National Labor Relations Board v. Harding Glass Co. , 500 F.3d 1 ( 2007 )

United States Court of Appeals
For the First Circuit
No. 06-2540
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
v.
HARDING GLASS COMPANY, INC.,
Respondent.
ON PETITION FOR ENFORCEMENT OF AN ORDER OF
THE NATIONAL LABOR RELATIONS BOARD
Before
Lynch, Circuit Judge,
Selya, Senior Circuit Judge,
and Lipez, Circuit Judge.
Christopher W. Young, Attorney, National Labor Relations
Board, with whom Fred B. Jacob, Supervisory Attorney, Ronald
Meisburg, General Counsel, John E. Higgins, Jr., Deputy General
Counsel, John H. Ferguson, Associate General Counsel, and Aileen A.
Armstrong, Deputy Associate General Counsel, were on brief, for
petitioner.
Robert Weihrauch for respondent.
August 17, 2007
LYNCH, Circuit Judge. The slow grinding of the wheels of
justice is a major theme in this National Labor Relations Board
("NLRB") compliance case.
In 2006, the NLRB awarded remedies for unfair labor
practices committed by Harding Glass Company ("Harding") in 1993.
Harding Glass Co. (Harding III), 347 N.L.R.B. No. 102, at 2 (Aug.
29, 2006). Those remedies awarded over $144,000 in back pay to
nine employees and over $360,000 to four union funds, with accrued
interest. Id. The Board seeks enforcement; the company says that
enforcement should be denied, arguing that it would be driven out
of business by enforcement of the order and that the sums owed
should, at the least, be discounted for the delay in the resolution
of this matter.
The case has cautionary lessons for counsel about the
costs of minimalist responses to Board allegations. Here, the
company failed to comply with the Board's rules for answering
compliance specifications. Those rules require highly specific
information, going well beyond the requirements for answers in
civil actions in federal courts. Additionally, although
interesting legal issues may lurk as to the limits of the Board's
ability to order payment to union funds, the company has failed to
provide any facts, thus rendering the questions hypothetical.
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We reject the company's arguments and enforce the Board's
order. We note that the Board has offered to work with the company
on a payment plan, should that be necessary.
I.
This saga, unfortunately, has taken fourteen years.
Harding sells and installs glass for automobiles and commercial
buildings in Worcester, Massachusetts. In October 1993, the
company employed two glaziers and three glassworkers. The glaziers
repaired and installed industrial and commercial glass, while the
glassworkers repaired and replaced automobile glass. Glaziers
Local 1044, International Brotherhood of Painters & Allied Trades,
AFL-CIO ("the Union"), represented both sets of employees.
Several months before the expiration of the then-current
collective bargaining agreement on October 16, 1993, the parties,
at Harding's request, entered into negotiations for a successor
agreement. The company proposed to reduce the glaziers' pay rate
from $22.05 per hour to $13.73 per hour, while raising the
glassworkers' pay rate from $13.23 per hour to $13.73 per hour.
The company also proposed eliminating all contributions to the
Union's health, welfare, pension, and annuity funds; it proposed
replacing only the health fund with another insurance plan. The
Union put forward a counterproposal, which Harding rejected. On
October 17, the glaziers voted to reject Harding's offer and
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strike. They established a picket line the next day. The
glassworkers initially respected the glaziers' picket line.
The parties met again on October 22 but failed to reach
an agreement. On October 23, Harding implemented its final offer.
The company offered the glassworkers the wage and benefit package
it had initially offered the Union, while at the same time
threatening to replace them. The three glassworkers resigned from
the Union and resumed working for Harding. The two glaziers
maintained their picket line, and the company hired a new glazier
under its new terms and conditions of employment. The Union filed
unfair labor practice charges against Harding alleging that the
company had, inter alia, unilaterally implemented its final offer
in the absence of a bona fide impasse in collective bargaining.
The Board, on March 31, 1995, held that the company had,
by its actions, violated section 8(a)(5) of the National Labor
Relations Act ("NLRA") by implementing unilateral changes in
employment conditions without a valid impasse in bargaining.
Harding Glass Co. (Harding I), 316 N.L.R.B. 985, 985 (1995). This
court, on March 27, 1996, enforced that portion of the Board's
order.1 NLRB v. Harding Glass Co., 80 F.3d 7, 10 (1st Cir. 1996).
1
The court denied enforcement of another portion of the
order, disagreeing with the Board that the economic strike, begun
on October 18, 1993, had been converted to an unfair labor practice
strike on October 25, 1993, the date union representatives informed
the striking glaziers of Harding's implementation of unilateral
changes. NLRB v. Harding Glass Co., 80 F.3d 7, 11, 13 (1st Cir.
1996).
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Under the relevant provisions of the Board's order, the company was
directed to restore all terms and conditions of employment to the
status quo as of October 23, 1993 and to make whole all employees
and union funds for the losses they had suffered. Harding I, 316
N.L.R.B. at 986. It is this make-whole obligation for the 1993
events that is the subject matter of the proceedings before us.
Once it had the enforcement order, the agency did not act
promptly. The Regional Office did not issue a Compliance
Specification until July 1, 1997. Thereafter, it issued a First
Amended Compliance Specification on January 20, 2000. After
various proceedings, the Board issued an order on August 1, 2002,
granting in large part the General Counsel's motion to strike
portions of Harding's answer for failure to comply with the Board's
rules. Those rules require respondents who dispute compliance
allegations to provide supporting figures or information. The
Board, having struck most of Harding's answer, then granted, with
one exception, summary judgment against the company on the pay
rates and the method of back pay calculation alleged by the General
Counsel to apply to the affected employees. Harding Glass Co.
(Harding II), 337 N.L.R.B. No. 175, at 2-4 (Aug. 1, 2002). The
Board denied the motion for summary judgment as to employee James
Tritone and left open for litigation the issue of whether Tritone's
back pay should be based on the full contract rate for a glazier,
$22.05 per hour, at the time of Tritone's reinstatement after
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recovering from a work-related injury. Id. at 2-3. For the period
in question, from March 28 to April 15, 1994, Harding had paid
Tritone at the rate of $13.73 per hour. The Board also left open
for litigation the parties' dispute over the date on which the
economic strike ended. Id. at 3-4.
In its 2002 order, the Board rejected the company's
affirmative defense that the amended compliance specification
should be dismissed in its entirety because of delay by the
Regional Office. The Board was not moved by the two-and-a-half-
year gap between the issuance of the initial Compliance
Specification and the First Amended Compliance Specification. The
Board similarly rejected Harding's defense that it was entitled to
offset on the payments due to the union funds for the value of
alternative benefit payments made by the company. The Board
ordered that both affirmative defenses be stricken. Id. Thus, the
2002 Board order resolved most, but not all, of the remedial issues
and remanded the remaining matters to an administrative law judge
("ALJ") for hearing. Id.
The company, instead of trying to expedite the remaining
proceedings, took the opposite tack. It did not ask the Board to
enter final judgment in 2002 on the matters then resolved. Rather,
Harding chose to petition for review of the Board's interlocutory
order. The predictable result was that this court granted, on
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November 25, 2002, the Board's motion to dismiss on the ground that
we lacked jurisdiction because there was no final order.
Again there was delay by the Regional Office as to the
issues remanded to the ALJ. The Regional Office, over two years
later, issued a Second Amended Compliance Specification on December
22, 2004. That was updated by a Third Amended Compliance
Specification on January 19, 2005.
On April 12, 2005, the General Counsel filed a motion in
limine to preclude Harding from rearguing issues that had already
been resolved against the company in the underlying unfair labor
practice proceedings. On April 27, 2005, the ALJ granted the
motion, over the company's objection.
On June 29, 2005, the ALJ issued a supplemental decision
agreeing with the Regional Director's back pay calculations for the
individual employees as well as for monies due to the union funds.
The ALJ agreed with the Regional Director that the economic strike
ended on June 4, 1996, and that the back pay period for replacement
workers began on the following day, June 5, 1996. As to the issue
of back pay for Tritone, the ALJ found that he was entitled to the
full contract rate for glaziers, and awarded back pay to Tritone in
the amount of $975.89 plus interest. In total, the ALJ ordered
Harding to pay lost wages of $144,074.95 plus interest to nine
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employees2 and $360,067.37 plus interest to four union funds.3 The
company sought review by the Board.
On August 29, 2006, the Board rejected the company's
exceptions, adopted the ALJ's rulings, and directed Harding to pay
the specified amounts plus interest to the employees and the union
funds. Harding III, 347 N.L.R.B. No. 102, at 1-2. With respect to
the calculation of Tritone's back pay, the Board agreed with the
ALJ that Tritone was entitled to the contractual glazier rate of
$22.05 per hour for the period from March 28 to April 15, 1994.
Id. at 2.
On October 25, 2006, the Board petitioned for enforcement
of its order in full. Harding did not cross-petition for review,
but it did assert in its answer to the enforcement application that
the Board's decision and order "are without foundation in law or
fact and are erroneous as a matter of law" and "are not supported
by substantial evidence on the record as a whole."
II.
A. The Board's 1995 Order
On several occasions, Harding has attempted to relitigate
issues already decided against it in the Board's March 31, 1995
2
The employees are Robert Mosely, James Tritone, Richard
Poirer, James Gabrielle, Richard VonMerta, David Elworthy,
Christopher Carle, Christopher Pelletier, and Kenneth Bullock.
3
The funds are the Health and Welfare Fund, the Pension
Fund, the Annuity Fund, and the Apprenticeship Fund.
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order. The Board and the ALJ justifiably rejected these efforts.
See Transport Serv. Co., 314 N.L.R.B. 458, 459 (1994) ("Issues
litigated and decided in an unfair labor practice proceeding may
not be relitigated in the ensuing backpay proceeding.").
To the extent Harding argues before this court that it
did not unilaterally implement its last and final offer in the
absence of a valid impasse in bargaining, that argument is
foreclosed. The Board's 1995 order concluded that Harding
implemented unilateral changes without having reached a bona fide
impasse. Harding I, 316 N.L.R.B. at 985. A different panel of
this court affirmed that conclusion. Harding Glass Co., 80 F.3d at
10, 13. We will not reconsider the issue here. The company is not
free to relitigate in an enforcement proceeding the underlying
finding of liability already decided by this court.
B. The Board's 2002 Entry of Summary Judgment and Striking
of Affirmative Defenses
Harding argues that the Board erred (1) in sua sponte
granting summary judgment for the Regional Director on certain
claims (e.g., dates pertaining to employees' back pay periods and
the status of eight employees as strike replacement workers) which
would otherwise have been litigated; (2) in allowing the Director's
request for summary judgment that two employees, David Elworthy and
Christopher Pelletier, were entitled to the glassworkers' pay rate;
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and (3) in striking the company's affirmative defense of mitigation
of liability to the union funds.4
What all three claims have in common is Harding's failure
to understand or meet its responsibilities in answering compliance
specifications issued by the Regional Director. The applicable
rules, contained in the Code of Federal Regulations, provide:
The answer shall specifically admit, deny, or
explain each and every allegation of the
specification, unless the respondent is
without knowledge, in which case the
respondent shall so state, such statement
operating as a denial. Denials shall fairly
meet the substance of the allegations of the
specification at issue. . . . As to all
matters within the knowledge of the
respondent, including but not limited to the
various factors entering into the computation
of gross backpay, a general denial shall not
suffice. As to such matters, if the
respondent disputes either the accuracy of the
figures in the specification or the premises
on which they are based, the answer shall
specifically state the basis for such
disagreement, setting forth in detail the
respondent's position as to the applicable
premises and furnishing the appropriate
supporting figures.
29 C.F.R. § 102.56(b) (emphasis added).
Harding responded to the Regional Director's compliance
specification with general denials and inadequate explanations. It
did not, for example, in its answers and amended answers dispute
4
Harding also argues that it should have been permitted to
introduce evidence regarding its affirmative defense that the delay
in initiating the compliance proceedings resulted in an
impermissible punitive and confiscatory order, and thus the
judgment should be modified. We discuss this claim below.
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the running of the back pay period by providing alternate dates and
a rationale. Nor did it sufficiently explain the basis for its
claim that eight employees were strike replacement workers not
entitled to the earnings and benefits of the 1991-1993 collective
bargaining agreement. As for the Regional Director's allegation
that Elworthy and Pelletier were glassworkers, it was not enough
for Harding simply to deny that this was so. As the Board noted,
Harding did not explain what jobs these employees performed, if
they were not glassworkers. Nor did the company state the basis
for its disagreement with the job classification alleged in the
compliance specification.
Under the Board's rules, when a respondent fails to deny
allegations with the required specificity, those allegations are
"deemed to be admitted to be true, and may be so found by the Board
without the taking of evidence supporting such allegation[s], and
the respondent shall be precluded from introducing any evidence
controverting the allegation[s]." Id. § 102.56(c). Harding had
fair notice of the costs of its evasiveness. The Board was
justified in striking portions of Harding's answer and awarding
partial summary judgment based on the allegations that were deemed
admitted to be true.
Harding nonetheless complains of the sua sponte nature of
the Board's award of summary judgment on issues that the Regional
Director was prepared to litigate. Harding never raised a word of
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protest about the sua sponte nature of the ruling to the Board,
though it could have sought reconsideration on this basis. We will
not hear such a procedural objection for the first time. See 29
U.S.C. § 160(e) ("No objection that has not been urged before the
Board, its member, agent, or agency, shall be considered by the
court, unless the failure or neglect to urge such objection shall
be excused because of extraordinary circumstances."); see also
Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645, 665 (1982);
E.C. Waste, Inc. v. NLRB, 359 F.3d 36, 41 (1st Cir. 2004).
Somewhat different is Harding's argument that the Board
erred in requiring it to make contributions of over $360,000 to
four union funds. The company asserts broadly that it offered
health insurance coverage to the employees during this period and
so it would be a windfall to the funds to pay back to them the full
amount of the contributions Harding withheld. Harding asserts that
it should be able to offset the contributions it made for the
health plan it unilaterally established for employees against the
ordered payments to union funds.
This court has not addressed this issue, on which the
circuit courts appear to have differing views. One court of
appeals apparently has taken the view that the company is not
entitled to an offset because it was the company's unlawful choice
to set up a private substitute insurance program. See Stone Boat
Yard v. NLRB, 715 F.2d 441, 446 (9th Cir. 1983). Under such an
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approach, Harding's contributions to a separate insurance program
are immaterial, and its evidence is irrelevant.
In NLRB v. Coca-Cola Bottling Co. of Buffalo, 191 F.3d
316 (2d Cir. 1999), the court held that make-whole remedial relief
may include contributions to union funds insofar as the employees
have a future interest in the financial strength of the funds. Id.
at 324. Under the Coca-Cola Bottling rationale, the limitation on
the Board's ability to order fund contributions derives from the
"essentially remedial" policies of the NLRA. Id.; cf. Sure-Tan,
Inc. v. NLRB, 467 U.S. 883, 900 (1984) ("[A] backpay remedy must be
sufficiently tailored to expunge only the actual, and not merely
speculative, consequences of the unfair labor practices."). This
approach is supported by the Board's view that contributions to
union funds may be ordered, at least where employees have an
interest in the future viability of those funds. See 1849 Sedgwick
Realty LLC, 337 N.L.R.B. 245, 248 n.8 (2001) (stating that the
Board has never "held that fund contributions may be ordered in the
absence of [a future] interest"); Manhattan Eye Ear & Throat Hosp.,
300 N.L.R.B. 201, 201-02 (1990) (adopting order of ALJ that company
make fund contributions on rationale that employees had "a clear
economic stake in the viability of funds to which part of their
compensation [was] remitted"), enforcement denied, 942 F.2d 151 (2d
Cir. 1991).
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In some instances, courts have directed the Board, in
circumstances where the employer provided alternative benefits, to
permit an employer an opportunity to show that payments to union
funds would be punitive, and not remedial. These courts have
remanded to permit the company to show that such reimbursement
would fail to benefit employees or would result in windfalls to
union funds. See Grondorf, Field, Black & Co. v. NLRB, 107 F.3d
882, 888 (D.C. Cir. 1997); Manhattan Eye Ear & Throat Hosp. v.
NLRB, 942 F.2d 151, 159-60 (2d Cir. 1991).
We take no position on the issue because Harding failed
to provide sufficient facts in support of its argument. At most,
the company asserted that the employees in question were provided
with health and medical insurance at no cost to them. Harding did
not put forward any other relevant facts. The company did not
explain how payment to the union funds would fail to benefit
employees or would result in a windfall, nor did it assert the
specific amount it was seeking as an offset. To the extent (if at
all) the argument is viable, it is the employer who bears the
burden of putting necessary facts into the record. See Banknote
Corp. of Am., 327 N.L.R.B. 625, 625 (1999); see also 29 C.F.R.
§ 102.56(b)-(c). In the absence of such facts, the company's claim
necessarily fails.
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C. The Board's 2006 Back Pay Award
The Board has broad remedial powers under section 10(c)
of the NLRA, 29 U.S.C. § 160(c). Sure-Tan, 467 U.S. at 898-99.
The Board has discretion both to determine that back pay is
appropriate to restore the economic status quo and to compute the
back pay amount. See Va. Elec. & Power Co. v. NLRB, 319 U.S. 533,
540-41 (1943); Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 198
(1941).
The only real issue here is the amount of the back pay
award. Harding does not dispute the method of calculation.
Rather, it argues that the back pay period should be shorter. It
attacks the date of June 5, 1996 as the starting point for
calculating back pay for replacement employees. The usual rule
applies that the Board's findings must stand unless there is no
substantial evidence supporting them. See Hosp. Cristo Redentor,
Inc. v. NLRB, 488 F.3d 513, 518-19 (1st Cir. 2007). The Board's
choice of date is more than adequately supported by the evidence.
The ALJ picked June 5, 1996 on the basis of his
determination that the economic strike ended on June 4, 1996. This
finding was based on a letter dated June 4, 1996 that Harding
received from the Union, which stated that the strike against the
company had concluded by January 1, 1994. The reasons given were
that (1) all striking employees -- that is, the glaziers -- who
were able to work had found other jobs and were not seeking
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reinstatement with Harding, and (2) the Union had stopped picketing
by that January date.
Despite the fact that the Union's position covered all
employees, Harding argued to the Board that the strike was ongoing
because it had not received explicit notice of whether one of the
striking employees, Charles Jones, had unequivocally abandoned his
right to future employment with the company or had made an
unconditional offer to return to work for Harding. The Board
reasonably rejected the company's argument that the strike
continued beyond June 4, 1996.5 As the company knew from the
Union's letter, Jones fit in the category of those who had found
other employment. Harding's position is based on a fundamental
misapprehension of labor law. It is the union that speaks for its
striking employees, and silence from a particular employee can
hardly justify the company's position. See Metro. Edison Co. v.
NLRB, 460 U.S. 693, 705 (1983) (recognizing that a union may waive
a represented employee's right to strike); Plumbers & Pipefitters
Local Union No. 520 v. NLRB, 955 F.2d 744, 751 (D.C. Cir. 1992)
("Among the rights that may be modified or waived [by the union] is
the right to strike."). The case on which Harding relies, Service
5
The ALJ used the date of the Union's June 4, 1996 letter
as the ending date for the strike, even though the letter's
contents indicated that the strike had ended by January 1, 1994.
The ALJ's use of the June 4, 1996 date therefore favored Harding.
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Elec. Co., 281 N.L.R.B. 633, 636-37 (1986), has very different
facts and is self-evidently inapplicable.
That leaves the company's objection to the back pay award
to Tritone for the period from March 28 to April 15, 1994. The
Board rejected Harding's argument that Tritone, who performed
glazier work when the strike started, was not entitled to back pay
at the full contract glazier's rate because he could not upon
reinstatement perform the same work that he did prior to the
strike. Harding III, 347 N.L.R.B. No. 102, at 1-2.
The Board applied its usual rule that an employee is
entitled to reinstatement to the position he was in at the time of
the strike unless the company shows changed circumstances. See
Transport Serv. Co., 314 N.L.R.B. at 459; cf. NLRB v. Rockwood &
Co., 834 F.2d 837, 841 (9th Cir. 1987) (holding that economic
striker was "entitled to reinstatement to his former position, to
one substantially equivalent, or to one for which he was
qualified"). The Board found that the work Tritone performed upon
reinstatement was glazier's work, notwithstanding the fact that the
work was not the same as before. Harding III, 347 N.L.R.B. No.
102, at 1. The evidence shows that Tritone returned to work in a
"temporary modified duty position," as described in a company
letter dated March 21, 1994. Tritone also testified before the ALJ
that he "measure[d] store fronts" for possible future glass
replacement and brought cars back to the workshop during the
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applicable period, and that he performed these same tasks as part
of his previous work as a glazier. Further, the workers'
compensation insurance provided under the collective bargaining
agreement supported the characterization of Tritone's post-
reinstatement work as glazier's work that was entitled to the full
contract rate. Harding's own Modified-Duty Policy provided "full
wages for an injured employee during recovery" (emphasis added).
Joseph Guiliano, the Union's business manager, also testified that
there was never "an agreement with Harding Glass or its
representatives that Harding could pay the glaziers less than the
full contract rate while they were on any kind of light duty."
Again, the Board's order is more than adequately supported.
D. Delay
Harding argues that it should not have to bear the
consequences of the interest payments (at least) accruing during
the long pendency of this action. Several different concerns are
raised by the delay in this case.
First, those primarily hurt by the delay are those
employees who did not receive the back pay or benefits to which
they were entitled. See NLRB v. J.H. Rutter-Rex Mfg. Co., 396 U.S.
258, 264 (1969) ("Wronged employees are at least as much injured by
the Board's delay in collecting their back pay as is the wrongdoing
employer."). There is no basis to excuse Harding from providing
the relief which has been ordered. Delay in a labor proceeding
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cannot be a basis on which to deny a remedy to the victims of the
company's unfair labor practice. See NLRB v. Int'l Ass'n of
Bridge, Structural & Ornamental Ironworkers, Local 480, 466 U.S.
720, 724-25 (1984) (per curiam) ("It is well established . . . that
the Court of Appeals may not refuse to enforce a backpay order
merely because of the Board's delay subsequent to that order in
formulating a backpay specification."); J.H. Rutter-Rex, 396 U.S.
at 265 ("[T]he Board is not required to place the consequences of
its own delay, even if inordinate, upon wronged employees to the
benefit of wrongdoing employers.").
Second, Harding is itself responsible for delay, as this
opinion shows, and so the company has little basis to seek refuge
in equitable arguments. The company has had the use of the money
the entire time. It has also had the option of establishing a
reserve to fund its contingent obligation. In any event, while it
is true that the dollar amounts have risen over time, the company
has the option of trying to work out a payment plan.
Third, none of this lets the NLRB off the hook for the
extraordinary length of time it took to resolve a relatively simple
labor issue. Not only has the delay hurt the employees, it
undermines confidence in the agency. At oral argument, the court
directed Board counsel to file a supplemental memorandum explaining
measures the agency is taking to improve its compliance procedures
to avoid lengthy delays in case processing. On June 20, 2007, the
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Office of the General Counsel filed a letter with us outlining four
measures the agency has taken to reduce delays in compliance
proceedings. We hope that such egregious delay will not recur.
We grant the Board's petition for enforcement.
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