David Oechsner,
You have informed me that in order to receive my vacation pay, and 401(k) money, I have to quit my job at KSM Indus.
Because of my financial situation, I am quitting my job at KSM Indus.
Thank you
/s/ Bob Hanrahan
Although
Hanrahan did not talk about it a lot on the picket line, those he talked with
told him not to quit: “Well they all told me don’t quit, but I was losing my
house. I had no choice. I had to quit to get my money.”
Hanrahan
received his vacation pay and the balance of his 401(k) account, which was
$8,813.38.
After resigning,
Hanrahan continued to picket with the
Hanrahan testified
that Oechsner did not tell him there was any other way to get money from his
401(k) without resigning. I note that
the weight of the evidence suggests that there was nothing inaccurate about
this. As Oechsner testified, having
taken a hardship withdrawal within the previous 12 months, in May 1996,
Hanrahan was barred in April 1997 (by the terms of the plan and by applicable
IRS rules governing the plan’s qualification status) from receiving another
hardship withdrawal within the 12 month period.
It was not, however, just a matter of waiting another month. In May 1996 Hanrahan had taken a distribution
of the entire employee contribution portion of the account. As a recipient of a hardship distribution he
had been prohibited from further contributing for 12 months. Thus, even after the 12 month period had
passed there would be no funds available for a hardship distribution. However, by terminating, Hanrahan was
eligible to receive the entire account, consisting of employer contributions,
contributions rolled over from the prior profitsharing, and earnings on
contributions.
With regard to
Oechsner’s linking of resignation to receipt of vacation pay, there is no
charitable interpretation. Hanrahan’s account
of his conversation with Oechsner was not disputed by Oechsner. Indeed, it is explicitly corroborated by
Hanrahan’s contemporaneous letter of resignation, in which he attributed to
Oechsner the assertion “[y]ou have informed me that in order to receive my
vacation pay, and 401(k) money, I have to quit my job at KSM Indus.” That Oechsner made this statement to Hanrahan
was not disputed.26 The handwritten notes on the letter indicate
that Hanrahan was, in fact, paid 120 hours vacation pay, the full yearly amount
owed to an employee of his seniority. As
Oechsner explained the vacation pay policy, Hanrahan, who had earned 120 hours
of vacation pay on his anniversary date of December 7, 1996, should have been
able to ask for and receive that money at any time during the strike. Oechsner misled Hanrahan in an effort to
encourage him to resign. Hanrahan did
resign, explicitly, as stated in his resignation letter, “[b]ecause of my
financial situation.” Hanrahan’s
resignation letter strongly corroborates his testimony in which he explained
that he felt that he “had no choice. I
had to quit to get my money.” I cannot
determine whether Hanrahan would have resigned if he had not been misled by
Oechsner regarding the necessity to resign in order to obtain vacation pay.27
“[A]ny uncertainty in this regard” is held “against the Respondent, the
wrongdoer here.” Alaska Pulp, supra at 525.
Against this is essentially no evidence that Hanrahan intended to
abandon his job and not return if recalled.
The interim employment he subsequently secured paid less than KSM, and
for a 1 year period did not cover Hanrahan’s serious health conditions. Hanrahan testified that he would have
returned to work at KSM if he had been offered recall at that time. After his resignation he continued picketing
as his interim employment permitted.
Nothing Hanrahan said or did indicates abandonment of employment with
KSM at the time of his resignation.28
b. Poststrike resignations
i. Roger Day
Roger Day was
the local union president during the strike and an employee of KSM since
1978. He was a painter at the time of
the strike. At the conclusion of the
strike Day and his wife29 found
themselves behind in their bills. In an
effort to ameliorate the situation they decided to withdraw money from his KSM
401(k). Day told his wife that he had to
quit in order to receive his 401(k) funds.
Day’s wife testified that “we discussed it that he had to resign because
we needed his 401(k) money. That was the
only way we could get it.” She testified
that Day resigned “[s]o we could get his—receive his 401(k) money to obtain the
401(k) funds.”
On October 10,
1997, Day called and left a voice-mail message at KSM stating he was resigning
and requesting a withdrawal from his 401(k) fund. Within minutes, Day’s son, Jason, who also
worked at KSM, called and left a similar message also resigning from employment
at KSM. According to Day’s widow, Day’s
son quit “[b]ecause his dad did. That’s
why he quit.”
That same day,
October 10, Oechsner sent Day a confirming letter enclosing the 401(k) distribution
forms he and his wife needed to fill out.30 He received a disbursement from his 401(k)
that month.
Around this
time, perhaps on October 5, but in any event within a few days of his resignation
from KSM, Day resigned as president of the local union, a position in which he
was serving a second term. His wife had
no explanation for this timing, but said that Day resigned as local union
president because he began working at a nonunion plant operated by his interim
employer (he worked for this employer since early 1997), and when the employer
learned of his union presidency he was told he had to resign as local union
president or resign the interim job.
Day worked at
that job performing work similar to that performed at KSM and earning slightly
more money than at KSM. In the first few
months of 1998, Day left that job to work as a painter in a supervisory
capacity at another employer. At this
job he was a salaried employee and earned still more money but worked more
hours.
I think that the
weight of the evidence demonstrates that Day unequivocally intended to abandon
his employment at KSM at the time he resigned.
I accept his wife’s testimony that he was motivated to resign in order
to obtain 401(k) funds, however this does not negate the evidence that he was
intending to leave KSM behind for good when he resigned. It is only a small point that General Counsel
tried but could not elicit testimony clearly stating that Day would not have
resigned but for his need for 401(k) funds.
There is also the fact that Day had obtained employment similar to his
KSM job and that it paid more than KSM paid.
This is certainly not dispositive of Day’s intention but it lends
context to two other pieces of evidence that suggest Day’s intention. First, Day’s resignation from KSM was
mirrored by a contemporaneous resignation from the position as union
president. The two resignations occurred
within days of each other, and within days of the end of the strike, indeed,
the resignation of union presidency was conveyed to KSM at the time the unconditional
offer was made to KSM. This
relinquishment of authority over and involvement in the union Day had headed
throughout the strike strongly suggests that with his resignation from KSM Day
was intending to drop the encumbrances of the job for good. He was divesting himself of KSM-related
responsibilities and it strikes me as highly unlikely that a union president
that had led his union through a strike that concluded without a contract,
would, at the same time, resign from
employment and resign his presidency, but intend to return to employment with
his employer, and this is especially unlikely when the employee has found
alternative more highly compensated employment.
He certainly did not need to resign from the union presidency in order
to receive his 401(k) funds.31 In addition and even more probative, Day’s
resignation was followed—by minutes—by the resignation of his son from employment
with KSM. Day’s son quit, “[b]ecause his
dad did.” The General Counsel
essentially concedes that Day’s son abandoned employment with his resignation
and did not intend to return to KSM. His
alleged backpay period ends with his resignation. However, this act of familial solidarity with
his father makes no sense if Day intended to return to work at KSM.
As discussed
herein, I agree with the General Counsel that KSM’s liability for the failure
to reinstate strikers begins when the strike ended, not a week later. However, by the time of Day’s resignation,
October 10, Day and the employees could not have known that reinstatements of
many employees would be unlawfully delayed for months and in some cases for
years. This realization developed over
time, and in time, may well have contributed to an employee’s willingness to
resign to obtain access to benefits funds.
But not on October 10. I find
that when Day resigned employment at the end of the strike, he intended to
permanently sever his employment relationship with KSM.32
Accordingly his backpay period is October 5 through 10, 1997.33
ii. Michael Bartelt
Michael Bartelt
worked at KSM since 1985 and was working in the welding department at the commencement
of the strike. In October 1997 Bartelt
contacted Oechsner over the phone in an effort to get a loan from his 401(k)
funds. Bartelt had outstanding bills and
his home was threatened with foreclosure.
Oechsner testified that he inquired as to why Bartelt sought the funds
but that Bartelt refused to tell him.34 Oechsner told Bartelt that in order to get
his 401(k) money he would “have to come in and sign a quit slip.” Bartelt said that “all I wanted to do was
borrow a loan.” Oechsner reiterated “that
I should come in, sign a quit slip and I could get the 401.” Bartelt went to KSM and met with Oechsner on
October 14, 1997.
Oechsner had
prepared a resignation statement.
Bartelt testified, “[w]e sat at the table and he said, well, here’s your
resignation paper. Sign it and then I
could get the 401.” Bartelt signed the
resignation. After he signed it, Bartelt
also asked about whether he could get his vacation pay. “He said no because I signed this piece of paper.”
Bartelt had
determined that the 401(k) at his new employer, Super Steel, permitted loans,
so he had Oechsner fill out the distribution forms to reflect his desire to roll
over his KSM 401(k) funds to the Super Steel 401(k), thus permitting Bartelt to
take a loan only for the amount of money he needed. Bartelt testified that the only reason he
resigned was to obtain the 401(k) money he needed to avoid a foreclosure. However, later in the evening of the very day
he resigned, Bartelt met with his parents who offered to loan him the money to
pay off his bills and keep the house out of foreclosure. As a result, Bartelt no longer required funds
from his 401(k) and he left his funds in the KSM 401(k) for nearly 4 years
before rolling it over into the Super Steel plan. After learning that his parents were willing
to loan him the necessary funds, Bartelt made no effort to contact KSM to
rescind or otherwise withdraw his resignation, or to tell Oechsner that he suddenly
did not need the KSM 401(k) funds.
However, according to Bartelt, “if my parents would have loaned me the
money sooner I would have never signed the quit slip to get it.”
Bartelt had
begun working at Super Steel on February 24, 1997, during the strike, and was
earning a higher hourly pay rate than at KSM.
He received a 50-cent-per-hour raise in September. After he took the job at Super Steel he
declined further strike benefits, as he felt that he was contributing less to
the strike. He continued to do some
picketing until about June 1997. In
September 2001 Bartelt came to KSM a final time to turn in forms to rollover
his KSM 401(k) funds to the Super Steel 401(k).
On those forms he listed his date of termination from KSM as February
24, 1997, the date he began employment with Super Steel.
The evaluation
of Bartelt’s resignation is complicated.
I accept that the afternoon that Bartelt resigned he did it in order to
obtain money he needed for financial reasons, and would not have done it
otherwise. He did not approach Oechsner
seeking to quit, but rather, seeking a loan.
His resignation was at Oechsner’s repeated suggestion, and Oechsner did
not offer him any alternatives. But just
a few hours later, that day, the need for the 401(k) money was obviated when
his parents offered to loan him the funds he needed. By Bartelt’s own admission (and by his
conduct in leaving freely available 401(k) money with KSM for four years) at
that point he did not need the 401(k) funds and the resignation was unnecessary. In evaluating Bartelt’s intentions it is
notable that, having resigned to obtain his 401(k) funds and then finding out
within hours that he did not need the 401(k) funds, that he did not attempt to
change course. It is very possible, of
course, that if, the morning after,
The General
Counsel contends that Bartelt’s continued interest in employment with KSM after
his resignation is indicated by the testimony that he returned to the facility,
after he heard from Malson that KSM vice-president Davis was interested in
talking to him about coming back to work.
Bartelt testified that he talked with Davis and agreed to meet Davis at
the facility but that when he showed up, another KSM top manager, “Bill James
came walking out and said, ‘We’re not hiring you back. You’re going to have to leave.’” None of Respondent’s witnesses—neither James
who testified, nor Davis, who did not—disputed this incident. However, in conflict with the General Counsel’s
theory, Bartelt insisted—four times, and
no matter how the General Counsel approached the question—that this incident
occurred before his October 14, 1997 resignation, that is, “before I met with
Oechsner.” This testimony notwithstanding,
there is, as General Counsel contends, reason to believe that Bartelt’s
recollection is wrong. Malson testified
that it was the summer of 1998 when Phil Davis approached him and asked him to
get in touch with Bartelt, because KSM was interested in having Bartelt come
back for welding. Malson recalls that
the incident occurred after his own April 1998 recall, something he would not
likely confuse, and I credit his testimony which was presented with a
unembellished certainty that was entirely convincing. In addition, this was at a time when Oechsner
described the demand for employees as expanding. Notably, according to the records, by May
1998 Bartelt was the only welding department former striker who had not
resigned or been offered recall. Thus,
it makes senses that
iii. The
Curtis, Wiedeman, and Kuhlenbeck were discharged
Before
considering the status of the four remaining resignees, it is appropriate to
discuss a legal contention that the
I reject these
arguments, at least as framed. The Board
could, but does not, equate an unlawful failure to reinstate a striker with a
discharge, and more to the point, takes the view that an unreinstated
striker—unlike an unlawfully discharged employee—can abandon employment, and
thereby waive further backpay and reinstatement. Zimmerman
Plumbing and Heating Co., 334 NLRB 586, 588 (2001). Notably, Big
Sky Metal concerned an actual, not a constructive discharge, and a finding
that the unlawful discharge in that case led to the discriminatee’s subsequent
decision to resign in order to receive pension payments. Roman
Iron Works does not suggest that an unlawful failure to reinstate a striker
is a discharge. Nor does the case
demonstrate that a striker unlawfully denied reinstatement cannot be proven to have abandoned employment. In C.K. Smith & Co. the Board adopted the view that the resignation
of an unreinstated striker was “similar to a constructive discharge,” but did
so in circumstances where the unreinstated striker’s resignation was found to
be “necessary in order to secure other employment.” In short, while an employer’s unlawful
failure to reinstate strikers may provide a further motive for the resignation
that bolsters the case against a finding of abandonment, the unlawful conduct
does not “establish[ ] per se that none
of the strikers intended to sever their employment by resigning to obtain their
pension funds.” Alaska Pulp, supra at 525 fn. 17.35
With that said,
an unlawful delay in reinstatement is, in many instances, an important factor
in evaluating whether an employee intended to abandon employment when he resigned. In Alaska
Pulp, supra at 524–525, the Board majority found that an unlawful delay in reinstatement
of just 2 weeks left the Board “unable to determine, under the subjective
standards set forth in Augusta Bakery,
whether the strikers unequivocally intended to abandon their prestrike or
substantially equivalent positions because the Respondent’s refusal to offer
full and timely reinstatement so tainted the atmosphere in which they resigned.” Alaska
Pulp, supra at 525 fn. 17. The Board
found that in the absence of such unfair labor practices the employee “may have
made a different choice regarding resignation.
We will hold any uncertainty in this regard against the Respondent, the
wrongdoer here.” Alaska Pulp, supra at 525. The Court of Appeals did not enforce the
Board’s order in Alaska Pulp on this
point, but it remains Board precedent. See also, Roman
Iron Works, Inc., 292 NLRB at 1301–1302 (application for and receipt of
pension benefits by strikers whom employer had unlawfully failed to reinstate
does not demonstrate intent to abandon employment, as failure to reinstate was “a
material factor in creating the confusion that exists now as to whether they
would have returned [earlier]. It is
well settled that where a party’s conduct results in an ambiguity, the
ambiguity is not to be resolved in its favor”).
The upshot is, that while the unlawful failure to reinstate a striker
does not amount to a discharge, the Board has recognized that it complicates
and therefore renders more difficult an employer’s effort to meet its burden to
prove that an unreinstated striker has abandoned his employment. There is no per se or irrebuttable rule. The specific facts must be examined in each
case. But if the unlawful failure to
reinstate makes the Board unable to determine whether the striker would have
made the same choice to resign in the absence of the unfair labor practices,
the uncertainty must be resolved in the discriminatee’s favor.
I now return to
consideration of the status of the four remaining resignees.
iv. Robert Graf
Robert Graf
worked for KSM since 1984. He was a spot
welder at the time the strike began.
During the strike, in January or February of 1997, while in the picket
trailer, he heard Allen Resch telling Roger Day about having to quit to collect
his 401(k) account. On another occasion
he heard Anthony Bannenberg in the strike trailer saying that he had to quit to
obtain his 401(k).36 As referenced, supra, the strike ended on
October 5 with the
Graf testified
that the reason he resigned was because he needed the 401(k) money “to set my
debts straight.” He testified that if he
had not needed the money he would not have resigned from KSM. He testified that it was his belief that had
he been called back to work immediately after the strike he would not have
needed to resign because he would have been making more money at KSM than he
was with his interim employer. Although
working at Mayville Engineering, Graf picketed with the union until the strike
ended.
Oechsner
testified it was his understanding that most of the strikers had found work “somewhere
or other.” He recalls Graf specifically
telling him that he had a job and something to the effect that “it was simply
time for him to move on.” When Graf
resigned, he was working at Mayville Engineering making significantly less (about
$3.69 less) an hour.
In Graf’s case,
his unrebutted testimony (and credited) testimony is that he told Oechsner that
he was quitting to obtain his 401(k) funds, which, of course, provides contemporaneous
support for Graf’s assertions that this was his motive. Oechsner’s testimony that Graf told him, in
the course of resigning, something to the effect that “it was simply time for
him to move on,” was also unrebutted, and I credit Oechsner’s assertion that it
was said. This statement supports Respondent’s
claim that Graf intended to abandon his employment. However, I do not think this one solitary
statement, made in the course of a meeting with Oechsner in which Graf
expressly explained his purpose for resigning is adequate to conclude that
Respondent has proven that Graf abandoned his employment. The other job that Graf was “moving on” to
paid significantly less than KSM and he had not resigned at anytime during the
strike although already working at this interim employer. He resigned when, and because, he needed
funds from his 401(k).
In addition,
with Graf’s resignation on October 28 another factor comes into play that, in
my judgment, would not apply to the resignees previously considered. By October 28, more than 3 weeks after the
end of the strike, Respondent had begun to reinstate a few of the
strikers. Graf was not among those
offered reinstatement. As discussed
below, the delay in Graf’s reinstatement was unlawful. This fact alone undercuts the contention that
Graf’s right to reinstatement was affected by his resignation. In Alaska
Pulp, supra at 524–525, the Board majority found that an unlawful delay in
reinstatement of just 2 weeks left the Board “unable to determine, under the
subjective
standards set
forth in Augusta Bakery, whether the
strikers unequivocally intended to abandon their prestrike or substantially
equivalent positions because the Respondent’s refusal to offer full and timely
reinstatement so tainted the atmosphere in which they resigned.” Alaska
Pulp, supra at 525 fn. 17. The Board
found that in the absence of such unfair labor practices the employee “may have
made a different choice regarding resignation.
We will hold any uncertainty in this regard against the Respondent, the
wrongdoer here.” Alaska Pulp, supra at 525. The court of appeals did not enforce the
Board’s order in Alaska Pulp on this
point, but it remains Board precedent.
See also, Roman Iron Works, Inc.,
292 NLRB at 1301–1302 (application for and receipt of pension benefits by
strikers whom employer had unlawfully failed to reinstate does not demonstrate
intent to abandon employment, as failure to reinstate was “a material factor in
creating the confusion that exists now as to whether they would have returned
[earlier]. It is well settled that where
a party’s conduct results in an ambiguity, the ambiguity is not to be resolved
in its favor”).
In this case,
any uncertainty weighs heavily in Graf’s favor here, as Graf was earning
significantly less at his interim employer and was driven to resign when he did
based on financial circumstances that, objectively, would have been mitigated
had he been recalled to KSM at the conclusion of the strike. Indeed, given that Graf’s credited testimony
directly links his economic circumstances to a lower paid job, and his
resignation to his economic circumstances, I believe that the evidence does not
create uncertainty, but affirmative evidence in support of the General Counsel’s
claim that Graf did not intend to abandon employment when he resigned. Respondent has failed to meet its burden of
demonstrating that the resignation amounted to abandonment.
v. Allen Curtis
Allen Curtis
began working for KSM in 1988. At the
time of the strike he was working as a painter.
Curtis picketed throughout the strike even while he worked various
interim jobs. When the strike ended
Curtis was not recalled and on December he contacted Oechsner to try to take a
loan out on his 401(k). Oechsner told
him to come in to see him. Once there,
Oechsner explained that the plan did not permit loans and he explained the
three conditions under which an employee could make withdrawals from the 401(k)
plan, which, although Curtis did not recall the word hardship being used, were
obviously the conditions for a hardship withdrawal. Curtis did not meet any of these hardship
conditions.37 Oechsner then told Curtis that in order to
get the funds he would have to quit.
Curtis told him that he did not want to quit, but Oechsner reiterated
that that was the only way to get the 401(k) funds. Curtis finally said he would have to “quit
for financial reasons, but I was quitting under protest.” Curtis wrote out a termination letter that
stated:
To Dave
I Allen Curtis have to terminate my
employment at K.S.M. Industries on 12.15.97 because of financial reasons.
Signed
Allen M. Curtis
Curtis
subsequently brought information to Strong so that the rollover of his 401(k)
to his new employer could be arranged.
For reasons unexplained in the record, the rollover distribution form
was not signed by Oechsner until March 5, 1998, and thereafter Curtis took a
loan for the amount he needed, which was $7000, as permitted by the new
employer’s plan.
Curtis testified
that he did not want to terminate his employment on December 15, 1997, but did
so because it was the only way to gain access to his 401(k) funds. His new job paid less, and instead of doing
painting work that “loved” as he had KSM, he did shearing work at the new
employer. He testified that the shearing
work was “not ideal” because of his “back situation.” Curtis testified that if offered recall to
KSM on October 5, “I absolutely would have gone back.”
The undisputed
evidence is that Curtis resigned “under protest” in order to obtain access to
his 401(k) account after Oechsner told him that the plan did not permit loans
and that he did not qualify for a hardship withdrawal. Curtis’ letter of resignation reflected that
he was resigning because of “financial reasons.” Indeed, the letter stated that “because of
financial reasons” that Curtis felt that “I have to terminate my employment at
K.S.M Industries.” Objectively, at the
time of his resignation Curtis’ interim employment was not satisfactory. It placed physical demands on him unlike his
work at KSM. He did not like the type of
work he was performing, compared to the painting he did for KSM that he “loved.” The interim job did not pay as well as
KSM. There is an unexplained delay in
Oechsner’s signing of the distribution forms for Curtis. The record is unclear whether the delay was
the result of inaction by Curtis, Strong, or Oechsner. In any event, there is no evidence of an
unequivocal intent by Curtis not to return to KSM. To the contrary, the evidence suggests that
he resigned only to obtain needed funds.
Respondent has
failed to meet its burden of showing that Curtis abandoned his employment with
KSM at the time he resigned. In
addition, as discussed with regard to Graf,
the unlawful delay in Curtis’s reinstatement creates uncertainty as to
whether he would have resigned in the absence of the unlawful failure to
reinstate him. This uncertainty must be
held against Respondent, and therefore, defeats Respondent’s effort to prove
Curtis abandoned his job by resigning. Alaska Pulp, supra.38
vi. Douglas Wiedeman
Douglas Wiedeman
began working at KSM in 1989. At the
time of the strike he worked in stockroom and receiving. After the strike, Wiedeman was not recalled
until 2004. In January 1998 Wiedeman, still not recalled to work,
contacted Oechsner because he needed his 401(k) funds.39
At the time Wiedeman was working at
The evidence
shows that Wiedeman contacted KSM seeking his 401(k) funds and Oechsner told
him he would have to quit to obtain the funds.
Wiedeman told Oechsner “I guess I’ll have to quit.” His conversation with Oechsner corroborates
his testimony that he resigned in order to obtain his 401(k) funds and would
not have resigned if he had another way to obtain the money.40
At the time he spoke with Oechsner he did not tell Oechsner that he had
another job. He did, but it paid approximately
$3 dollars an hour less than what his job at KSM paid. As noted, I credit Wiedeman’s (undisputed)
testimony. Respondent has offered no
evidence demonstrating that Wiedeman intended to abandon his employment when he
resigned. Indeed, the fact that he
accepted KSM’s recall when it finally came in 2004 suggests that Wiedeman had
not abandoned his employment. See, Zimmerman Plumbing and Heating Co., 339
NLRB at 1311. I find that Respondent has
not demonstrated that Wiedeman abandoned his employment when he resigned in
January 1998.41
vii. Richard Kuhlenbeck
Richard
Kuhlenbeck began employment with KSM in 1978.
At the time of the strike he was working as a tape operator. He was not recalled after the strike ended on
October 5. Late in October he contacted
Oechsner to find out if he was allowed to withdraw a portion of his
401(k). Oechsner set up a meeting with
him that week in his office. This
meeting took place in November 1997.
Kuhlenbeck told Oechsner that “I was going through a divorce at the
time, and my house was in foreclosure pending auction,” and that “I needed the
money for a security of deposit and first month’s rent on a new residence.” Oechsner helped Kuhlenbeck fill out the forms
to make a hardship withdrawal from his 401(k) and Kuhlenbeck withdrew funds from
the 401(k), using it for a security deposit and first month’s rent on his new
residence.
In November
1998, still not recalled to KSM, Kuhlenbeck contacted Oechsner again to see if
he could make a further withdrawal from his 401(k). They met in Oechsner’s office on November 16,
1998. Kuhlenbeck told Oechsner about his
financial problems, which included back rent that was due and utility
bills. Oechsner told Kuhlenbeck that
there were no funds available for a hardship withdrawal because he had taken out
all available funds when took the hardship distribution in 1997. Oechsner told him that he would not be able
to withdraw any more of the 401(k) unless he terminated his employment. Kuhlenbeck told him that he did not want to
terminate from KSM. However, Kuhlenbeck
said that he needed the money and by the end of the conversation he signed a
termination notice typed up by Oechsner while they were in the meeting. During this meeting, Oechsner also filled out
the 401(k) distribution forms with Kuhlenbeck.
Kuhlenbeck subsequently received his 401(k) distribution.
Kuhlenbeck
testified that when he went to KSM Industries on November 16, 1998 he did not
want to terminate his employment. He
also felt that had he been recalled to work after the strike he would not have
had to resign in November 1998. At that
time he was working at Mayville Engineering for less pay than he had earned at
KSM ($3.23 an hour less). He had to
travel a farther distance to go to Mayville than to KSM.
On October 6,
2003, Kuhlenbeck accepted recall to KSM.
However, on his first day back he was approached by a supervisor, Robert
McKinney, who told him “that I was replacing one of his better replacement workers
and that I had 30 days to know what I was doing . . . . otherwise he was going
to do whatever he could to fire me.”
After that conversation Kuhlenbeck approached a former employer, General
Metal Works, and asked if they would allow him to return to their employ. He was told he could and did, leaving KSM.42
Respondent has
failed to prove that Kuhlenbeck unequivocally intended not to return to his job
at KSM when he resigned. Kuhlenbeck went
to Oechsner in November 1998 seeking additional funds from his 401(k). He was not seeking to quit. Indeed, Kuhlenbeck told Oechsner he did not
want to quit, but that he needed the money.
This corroborates Kuhlenbeck’s testimony at trial regarding the motives
for his resignation. Generally, the
evidence does not show an intent not to return to employment at KSM. The interim employment that Kuhlenbeck
obtained paid significantly less than the KSM job, and required a much farther
commute (38 miles each way as opposed to 1 mile to KSM). And, of course, it is also significant to the
question of whether Kuhlenbeck intended not to return to his job that, in 2003
when he was recalled to KSM, Kuhlenbeck accepted the recall. This strongly supports the view that he had
not abandoned his employment when he resigned in 1998 for financial
reasons. Of course, McKinney’s threat to
fire Kuhlenbeck his first day back caused him to reconsider and leave KSM for
good, but this does not (in any way) demonstrate that Kuhlenbeck did not return
in good faith, or that he had abandoned his job in 1998. In short, the evidence suggests that
Kuhlenbeck did not intend to abandon his job when he resigned for financial
reasons. This is the opposite of
Respondent burden.43
c. Other defenses to the resignees
In addition to
its contention that the resignees abandoned employment, KSM expends significant
effort advancing two other, more generalized defenses to paying these individuals
backpay. First, Respondent reasserts the
substance of its pretrial motion to dismiss, contending that because, as a
matter of federal law, regulation, and the 401(k) plan, receipt of their 401(k)
funds required their cessation of employment with KSM, the Board may not
require KSM to reinstate the resignees or pay them backpay for any period after
the resignation. Second, Respondent
contends that even if the resignees are found to be eligible for reinstatement,
it is inequitable to impose backpay liability on KSM for relying on the employees’
resignations.
i. Respondent’s reasserted motion to dismiss
KSM attempted to
eliminate the issue regarding backpay and reinstatement for the “401(k)”
resignees prior to the hearing with a pretrial motion seeking to dismiss the
amended compliance specification with regard to the five discriminatees who
tendered resignations prior to the end of the strike (or in one case after the
strike but before the General Counsel alleges they should have been reinstated)
and to limit the backpay period with regard to five others who tendered
resignations after the strike was called off and after the General Counsel
claims they should have been reinstated.
In its pretrial motion the Respondent contended that, as a matter of
law, the employees’ who received 401(k) funds upon their resignation must be found to have to have severed
their employment and could not be eligible for backpay or reinstatement. Respondent contended that pursuant to the
terms of the expired labor agreement, pursuant to the terms of the 401(k) plan,
and pursuant to the terms of federal law and regulations governing such plans,
the only way for the employees to receive their 401(k) money was to resign, and
therefore, reasons the Respondent, as these employees received their 401(k)
funds, they must have intended to sever and not return to their
employment. According to the KSM, if
that is not the case and the Board orders reinstatement and backpay for such employees
(for any period after the resignation) the Board is requiring the Respondent to
violate the terms of the 401(k) plan, the Board is amending the terms and conditions
of employment, forcing Respondent to violate its fiduciary obligations under
ERISA, and imperiling the tax status of the plan by forcing Respondent to
violate federal regulations governing the taxability of 401(k) plans.
At the
commencement of the trial in this case, I rejected Respondent’s motion, as it
is clear that Board precedent on this issue requires development of record evidence
with regard to the circumstances surrounding the resignations. However, I invited Respondent to renew its
argument in its post-trial brief. Respondent
has done so, in a recapitulation of its motion with added alarums
regarding the “patent violation of the
law,” and “legal impossibility” represented by the General Counsel’s position. However, I reaffirm my rejection of this
argument. Indeed, I think Respondent’s
contention is irrelevant to the Board’s precedents, and specious at core.
My view reflects
the fact that the premise of the Board’s case law in this area is the finding,
or at least the assumption, that the employee received funds, the receipt of
which required a resignation. A valid
resignation is the starting point of the Board’s analysis. Indeed, in Augusta Bakery, the Board rejected the
precise argument advanced by KSM here—adopting the judge’s conclusion that the
employer violated the Act by denying the employees reinstatement notwithstanding
the argument pressed by the employer “that as pension benefits are payable only
when an employee ceases work, the Respondent lawfully denied them reinstatement
because they had abandoned their employment.”
298 NLRB at 58. There is no issue,
as KSM contends, that the resignations were “fictitious” or a “sham” for any
purpose, including for purposes of meeting the severance requirements for
distribution under the plan, and as required for the plan to maintain
preferential tax status under the Internal Revenue Code and Treasury
Regulations. As in
In essence,
Respondent’s contention is no more involved than an effort to pick concepts and
terminology from one legal regime and apply them out of context in another different
legal regime in an effort to thwart the Board’s best sense of meaningful labor
policy. Thus, while an employee who
resigns and takes a distribution from a tax qualified 401(k) plan may well “cease[
] to be an employee of the employer” for purposes of the Treasury Regulations
governing the tax status of 401(k) plans,45
the Internal Revenue Code’s views on taxability of 401(k) plans does not
particularly bear on, much less preclude, the Board’s view that for purposes of
federal labor policy an employee who resigns and takes 401(k) distribution
remains an “employee” of the employer.46 In cases in which the Board considers the
resigned employee to remain an employee under the Act, the Board can, should,
and has recognized and considered that employees have resigned precisely so that
they can be treated as ex-employees for purposes of the rules surrounding the payment of pensions
or 401(k) benefits. But nothing attendant
to that compels the Board to ignore the
important considerations of federal labor policy that have led the Board to recognize
that a resignation by a striker for the purpose of obtaining fringe benefits is
not, without more, proof of abandonment of employment.
Notably, 401(k)
plans typically, and this one too, provide for an employee’s reemployment and
continued participation in the plan.
See, Article 6.4(g) of the plan.
KSM points to nothing in ERISA that suggests that KSM would violate any
fiduciary duty if it permitted the reinstatement of an employee (particularly
pursuant to the order of a federal agency, enforced by a court) who, pursuant
to the plan, had severed employment and taken a distribution. Similarly, KSM points to nothing in the Internal
Revenue Code Treasury regulations that suggests that the reinstatement of a
former employee, as the Treasury regulations apply that term, would threaten
the tax status of the plan. To the
contrary, the reemployment and continued participation in a plan is
affirmatively permitted by this plan and the case law.
It is also
notable that in all its pages of briefing on the subject, Respondent does not
cite a single Board case, much less a single federal court case that offers the
slightest support for its argument.
Thus, Respondent’s contention carries the added suspicion of novelty,
many years after these issues have been mooted in repeated Board cases ordering
reinstatement and backpay for employees who resigned during a strike in order
to receive benefits requiring such resignation or retirement. Thus, the argument rises, and falls, entirely
on the logic of the argument and, in my view, the argument is not sound, for
the reasons I have described.
ii. Respondent’s equitable defense
Respondent
contends that it was entitled to rely on the employees’ resignations and thus,
even if the resignees are to be reinstated, KSM should not be liable for
backpay beyond the date of resignation.
KSM asserts that when faced with a resignation by an employee, there was
no way for it to know that the General Counsel would subsequently contend that
the employee did not intend to abandon employment. Respondent points out that there were numerous
employees who resigned, and for whom the General Counsel has not contended
further backpay or reinstatement was due.
Those resignations, in other words, did
represent the abandonment of employment by the resigning employees. In essence, KSM asserts that it is unfair to
hold it liable for additional backpay when it accepted and relied upon the
resignations, and had no way to distinguish resignations that were part of an
abandonment of employment from those that were not.
Respondent’s
contention is answered by the fact that for many years the Board has made clear
that in dealing with unrecalled strikers an employer may not presume that a
resigning striker intended to abandon employment. As discussed above, Board precedent is clear
that the burden is on the employer to demonstrate an employee’s unequivocal
intent to abandon employment and that a resignation is not adequate. In a strike recall situation, an employer
acts at its peril if it assumes that the resignation indicates abandonment of employment. The reasons for this are set out in the Board’s
case law, discussed supra, and undoubtedly reflect federal labor policy’s
recognition that the right to strike involves a predictable economic burden on
employees that can lead an employee to resign in order to obtain available
funds, even when the employee does not intend to abandon employment.
In this regard,
the employer’s uncertainty with regard to resignations is consistent with the
fact that an employer should not presume from an employee’s acceptance of
interim employment that the employee has abandoned his employment. More generally, an employer will not know
until it offers recall whether an individual striker intends to return. The burden on the employer is not great. It simply needs to offer reinstatement to
former strikers—notwithstanding what it may guess, have heard, contemplate, or
hope about a striker’s intentions with regard to returning to employment. When it fails to do so, and takes the
position that the employee has abandoned employment, it needs unequivocal
evidence to prove it, and a resignation is not enough under well settled
law. The point, of course, is that the
Board has determined that the employer, and not the striker, must bear the risk
when the employer chooses not to heed the Board’s warnings to presume, until it
can prove otherwise, that a striker will choose to return to employment at the
completion of the strike.
Equitable
considerations do not weigh in favor of Respondent. Indeed, the inequity in Board law in this
area is more likely to weigh on employees rather than employers. As I discussed, above, there may be resignees
on whose behalf the General Counsel did not seek backpay or reinstatement, but
who were resigning because they needed their 401(k) funds. These may be employee who, believing (as
Respondent contends the law should be) that having resigned to obtain the money
they had no choice but to abandon employment at KSM, acted unequivocally in
accordance with that belief and did, therefore, regardless of their true
unstated desire to return to work at KSM, by all appearances abandon their jobs
at KSM. This is the other side of the
coin of Respondent’s “equity” argument, and I have no doubt that in some instances
resigning strikers suffer on account of their ignorance of Board legal
doctrines. Nevertheless, employees in that situation will often be denied
backpay and reinstatement.
KSM cites a 1968
case, Mississippi Steel Corp., 169
NLRB 647, 663, enfd. in part, 405 F.2d 1373 (D.C. Cir. 1968) for the
proposition that “[f]rom Respondent’s standpoint, it did have a right to rely
on the resignations in order to fill the vacancies created.” In that case the Administrative Law Judge, in
a finding adopted by the Board, determined “[a]s a balance of the equities,”
that the resigning strikers must be reinstated but that backpay was tolled as
of the resignation. In Alaska Pulp, supra at 525 fn. 17, the
Board avoided addressing the continued viability of this dormant doctrine,
noting that it “sometimes tolls a respondent’s backpay liability if it finds
that the respondent relied in good faith on a striker’s resignation,” but found
such tolling inappropriate because “Respondent’s unfair labor practices may
have contributed to the strikers’ willingness to resign.” As discussed above, in view of the Board’s
subsequent development of the law, I do not believe that reliance on Mississippi Steel, or the strikers’
resignations, justifies tolling backpay.
An employer presumes abandonment at its peril. But even if this tolling doctrine lives at
all, it should not apply here. As to
four of ten resigning strikers, it is inappropriate for the same reasons relied
upon by the Board in Alaska Pulp: “Respondent’s
unfair labor practices may have contributed to the strikers’ willingness to
resign.” As to the remaining resigning
employees, the record leaves no doubt that KSM played an active role in
encouraging and facilitating striker resignations. The resignations were not visited upon an
indifferent, unsuspecting employer, which then had to adapt to the loss of
these employees. KSM was complicit in
securing resignations without any concern or interest in whether the employees
actually intended to abandon employment.
Having encouraged, facilitated, and suggested the resignations, Respondent
is not in a position to claim that equity demands that it can rely on the
resignations to toll backpay at great cost to the discriminatees.47
2. Rodriguez’s
response to KSM’s questionnaire
as evidence of abandonment of employment
On October 16,
1997, after the
Do you wish to be considered for future
recall to KSM Industries as positions for which you are qualified become available? (Place an “X” indicating your choice)
Yes
___No ___
The letter provided a place for the
striker to sign and date his response, under a legend that read “I understand
that a “NO” choice voluntarily terminates my employment with KSM Industries.”
Jesus Rodriguez
was a general factory striker who received the KSM inquiry described
above. Rodriguez signed and returned the
form, marking “No,” in response to the question asking whether he wished to be
considered for future recall to KSM.
Respondent points out that at the time Rodriguez signed the form he was
working at another employer, Milsco, which was closer to his home than KSM, and
covered by a collective-bargaining agreement.48 Rodriguez did not endorse KSM counsel’s
suggestion that he answered “no” on the questionnaire because the Milsco job
was “a better situation” for him. However,
Rodriguez agreed that “[a]t least back in October 1997 [he] preferred to stay
at Milsco and work.”
Respondent
contends that Rodriguez’s negative response to KSM’s inquiry terminated his
employment. This is incorrect under
Board precedent. Respondent’s inquiry
clearly was not an offer of employment,49
and Respondent does not so contend. “[Until the discriminatee has received an
unconditional offer from his employer he is incapable of refusing reemployment.” Montgomery
County MH/MR Emergency Services, 239 NLRB at 827; REA Trucking Co., Inc., 176 NLRB 520, 526 (1969), enfd. 439 F.2d
1065, 1066 (9th Cir. 1971). Alaska Pulp Corp., 326 NLRB at 541 (“Respondent
argues that [unreinstated striker] Bartels had been unwilling to participate in
an apprenticeship program to acquire multi-craft skills, thereby rendering
himself ineligible for the only maintenance position in which he could have
been employed. Yet, regardless of what Bartels may have said at that time, it
was not said in response to an offer of reinstatement”). A negative response to an invalid offer is of
no consequence. CleanSoils, Inc., 317 NLRB 99, 110 (1995). Respondent’s contention is that it is clear
from Rodriguez’ statement at trial, combined with the response to KSM’s recall
inquiry, that, in October 1997, Rodriguez had abandoned employment. However, the Board has rejected this
contention. In L’Ermitage Hotel, 293 NLRB at 927, a discriminatee who failed to
respond to a letter inquiring about his interest in reinstatement testified
that he did not do so because,
when he received the letter he was
working for another employer and believed he was making more money than he
could have made in Respondent’s employ. Therefore he did not respond to the
letter. This admission, according to Respondent, tolls its backpay liability
even if the letter was deficient.
Respondent’s contention must be rejected in light of the Board’s recent
decision in Consolidated Freightways, 290 NLRB [771] 1988 wherein the Board
held that “an employer must first extend a facially valid offer of
reinstatement before we examine a discriminatee’s reasons for declining the offer.”
Given KSM’s failure to offer
reinstatement to Rodriguez in October 1997, “it is unnecessary to speculate on
what [Rodriguez’s] response would have been had Respondent unconditionally
offered to reinstate him” in October 1997.
B. The reinstatement process
In NLRB v. Fleetwood Trailer, 389 U.S. 375
(1967), the Supreme Court explained that,
If, after conclusion of the strike, the
employer refuses to reinstate striking employees, the effect is to discourage
employees from exercising their rights to organize and to strike guaranteed by
§§ 7 and 13 of the Act. Under §§ 8
(a)(1) and (3) it is an unfair labor practice to interfere with the exercise of
these rights . . . . without reference
to intent.
389
Once the striker
makes an unconditional offer to return to work, “the Respondent [is] under a
duty to timely reinstate him to his prestrike position or, if that
position no longer exist[s], to a substantially equivalent position.” T.E.
Briggs Construction Co., Inc., 349 NLRB 671, 672 (2007).
Notwithstanding
this, an employer can mitigate its liability or rebut the finding of an unfair
labor practice entirely by demonstrating that its refusal to reinstate strikers
was due to “legitimate and substantial business justifications.” NLRB v.
Great Dane Trailers, 388
If the General
Counsel has not proven that the strikers are unfair labor practice strikers,
one substantial and legitimate business justification that an employer can rely
upon for failing to reinstate strikers is proof by the employer that the
strikers have been permanently replaced.
Id. at 379 & fn.5; Chicago Tribune Co., 304 NLRB 259, 261
(1991) (“Contrary to the Respondent, we find that it must prove the contested
fact of permanent replacement as part of its affirmative burden of proving substantial
and legitimate justification for failing to hire former economic strikers
upon receipt of their unconditional offer to return to work”). This
justification is unavailing in the case of unfair labor practice strikers,
because the employer’s duty to reinstate includes the obligation to displace
replacements hired to fill the unfair labor practice strikers’ positions. Mastro
Plastics Corp. v. NLRB, 350
Another “legitimate
and substantial justification for not immediately reinstating former strikers
is a bona fide absence of available work for the strikers in their prestrike or
substantially equivalent positions.” Zimmerman Plumbing and Heating Co., Inc.,
334 NLRB 586, 588 (2001). This requires
a showing by the employer that there is not work available because of reductions
in business or the elimination of a striker’s job based on “substantial and
bona fide reasons other than considerations relating to labor relations.” Fleetwood
Trailer, supra at 378 fn. 4, 379–380 (proof by General Counsel that jobs of
strikers are still available “is not essential to establish an unfair labor practice. It relates to justification, and the burden
of proof is on the employer”); Refuse
Compactor Services, Inc., 311 NLRB 12 fn. 4 (1993), enfd. without op. 57
F.3d 1077 (9th Cir. 1995); Radio Electric
Service Co., 278 NLRB 531, 532 (1986), enfd. without op. 826 F.2d 1056 (3d
Cir. 1987); Burns Motor Freight, 250
NLRB 276, 279 (1980).
1. The General Counsel’s formula
The General
Counsel’s formula for calculating recall and backpay eligibility is based,
first, on the immediate slotting, as of October 5, 1997, of strikers into
positions held by “unprotected” replacements.
Under the General Counsel’s formula, the strikers entitled to reinstatement
to these positions were the most senior strikers within each job classification
in which unprotected replacement workers remained. Notably, based on a review of R. Exh. 39 (a
chart created by Respondent to show its view of the individuals entitled to
backpay and reinstatement) KSM does not dispute—indeed, it admits—that at
strike’s end the senior strikers within each classification should have been
reinstated to positions occupied by the unprotected replacements.
Under the
General Counsel’s compliance formula, after assigning strikers to fill
unprotected replacements’ positions, each time a working employee, whether a
protected replacement worker or recalled striker, terminated their employment,
or when a striker offered recall declined the offer, an additional striker—the
senior unrecalled striker in the relevant classification—should have been recalled
and backpay began accruing for that striker.
Putting aside,
for the now, the issue of the General Counsel’s reliance on seniority to
determine who should have been entitled to vacancies (a matter I take up below),
the General Counsel’s presumptions that the departure of a protected
replacement or recalled striker, and the unaccepted offer of employment by a
recalled striker, showed an open position for a new unrecalled striker, is a
reasonable formula. The proposition that an employee left work
to be performed when he quit, and that the employer offered recall to an
employee because there was work for that employee, are logical and
presumptively true. The formula, in this
regard, satisfies the General Counsel’s burden, and the burden shifts to
Respondent to establish facts that would negate or mitigate its liability. Thus, it is Respondent’s burden to
demonstrate that work was not available in the classification where an employee
has just resigned or where Respondent has offered a position to an employee who
declined recall. This could be because
of an abrupt halt in work, or because the departing employee was laid off for
lack of work, or any number of other circumstances. But it is Respondent’s burden to show. No argument to counter the General Counsel’s
position is offered on brief and no evidence was proffered at trial to counter
this logical presumption. I reject the
contention that where no one was immediately hired to replace a departing
employee, the Respondent has proven that there was no position for an unrecalled
striker. This ignores the ability of an
employer to avoid recalling strikers to perform available work, at least for a
period of time, by not undertaking available work, stretching its existing
workforce, and shifting unit work to supervisors (a matter discussed
below). Respondent’s duty was to
reinstate the unfair labor practice strikers to their former position or to one
substantially equivalent, and not, as Oechsner put it, to “just ke[ep] muddling
through it” without unreinstated strikers.
I accept the General Counsel’s formula in this regard.
A related
challenge to the General Counsel’s reinstatement formula is Respondent’s department-specific
challenges to the General Counsel’s reinstatement allegations. The General Counsel’s compliance specification
seeks backpay for a number of employees in specific departments in which
Respondent asserts it did not have available work at the conclusion of the
strike. Specifically, to the extent that
Respondent’s diminished need to recall strikers is based on supervisors
performing bargaining unit work, or the assumption of strikers’ job duties by
other bargaining unit employees (replacements or recalled strikers), the
General Counsel rejects Respondent’s position that work was unavailable for the
unrecalled strikers. As discussed below
the General Counsel disputes that Respondent has demonstrated a substantial and
legitimate justification for failing to reinstate strikers where the failure is
attributable to any of these reasons. 51
2. Departmental and individual reinstatement issues
a. Shearing
Shearing
involves the cutting and refabrication of the metal used in KSM’s
production. The introduction in the
spring of 1996 of a computerized laser system, called the Mazak, to cut and
fabricate the metal dramatically reduced the amount of shearing work
required. Shortly after the introduction
of the Mazak, a “tower” that attached to the Mazak and automatically loaded the
steel from the laser was introduced.
Prior to the introduction of the laser, KSM employed 6-7 shear operators
on a total of two shifts. At the
commencement of the strike in 1997, there were 4 shear operators, with one,
Roger Stern, spending approximately 30–40 percent of his time operating the
Mazak laser. A second Mazak laser was installed
in 1999, and a third in 2006. Currently,
one individual, Stern, performs shearing work on a regular basis.
After the
strike, Respondent did not regularly employ any strike replacements in the shear
position. There was, however, shearing
work performed. Instead of recalling a
shearing operator employee, Respondent recalled a general factory employee and
striker, Laverne Jung, on December 1,
1997, and assigned him to operate the shear.
Before the strike, Jung had occasionally operated the shear (the ability
to do shearing work is covered by the general factory job description) but his
testimony demonstrates that this was seldom part of his work. After the strike, he performed primarily
shear work until his retirement June 11,1999.
Stern was
recalled to the shear department in February 1999. He soon realized that the bargaining unit
work he had performed on the Mazak laser before the strike had been taken over
by supervisors. Before the strike, supervisors
had been responsible for programming the laser to make the desired cuts on the
metal, and had directed bargaining unit employees with regard to the materials
and sizes needed to be loaded into the tower.
They occasionally did other work, such as unloading steel from the
Mazak, if bargaining unit employees were on break or otherwise unavailable, and
they helped to clean and focus the specialized lenses on the laser. However, the bargaining unit employees would
then download the program, load the tower, change the tanks, clean under the
machine, place order papers on the finished material, and “just generally ran .
. . the machine.” This work comprised a
significant amount of Stern’s work prior to the strike. After the strike, Stern “wasn’t to do
anything with the laser.” He asked his
supervisor, Bob McKinney about this, and
In sum,
traditional shearing work, which had begun declining before the strike, continued
to decline after that strike, even after orders picked up. However, laser work, which before the strike
had been part of the shearer operator’s work, increased after the strike to the
extent that additional lasers were added.
The consequence of turning this work over to supervisors was that work
opportunities were limited for unrecalled shear operators.
The General
Counsel’s position, as set forth on brief, and consistent with the calculations
in the compliance specification, is that shear operator employees should have
been recalled to perform the shear department’s work. This includes the laser operations work that,
prior to the strike consumed up to 40 percent of bargaining unit employee Stern’s
time, as well as shearing work that general factory Jung was utilized to perform. Respondent disputes any obligation to
preserve the prestrike bargaining unit work for shear department employees.
In assessing
available work for returning strikers, the Board considers nonbargaining unit
employees and supervisors in particular, to be “in effect, striker
replacements.” Radio Electric Service Co., 278 NLRB at 532 (“it is clear that the
work previously performed by the strikers has not been abolished because, by
the Respondent’s own admission, that work has been reassigned to, and is
presently being performed by, nonbargaining unit employees”) Super
Glass Corp., 314 NLRB 596 fn. 1 (1994) (“In adopting the judge’s finding
that the Respondent unlawfully refused to reinstate five striking employees, we
reject, as did the judge, the Respondent’s contention that it had no work for
these five strikers. The evidence indicates that the Respondent utilized
several individuals, some of who were already on the Respondent’s payroll, to
perform unit work during the strike as well as after the Respondent received
the
The issue is
somewhat different with regard to Respondent’s decision to recall general
factory employee Jung on December 1, 1997, nearly 2 months after the strike
ended, and assign him to perform shearing work.
There is no issue here of available work being absorbed by nonunit
employees or unprotected replacements.
The objection is to Jung’s recall to shearing duties on an essentially
full-time basis, at a time when the shearing position was vacant and shearing
operators were awaiting recall.
Respondent contends it was free to make such an assignment, prestrike
under the terms of the labor agreement, and poststrike in accordance with the
terms and conditions of the expired agreement.
That may be, certainly there is no evidence, either at trial, or at the
time, that the
Be that as it
may, Respondent’s contention that it was acting within its contractual—or more
precisely, as the contract had expired, acting without committing an unlawful
unilateral change—misses the point. Respondent’s obligation under the
longstanding case law, and specifically under the Board’s order in this case,
was to offer reinstatement to these unfair labor practice strikers “to their former
positions or, if those positions no longer exist, to substantially equivalent
positions.” KSM, supra at 136. The
phrasing of the order is not superfluous, and not arbitrary. It reflects the Board’s longstanding view
that it is “[o]ur duty is to ensure that strikers who have unconditionally
offered to return to work are to be treated the same as they would have been
had they not withheld their service.” Rose Printing Co., 304 NLRB at
1078. For this reason “the touchstone
for determining reinstatement rights is ascertaining whether the job is the
same as, or substantially equivalent to, the prestrike job.”
The upshot is
that Stern should have been recalled to fill the vacant shear operator position
at the end of the strike. This work was
available prior to Jung’s December 1, 1997 recall and assignment to perform
it. No evidence suggests that the shearing
work, including the Mazak work, only became available after Jung had been reinstated.
General Counsel
also contends that with the recall of Stern on February 15, 1999, with Stern
working alongside Jung, the evidence shows that there was enough work in the
shear department for two shear operators, and those two should have been Stern
and Rettler, the next most senior shear operator. In other words, the General Counsel contends
that Jung, who should not have been working in the shear department in Stern’s
place in the first place, should not, as well, been working in place of Rettler
either. I do not agree.
As discussed,
above, there is no allegation that Respondent independently violated the Act by
using Jung to perform shearing. Stern
was entitled to backpay for the shearing work Jung (and supervisors) were
performing because the work was available for Stern even before Jung was
recalled and assigned to perform shearing work.
But when Stern actually assumed his shearing position, that does not
mean that Rettler was entitled to Jung’s work as well. To the contrary, at least where there is no
independent violation of the Act—i.e., an unlawful discriminatory motive or an
unlawful unilateral change—Board law permits the use of previously reinstated
strikers or lawfully retained replacements to be assigned the work of
unrecalled strikers. Randall, Burkett/Randall, Division of
Textron, Inc., 257 NLRB 1 (1981).
The transfer or reassignment of such work does not trigger a vacancy for an unrecalled striker.
However, when
Jung left in June 1999, the evidence would suggest that an additional shear
position was available, which should have been filled by Rettler. Respondent points out that no one replaced
Jung performing full-time shearing, but his shear work had to be done. More important, even if Jung’s shear work was
diminishing, in 1999 a second laser was added at KSM. This would involve a significant increase in
laser work performed by supervisors but owed to an unrecalled striker. Prestrike, Stern spent 30 to 40 percent of
his time operating one laser. Two
operating lasers, combined with the remainder of Jung’s work, would easily
provide work for another full-time employee.
Although there is uncertainty about the date in 1999 when the second
laser began operation, these doubts are properly resolved against
Respondent. I find that upon Jung’s
departure, there was work for a second shearer operator and an additional shear
operator should have been recalled.
Obviously this determination is an example of the “problematic and
inexact” nature of determining backpay awards, but it is the most accurate
calculation possible under the circumstances.56
b. Inspection department
Prior to the
strike two bargaining unit employees worked as inspectors.57
Along with a quality control supervisor, they performed general
inspection work throughout the facility.
In addition to the inspectors, it had long been the practice for production
employees to contribute to quality control by checking their own work for
errors or deviations.58 Production supervisors performed minor
inspection duties in their departments as well.
After the strike,
KSM did not recall the inspectors. Inspection
duties were performed, as before, by bargaining unit employees checking their
own work, supervisors assisting in their departments, and by the quality
control manager. The significant change
after the strike was the increase in inspection performed by supervisors, who
now performed inspection daily, as well as the inspection work now performed
extensively by other nonbargaining unit employees were also assigned inspection
work after the strike. As employee Paul
Bojar explained, “[w]hoever was not doing anything in the office I think they
came down and helped inspect.”59
In this case,
Respondent has failed to show that there was not work available for one
inspector at the end of the strike. Instead
the work was shifted to supervisory and nonbargaining unit personnel. As discussed above with regard to the laser
work, Respondent cannot shift bargaining unit work to nonunit employees and
claim that work is unavailable for a qualified unrecalled unfair labor practice
striker. Radio Electric Service Co., supra at 532; Super Glass Corp., supra at
596 fn. 1.60
c. The Stockroom
Prior to the
strike one bargaining unit employee, Doug Wiedeman, was employed in the
Stockroom and Receiving 2 position. His
supervisor was Dave Hunkel. His work
involved accepting incoming parcels, unloading trucks, storing, disbursing, and
inventorying, and monitoring stock levels of materials.
Wiedeman was not
recalled until February 3, 2004. A number
of witnesses testified, and I find, that until Wiedeman was recalled his
stockroom work was performed by supervisors Kingsbury, Hunkel, and recalled
striker Norbert Jahn. Hunkel also
confirmed this to Wiedeman. Kingsbury,
the welding supervisor, ordered and took stock for the welders. He would write up orders to give to
Hunkel. Hunkel would stock incoming
parts, determine what needed to be ordered and enter the information in the
computer. Jahn would unload trucks and
move materials to the inventory. Jahn
was recalled to work October 20, 1997 to his general factory 2 position. After the strike, in addition to his general
factory 2 work, he performed significantly more stockroom duties than in the
past. However, certain stockroom and
receiving duties were part of the general factory job description, a job
designed to be flexible and to encompass a broad range of work. Jahn testified that before the strike he also
performed some stockroom and receiving work.
On November 8,
1999, Union President Malson complained to KSM that while Jahn was classified
and paid as a general factory 2 employee, since returning from the strike KSM
had added stockroom and receiving work to his duties and he should be receiving
the highest paying stockroom rate applicable to the stockroom and receiving 1
position.61 The next day KSM, by Oechsner, responded to
Malson’s grievance, denying the request.
Oechsner denied that Jahn performed many duties covered by the stock and
receiving 1 position. He admitted that
Jahn performed some duties consistent with Stock and Receiving 2, but concluded
that “for the majority of a workweek Mr. Jahn works within the General Factory
3 classification while occasionally performing duties that cross into the
General Factory 2 and Stock and receiving 2 classifications.”
The upshot of
this is that Jahn, who had performed some stockroom work prior to the strike,
performed more after the strike. Yet KSM
denies that the majority of his workweek was spent performing stockroom
work. I accept Respondent’s claim,
which, in this context is an admission of a party opponent. I find that after the strike, the majority of
Wiedeman’s work was performed by supervisors Kingsbury and Hunkel. Wiedeman’s work was available, but was being
performed by supervisors. As discussed
above with regard to the laser and inspection work, Respondent cannot shift bargaining
unit work to nonunit employees and claim that work is unavailable for a
qualified unrecalled striker. Radio Electric Service Co., supra at
532; Super Glass Corp., supra at 596 fn. 1.
The work that Jahn performed in the stockroom, must be analyzed similar
to the situation with Stern and the shearing department, set forth above. At strike’s end, the stocking and receiving
position was vacant, manned, illegitimately by supervisory personnel. Instead of recalling the stocking and
receiving employee to his former position to displace the supervisor’s and pick
up the additional work assumed 2 weeks later by Jahn, Respondent ignored
Wiedeman and recalled a general factory employee, added some stockroom duties
to his prestrike work, and, along with supervisors, filled the stockroom
position to which Wiedeman was entitled.
As with Jung and the shearing work, after the strike was over, Respondent
might have been able to transfer stockroom duties to an incumbent general
factory employee when inspector work arose instead of recalling an unrecalled
inspector. But Respondent was not
privileged to recall a general
factory employee after the strike was
over and have him and two supervisors perform the job that was the prestrike
job of an unrecalled and unreplaced stock and receiving employee.
Respondent
contends that stocking and receiving work declined after the strike and did not
warrant the reinstatement of a stocking and receiving employee at strike’s
end. Respondent has failed to meet its
burden of proving this. It asserts that
the conversion of the stockroom from a “closed” to an “open” stockroom—which
made certain items accessible to employees without the need of consulting with
a stockroom attendant—diminished the need for a stocking and receiving
employee. But that change occurred prior
to the strike and there is no evidence suggesting that Wiedeman’s position was
imperiled by this change. Respondent
also contends that work orders were reduced after the strike, but this
assertion—which I do not doubt—is unsupported by any evidence that could be
used to assess the impact of the loss of work for the stocking and receiving position. Since the record is clear that a significant
amount of stocking and receiving continued after the strike—doled out between 2
supervisors and a general factory employee—the bald assertion, even if
uncontradicted, is insufficient to meet Respondent’s burden. Burns
Motor Freight, 250 NLRB at 279 (“testimony that the Respondent lost
business as a result of the strike, although uncontradicted, was not corroborated
or documented. . . . There was no
showing of any specific loss of revenues, nor was there even a showing of the
effect of the claimed loss of business on the
total employee complement as compared to that existing prior to the strike”). It is no small matter that neither Hunkel nor
Kingsbury was called to testify. They
would have been the natural witnesses to
provide evidence that, contrary to the testimony of employee witnesses,
they were doing a paltry amount of stocking and receiving work, and that their
stocking and receiving work, combined with Jahn’s, did not amount to a
full-time job. There was no such
testimony. Wiedeman, on the other hand,
testified that in February 2004 when he was reassigned to his prestrike
stocking and receiving position it was a fulltime job.62
d. General Factory classification
One aspect of
the compliance specification that Respondent disputes is the treatment of replacement
Pane Chanthaphavong—who was hired March 19, 1997, the date the strike
converted. The General Counsel’s
compliance specification treats Chanthaphavong as an unprotected replacement in
the General Factory position. I reject
Respondent’s assertion that Chanthaphavong should be accorded the status of a
permanent (or as the parties put it a “protected”) replacement. The Board’s order in this case—terms of which
are not in dispute or subject to amendment in this proceeding63—states unequivocally that strikers are
to be reinstated to their former positions “dismissing if necessary any persons
hired as replacements on or after
March 19, 1997.” (emphasis added). The order further states that remaining
strikers are to be placed on a preferential hiring list and offered employment “on
the departure of any replacement hired before March 19, 1997.” Under the explicit terms of the Board order,
Respondent was required to dismiss Pane Chanthaphavong, and all others “hired
as replacements on or after March 19, 1997,” in order to make way for returning
strikers.64
Respondent
raises two additional contentions regarding the general factory aspect of the
compliance specification.
Respondent
asserts that the General Counsel’s compliance specification fails to account
for two unprotected replacements (N. Love and T. Keungsavath) who were “laid
off due to returning strikers” on October 10, 1997. I disagree.
At strike’s end there were six unprotected replacements working in the
general factory classification, including Love and Keungsavath. The General Counsel seeks backpay for six
unrecalled strikers at strike’s end.
After Love and Keungsavath’s layoff, striker Jahn was recalled on
October 20, 1997. At that point, the General
Counsel reduces the accruing backpay demand to five strikers. When striker Jung was recalled on December 1,
1997, leaving four unprotected replacements working in the general factory
classification, the General Counsel reduces the accruing backpay demand to four
strikers. Thus, as N. Love and T. Keungsavath’s
positions were filled by Jahn and Jung the General Counsel accounted for this
by reducing the number of strikers continuing to accrue backpay to equal the
number of unprotected replacements who continued to work.
Respondent also
asserts that it is paying “double backpay liability” because the General
Counsel seeks backpay for unrecalled striker Stern in the shearing department,
while that work was performed by a general factory employee. According to Respondent, it should not have
to pay backpay to “two individuals—one in GF and one in Shear—for one replacement
worker in GF.” Respondent contends that
this “goes beyond making discriminatees whole and should be denied.” Respondent misconceives the compliance
specification. General Counsel,
appropriately, seeks backpay for one unrecalled general factory striker for
each unprotected replacement position.
As discussed above, in addition to the four unprotected general factory
replacements working as of December 1, 1997, Respondent recalled striker Jung
to work in the shear department, along with supervisors, thus unlawfully
denying reinstatement to shear operator Stern.
As discussed above, Stern is owed backpay. No general factory striker is receiving
backpay on account of Jung’s work. As discussed
in the preceding paragraph, Jung’s reinstatement reduced by one the number of
unreinstated general factory employees receiving backpay. It is true, of course, that Respondent paid
wages to Jung, and to two supervisors, for work that should have been performed
by Stern and for which backpay is appropriately assessed on Stern’s
behalf. In this sense only is Respondent
“double paying.” But I do not think that
Respondent intends to contend that backpay due a striker—or any discriminatee,
for that matter—should be reduced by the amount of wages Respondent paid to
those who unlawfully replaced him.
e.
Shipping department and James Kollenbroich’s
reinstatement
James
Kollenbroich worked for KSM since 1977.
Prior to the strike he worked for 20 years on the first shift in the shipping
department performing final assembly work.
At the time of the strike Kollenbroich’s job title was shipping A. Prior to the strike Anthony Bannenberg worked
as a shipping B employee with Kollenbroich.
Prior to the strike, Roger Gutjahr worked second shift as a shipping A
employee.
Prior to the
strike, two employees, James Kranz and Anthony Schmitt worked as shipping &
trucking A employees (first shift).
Based on the job descriptions for these positions, the main difference
between shipping A and shipping & trucking A (in addition to the higher pay
for the shipping and trucking position) was that a shipping & trucking A employee
was to maintain a commercial drivers license (CDL) that would allow him to
drive the large truck used by KSM for deliveries. In fact, Kranz was the primary truckdriver
and usually drove the large truck. He
also performed assembly work similar to that performed by Schmitt and
Kollenbroich. Schmitt “very seldom”
drove the large truck. He did so when
neither Kranz nor Supervisor Tony Oechsner were at work. Both before and after his promotion,
Kollenbroich and Schmitt had worked alongside each other, for the most part
performing the same or very similar work.
Kranz was
recalled to work October 20, 1997, and resumed his prior work, including being
the primary driver of the large truck.
Schmitt was offered recall on May 19, 1998, to his first-shift shipping
and trucking A position. He declined the
offer on May 20, 1998. No one was hired to
fill the position that Schmitt turned down.
By letter dated May 19, 1998, Kollenbroich was offered a shipper A
position, but in a subsequent phone call with Oechsner on May 20, the position
offered to Kollenbroich was to a second-shift shipper A position. Kollenbroich agreed to take the second-shift
position and reported for work on May 26.
He reported for work on the first shift pursuant to KSM’s request that
he undergo a 1–2 week “indoctrination period” before being put on the second
shift.
One week later,
on June 2, 1998, with his commencement of second-shift work imminent,
Kollenbroich told Oechsner that he did not want to work the second shift. Oechsner and Kollenbroich agreed that KSM
would recall another employee on the recall list for the second shift and Kollenbroich
would then return to the recall list and await an opening on the first
shift. Oechsner prepared a letter
summarizing what had transpired and asked Kollenbroich to review it and if it
was accurate, to sign it. Kollenbroich
and Oechsner both signed the letter, which is dated June 3, 1998, and which
states:
Dear Mr. Kollenbroich:
This letter is to confirm our
conversation and mutual agreement on June 2, 1998, regarding your employment
status. On May 19, 1998, the Company
extended a recall of employment offer by certified mail. The job offered to you during our phone
conversation on May 20, 1998, was a second shift Shipper A position. You initially agreed to report to second
shift following a one to two week first shift indoctrination period. You reported for work on Tuesday May 26th.
However, on June 2, 1998, you stated your desire not to work second shift and requested the Company recall another laid-off worker to that position and to place your name back on the laid-off subject to recall list. It was mutually agreed that the Company will attempt to recall another Shipper A for the second shift position and that you will continue to work first shift pending replacement. The Company does[,] however, reserve the right to transfer you to second shift in the event it is unsuccessful in its attempt to recall another Shipper A.
Kollenbroich was
then laid off and returned to the recall list.
Records in evidence show that Roger Gutjahr was offered recall on June
3, 1998. Prior to the strike he had been
a shipper A on the second shift. He accepted
the recall and on June 15, 1998, began working on the first shift and moved to
second shift June 22, 1998. There is no
evidence suggesting that an additional employee was hired to work in shipping
prior to February 25, 1999, when Kollenbroich was finally offered his
first-shift shipping position.
Kollenbroich declined that offer of recall on March 1, 1999.
The General
Counsel contends that with Schmitt’s decline of his recall, there was shipping
work for Kollenbroich on the first shift, and Kollenbroich should have been
recalled—not to Roger Gutjahr’s second shift position, but to the first-shift
shipping position that he held before the strike. The General Counsel’s position stems from the
fact, established by multiple witnesses, that qualifications and licensing
aside, Schmitt performed very little truck driving and mostly performed shipping
work identical to that performed by Kollenbroich. Kranz was recalled shortly after the strike ended
and resumed truckdriving and his other prestrike duties. The General Counsel’s contention is that the
recall of Schmitt demonstrates that there was first-shift shipping/assembly
work—of the very kind that Kollenbroich and Schmitt regularly performed.
KSM contends,
initially, that Kollenbroich was
recalled to his first shift, but then transferred, in accordance with the terms
and conditions of the expired labor agreement, to the second shift. According to KSM, “the recall to first shift
terminated any entitlement to backpay.”
(R. Br. at 109). This argument is
inconsistent with the record facts. As
clearly set forth in the letter (reproduced above) that Oechsner wrote to document
events surrounding Kollenbroich’s recall, Kollenbroich was not offered reinstatement
to the first shift. He was offered the
second shift position with the understanding that he would have a short “indoctrination
period” on the first shift. It is
well-settled that “an offer of employment for a different shift is not “substantially
equivalent.” Associated Grocers, 295 NLRB 806, 807 (1989). KSM cannot transform its offer of
second-shift work preceded by a temporary “indoctrination period” on the first
shift, into a bona fide offer of reinstatement to Kollenbroich’s first shift
position.65
The more
significant issue is the question of whether there was, in fact, as General
Counsel contends, work for Kollenbroich as a first shift shipping A
employee. After Schmitt turned down the
offer of recall to shipping and trucking A, KSM did not hire or recall another
shipping and trucking A employee to the first shift. Nor did it hire or recall another shipping A
employee to the first shift. After
Kollenbroich rejected the second shift, Gutjahr was recalled and after a week
on first shift, presumably an “indoctrination period” such as Kollenbroich had
enjoyed, was put on second shift (where he had worked immediately prior to the
strike). This raises the question: who,
if anyone, performed the final assembly work that Schmitt would have done if he
had been recalled and to which General Counsel maintains Kollenbroich was entitled? Oechsner testified that no additional
employees were needed on the first shift.
This was, however, at a time, late May and June 1998 when the “production
requirements were building,” or as Oechsner put it with regard to reinstatement
of factory employees at this time, “[i]t was all hands on deck.” Moreover, records show that strike
replacement Durwin Nash, who worked as a first-shift shipping B employee, resigned
in May 1999, presumably leaving additional shipping department work. The record shows, and Oechsner testified,
that employees were routinely moved throughout the facility to accomplish work,
including in the shipping area. Thus,
the shipping work was performed on the first shift by a variety of employees
from many different classifications, although it appears that none were
classified as shipping department employees at that time. This included recalled strikers (such as
Brandon Hottenstein), protected replacements (such as Charles Nash, who
Oechsner recalled being “routinely” assigned to shipping) and unprotected
replacement Pane Chanthaphavong who James indicated worked in shipping and who
Oechsner recalled as working in shipping “a good portion” of 1998 and 1999 (and
who Nash complained should have been moved out of shipping, instead of
himself). Based on KSM’s admittedly
expanding production, its attempt to recall Schmitt to a first-shift position
that would have primarily involved shipping assembly work, and the admitted use
of unprotected replacement Chanthaphavong to perform shipping department work
on the first shift, I find that the evidence supports the General Counsel’s
contention that there was work for at least one unrecalled shipping employee on
the first shift as of May 1998.
Kollenbroich’s backpay period appropriately began to run on May 20,
1998, the date of Schmitt’s rejection of a first shift offer that would have
involved significant amounts of shipping assembly work of the type he and
Kollenbroich had performed together for many years.66
f. The offer to reinstate Michael Servi
Michael Servi
began at KSM in August 1976 and went on strike in January 1997. He worked as a Tape A programmer on the first
shift prior to the strike. Four unprotected
replacements were working in the tape department at strike’s end and two
remained working there through January 1999.
The parties agree that Servi was unlawfully denied reinstatement at the
end of the strike. However, the parties
dispute whether Servi’s backpay tolled and his right to reinstatement waived
when he declined an offer of reinstatement in January 1999.
More than 14
months after the strike, KSM contacted Servi by letter dated December 22,
1998. The letter, from Oechsner, stated
that “KSM anticipates an opening within the classification Tape A to occur in
mid-January of 1999. This letter is to
determine your availability for recall to that position.” The letter went on to request that Servi
contact Oechsner “to discuss your availability and possible recall.” A few day later, on December 28, 1998, Servi
called Oechsner to say, according to Oechsner’s notes, that “he is available
for recall in mid-January. I advised him
the Company would contact him again should the opening occur.” Oechsner wrote Servi again on January 26,
1999, stating,
Following up on our conversation of last December, I am hereby offering you reinstatement to your former position of Tape A. If you are interested in returning to employment with KSM, contact me within three business days following receipt of this letter to discuss your date of return.
Servi called
Oechsner on February 2, 1999. Servi said
he would like to return to KSM but told Oechsner he would not be available
until March 1, 1999. Oechsner testified
that he
reminded him of our conversation --
earlier conversation where he said he would be available in January and I asked
him what prevented him from reporting sooner.
He indicated to me that he had things to do and that the earliest he
could report was 2/22 and we then agreed on that date.
Oechsner did not
have an independent recollection of discussing health insurance with Servi
during this conversation, but, based on the letter he received from Servi on
February 18, he assumed that they did.
Servi’s letter (dated February 16, 1999) stated:
Dear Dave,
After our last conversation on February
2, 1999, it is apparent to me that some things have changed at KSM Industries
that I believe were not part of the unconditional agreement to return to
work. One of the most disturbing changes
that you told me was a wait of over 60 days before I am eligible for any health
insurance. The wait of over 60 days for
these benefits greatly compromises my daughter, wife as well as myself.
Therefore, with great disappointment I
have to decline your offer of employment.
Servi’s
reference in this letter was to the fact, as Oechsner says he would have explained
it to Servi, that health insurance for a returning striker would be effective
on the first day of the month following 60 days. This was not the case for strikers who were
previously recalled. Prior to
Oechsner agreed
that, had Servi been recalled prior to December 31, 1997, he would have
immediately been eligible for health insurance and would not have been subject
to a waiting period for commencement of health insurance.67
The General
Counsel contends that the offer of reinstatement was invalid because of the
attendant condition that Servi could not resume health care coverage for over
60 days and, therefore, by declining Servi did not toll backpay or waive reinstatement. It is, in fact, indisputable that had
Respondent offered Servi reinstatement at strike’s end, as it was lawfully
required to do, Servi would not have been subject to a waiting period before
resuming health insurance coverage.
Therefore, the January 1999 offer of reinstatement was not an offer to a
position with the same benefits that he would have received but for Respondent’s
discriminatory failure to recall him earlier.
This “clearly
renders the offer invalid because ‘a Board order for reinstatement of a
discriminatee is designed to place that individual in the same position the
individual would have been in had there not been discrimination against him.’” Consolidated
Freightways, 290 NLRB 771, 772 (1988) (quoting Craw & Sons, 244 NLRB 241 (1979), enfd. without op. 622 F.2d
579 (3d Cir. 1980)), enfd. as modified 892 F.2d 1052 (D.C. Cir. 1989), cert.
denied 489 U.S. 817 (1990). “Accordingly,
an evaluation of the discriminatees’ response to the letter [offer] is
unnecessary.” Midwestern Personnel Services, Inc., 346 NLRB 624, 625 fn. 8
(2006).
In this case, it
is notable, however, that consideration of the discriminatee’s motive for
rejecting the offer buttresses the General Counsel’s position and, indeed,
eliminates any suggestion that, in these circumstances, the delay in resumption
of health care coverage was insignificant to the discriminatee. As Oechsner knew, Servi suffered from
non-Hodgkin’s lymphoma. He died from it
March 7, 2001. His widow, Michelle Servi
testified at the hearing that Servi had had cancer since 1981. It had never been in remission and “[h]e was
always under medical care.” She
testified that “he did decide to go back” to KSM but “[a]fter he had called and talked to Dave
Oechsner and found out the conditions of his returning . . . he change[d] his
mind.” Mrs. Servi testified, “it would
have been financially devastating to us not—for him not to have health
insurance.” Mrs. Servi testified that “he
couldn’t go back under those circumstances of having to wait 60 days for the
health insurance.”68
Thus, this case
involved an individual who Respondent knew to have a serious medical condition
requiring continuous medical attention, and as is evident from his response to
the recall offer, the delay in health care coverage motivated Servi to reject
the offer. It is common knowledge that
for many in Servi’s circumstances, health care coverage is a more important condition of employment than wages or other
working conditions. It is hardly a “fringe”
benefit in such circumstances. An offer
of reinstatement that delays benefits (more than) 60 days is substantively and
materially deficient compared to the offer Servi was legally entitled to
receive and would have received in the absence of KSM’s unlawful delay in reinstatement. These circumstances render inapposite the
decision by ALJ Judge Kennedy in Desert
Aggregates, Inc., 32–CA–18653, (NLRB Div. of Judges, Nov. 2, 2004), relied
upon by Respondent. In that case Judge
Kennedy found that an offer of recall to a “manipulat[ive]” discriminatee that
included a 90-day delay in health coverage eligibility did not invalidate the
offer where the Judge found that the health insurance issue “inconsequential to
the discriminatee,” and “had no value for him.”
In the instant case, health insurance was of great significance to
Servi.69
The offer was
invalid and Servi’s rejection had no impact on Respondent’s duty to reinstate
him or his continuing backpay accrual.70
3. The order of reinstatement
The General
Counsel asserts and Respondent concedes, that at strike’s end it was required,
but failed, to reinstate strikers to available positions, including positions
held by unprotected strike replacements.
The parties agree that backpay is owing to each striker whose position
was available at the strike’s conclusion.
The parties also agree that at strike’s end there were not sufficient
available positions for every striker and that those remaining strikers were
entitled to recall as positions became available. The parties disagree on the order in which
these unreinstated strikers should have been reinstated. KSM disputes the compliance specification’s
premise that employees should have been recalled to available positions within
their pre-strike department classification in order of their plant-wide
seniority. KSM contends that the more
appropriate order of recall was the one KSM utilized (albeit with delays and
inconsistencies that in some cases admittedly result in liability) of recalling
unreinstated employees based on whom KSM believed to be the most qualified of
eligible employees. In this regard, KSM
contends that it followed the recall provisions of the expired collective-bargaining
agreement in recalling employees as openings arose. Respondent asserts that in its weekly
management meetings, if it determined that work justified the recall of a
striker, management would make a group decision regarding the most qualified
unreinstated striker in the classification.
That employee would then be recalled without regard to seniority. If, in management’s view the qualifications
of unrecalled strikers were approximately equal, then management would look to
seniority as a tie breaker.
In considering
the competing positions, the Board’s disposition of a very similar dispute in Alaska Pulp, is instructive. In Alaska
Pulp, the Board explained:
Our objective in compliance proceedings is to restore, to
the extent feasible, the status quo ante by restructuring the circumstances
that would have existed had there been no unfair labor practices. Phelps
Dodge Corp. v. NLRB, 313
326 NLRB at 523 (footnotes omitted). See also, Parts
Depot, Inc., 348 NLRB 152 (2006) (“Our objective in compliance proceedings
is to restore, to the extent feasible, the status quo ante by restoring the
circumstances that would have existed had there been no unfair labor
practices”).
Thus, the “wide
discretion” afforded the General Counsel in selecting a backpay formula is bounded
by Board’s desire to utilize the “most accurate method” of calculating
backpay. This means the “objective” is “to
restore, to the extent feasible, the status quo ante by restructuring the circumstances
that would have existed had there been no unfair labor practices. In considering this question, the issue is
not whether KSM’s practice of calling back the unreinstated striker it deemed
most qualified was independently lawful or unlawful, but “[r]ather, the issue
is whether the merit rankings by the Respondent accurately reflect the order in
which the Respondent would have recalled the strikers, under a lawful plan, to
their pre-strike or substantially equivalent positions.” Alaska
Pulp, supra at 523.
In this case I
accept the General Counsel’s position that recalling strikers in order of
seniority within classification is the most accurate reconstruction of what
would have happened in the absence of unfair labor practices. I reach this conclusion for the following reasons.
First,
Respondent admits it as to the strikers who should have been recalled
immediately at the conclusion of the strike.
Thus, Respondent’s answer to the compliance specification, and its
summary exhibit, R. Exh. 39, set forth a backpay formula that provides for the
most senior strikers in each job classification to receive backpay—one striker
for each working unprotected replacement, starting with the most senior striker
and continuing down the seniority roster until there is one striker accruing
backpay for each unprotected replacement working in a given
classification. Respondent offers no
explanation as to why seniority by job classification is the appropriate method
of recall to vacancies at the end of the strike, but not for vacancies that
develop subsequently. If recall of the
most qualified is the operative principle then Respondent would have taken the
position that the most qualified—not the most senior—in each department should
have begun accruing backpay when they were not reinstated at strike’s end. Notably, when Respondent recalls a senior
striker (who Respondent admits had been accruing backpay) without displacing an
unprotected striker, Respondent takes the position that the next most senior
unreinstated striker in the department begins accruing backpay.71
Thus, throughout the recall period, even while Respondent is contending
that the right to reinstatement should be based on relative qualification, it
is willing to rely on seniority to determine the right to reinstatement to a
position held by an unprotected replacement.
No rationale is offered by Respondent for accepting that working
unprotected replacements trigger a right to reinstatement for strikers in order
of seniority, while Respondent can choose “the most qualified” for any other
available position. And when unprotected
replacements left, Respondent did not necessarily offer reinstatement to the senior
employees that Respondent admits had been accruing backpay and entitled to
those positions.72 Another way to view Respondent’s position is
that it accepts the principle of reinstatement by seniority in cases where the principle is theoretical, i.e., in instances
where Respondent unlawfully failed to reinstate a striker and allowed an
unprotected replacement to keep working.
But opposes the General Counsel’s methodology, in any instance where it
actually reinstated a striker. In that
case, Respondent claims the right to reinstate the most qualified of the
unrecalled strikers from the relevant department. The arbitrariness and incoherence of
Respondent’s model weighs against its adoption.73
Second,
Respondent’s proposed and highly subjective method of recall (something I
discuss below) was carried out in a context where its decisions were hopelessly
confounded with its admittedly unlawful conduct. Thus, Respondent’s position is that in each
case it called back the “most qualified.”
But Oechsner admitted (as he obviously had to) that had Respondent
immediately displaced the unprotected replacements after the strike, there is
no way to know what Respondent’s hiring needs would have been when they were
ready to reinstate additional strikers.
This is an obvious point, but it highlights that Respondent’s unlawful
failure to reinstate strikers in October 1997 inextricably impacted the
selection of strikers later in the recall process. Thus, the unlawful discriminatory failure to
recall strikers in October 1997 taints the subsequent unilateral decisions on
reinstatement that Respondent seeks to validate. Indeed, as unprotected replacements continued
working beyond the time the last striker was offered recall, Respondent’s unlawful
refusal to displace the unprotected replacements with strikers framed and
shaped its recall choices in every instance throughout the recall process. Thus, far from providing “the most accurate
reconstruction of what would have happened in the absence of Respondent’s
unfair labor practices,” the choices made by KSM using its recall method are
infected by and of a piece with its unfair labor practices.74
Third,
particularly given the previous point, the utter subjectivity of Respondent’s
recall procedure is troubling. As described
by Oechsner and William James, then vice-president of operations, Respondent’s
recall determinations were made by a “management team” that met at least weekly
on an array of production matters. When
managers felt that available work required an additional employee the team
would look at a list of unreinstated strikers from the relevant department and
choose the one that was most qualified in terms of the particular work facing
the department. James described an informal
process:
“Well, you know, how it usually would
happen is either Phil Davis or myself from the shop floor end would say “We are
going to need somebody”. You know, “We
are going to need—we are going to have to start up a second shift in painting
to handle this”. . . . [I]mmediately
after the strike we had the recall list and then we would see if one of those
people would -- that would be Dave[ Oechsner]’s input. He would say “We got so-and-so out here. Weren’t they a painter”? Something like that.”
Where the
qualifications of two unrecalled strikers were deemed, in the team’s view, to
be approximately equal, then the team would select the most senior striker for
reinstatement. At trial, this basic
description of the recall process was repeatedly invoked by Oechsner for every
recall decision he was asked about.
Oechsner’s testimony made clear that the process was not to determine
whether two (or more) unrecalled strikers were capable or qualified to do the
work required, but, rather, who was “the most qualified” or “more skilled” employee,
or the one “better than anyone else that was on the list” from the relevant
classification. (Tr. 1145, 1147, 1159,
1175, 1180). As Oechsner explained it,
Well, as our routine was, we would look
at the available workers, we would look at the -- well, first we’d look at what
was the work available, what did we want done, what did we need to have done,
and then we looked at the available workers and made a determination as to who
had the most skill and ability to perform that work. And that’s how we did it.”
The informality
of the process is corroborated by the fact that Respondent offered not one
piece of documentary evidence corroborating any details of these weekly
meetings. No notes of the meetings or
the consideration provided to these recall issues were introduced. Perhaps none exist. The ad hoc quality to the “qualification
decisions” relied upon by KSM stand in sharp contrast even to the merit
selection process relied upon by the employer in Alaska Pulp, supra, which “merit-rated [employees] according to
various criteria and gave each employee a numerical ranking within his or her
former department.”
Both Oechsner
and James insisted that in recalling strikers they followed the procedures of
the expired labor agreement, specifically, Article IX, section 4. However, there is no evidence that the
parties intended this provision to apply to reinstatement of strikers. By its terms it applies “[w]here the Company
finds it necessary to lay off employees . . .” and, of course, reinstatement
after an unfair labor practice strike is not the product of a layoff. Section 4 concerns recalls that follow
layoffs, and explicitly provides for employees to be recalled, according to Section 4(E) “in the reverse
order in which they were laid off, in accordance with their seniority in their
classification in accordance with ‘A’ of this Section.” Section 4 covers recalls, but anticipates a
recall that is a response to a layoff, not a strike.
But even
assuming, wrongly by all evidence, that this provision was intended to be applicable
to striker reinstatement, I think KSM stretches this language farther than it
will reach. While the contract language
does not provide for recall or layoff strictly by seniority, it also does not,
fairly read, anticipate the ad hoc discretion to chose the “most qualified”
that KSM claims it exercised in this
instance.
The expired
contract provides that “Employees shall be shall ‘be laid off and recalled on
the basis of their seniority as established in their classification in accordance
with “A” of this Section.” Article IX,
Section 3(B). Section A provides that
factors the employer shall consider:
A) Where
the Company finds it necessary to
layoff employees, the following factors shall be considered by the Company:
1. Qualifications, which shall be de-
fined to mean present ability to perform the work available in a good,
efficient, and workmanlike manner demonstrated by prior experience or training
with the Company. An employee who meets such qualifications shall be deemed “qualified”
for purposes of this Section.
2. Seniority in the affected classify-
cation or plant wide seniority whichever is appropriate.
When
as between two or more employees,
Factor “1” (Qualifications), is approximately
equal , Factor “2” (Seniority) shall
govern.
Respondent’s
entire argument is based on its reading of this last quoted paragraph. However, it is apparent from Oechsner and
James’ description of the recall process, and from a reading of the entire
Section A as a whole, another way to interpret the language is that an employee
is “deemed ‘qualified,’” i.e., possesses the “qualifications” for the position,
expressly defined as the “present ability to perform the work available in a
good, efficient, and workmanlike manner demonstrated by prior experience or
training with the Company.” Under this
standard, employees being recalled to prior positions would—except in very
unusual circumstances not relevant here—all be “qualified” with approximately
equal qualifications as they are all able to “perform the work available in a
good, efficient, and workmanlike manner.”
Under this view, this recall provision is essentially a seniority recall
provision with the condition that seniority must give way to a review of
employee’s qualifications to perform the work.
Although not the only interpretation of this clause, it is a compelling
one. What is unique, and untenable, I
believe, is KSM’s position that this language permits it to recall the employee
it views as “the most qualified” in every instance, without a nod to the
definition of “qualifications” set forth in the language. Notably, there is no evidence that KSM
considered the definition of qualifications set forth in the language of the
expired contract. Thus, I reject Respondent’s
contention that its method of recall is the one for which the parties previously
bargained.
Fourth, while
Respondent’s witnesses asserted, without rebuttal, that this recall policy had
been used in the past, no examples were provided, and no documentary evidence
corroborates this claim. I accept that
there were past recalls in which people were not recalled in accordance with
strict seniority. But there is no
evidence that in the past a recall of any magnitude was carried out in the ad
hoc fashion that striker’s recall was undertaken. To the contrary, there is documentary evidence
suggesting that, both before and after the strike, classification seniority was
followed with regard to layoffs. Thus, a
KSM list entitled “Callback Effective January 20, 1997” was stipulated into
evidence by the parties which appears to list, by strict seniority within classification
who will be working and who will be on layoff as of January 20, 1997. In each classification, it is only the junior
employees who are on layoff.75 Similarly, after the strike, in 2002 and
2004, plant wide seniority within classifications was followed in layoffs with
junior employees within each classification being scheduled for layoff unless
they were able to bump more junior employees in another classification. (See, GC Exh. 6-8). In those two cases, Oechsner admitted, plant
seniority within classification was the basis used to determine who would be
laid off. Thus, the only documentary
evidence introduced at trial demonstrates the use of seniority within
classification as the basis for layoffs.
KSM’s contention that the contract calls for recall of those KSM
considers the most qualified is uncorroborated by any definitive examples,
except for KSM’s reinstatement of strikers.
Respondent
contends that its version of the contractual recall provisions is undisputed.
This is not so. Oechsner testified that
the
In summary, the
General Counsel’s proposed order of recall for purposes of determining backpay
is based on a method at least sometimes used by Respondent to effectuate
layoffs and which objectively determines the order of recall for all strikers—whether
they should have been reinstated at the strike’s conclusion, or later as
vacancies developed—based on the same principle. By recalling strikers based on seniority
within the employees’ respective classifications, the General Counsel’s method
ensures that the returning striker has the qualifications for the position, as
they are being recalled in every case to a position they previously held. The striker may not be the “the most
qualified” or skilled of all unrecalled strikers for the position, but the
striker has demonstrated through past experience on the job the ability to
perform that work in a reasonably competent manner. By contrast, Respondent proposes to use a
method that, quite apart from how Respondent describes it, allows KSM the
nearly unfettered discretion to choose who it reinstates, in a context where
its choices are the product of an admittedly unlawful refusal to reinstate
strikers at the conclusion of the strike, strikers KSM admits should have been
reinstated by seniority. Respondent’s
rationale for this method, the expired collective-bargaining agreement, does
not appear to offer support. In this
context, Respondent’s method of recall cannot be a reconstruction “what would
have happened in the absence of respondent’s unfair labor practices” because
its choices are the product of its unfair labor practices. It is a method that Respondent proffers
because it reflects what Respondent did and therefore its adoption would result
in the minimum of liability for Respondent.
That is not a sound basis for determining, to the extent possible, the
method Respondent would have used to lawfully reinstate strikers had it not
unlawfully denied reinstatement to so many at strike’s end. Respondent’s contention that Board law does
not require the use of seniority and that absent discrimination “an employer
can use any method of recall” (R. Br. at 51) is beside the point. The issue is not whether Respondent’s recall
method could violate the Act if considered in a different legal context. The
issue is whether, in the absence of Respondent’s unfair labor practices, its
recall method approximates what would have occurred. For the reasons set forth above, Respondent’s
method fails to meet that test. I
believe that the General Counsel’s is the more accurate and I see no reason to
modify it.77
C. General gross backpay issues
1. Beginning date for backpay period
In the
underlying decision in this case the Board found that the
Respondent disputes
this, contending in its answer to the compliance specification that,
“[n]o backpay period should commence
prior to October 12, 1997, the date one week after the
The answer to
this, of course, is that Respondent did not try. The “Board’s long-standing practice” of
permitting 5 days to reinstate strikers is designed “to provide a reasonable
accommodation between the interest of the employees in returning to work as
quickly as possible and the employer’s need to effectuate that return in an
orderly manner.” Teamsters Local 574, 259 NLRB 344 fn. 2 (1981). On the other hand, as the Board explained In Drug Package Co., 228 NLRB 108, 114
(1977), enft. denied in part on other grounds, 570 F.2d 1340 (8th Cir. 1978):
in those instances [where] the employer
has made it clear that it does not intend to reinstate the unfair labor practice strikers . . . there
is no reason to permit it 5 days in order to effectuate an orderly reinstatement and the Board will not,
in this circumstance, do so. The 5-day
period is not to enable the employer to delay reinstatement or to obtain 5 days during which he is not required
to pay backpay, but is in recognition of the practical difficulties he may face
in reinstating the employees,
when he is not in a position to know exactly when they may seek to return.”
“[I]f an
employer has rejected, attached an unlawful condition to, or ignored an unconditional
offer to return to work, the 5-day period serves no useful purpose and backpay
will commence as of the unconditional offer to return to work.” Teamsters
Local 574, supra; Northern
Wire Corp., 291 NLRB 727 fn. 5 (1988), enfd. in part, 887 F.2d 1313 (7th
Cir. 1989); Westpac Elec., 321 NLRB
1322 (1996). In such case the backpay
obligation begins from the date of the unconditional offer to return to
work. Northern Wire Corp., supra; La Corte ECM, 322 NLRB 137 (1996); Newport News Shipbuilding, 236 NLRB
1637, 1638 (1978), enfd. 602 F.2d 73 (4th Cir. 1979).
In this case,
Respondent offered reinstatement to only 3 strikers within the 5 days after the
unconditional offer to return. None of
those was reinstated within the 5-day period.
Respondent failed to reinstate any employees within the 5 day, or even 7
days, following the offer to return.
Within the first 30 days, only 10 strikers were offered reinstatement,
although 25 unprotected replacements continued working. Thus, the 5-day grace period the Board provides
to reinstate strikers “serves no useful purpose and backpay will commence as of
the date of the unconditional offer to return to work.”
2.
Cessation of backpay for those accepting,
declining, or failing to respond to an offer of recall
In terms of the
cessation of the backpay period, the General Counsel takes the position that
for employees who ultimately returned to work at KSM, the backpay period ended
when the employee actually returned to work, not on the date that a valid offer
of reinstatement was made by KSM. For employees
who declined an offer of recall, the General Counsel contends that the backpay
period ends on the date that the employee advised Respondent of the decision to
decline recall. These parameters are in
accordance with settled Board precedent.
Cliffstar Transportation Co.,
311 NLRB 152, 154–155 (1993); Southern
Household Products Co., 203 NLRB 881, 882 (1973).78
I would note
that the General Counsel also contends that for employees who failed to respond
to an offer of recall, generally the backpay period ends on the date set by
Respondent to provide a response to the offer of reinstatement. This issue was not litigated, or disputed by
any party, and Respondent’s letters usually sought a response within 3 business
days of receipt of the letter. Although
there was some variation, typically these letters, from Oechsner, requested
that the employee “please contact me within three business days following
receipt of this letter to discuss your possible date of return.”
I doubt that
this provides a “reasonable time” for an employee receiving an offer of
reinstatement to consider the offer before backpay tolls. See Cliffstar
Transportation.
3.Discriminatees’ right to recover expenses
for out-of-pocket interim health care premiums
The General
Counsel alleges that the backpay owed employees includes the out-of-pocket cost
of health care premiums paid by employees for themselves and/or their families
during the backpay period that substituted for the KSM-provided insurance that
would have covered employees had they been reinstated. Respondent does not dispute that the Board
customarily includes reimbursement of substitute health insurance premiums in
make-whole remedies for fringe benefits lost.
See, e.g. Aroostook County Regional Ophthalmology Center, 332 NLRB 1616, 1618
(2001); Cliffstar Transportation Co., supra at 166. However, Respondent contends that in this instance
the discriminatees are not entitled to recovery of these costs, contending (R.
Br. at 112–113) that the General Counsel unambiguously waived the right to
recover these costs. KSM’s contention is
based on the October 3, 2006 Stipulation and Partial Settlement Agreement, in
which KSM waived the right to contest the underlying Board Order in this case,
and which was signed by the General Counsel, KSM, and the Union. The stipulation provides:
“Respondent has not been able to reach
agreement with the Board concerning the liability, if any, owing under
paragraph 2(c) of the Board’s September 28, 2001 Order (336 NLRB 133), as
modified by its November 7, 2001 Order, which includes the lost pay and
out-of-pocket medical expenses allegedly incurred by the strikers who were not
recalled in a timely manner. Accordingly,
Respondent reserves the right to a hearing before an administrative law judge
to determine the amount due, if any, under paragraph 2(c) of the Board’s September
28, 2001 Order, as modified, and to present any other compliance-related issues
except those [relating to the resolved health care changes and bargaining
positions referenced above].”
Respondent
argues that “[t]his language is unambiguous.”
Respondent claims that “by its terms,” the stipulation “provided that
the only issues remaining for this proceeding are the ‘lost pay and
out-of-pocket medical expenses allegedly incurred by the strikers who were not
recalled in a timely manner.’”
I think this is
inaccurate. By its terms, the stipulation
states that the parties failed to reach agreement concerning liability owing
under paragraph 2(c) of the Board’s Order “which includes the lost pay and out-of-pocket medical expenses.” (emphasis added).
The issue comes
down to the meaning of the word “includes.”
Respondent’s contention is that the stipulation’s description of subjects
“include[d]” under paragraph 2(c) of the Board’s order—the paragraph on which
agreement was not reached—is intended to be an exhaustive list, and not an illustrative
one. I think it is possible to read the
word “include” to exclude everything else, but it is not the only, or the
preferred, or the most likely meaning of the word. The relevant definition for “include” from
Webster’s Third New International Dictionary (1976) 1143—”to place, list, or
rate as part or component of a whole or of a larger group, class, or aggregate”—is
at odds with Respondent’s contention. Fowler’s
Modern English Language Usage 387 (R.W. Burchfield ed., 3d ed. 1996) treats with the distinction between “include”
and “comprise,” and the discussion is relevant here. It is clear that R.W. Burchfield, at least,
would look down at his nose at wordsmiths who intended what Respondent claims
it, the General Counsel, and
“comprise
is appropriate when the content of the whole is in question, and include only when the admission or
presence of an item is in question: good writers say comprise when looking at the matter from the point of view of the
whole, include from that of the
part. With include, there is no presumption (though it is often the fact) that
all or even most of the components are mentioned; with comprise, the whole of them are understood to be in the list.”
Had the word “only”
been appended to the word “include,” Respondent’s argument would have more traction. But in its absence, Respondent has no other
argument as to why I should read a word that commonly describes “part of a
whole or group” as meaning the entirety of the whole or group. I do think it a possible reading, but nothing—nothing in the paragraph as a
whole, nothing in the stipulation agreement, and no extra-textual
argument—suggests that Respondent’s view is correct. The preceding sentence of the stipulation references
the parties’ inability to reach agreement on liability under paragraph 2(c),
hardly language that prefaces a waiver. The subsequent sentence provides Respondent
with an unqualified right to a hearing on what it owes under paragraph 2(c),
without any attempt to limit or define the scope of paragraph 2(c) which, as
noted, would be interpreted ab initio to
cover out-of-pocket medical expenses.
Nor is there any suggestion or basis to infer in the remainder of the
stipulation agreement that the General Counsel waived the right to seek
compliance with the full scope of Section 2(c), with the exception of the
unilateral changes in health care clearly referenced and on which accord was
clearly reached in the stipulation agreement.
Finally, Respondent does not make any type of argument relying on parol
or any other evidence beyond the text of the stipulation. It is noteworthy, in that regard, that the
unrebutted testimony of the compliance officer was that discriminatees in this
case did not receive any money under the settlement for lost benefits during
their backpay periods. In this case, I
think that the contention that the stipulation indicates a waiver of the right
to otherwise reimbursable health care premiums is untenable. It is supported by nothing other than a
dubious reading of the word “include” to exclude anything not mentioned.80
D. Mitigation and offset issues
A discriminatee
is entitled to backpay if he makes a “reasonably diligent effort to obtain
substantially equivalent employment.” Moran Printing, 330 NLRB 376
(1999). In seeking to mitigate loss of
income, a backpay claimant is held only to reasonable exertions, not the
highest standard for diligence. The
Board stated in Flannery Motors, Inc.,
330 NLRB 994, 995 (2000):
A good faith effort requires conduct
consistent with an inclination to work and to be self-supporting and that such
inclination is best evidenced not by a purely mechanical examination of the
number or kind of applications for work which have been made, but rather by the
sincerity and reasonableness of the efforts made by an individual in his
circumstances to relieve his unemployment.
The principle of
mitigation does not require success; it only requires an honest, good faith
effort. Fabi Fashions, 291 NLRB 586, 587 (1988). Whether a claimant’s search for employment
has been reasonable is evaluated in light of all of the circumstances. Pope Concrete
Products, 312 NLRB 1171 (1993), 67 F.3d 300 (6th Cir. 1995); Cornwell Co., 171 NLRB 342, 343
(1968). It is measured over the backpay
period as a whole, not isolated portions thereof. First
Transit Inc., 350 NLRB 825 fn. 8 (2007); Wright Electric, 334 NLRB 1031 (2001), enfd. 39 Fed. Appx. (8th
Cir. 2002); IBEW Local 3 (Fischbach &
Moore), 315 NLRB 266 (1995). Any
doubt or uncertainty in the evidence must be resolved in favor of the innocent
employee claimant and not the respondent wrongdoer. NLRB v.
NHE/Freeway, Inc., 545 F.2d 592, 594 (7th Cir. 1976); NLRB v.
KSM challenges
the mitigation efforts and conduct of certain employees and argues that the
alleged backpay set forth in the compliance specification should be limited as
to these employees. I consider each of
KSM’s mitigation-related challenges herein.
In addition, I consider a few miscellaneous changes to the backpay
figures advanced by the General Counsel in his brief.
1.Failure to commence mitigation efforts
(Laverne
Jung & Norbert Jahn)
As discussed
above, Norbert Jahn resumed work at KSM on October 20, 1997. The record shows that KSM called Jahn on
October 17—12 days after the unconditional offer to return to work—and reached
his mother who “stated Norb was ready and willing to get back to work.” KSM told Jahn’s mother to have Jahn report to
work October 20, and he did. Laverne
Jung resumed work at KSM on December 1, 1997.
He received his offer of recall 2 weeks earlier on November 14, in a
letter from KSM dated November 12, offering him recall effective December
1. The record suggests that Jung
responded by phone the day he received the letter, presumably accepting the
offer of recall. (In the record, the
notes of the conversation are covered by a photocopy of Jung’s signed receipt
of the offer of employment. See GC Exh.
4.) Based on the compliance specification,
neither Jahn nor Jung had interim earnings before they returned to work. The
General Counsel seeks backpay for the period October 5 through December 1, 1997
for Jung, and October 5 through 20, 1997 for Jahn.
Respondent
disputes the backpay alleged for each on the same grounds: at the hearing both
Jahn and Jung indicated in response to questioning that they did not look for
interim employment during the periods before they were recalled. On that basis, Respondent contends that
neither Jung nor Jahn is eligible for backpay as the record demonstrates that
no effort of any kind to mitigate their losses was made during this time.
In response to
Respondent’s argument, the General Counsel cites a number of cases that suggest
that “a discriminatee is not required to seek work instantly,” but these cases
all make a different point. These cases
involve circumstances where a discriminatee undertook efforts to mitigate after
a delay in seeking work. It is in that
context that the Board has repeatedly held “that an employee discriminatorily
[terminated] need not instantly seek new work; rather the test is whether, on
the record as a whole, the employee has diligently sought employment during the
entire backpay period.”81 The issue raised by Respondent is
different: it involves discriminatees
who did not seek employment at any time during their (short) backpay period.
The General
Counsel contends that the former strikers’ “obligation to mitigate their
damages did not begin for a reasonable amount of time after strikers would have
realized they would not be recalled and thus [that] they had an obligation to
search for work.” (GC Br. at 115). While I think that the General Counsel’s
proposed rule is too expansive, I do agree that a rule of reason should
apply. The rule of mitigation is rooted
in the Supreme Court’s view “that deductions [in backpay] should be made not
only for actual earnings by the worker but also for losses which he willfully
incurred.” Phelps Dodge Corp. v. NLRB, 313
As noted, Jahn
was offered recall and indicated acceptance October 17, 1997, 12 days after the
strike ended. Jung accepted the offer of
recall November 14, but was not asked to report until December 1.82
After a 9 month
strike, I believe (and Respondent, who bears the burden of showing inadequate
mitigation efforts, did not show otherwise), that Jahn and Jung reasonably may
have concluded (correctly, it turned out) that Respondent was preparing to
recall them and that a search for interim work in that short time period would
be unnecessary. It should be remembered
in this regard that on or about October 16, the Employer solicited from all employees
their availability for recall, suggesting that recall would be forthcoming to
those who responded affirmatively. Jung
answered affirmatively. This inquiry
would have only encouraged employees to believe that recall was likely and
imminent.
This is one
important distinction between this case and the Board’s recent decision in Grosvenor Orlando Associates, 350 NLRB 1197
(2007). In Grosvenor, a Board majority found that striking employees who were
discharged and who did not commence a search for interim employment within 2
weeks after their discharge should have backpay tolled until such time as they
began looking for interim employment. In
reaching this result, the Board emphasized that it was not choosing a rule to
be rigidly applied, but rather, was assessing the circumstances in that
case. Notably, the Board in Grosvenor found that “there is no
evidence that the Respondent engaged in any conduct that would warrant any
optimism about the prospect of reinstatement and thus justify a further delay
in the initial search for interim work beyond a 2-week period.” Grosvenor,
supra at 1200. To the contrary, in Grosvenor, the Board found that the strikers’
backpay period began when the Respondent sent a letter to the strikers that
effectively discharged the strikers.
This affirmative action by an employer to discharge striking employees obviously suggests that reinstatement
is not in the offing. It is the opposite
of suggesting the possibility of reinstatement.
The instant case is very different.
Here, at strike’s end Respondent issued a letter to each former striker
seeking information “concerning your personal intention to be considered for
recall.” An employee who had not sought or
not obtained interim employment during the strike would, in view of Respondent’s
letter, be likely to delay a search for interim employment after the strike in
anticipation of recall. The strike ended
on October 5, and it would have been a reasonable presumption of employees,
particularly in view of Respondent’s October 16 correspondence, that reinstatement
was in the offing.
The question, in
my view, is whether it is reasonable to conclude, looking at Jahn and Jung’s
limited backpay period as a whole, whether the failure to seek work during this
initial period after the strike proves an inclination not to mitigate damages. Under the circumstances, employees recalled in this time period cannot
reasonably be said to have willfully incurred wage losses by not seeking work
after the strike. They did not demonstrate a commitment to idleness and lack of
productivity which Board policy is directed towards deterring. I do not limit Jung or Jahn’s backpay for
failure to mitigate during the time before they were reinstated.
2. Adequacy of mitigation efforts (Hans Eusch
and
James Malson)
Respondent
contends that discriminatees Hans Eusch and James Malson failed to engage in a
reasonably diligent search for interim employment, and their backpay should be
limited accordingly. Respondent also
contends that Eusch’s backpay should be tolled because Eusch turned down an
offer of employment during his backpay period.
Each of these discriminatees testified to seeking work during the
backpay period. However, KSM contends
that their efforts did not satisfy the Board’s standards and that backpay
should be limited.
Hans Eusch. Eusch failed to work during his backpay period,
which, according to the specification began on December 1, 1997 and ended when
he returned to work at KSM on February 8, 1999.
Eusch testified that he applied for ten jobs during this period,
beginning in January 1998. Eusch did not
apply for any jobs in December 1997.
Eusch testified credibly that based on Respondent’s questionnaire
soliciting interest in reinstatement he believed he would be recalled soon and “that’s
the reason why I didn’t look for work during that period, because I didn’t want
to start a job and then have to quit right away.” Eusch applied for no jobs after August 1998
until January 1999 when he applied for three positions. However, he did have an interview in October
for a job he applied for in the spring of 1998.
Eusch was offered employment at one industrial facility, Tecumseh
Products, but the position offered was an unskilled general laborer position,
at significantly less pay and without other benefits that Eusch enjoyed at
KSM. Although it is not clear that Eusch
was offered employment at Maysteel, he was told by Maysteel that he would have
to resign from KSM in order to accept a position there and “guarantee that if I
was recalled to work for KSM that I would stay at Maysteel.”
While Eusch’s
search for work cannot be called zealous, such efforts are not required. As referenced, supra, his failure to succeed
in obtaining interim employment is not a basis for demonstrating a lack of
effort to obtain interim employment. Aneco, Inc., 333 NLRB 691 (2001), enfd.
in part, 285 F.3d 326 (4th Cir. 2002).
His failure to seek work in December 1997 was attributable to his reasonable
belief—based on KSM’s solicitation of employees’ interest in reinstatement—that
he would soon be offered reinstatement at KSM.83 In any event, a delay in initiating job
search is not to be held against an employee, whose efforts must be considered
in the context of his efforts throughout the backpay period. See, e.g., Midwestern Personnel Service, 346 NLRB at slip op. at 2 (sufficiency
of discriminatee’s efforts to mitigate backpay are determined with respect to
the backpay period as a whole and not based on isolated portions of the backpay
period); Colorado Forge Corp., 285
NLRB 530, 538 (1987) and cases cited therein (discriminatee not required to
instantly seek interim employment). From
January through August 1998 Eusch applied to a variety of positions. He credibly explained why he turned down the
position offered to him at Tecumseh, which clearly cannot be considered
substantially equivalent employment given the significant difference in pay
(nearly a 1/3 less pay) and benefits, and skill (a general laborer position),
from his position at KSM. Minette Mills, Inc., 316 NLRB at 1010
(“it is well established that a discriminatee’s obligation to mitigate an
employer’s backpay liability requires only that the discriminatee accept
substantially equivalent employment”).84 Similarly, Maysteel’s insistence that Eusch
resign from KSM in order to work there provides sufficient grounds for him not
to take a position there. Eusch made no
applications during the entire fourth quarter of 1998. But Board precedent does not reject backpay
for discriminatees just because they ceased filing applications for a
quarter. As the Board stated in Cornwell Co., 171 NLRB at 343:
A discriminatee who has otherwise made
reasonable efforts to seek out new employment is not required in each specific
quarter to repeat job applications which from her past efforts she knows are
foredoomed to futility in order to protect her claim of backpay for that particular
quarter. Rather, the entire backpay
period must be scrutinized to determine whether throughout that period there
was, in the light of all surrounding circumstances, a reasonable continuing
search such as to foreclose a finding of willful loss.
After submitting
no new job applications in the 4th quarter of 1998, Eusch submitted three new
applications for employment in January 1999.
I do not disagree that there are discriminatees who more actively made
efforts to seek interim employment.
However, it is also true that Respondent did not establish that there
was plentiful interim work available for employees with Eusch’s background (her
worked as a tape operator). I cannot
find that Eusch’s efforts were so inadequate as to suggest that during his
backpay period he was not engaged in “a reasonable continuing search such as to
foreclose a finding of willful loss.”85
James Malson: Malson’s backpay period is October 5, 1997 to
April 22, 1998, when he returned to work for KSM. Malson did not obtain interim employment
during his backpay period. Malson
testified that he applied to a significant number of jobs during his backpay
period including numerous skilled welding jobs beginning in January 1998. Respondent questions Malson’s testimony
because his NLRB work search form did not reflect all of the applications to
which he testified. However, Malson
credibly explained the discrepancy. He
testified that in preparing his NLRB form, submitted in 2002, 4 years after his
return to employment at KSM, his wife simply copied from his work search forms
supplied to state unemployment compensation authorities. Those forms only covered the period for which
Malson received unemployment compensation, which was October into January
1998. Malson testified that he did not
have accurate records demonstrating his job search for the period January
through April 1998.86 I found Malson’s testimony credible in this
regard and I accept his explanation.
Moreover, “[t]he receipt of unemployment compensation pursuant to the
rules regarding eligibility constitutes ‘prima facie evidence of a reasonable
search for interim employment.’” Taylor Machine Products, 338 NLRB 831,
832 (2003) (quoting Birch Run Welding,
286 NLRB 1316, 1319 (1987), enfd. 860 F.2d 1080 (6th Cir. 1988)) enfd. 98 Fed.
Appx. 424 (6th Cir. 1987).
Respondent also
contends that acceptance of Malson’s explanation demonstrates that from the
strike’s end in October through December 1997, Malson did not apply for skilled
welding positions but rather, lower skilled positions including entry level
service sector jobs. I think that under
the circumstances, this observation is inadequate to prove that Malson did not
make a reasonably diligent effort to mitigate his backpay losses. As noted, supra, his effort must be evaluated
based on the total backpay period, not just a particular quarter. As also noted supra, an employee is not required
to begin his job search instantly with the start of the backpay period. Here Malson did instantly begin a job search
and actively sought work during the entire backpay period, but waited 3 months
into his job search, until January 1998, to look for high skilled,
substantially equivalent work. Prior to
that time, Malson’s search appears to have been for jobs with less skill and
likely involving more turnover and less permanence than more highly skilled
welding jobs. Given the uncertainty
surrounding KSM’s recall intentions after the strike—uncertainty generated by
KSM—Malson’s job search, viewed over the course of the backpay period, does not
warrant a reduction in backpay for failure to take reasonable mitigation
efforts.
3. Resignations from interim employment
(Thomas Cooper, Lawrence Wetzel, Allen Curtis,
Anthony Bannenberg)
Respondent
contends that discriminatees Cooper, Wetzel, Curtis, and Bannenberg failed to
properly mitigate based on the fact that they obtained but then quit interim employment
during their backpay periods.
As KSM points
out, it is established Board policy that a discriminatee is deemed to have
willfully incurred loss of income by voluntarily relinquishing interim
employment “without compelling or justifying means.” Knickerbocker
Plastic Co., 132 NLRB 1209, 1212 (1961). However, it is equally well settled
that a discriminatee does not incur a willful loss of earnings by quitting an
interim job for justifiable reason.
Florida Steel Corp., 234 NLRB
1089, 1092, 1094–1095 (1978). It is also
established Board precedent that a discriminatee “is under no obligation to
retain non-equivalent employment, once secured, regardless of the conditions
under which the employee was required to work.”
Churchill’s Supermarkets, 301
NLRB 722, 725 (1991). Generally, in assessing
whether the discriminatee has failed to adequately mitigate, the Board will
look to the reasons that an employee has given up an interim position. “When a backpay claimant quits interim
employment, ‘the burden shifts from the Respondent to the Government to show
that the decision to quit was reasonable.’”
First Transit Inc., 350 NLRB 825,
826 (quoting Minette Mills, Inc., 316 NLRB at 1010); Parts Depot, 348 NLRB at 154.
Thomas Cooper: Cooper worked for KSM in a maintenance
position prior to the strike. General
Counsel alleges that his backpay period runs from October 5, 1997, through
February 16, 1998, when he returned to work at KSM. In September 1997, Cooper began working at a
foundry called Craft Cast, where he earned the same amount as he had at
KSM.
Within 60 days,
in November 1997, Cooper quit his job at Cast Craft. In its brief, KSM quotes Cooper saying that
he quit Cast Craft because “it wasn’t fun” and argues, correctly, that finding
work at a foundry not to be “fun” does not establish good cause for quitting
interim employment. Respondent cites Cooper’s
concerns about “poor lighting and glue being kept in a refrigerator” and states
that while these “may justify a complaint to a manager, they are not conditions
that justify a resignation.” Respondent
offers a startling unfair summary of Cooper’s testimony. I found Cooper’s testimony far more compelling
than that. Asked why he quit, Cooper
testified, “It was an unhealthy and very dangerous place to work.” Asked if he had any reason at the time of his
resignation to believe that his Craft Casters employment would have ended prior
to being recalled at KSM, Cooper answered: “Well, I kind of thought I’d probably
die there. It was a dangerous place to
work if that answers your question.”
Given the opportunity on cross examination to explain his concerns,
Cooper testified:
Well, it was a poorly ventilated, poorly lit facility. Very crude facility. There was a mind-set there about, you know, safety was not -- conditions and safety were not -- you know, were not important. . . .
[T]the atmosphere in the building was always really bad. Poor ventilation like I said. It is a foundry melting metal and what not. There was electrical problems with equipment, lighting. . . .
Probably one of the most glaring things was in the cafeteria. They had a small cafeteria, you know, with vending machines and tables and a refrigerator where people could put their lunches and in this refrigerator they also kept industrial chemicals. Super Glue and sometimes unmarked vessels and I just thought that was just so -- you know, so dangerous because, you know, having people access the chemicals that should be stored in a hazardous lockup. That was, you know, just a glaring example.
Facility compressor had no dryer on it so it wasn’t uncommon if you were to take an air hose and blow it water would come out as if it was a garden hose and, you know, it would do that until the line would purge itself and I thought that was -- that was just so dangerous. I’m surprised people haven’t -- I didn’t see anybody get hurt with that condition. The foundry was -- I always thought that was a particularly dangerous because they used ladles that are raised by a hoist that were -- these hoists were never maintained properly. On occasion I would have to repair stuff but they weren’t interested -- they were interested in getting it repaired and not about safety factors, the condition of cables that hold ladles. Just myself having to repair it was a dangerous thing. They had no -- you know, I’m on a ladder, you know, with no help and on a high ladder. They didn’t -- I would ask can somebody hold the ladder while I’m up there and, you know, they couldn’t spare anybody. There was always an excuse. It was just -- yeah, it wasn’t fun.”
I credit Cooper’s
unrebutted, unchallenged testimony, and I find that his resignation was
reasonable and not grounds for limiting his backpay. Parts Depot,
Inc., 348 NLRB 154 fn. 16 (employee not required to accept jobs posing
increased exposure to environmental hazards or more onerous conditions).
However, Wetzel’s
interest in finding interim employment that would allow him to accrue and
ultimately obtain a pension upon retirement is not so easily dismissed. Indeed, based on the testimony, I find that
this was the primary and most plausible motive for Wetzel’s decision to leave
General Metalworks. Respondent contends
that “[q]uitting because one employer has a retirement program that is more
preferable also constitutes quitting for personal preference or accommodation.” I do not agree with that. Pensions are deferred compensation and Wetzel’s
decision then, was governed by an entirely reasonable desire to increase this
important form of compensation. Respondent’s
concern is not with the reasonableness of Wetzel’s decision, but with the attendant
reduction of wages that would offset its backpay obligation to Wetzel. Wetzel’s increase in pension that ultimately
resulted from his move to the West Bend District job does not serve as an
offset to wages owed by KSM on account of its unfair labor practices. John T.
Jones Construction, Inc., 349 NLRB No. 119 (2007) [not reported in Board
volumes]. Whether it could serve as an
offset to KSM’s obligation to provide 401(k)
contributions on Wetzel’s behalf as a component of gross backpay
obligation is a question I consider infra.
But it would seem antithetical to the public policy concerns underlying
the mitigation requirements to discourage discriminatees from switching interim
employers in order to provide for their long time retirement needs. It is appropriate to recall that KSM’s
unlawful conduct was at the root of the dilemma faced by Wetzel. He was forced to consider his retirement
situation without knowing when KSM intended to recall him, and without, in
fact, being able to know what KSM’s legal obligations for backpay and 401(k)
retirement contributions would be.
Wetzel cannot be faulted for taking retirement income issues into
account when he made interim employment choices. I find that his decision to leave General
Metalworks was based primarily on this consideration and that it was justified
and reasonable, and not grounds for limiting his backpay.
Allen Curtis: Allen Curtis worked as a painter at KSM prior
to the strike. His backpay period is
alleged to be from February 13, 1998 to February 3, 2004. However, the General Counsel concedes that
Curtis’ backpay was tolled between January 15 and May 15, 2003 when Curtis
attended school fulltime and was not available for employment. Curtis was employed during the strike at
Tramont, and stayed there until August 1998 when he took a position with
Liftco, a family owned business that sold and rented scissors, lifts, and
booms. At Liftco, Curtis was paid
primarily based on “piece rate,” and estimated that his average earnings were
between $18 and $22 per hour, significantly more than the $12 an hour he had
earned at KSM. Curtis remained at Liftco
until June 2000. At that time he left
Liftco and took a job at Cummins. There
he earned approximately $12 an hour.
Curtis testified that he left Liftco because he found a painting job,
the kind of work he had done at KSM and “the kind of work that I really enjoy
doing,” and it was closer to his home.
About a year before leaving Liftco, Curtis had moved from the
KSM contends
that Curtis incurred a willful loss of earnings when he left Liftco and took a
lower paying job at Cummins. The problem
with this argument is that well-compensated though it may have been, Liftco—a
family owned business that sold and rented scissors lifts and booms—was a very
different type of work than being a painter at KSM. Curtis left Liftco to take a painting job,
work that he “loved” and like the work he performed at KSM. Under Board precedent, a discriminatee may
quit an interim position for any reason if the position is not substantially
equivalent to the unlawfully denied position.
Here, Curtis quit to take a position that was more equivalent to the job
he had at KSM. Moreover, the Liftco position, though well
paid, was also more onerous, requiring work outside in the (
Anthony Bannenberg:
During the strike Bannenberg began working at Performance Alloys, but
quit in August 1998 to work at Alto-Shaam for lesser pay than he was earning at
Performance Alloys. Respondent contends
that Bannenberg’s decision to quit Performance Alloys and take a lower paying
job at Alto-Shaam has not been shown to be justified under applicable Board
precedent. However, Bannenberg quit Performance
Alloys and began working at Alto-Shaam 7 months prior to the March 1, 1999
commencement of his alleged backpay period.
The General Counsel seeks no backpay for him during the time he worked
at Performance Alloys (or for 7 months thereafter) and he had no damages that
he was under any obligation to mitigate.
Accordingly, I reject Respondent’s contention.
4. Discharges from interim employment
(Brandon Hottenstein, Douglas Wiedeman, Jesus
Rodriguez, Gordon Sabel)
The above-named employees were discharged from
interim employers at various times during their backpay periods. Respondent advances the position that because
these employees were discharged due to misconduct, their loss of earnings was
willful. Respondent contends that the
discharges should be treated as willful loss of income by the discriminatees
and the income they would have received but for the discharge imputed to the
discriminatees and used as an offset to gross backpay.
Contrary to the standard proposed by Respondent,
Board precedent is clear that a discharge, without more, is not sufficient to
constitute a willful loss of employment.
It is the employer’s burden to establish that the discriminatee “engaged in
deliberate or gross misconduct” in order to show a willful loss of
employment. Pie Nationwide, 297 NLRB 454, 454–455 (1989); Cassis Mgtmt. Corp., 336 NLRB 961, 966–967 (2001) (discharge
constitutes willful loss of earnings only when shown to have been caused by “deliberate
and gross misconduct which is so outrageous that it suggests deliberate
courting of discharge”); Ryder System,
302 NLRB 608, 610 (1991) (“A respondent must show deliberate or gross misconduct on the part of the
discharged employee in order to establish a willful loss of employment. . . .
Elmore may have missed several scheduled deliveries, but he committed no
offense involving moral turpitude and his conduct was not otherwise so
outrageous as to suggest deliberate courting of discharge. Without such proof,
Elmore’s discharge from ATS will not serve as a basis for tolling his backpay”)
(footnotes omitted), enfd. 983 F.2d 705 (6th Cir. 1993).87
With regard to
each of the discriminatees at issue, there has been no showing that their
discharges were the result of deliberate or gross misconduct or conduct so
outrageous as to suggest a deliberate courting of discharge. Hottenstein was terminated from an interim
position after 2 weeks for reporting to work late one day. Consistently showing up for work late is
clearly misconduct, and is a dischargeable offense in nearly every position,
but it is hardly gross or outrageous misconduct, and there is no evidence that
Hottenstein’s discharge, occurring because of one tardy report to work, was
deliberate on his part. Sorenson
Lighted Controls, 297 NLRB 282, 288 (1989).
Wiedeman worked
at Troyk Printing from August 1999 to May 2001, when he was terminated. The employer told him it was for “misconduct.” Wiedeman said it was for “bad work habits,”
and explained that his performance suffered because “the guy I was working
with[,] I didn’t get along with him too well.
And then my work ability was getting worse and worse, ‘cause I couldn’t
work with the guy. And so then I was
terminated then.” The cause of discharge
is obviously vague, but it is Respondent’s burden to establish gross,
deliberate, or outrageous misconduct, and there is not a hint of it. Ernst
& Young, 304 NLRB 178, 180 (1991) (“The issue presented is whether
Bloom’s conduct in either or both jobs amounted to a willful act by Bloom which
resulted in her discharge from Cohen and Seidman. The Board has repeatedly held
that a discharge based upon poor work performance does not constitute a willful
loss of earnings”); Barberton Plastics
Products, Inc., 146 NLRB 393, 396 (1964) (no loss of backpay for
discriminatee discharged from interim employment for unsatisfactory performance),
enf’t. denied on other grounds, 354 F.2d 66 (6th Cir. 1965). Wiedeman obtained employment as a security
guard in early 2002 but was terminated in August 2003 for attendance problems
that Wiedeman ascribed to his truck breaking down. This discharge also was not caused by gross, deliberate, or outrageous
conduct.
Jesus Rodriguez began working at
Milsco Manufacturing during the strike.
He worked at Milsco until terminated in 1998. When in 1998 is unclear. Rodriguez agreed with the suggestion of
Respondent’s counsel that he worked at Milsco until the end of 1998. However, the General Counsel seeks no backpay
for Rodriguez from August 1, 1998 to January 15, 1999, pleading that Rodriguez
was incarcerated and unavailable for work during this period. Respondent contends that Rodriguez lost his
job at Milsco as a result of his conviction and incarceration. If this is so, it is not proven in the
record. Rodriguez’ unrebutted testimony
is that these problems postdated his termination from Milsco for absenteeism,
and that after his termination from Milsco he continued working at another job
until his incarceration. There is no evidence
in the record regarding that job, which Rodriguez identified as Larry’s Upholstery,
and which may have been the second part-time job that Rodriguez said he
maintained while working at Milsco. Respondent
does not assert that the loss of the job at Larry’s Upholstery constituted a
willful loss of earnings. Respondent has
not proven its claim that Rodriguez’ legal problems led to his termination from
Milsco for absenteeism. In any event, Respondent
does not contend (nor offer any cases to support a contention) that the Board
should concern itself with the underlying cause of an employee’s absenteeism in
evaluating whether the discharge constituted a willful loss of earnings. As set forth, supra, a discharge for
absenteeism does not constitute a willful loss of earnings. Sorenson,
supra.88
After the
strike, unreinstated striker Gordon Sabel took a position with Matenaer
Corporation as a coil press operator. In
late1998, Sabel was discharged when the company blamed him for a die that
chipped and broke. Sabel testified that
it was another employee that set up the machine wrong causing the die to break,
but that was blamed for it because he had been told to set up the machine. Based on the evidence in the record, there is
nothing gross,
deliberate, or outrageous conduct about Sabel’s conduct. See, e.g., Cassis
Mgmt. Corp.,
336 at 966–967 (discharge for losing company payroll in auto accident does not
constitute willful loss of earnings); Ernst
& Young, supra. Income Sabel would have earned but
for the discharge will not be used as an offset to his backpay.
5. Concealment of interim earnings (James Kollenbroich)
Respondent
contends that James Kollenbroich intentionally concealed interim earnings and
should be denied backpay because of it.
The Board’s policy is to deny gross backpay for each quarter as to which
a claimant willfully concealed interim earnings. American
Navigation Co., 268 NLRB 426, 428–429 (1983).
As discussed,
supra, after the strike, Kollenbroich was recalled to a second shift position
at KSM in May. His prestrike position
had been on first shift and after a couple of weeks he and Oechsner agreed that
he would relinquish the second shift job but remain on the recall list. He stopped working at KSM on June 2,
1998. During cross examination,
Kollenbroich testified that after he left KSM he performed “side jobs, painting
and stuff like that” for “cash” until he secured employment in August 1998 with
a company called Key Logo. Counsel for Respondent then asked Kollenbroich,
[Q] [I]s there a reason that you did not report those -- the money that you made on these side jobs to the people at the Labor Board?
A Well, this was cash.
Q Oh, oh, yah. Okay.
MR. KINNEY: I don’t have any more questions.
By itself, this
would be insufficient to demonstrate intentional concealment of earnings. There is no evidence that Kollenbroich was
told by the Region personnel to report cash earnings to them. There is no evidence regarding the instructions
on the form (if any) that he used to report interim earnings to the
Region. There is no evidence that
Kollenbroich knew he was supposed to report such earnings. I do not believe it can be assumed that he
knew this. These questions were not
asked. If that is all there was, I would
be inclined to find that the allegations of intentional concealment were
unproven. But I was impressed,
negatively, by the change in Kollenbroich’s testimony on cross examination, in
which, after reconfirming his initial testimony, he claimed he had been
confused and the reference to cash jobs was to work performed while on layoff
prior to the strike.89
For the reasons
set forth (in the relevant footnote) I do not credit Kollenbroich’s disavowal
of his initial testimony. This was an
attempt to conceal interim earnings, although not a premeditated one. I sensed that Kollenbroich realized he had,
to everyone’s surprise, admitted earnings no one else had known about, and
feeling the pressure of questioning, he tried to take it back. It may be more proof of the adage that its
not the crime but the cover up that gets you, but it added an unsavory cast to
the entire incident. There is ample room
for debate about the best policy here: it is ironic that Kollenbroich’s
credited testimony is the only evidence that there was unreported income, and
his uncredited testimony the only evidence of concealment. Perhaps we discourage candor by penalizing a
discriminatee who has come forward to divulge interim earnings, albeit late and
albeit inconsistently. But viewing the
incident in its totality my considered view is that Kollenbroich attempted to
intentionally conceal his cash earnings earned during the summer of 1998. It is clear that the remedy for intentional
concealment of backpay is to refuse to permit the wage component of backpay in
quarters where income has been intentionally concealed. Parts Depot,
348 NLRB at 153–154. I will deny backpay
for the 2nd and 3rd quarters of 1998.90
6. Miscellaneous Adjustments to Backpay
(Brandon Hottenstein, Douglas Wiedeman,
Wetzel, Alan Curtis)
In their briefs,
the General Counsel and/or Respondent propose further miscellaneous refinements
to the compliance specification. These
changes propose to alter the backpay for four employees: Hottenstein, Wiedeman,
Wetzel, and Curtis. In each case the proposed
change is based on inadvertent errors, or evidence or information discovered
during the hearing, and thus, these matters are not reflected in the compliance
specification.
Brandon
Hottenstein: At the hearing, the parties learned that
Hottenstein worked between 4–6 hours, 2–3 days a week, for $8 an hour as a
bouncer at a nightclub, from November 1997 until the nightclub closed in
February. During January 1998,
Hottenstein also worked for 2 weeks at General Metalworks before being
discharged. The latter income had already
been accounted for in the compliance specification. Based on the new information provided by Hottenstein
at the hearing, the General Counsel and Respondent stipulated that Hottenstein’s
backpay should include an offset for Hottenstein’s wages for the period of time
he worked at CB Enterprises and was
not employed at General Metalworks. In
his brief, the General Counsel proposes to reduce Hottenstein’s backpay by $860
for the fourth quarter of 1997 and $660 for the first quarter of 1998.91
On brief, Respondent acknowledges the stipulation and requests that Hottenstein’s
backpay be offset pursuant to the stipulation.
My review of the record indicates that this change, and the General
Counsel’s calculations, are appropriate.
My order will be adjusted accordingly.92
Douglas Wiedeman: On brief, the General Counsel points out
that Wiedeman’s testimony that he was terminated from Allied Security in August
2003 came to the General Counsel’s attention at the hearing for the first
time. Previously, the General Counsel
believed that Wiedeman had worked at Allied Security until returning to work at
KSM. Therefore, the backpay calculations
for Wiedeman in the compliance specification erroneously included interim
earnings offsets for the period from Wiedeman’s discharge at Allied Security to
his reinstatement at KSM. General
Counsel contends that Wiedeman’s backpay calculations should be amended to
reduce the interim earnings for this period.
I have, supra, rejected Respondent’s contention that Wiedeman’s
discharge from Allied Security provides a basis to impute interim
earnings. Therefore, I agree with
General Counsel’s point and will adjust Wiedeman’s backpay accordingly. However, Respondent points out on brief that
the General Counsel’s backpay figures for Wiedeman plead no interim earnings
for the first two quarters of 2001, notwithstanding evidence showing that
Wiedeman worked at Troyk Printing from August 1999 until May 24, 2001. Respondent’s point too, is well taken, and I
will adjust the backpay award
accordingly.93
Allen Curtis: Curtis was laid off from Cummins in August
2002 when the facility shut and moved to
7. Offset for interim 401(k) and retiree
benefits
received or available to discriminatees
KSM contends (1)
that discriminatees who participated in a retirement plan at an interim
employer should have their lost 401(k) benefits from KSM offset by
contributions and earnings from the new plan; and (2) that where an employee
had an opportunity but failed to participate in a retirement plan at an interim
employer, he should not receive backpay for lost 401(k) benefits from KSM for
the time that he could have been participating in the interim employer’s plan.
To some extent,
the General Counsel does not dispute KSM’s first contention, agreeing that an
employer’s benefits obligation to discriminatees can be offset by “equivalent”
interim benefits. John T. Jones Construction, Inc., 349 NLRB No. 119, slip op. at 1 [not
reported in Board volumes] (“Retirement benefits earned during interim employment
that are equivalent to what would have been earned absent the discrimination
are properly offset against gross retirement benefits”); Aroostook County Regional Ophthalmology Center, 332 NLRB at 1618.96
Indeed, the General Counsel amended the compliance specification at
trial, in part, to reduce or eliminate the claim for backpay based on “401(k)
benefits or comparable retirement benefits received at interim employers” for 7
discriminatees who the Region determined to have received such benefits. See, Proposed Second Amendment to Amended
Compliance Specification at ¶¶15-16. However, Respondent complains that there
may be other employees for whom KSM’s 401(k) plan contributions are a component
of gross backpay, and no offset is pled for them.
The gravamen of
Respondent’s complaint is that “General Counsel failed to properly investigate
retirement plan participation and availability” at interim employers and that
the “initial burden” to do so falls on the General Counsel. And this, I believe, is where Respondent’s argument
falls off the tracks. With a few exceptions I will discuss, infra, Respondent
is not arguing that specific employees received 401(k) benefits that should
have been but were not offset from gross backpay. Rather, Respondent contends, without
authority, that “[t]he Region has the burden of investigating whether an
employee had available or participated in a retirement plan at an interim employer”
and that “[h]ere, General Counsel failed to establish that the Region properly
investigated whether the employees participated in a retirement plan at their
interim employers . . . [and] did not investigate whether the employees had
retirement plans available to them at the interim employers, but chose not to
participate.” Thus, according to
Respondent, the General Counsel failed to meet his “initial burden . . . to investigate”
interim 401(k) participation and availability.
In the first
place, Respondent offers no evidence to support the claim that the Region’s investigation was lacking in any qualitative
way. But that is beside the point. The point is that Respondent’s argument is
premised on the overturning of a fundamental tenet of Board compliance
precedent—that is, that the burden of proving the existence, amount, and applicability
of interim offsets to gross backpay figures is borne by the respondent that committed
the unfair labor practices and not by the General Counsel. Minette
Mills, 316 NLRB at 1010, citing Arlington
Hotel Co., 287 NLRB at 855); Florida
Tile Co., 310 NLRB 609 (1993), enfd. without op. 19 F.3d 36 (11th Cir.
1994). While it is the General Counsel’s
voluntary policy to assist in gathering information on interim earnings and
include this data in the compliance specification “the voluntary policy is
nothing more than an ‘administrative courtesy.’” Minette
Mills, supra, quoting Ryder System, Inc.,
302 NLRB at 613 fn. 7 of ALJD (1991). “The
Respondents still shouldered the burden of establishing these offsets.” Ryder
System, supra. With specific
reference to retirement benefits, the Board holds that “it is a respondent’s burden
to show that interim benefits were equivalent in nature, and therefore
appropriately offset, against those lost as a result of the discrimination.” John T.
Jones Construction, Inc., supra. The
issue is whether the Respondent has shown that the interim benefits were fungible
with the gross employer’s benefits.
Thus, contrary
to the very starting point of Respondent’s argument, the General Counsel carries
no burden in compliance litigation to establish any facts about the interim
earnings of employees or the Region’s investigation of that subject. In fact, the compliance officer and the
Region, by all appearances provided (and pled) significant information, to
Respondent’s benefit, regarding interim earnings by discriminatees. By all appearances its investigation was
fully in keeping with its practice of administrative courtesy. But it is not a point that Respondent can
litigate or force the General Counsel to prove.
On the evidence,
KSM cannot carry its burden of demonstrating that—beyond the significant
offsets set forth by the General Counsel in the compliance specification, as
amended—there are additional 401(k) or other retirement-related interim earnings
to be offset. Respondent points (R. Br.
at 115-116) to 8 discriminatees who “[t]he
Region alleges . . . are entitled to a substantial amount of backpay for lost
401(k) benefits.” But KSM provides only
the most limited evidence as to any of their interim earnings.
For instance,
Respondent points out that discriminatee Allen Curtis testified that he participated
in a 401(k) at his interim employer.
However, Respondent secured, and the record reveals, absolutely no
evidence about this 401(k) and Curtis’ participation in it. There is, for instance, no evidence regarding
the terms of the 401(k), how much Curtis invested, whether the employer
provided any match for employee contributions, the nature of the investment
options, or any other information, without which it is impossible to determine
whether an offset is appropriate and how much that offset would be.
Respondent also
asserts that it is entitled to offset a portion of Lawrence Wetzel’s retirement
benefits, as he testified that he left an interim employer to work at the
Respondent argues that it may escape liability for pension fund contributions if it can show that interim benefits were “equivalent” to those lost due to discrimination. However, it is unclear that this would justify an offset, at least where the interim pension benefits come from a different employer or entity from that which provided the original benefits. As the Board has stated, “a unique benefit flows from longevity in a specific pension fund that cannot be duplicated by contributions into another pension fund.” American Navigation Co., 268 NLRB 426, 428-429 (1983). Thus, it is highly unlikely that any interim pension benefit would be “exactly equivalent” to that lost through discrimination. Ibid.
However, that
issue need not be reached, as the factual foundation to make the argument is
wholly lacking. Respondent did not
adduce, and did not attempt to adduce
evidence regarding Wetzel’s interim pension contributions. There is no evidence about the nature of the
benefit, rate of accrual, availability for distribution, or anything else other
than the perception by Wetzel that his retirement would be better served if,
while unlawfully not reinstated to KSM, he left General Metalworks to assume
employment with an employer that contributed to the state employee pension
fund. Respondent has failed to prove
that its backpay obligations should be reduced based on Wetzel’s interim
pension benefits accrual.
Finally,
Respondent asserts the related argument that its 401(k) remedy obligations to
discriminatees should be offset to the extent an employee working at an interim
employer had the ability but chose not to participate in an interim employer’s
401(k) plan. In Respondent’s view, the
failure of an employee to participate in an interim employer’s 401(k)
constitutes a failure of the duty to mitigate damages. In advancing this argument, Respondent again
contends that the Region was under a duty to investigate this matter and that
the General Counsel has not met his burden to establish the adequacy of such
investigation. This argument is rejected
for the same reasons it was rejected with regard to Respondent’s similar
contention regarding the Region’s investigation into actual 401(k) interim earnings. As to the legal proposition that the failure
of an employee to participate in an interim employer’s 401(k) is a failure to
mitigate, tantamount to a willful loss of earnings, Respondent cites no case
law. I am unaware of any case law considering
this issue. However, it is not an issue
that can be decided in Respondent’s favor on this record. Respondent’s “evidence” on this point is the
testimony of Gordon Sabel that one of his interim employers offered an
Individual Retirement Account (IRA)—which, of course, operates differently than
a 401(k)—in which Sabel chose not to participate. The record tells us nothing about that plan,
nothing about the potential benefits, nothing about the tax treatment of
contributions, nothing about investment options, nothing about employee contribution
options, nothing about the employer contribution (Sabel thought there was
one). Given the dearth of information,
even assuming arguendo that Respondent’s legal point was accepted, the evidence
would not support Respondent’s claim.
On these findings
of fact and conclusions of law and on the entire record, I issue the following
recommended97
SUPPLEMENTAL ORDER
IT IS HEREBY
ORDERED that the Respondent KSM Industries, Inc.,
(1) Reinstate
Jesus Rodriguez’ seniority and vacation benefits as if he had been reinstated
to employment and remained continuously in the employ of Respondent since
October 20, 1997.
(2) Satisfy the
obligation to make whole the following discriminatees98 by paying them the following amounts
(which total $395,502.65) with interest thereon to be added, accrued to the
date of payment computed in the manner described in New Horizons for the Retarded, 283 NLRB 1173 (1987), minus tax and
withholdings required by Federal and State laws.
Anthony H.
Bannenberg $14,110.10
Michael R.
Bartelt $1,661.31
Dennis M. Benke
$6,527.49
Paul W. Bojar $0.00
Jeffrey J.
Cadeau $211.85
Darryl G.
Campbell $716.25
John F. Casetta $212.16
Orin E.
Christensen
$1,761.33
Thomas Cooper
$6,085.65
Allen M. Curtis
$41,702.98
Jason R. Day
$0.00
Roger R. Day $5.00
Hans R. Eusch $36,926.29
Raymond J.
Fairbanks $0.00
Robert A. Graf $23,393.24
Robert C. Green $457.77
Francisco
Guerrero $110.69
Manuel Guerrero $34.50
Paul J. Gutjahr $218.05
Roger J. Gutjahr $0.00
Randy A. Habram $0.00
Robert J.
Hanrahan
$5,311.44
Randall H.
Henning
$4,599.01
Michael S.
Herbst $0.00
Jerome Hoover $0.00
Brandon
Hottenstein $11,127.75
Donald D.
Hottenstein $0.00
Ronald L.
Hottenstein $0.00
Norbert John
Jahn $847.94
Laverne L. Jung
$3,944.33
James C.
Kollenbroich
$7,392.17
Harold S. Koslo
$2,110.80
Gaylord E. Krahn $0.00
James Kranz $0.00
Arthur L. Kreis $446.49
David J. Krull
$2,598.64
Richard J.
Kuhlenbeck
$31,841.01
Roger R. Malchow $11,900.63
James W. Malson $16,358.58
Jeffrey J. Mutz
$0.00
Charles J.
Peltier
$2,810.90
William J.
Peltier
$1,462.67
Alan K. Resch
$16,455.91
Mark W. Rettler
$1869.98
Jesus Rodriguez
$4,474.02
David W. Rosbeck $342.16
James C. Roskopf
$2,534.04
Gordon John
Sabel $50,981.66
Jason Sanger $0.00
Anthony D.
Schmitt $0.00
Leroy Schmitt,
Jr. $763.44
David
Schneidervin $0.00
Michael A. Servi
$4,318.25
Mark A. Snyder $0.00
Roger J. Stern $14,124.03
Williams L.
Stiggers $0.00
Gerardo
Villarreal $0.00
Douglas Wiedeman $48,386.66
Michael Lee
Zwieg $431.13
Dated,