UNITED STATES COURT OF APPEALS Filed 4/22/96 TENTH CIRCUIT
INTERMOUNTAIN RURAL ELECTRIC ASSOCIATION,
Petitioner/Cross-Respondent, v. No. 95-9529 (Board Case No. 27-CA-10711) NATIONAL LABOR RELATIONS BOARD,
Respondent/Cross-Petitioner.
ORDER AND JUDGMENT*
Before PORFILIO, BARRETT, and LUCERO, Circuit Judges.
These cross appeals raise issues relating to an award of
approximately $3,000 in backpay to two linemen who work for
Intermountain Rural Electric Association (the Company). The
remedy was generated after the National Labor Relations Board
* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. This court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3. found the Company violated section 8(a)(5) and (1) of the
National Labor Relations Act (NLRA), 29 U.S.C. § 158(a)(5) and
(1), by unilaterally changing the procedure for selecting
employees for overtime. Intermountain Rural Elec. Ass’n, 305
N.L.R.B. 783 (1991)(IREA I), review denied, enforcement granted,
Intermountain Rural Elec. Ass’n v. NLRB, 984 F.2d 1562 (10th Cir.
1993)(IREA II). On its cross appeal, we enforce the Board’s
order.
The Company is a rural electric cooperative providing
electrical services to customers in the area surrounding its
facility in Sedalia, Colorado. The International Brotherhood of
Electrical Workers, Local 111, AFL-CIO (the Union), represents
the linemen, employees who construct, maintain and service the
electrical lines. The Company and the Union have a longstanding
collective bargaining agreement. Under that agreement, the
Company called linemen for overtime work in inverse order of the
total amount of overtime the employee had worked the prior year
so that linemen who had worked the least hours would be called
first by dispatchers. For the purpose of this case, linemen may
be called for two types of overtime: callout overtime - employees
are called to return to work during weekday evenings and nights
in response to unforeseen emergencies such as power outages; and,
standby overtime - linemen assigned to be “on call” during
weekends and holidays earn two hours each day for being on call;
-2- and, in case emergency work has to be performed and they are
called, they earn additional standby overtime. Callout overtime
is not mandatory, and a lineman called may refuse the overtime
assignment without penalty.
In practice, an overtime committee made up of employees
oversaw the allocation of overtime. Until the change in late
1988, the committee assigned callout and standby overtime at the
beginning of each calendar year on the basis of seniority. More
senior employees could select the holidays and weekends they
wanted to work and then swap schedules if they were later unable
to work.
On December 14, 1988, however, during negotiations over a
new collective bargaining agreement, the Company announced it
would instruct its dispatchers to use an alphabetical rotation
procedure exclusively to schedule callout and standby overtime.
Then, when an emergency arose during the evening or on weekends,
the dispatcher would call the next name alphabetically on the
list. Linemen could still refuse callout time, but the alphabet,
not seniority, controlled standby overtime.
This unilateral change during the collective bargaining
process was deemed an unfair bargaining practice in IREA I, and
enforced in IREA II. That finding carried with it a remedial
order to restore the overtime procedures previously bargained for
and for backpay to be awarded to specific employees who suffered
-3- as a consequence of the unilateral change. The Company did not
challenge either order. However, after the General Counsel
submitted a Compliance Specification alleging the Company owed
approximately $13,724 plus interest in backpay to four employees,
the Company objected, contending it owed no money to any employee
because of its change in overtime call procedures.
The issue was brought to trial before an administrative law
judge upon the General Counsel’s amended Compliance Specification
which reduced the amount of backpay allegedly owed to $10,225.84.
At the hearing, the General Counsel called Robert Cervone, an
NLRB field examiner, who explained how he arrived at a
“representative period” by including as potential backpay
claimants all linemen who had been employed consistently for the
three years prior to 1988 and at least into the first calendar
quarter of 1991. Only overtime actually worked by those linemen
was included in the backpay computations. The formula then
compared the average percentage of total overtime hours each such
lineman worked during that three-year period. It also compared
the percentage of overtime worked before and after 1988. Mr.
Cervone calculated the difference between the representative
percentage and each quarterly percentage after the change,
converting the difference into hours and multiplying by the
overtime pay rate to determine the backpay owed. Given that the
total number of overtime hours had not changed - the Company
-4- still called linemen to approximately the same number of calls -
Mr. Cervone could then determine how the new system impacted an
employee’s total number of overtime hours while also taking into
consideration employees’ refusing callout overtime.
After the hearing, however, the General Counsel submitted a
brief to which he appended an amended calculation reducing the
total amount of overtime he claimed was owed to $3,993.30.
Unfortunately, the brief itself is not in the record before us;
therefore, we cannot be certain of its contents. About those
contents, however, the Board stated in its order:
[T]he General Counsel took account of the Respondent’s evidence concerning the similarly situated unit employees and, deleting the hours for employees Kogan and Keefe, recomputed the representative percentages and submitted these revised backpay figures to the judge.
Although the ALJ granted the General Counsel’s request the
record remain open to permit submission of rebuttal to the
Company’s expert, the General Counsel did not add any more
evidence. He then moved to close the record. The Company filed
no objection to the General Counsel’s appended brief, nor did it
attempt to otherwise object before the ALJ to its contents.
The ALJ dismissed the amended backpay specification,
finding the General Counsel’s posthearing attachments should be
stricken from the record because they were not properly
introduced; that this unfair labor practice did not warrant the
usual presumption that backpay was owed; and the General
-5- Counsel’s formula to calculate backpay was not “reasonably
designed to produce approximate awards due.” The General
Counsel took exception, and after briefing, the Board reversed
the ALJ’s decision.
The Board defined “the single backpay issue” before it as
“the extent of the loss suffered by certain unit employees when
[the Company] changed its procedure for selecting employees for
callout overtime ... and standby overtime.” The Board rejected
the ALJ’s characterization of the General Counsel’s posthearing
brief as an amended specification of new evidence, stating the
attachments are recalculations of the backpay figures based on
the evidence about the composition of the bargaining unit the
Company submitted at the hearing. The Board stated this was not
“new evidence” but an arithmetic adjustment in light of the
record. This adjustment did not necessitate reopening the
record, and the Company could hardly claim surprise or prejudice
by having the General Counsel agree with one of its arguments.
Next, the Board disagreed with the ALJ’s finding that the
award of backpay for other unfair labor practices ascribed to
the Company in this case negated the presumption of backpay in
this instance. Reversing the ALJ, the Board held the unilateral
action changing the callout system “created the potential loss
of income to employees” which is distinct from other losses.
-6- The Board found the Company did not carry its burden
through the testimony of its expert, Dr. Bien. The Board
concluded this testimony did not “amount to an affirmative
conclusion that the differences were not caused by the selection
procedure change, so it does not rebut the presumption
[requiring backpay awards.]”
Finally, the Board rejected the ALJ’s conclusion the
General Counsel’s proposed formula was not reasonably calculated
to correctly establish the losses at issue. Had the Company not
changed the procedure, the loss would not have ensued, the Board
stated, permitting it to construe uncertainties against the
wrongdoer. La Favorita, Inc., 313 N.L.R.B. 902 (1994), review
denied, enforcement granted, 48 F.3d 1232 (10th Cir. Jan. 27,
1995) (unpublished disposition). The Board found the General
Counsel’s formula adequately considered the vagaries of the
voluntariness of overtime, and the three-year representative
time period produced a “fairly accurate picture of the amount of
overtime.” The Board rejected the ALJ’s reliance on the hearsay
testimony of Company supervisors, finding: “Such vague and
speculative testimony is insufficient to defeat the presumption
that backpay is due because of the unlawful reduction in offered
overtime.” The Board also found the General Counsel’s method
took into account the technological changes that might have
reduced the number of overtime hours available. “By calculating
-7- each employee’s overtime during the backpay period as a
percentage of the total available during that period, variance
in the actual number of hours is taken into account.” The Board
did not fault the use of total types of overtime from which to
calculate the specific losses. It noted the Company did not
keep records compiling overtime by category and never suggested
the General Counsel examine five and one-half years of employee
time cards. “Because the [Company] was urging that callout and
standby overtime did not constitute a substantial portion of the
total [hours] worked, it was required to do more than gesture
vaguely in the direction of thousands of employee timecards.”
Thus, the Board affirmed the award of $2,123.04 in backpay to
Gerald Fedders and $1,870.26 to Mitchell Eveleth.
On appeal, the Company essentially argues because backpay
was not calculated with absolute precision, the resulting award,
arrived at after the hearing, amounts to a “penalty” imposed
without due process. The backpay formula, it insists,
arbitrarily and unreliably figured overtime based on factual
inaccuracies, forcing the Company to pay employees for not
working.
Nonetheless, because we must give considerable deference to
the Board’s construction of the National Labor Relations Act,
IREA II, 984 F.2d at 1566, we must agree with the conclusions of
the Board. Under the very deferential standard of review to
-8- which the Board’s judgments are entitled, its findings of fact
must be upheld “if they are supported by substantial evidence in
the record considered as a whole.” Monfort, Inc. v. NLRB, 965
F.2d 1538, 1540 (10th Cir. 1992) (citing Universal Camera Corp.
v. NLRB, 340 U.S. 474, 488 (1951)). In this review, we must
consider both the findings of the ALJ and the Board, recognizing
the wider experience and combined knowledge of the three members
of the Board’s panel. We stated in Ann Lee Sportswear, Inc. v.
NLRB, 543 F.2d 739 (10th Cir. 1976), “The Board, of course, is
not bound by the findings and conclusions of an Administrative
Judge, and is free to draw its own inferences, as well as
conclusions, when its broader experience and expertise indicates
that such is in order.” Id. at 743 (citations omitted).
Moreover, while a Court of Appeals “might disagree with the
Board’s interpretation of the evidence in a given case, we are
not free to substitute our view of the facts for the Board’s
when it is supported by some credible evidence in the record
that is not outweighed by evidence opposed to the Board’s view.”
NLRB v. Cell Agric. Mfg. Co., 41 F.3d 389, 393-94 (8th Cir.
1994).
We stated in Angle v. NLRB, 683 F.2d 1296 (10th Cir. 1982):
The purpose of a backpay order is to vindicate the public policy of the Act by making any employee whole for any losses suffered because of an employer’s unfair labor practice. The Board’s power to order backpay is a broad discretionary one, subject to limited judicial review.
-9- Id. at 1301 (citations and quotation marks omitted).
A finding the employer has committed an unfair labor
practice which creates a potential for loss “is presumptive
proof that some backpay is owed by the employer.” NLRB v.
Mastro Plastics Corp., 354 F.2d 170, 178 (2d Cir. 1965), cert.
denied, 384 U.S. 972 (1966). Moreover, it is the burden of the
employer “to establish facts which would negative ... or ...
mitigate that liability.” NLRB v. Brown & Root, Inc., 311 F.2d
447, 454 (8th Cir. 1963). “We will not disturb a backpay order
“‘unless it can be shown that the order is a patent attempt to
achieve ends other than those which can fairly be said to
effectuate the policies of the Act.’” 88 Transit Lines, Inc. v.
NLRB, 55 F.3d 823, 825 (3d Cir. 1995) (quoting Fibreboard Paper
Prod. Corp. v. NLRB, 379 U.S. 203, 216 (1964) quoting Virginia
Elec. & Power Co. v. NLRB, 319 U.S. 533, 540 (1943)).
With these principles in mind, we briefly turn to the
issues raised by the Company in this appeal. The Company
contends the Board erred by reversing the ALJ’s order striking
the General Counsel’s post-hearing brief. The Company offers
several reasons for its position: (1) the new calculations
were an attempt by the General Counsel to rehabilitate its only
witness who had been discredited by the ALJ; (2) the amended
- 10 - calculations have serious flaws the Company was unable to
address on cross-examination; and, (3) even if the amended
calculations “applied the correct data,” they were based on
faulty assumptions because no employee actually lost overtime
work.
Second, the Company argues the backpay formula did not
adequately take personal variables into account. The Company
states when backpay was calculated by comparing the difference
between the relative percentages of overtime worked before and
after the change, the formula did not adequately consider
employee refusals or unavailability or personal changes of any
sort in responding to a callout. The Company points to
testimony of Mr. Eveleth, one of the backpay awardees, that he
would have been disinclined to accept overtime because of his
increased family responsibilities during the period.1 The
Company also relies on a supervisor's testimony about the other
employee, Mr. Fedder, and his overtime availability in support
of its contention.2
Third, the Company challenges the General Counsel's lumping
all overtime work together to make his computation. Finally,
1 Later, however, Mr. Eveleth changed his opinion and stated he would probably have earned about ten percent of the figure the General Counsel’s formula attributed to him. 2 Yet, the Company does not explain why it did not call Mr. Fedder to testify. Nevertheless, it urges the Board improperly rejected this testimony as speculative hearsay.
- 11 - the Company maintains, the formula did not consider: (1) the
behavior of individual employees with respect to their ability
or willingness to accept overtime; (2) callout procedures prior
to December 1988; and (3) the number and identity of employees
in a group of employees whose relative overtime was compared.
Having examined the record, we find nothing leading us to
the conclusion the Company was deprived of due process. If we
correctly understand the facts, the only purpose of the General
Counsel’s attachment to his brief was to lower the amount of
backpay he claimed due to reflect the elimination of two
employees from those eligible for compensation. This
calculation was not based upon a theory new to the proceedings.
Indeed, it was the formula over which the litigation occurred.
We must uphold the Board’s holding on this issue.
As for the remaining issues, we believe 88 Transit Lines is
particularly illuminative because it also involves a
supplemental backpay proceeding following an order enforcing an
earlier NLRB finding. In that case, the NLRB found the employer
discriminated against its employees by unilaterally replacing
the transit run schedule which had been in effect for many years
with a new one that reduced the number of runs employees could
work. In that case, too, the ALJ recommended amending the
General Counsel’s backpay calculation by not awarding backpay to
fourteen replacement workers who had been hired during the
- 12 - backpay period because they had no losses to be restored to
them. It also recommended treating as interim earnings any
amount by which post-unfair labor practice earnings exceeded
employee earnings during the base-period year. The Board
rejected both suggestions.
On appeal, the Third Circuit agreed, rejecting each of the
Company’s three claims of error, issues mirroring those before
us here. The court rejected the Company’s characterization of
the award of backpay to the fourteen employees hired after the
schedule change as punitive. 55 F.3d at 826. In our case, the
Company asserts a similar argument, contending granting backpay
to the two linemen who voluntarily refused some callout time
based solely on applying the formula is a penalty. The Third
Circuit, holding to the contrary, reasoned the change in
schedule caused a loss of work for the entire bargaining unit.
“The Board correctly found that the remedy was to inure to the
benefit of the entire bargaining unit. The award of backpay to
the fourteen replacement employees was not “‘punitive or
confiscatory’” and was “‘reasonably adapted to the situation
that call[ed] for the redress.’” Id. (citations omitted).
The employer’s second argument about the duty of
employee/discriminatees to mitigate damages and that gross
backpay must be reduced by interim earnings to derive a net
backpay award was also rejected. “It is true that mitigation
- 13 - of loss of earnings is a cardinal principle in the development
of remedial orders under the National Labor Relations Act.” Id.
at 826-27. However, the court continued, in that case, the
excess was attributable to fluctuations in the amount of
available work during the applicable time period rather than to
the restoration of lost work by the employer. The Third Circuit
observed: “The Company has provided us with no authority for its
argument that it can avoid the payment of backpay liability for
its discriminatory schedule change simply because discriminatees
happened to do better financially during the backpay period than
during the base-year period.” Id. at 827. In our case, the
Company takes a similar tack contending the two linemen have
reaped a windfall by being paid for not working.
In sum, we find no support in the cases for the Company's
assertion the change in overtime resulted in no backpay. We
agree with the Third Circuit that the injury was to the
bargaining unit, and the Company should not be able to profit
from its unfair labor practice. A backpay award is only an
approximation of what is owed. See La Favorita, 313 N.L.R.B. at
903. Thus, to urge the calculation is incorrect because it
didn't properly account for the technological improvements or
correspond to precise statistical principles is inapposite. The
General Counsel’s formula does not have to achieve perfection;
it need only be non-arbitrary.
- 14 - Having concluded the record contains substantial evidence
supporting the conclusions of the Board, we then apply the rule
of Ann Lee Sportswear, where we stated when it comes to crafting
remedies, we should look to the expertise of the Board over that
of an ALJ. 543 F.2d at 743. The Board’s "broader experience
and expertise" are entitled to considerable weight. Id. Upon
that basis, the Company’s PETITION FOR REVIEW IS DENIED, and the
Board’s ORDER is ENFORCED.
ENTERED FOR THE COURT
John C. Porfilio Circuit Judge
- 15 -