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Parties Involved:
Cobb Mechanical Contractors, Inc.
Petitioner
National Labor Relations Board
Respondent
United Association of Plumbers and Pipefitters, Local Union No. 196
Intervenor

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 23, 2002 Decided July 23, 2002

No. 01-1259

Cobb Mechanical Contractors, Inc.,

Petitioner

v.

National Labor Relations Board,

Respondent

United Association of Plumbers and Pipefitters,

Local Union No. 196, AFL-CIO,

Intervenor

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

Walter V. Siebert argued the cause for the petitioner.

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David A. Fleischer, Attorney, National Labor Relations

Board, argued the cause for the respondent. Arthur F.

Rosenfeld, General Counsel, John H. Ferguson, Associate

General Counsel, Aileen A. Armstrong, Deputy Associate

General Counsel, and Fred L. Cornnell Jr., Attorney, National Labor Relations Board were on brief.

Brian A. Powers argued the cause for the intervenor.

Keith R. Bolek was on brief.

Before: Ginsburg, Chief Judge, and Sentelle and

Henderson, Circuit Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge: Cobb Mechanical Contractors, Inc. (Cobb) petitions for review and the

National Labor Relations Board (NLRB or Board) crosspetitions for enforcement of the Board's imposition of instatement1 and backpay awards resulting from Cobb's unlawful

refusal to hire nineteen job applicants in violation of sections

8(a)(1) and (3) of the National Labor Relations Act (Act), 29

U.S.C. ss 151 et seq. In particular, Cobb argues that the

remedies are not warranted under the Act absent a determination that Cobb refused to hire, rather than merely failed to

consider for hire, nineteen applicants who were members of

Local Union No. 196 of the United Association of Plumbers

and Pipefitters, AFL-CIO (Union). Because the United

States Court of Appeals for the Fifth Circuit affirmed the

liability determination, this appeal deals solely with issues

arising from the compliance proceeding, namely how much

backpay Cobb is required to pay and what other relief, if any,

is appropriate. In limiting our inquiry to the compliance

proceeding, like the Board, we reject Cobb's invitation to

reconsider whether Cobb would have hired the Union appli-

__________

1 As used by the Board, "instatement" refers to the employer's

obligation to offer union applicants the "positions to which they

applied or, if those positions no longer exist, to substantially equivalent positions." See FES (a Division of Thermo Power) & Plumbers & Pipefitters Local 520, 331 NLRB No. 20, 2000 WL 627640, at

*6 (2000).

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cants in the first instance absent union animus because that

issue was decided at the liability stage. We nonetheless

remand to the Board for it to recalculate the amount of

backpay owed based on our conclusion that Cobb may have

had a non-discriminatory policy of not hiring plumbers for

plumber helper positions and that the end date for the

backpay periods should take into account each Union applicant's likelihood of transferring to another Cobb project. In

all other respects, we deny Cobb's petition for review.

I.

Cobb, a Colorado corporation, is a mechanical contractor

engaged in the business of plumbing, pipefitting and sheetmetal construction. See April 26, 1995 Decision of Administrative Law Judge Frederick Herzog at 2 (Cobb Mech. Contractors, Inc., Case No. 16-CA-1643) (Herzog Decision). In

September 1993 Cobb entered into a thirteen-month contract

to perform all mechanical contracting work at two federal

prison construction sites, one in Amarillo and one in Dalhart,

Texas. The Union represents plumbers, pipefitters and

plumber helpers in the Amarillo and Dalhart areas. Id.

Cobb initially arranged with the Texas Employment Commission (TEC) to handle, on Cobb's behalf, all of the project's

employment applications for welder, sheet metal worker,

pipefitter, plumber and laborer positions. TEC accepted

applications for Cobb from November 10 through November

21, 1993, when Cobb's project superintendent David Sandlin

terminated the agreement. Id. Sandlin then informed TEC

that Cobb no longer required TEC's services because it had

hired everyone needed for the project. Id. Even though

several Union members applied for the various positions

available and all had "commercial experience relevant to the

Amarillo/Dalhart jobs," none was hired. Id. at 3.

On May 31, 1994 the NLRB Regional Director for Region

16 issued a complaint against Cobb based on a charge filed by

the Union. Id. at 1. Specifically, the complaint alleged that

Cobb violated section 8(a)(1) and (3) of the Act by refusing to

employ or consider for employment twenty-four applicants

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because of their Union membership. After a hearing, Administrative Law Judge (ALJ) Herzog issued a decision on April

26, 1995. He found, inter alia, that Cobb "refused to hire

Union applicants in violation of sections 8(a)(1) and (3) of the

Act." Herzog Decision at 11. The ALJ ordered Cobb to

cease and desist from "refusing to consider for employment

and/or refusing to employ" twenty-two of the applicants. Id.

at 21. In addition, he required Cobb to offer them "employment in positions for which they applied or, if such positions

no longer exist, to substantially equivalent positions, and to

make them whole for any loss of earnings and other benefits

that they may have suffered as a result of the discrimination

against them." Id. at 21. Cobb failed to timely except to the

ALJ's decision. On June 23, 1995 the Board adopted by

order the ALJ's decision and ordered Cobb to comply therewith. See June 23, 1995 Order at 1. On June 6, 1996 the

United States Court of Appeals for the Fifth Circuit enforced

the Board's order, concluding that the Board did not abuse its

discretion in rejecting Cobb's exceptions as untimely. See

NLRB v. Cobb Mech. Contractors, Inc., 91 F.3d 139 (5th Cir.

1996) (unpublished opinion).

The General Counsel and Cobb could not agree on the

amount of backpay and benefits due under the Board's June

23, 1995 order. On June 20, 1997 the Regional Director

issued a compliance specification and notice of hearing laying

out a formula to determine the amount of backpay each

discriminatee was entitled to receive. See June 20, 1997

Compliance Specification and Notice of Hearing at 1-5. Because, according to Cobb, the Board failed to find that Cobb

unlawfully refused to hire any Union applicant, Cobb contended that the backpay remedy was punitive and thus barred by

the Act. See Cobb's July 23, 1997 Answer to Compliance

Specification and Notice of Hearing at 1. Following a compliance proceeding, ALJ Keltner Locke issued a supplemental

decision finding, inter alia, that nineteen discriminatees were

entitled to backpay totaling $672,890 plus interest and that

Cobb had a continuing obligation to offer employment to

eighteen of them. See May 13, 1998 Supplemental Decision,

1998 WL 1984978 (NLRB Div. of Judges, 1998), reprinted in

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In re Cobb Mech. Contractors, Inc., 333 NLRB No. 142, 2001

WL 473984, at *3 (Locke Decision). Cobb filed exceptions to

the supplemental decision. Upon review, the NLRB adopted

ALJ Locke's findings and conclusions and required Cobb to

make the discriminatees "whole" by paying them the amounts

specified, plus interest. See In re Cobb Mech. Contractors,

Inc., 333 NLRB No. 142, 2001 WL 473984, at *2 (2001).

Cobb filed a timely petition for review and the Board crossapplied for enforcement.

II.

We must uphold the Board's factual findings if supported

by substantial evidence in the record. See Williams Enters.,

Inc. v. NLRB, 956 F.2d 1226, 1232 (D.C. Cir. 1992). Furthermore, the ALJ's credibility determinations, as adopted by the

Board, will be upheld unless patently insupportable. See id.

If the Board finds an unfair labor practice, its choice of

remedies is given "special respect." Id. We examine the

remedy selected, however, to "assure that the Board has

considered the factors which are relevant to its choice of

remedy, selected a course which is remedial rather than

punitive, and chosen a remedy which can fairly be said to

effectuate the purposes of the Act." Id. (quotations omitted).

A. Refusal to Hire/Refusal to Consider

Section 8(a)(3) of the Act makes it an unfair labor practice

for an employer "by discrimination in regard to hire or tenure

of employment or any term or condition of employment to

encourage or discourage membership in any labor organization." 29 U.S.C. s 158(a)(3). Section 8(a)(1) makes it an

unfair labor practice "to interfere with, restrain, or coerce in

the exercise of rights guaranteed" in the Act. 29 U.S.C.

s 158(a)(1). An employer violates section 8(a)(3), and thereby section 8(a)(1), if it refuses to hire or consider for hire an

applicant because of his union membership or activity. See

Southwest Merch. Corp. v. NLRB, 53 F.3d 1334, 1339 (D.C.

Cir. 1995). In determining whether an employer has committed a violation, the Board uses the Wright Line test. See

Wright Line, 251 NLRB 1083, 1980 WL 12312, enf'd, 662

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F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982).

Under Wright Line, the General Counsel must make a prima

facie showing sufficient to support an inference that the

applicant's protected conduct was a "motivating factor" in the

employer's decision. The burden then shifts to the employer

to demonstrate it would have made the same decision irrespective of the applicant's protected union activities. See

Southwest Merch. Corp., 53 F.3d at 1339; Wright Line, 251

NLRB at 1089.

As noted above, the Board is accorded broad discretion in

fashioning an appropriate remedy. Nonetheless, a proposed

remedy must "be tailored to the unfair labor practice it is

intended to redress." Sure-Tan, Inc. v. NLRB, 467 U.S. 883,

900 (1984). With regard to a backpay award in particular, "it

remains a cardinal, albeit frequently unarticulated assumption, that a backpay remedy must be sufficiently tailored to

expunge only the actual, and not merely speculative, consequences of the unfair labor practices." Id. at 900-01 (citing

Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 198 (1941)

("[O]nly actual losses should be made good....")); see also

Capital Cleaning Contractors, Inc. v. NLRB, 147 F.3d 999,

1009 (D.C. Cir. 1998) (Board's remedy must be "truly remedial and not punitive"). Consistent with these admonitions, the

Board has held that instatement and backpay awards, like

those at issue here, are appropriate remedies only if an

employer actually refuses to hire a union applicant. See FES

(a Division of Thermo Power) & Plumbers & Pipefitters

Local 520, 331 NLRB No. 20, 2000 WL 627640, at *7 (2000).

In contrast, "the appropriate remedy for [a refusal to consider] violation is a cease-and-desist order; an order to place the

discriminatees in the position they would have been in, absent

discrimination, for consideration for future openings and to

consider them for the openings in accord with nondiscriminatory criteria." Id. at *10. The distinction makes sense

because the NRLB's remedial aim is to "restore the economic

status quo that would have obtained but for the company's

wrongful action." Geiger Ready-Mix Co. v. NLRB, 87 F.3d

1363, 1371 (D.C. Cir. 1995) (quotations omitted and emphasis

added). If an employer merely refuses to consider a union

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applicant, an award of backpay and instatement without proof

that the applicant would have been hired absent union animus

does not "effectuate the purposes of the Act." Williams

Enters., supra.2 The thrust of Cobb's argument is that the

Board erred in fashioning an instatement and backpay remedy because, contrary to ALJ Locke's interpretation, ALJ

Herzog did not determine that Cobb refused to hire the

discriminatees but instead that Cobb refused to consider

them for hire. See Cobb Br. 14-26.

The critical issue is whether ALJ Locke's supplemental

decision, affirmed by the Board, correctly concluded that ALJ

Herzog had determined that Cobb refused to hire, rather

than refused to consider for hire, the Union applicants.

While acknowledging that "certain statements in ALJ Herzog's decision would appear to support [Cobb's] position,"

Locke nonetheless concluded that Herzog's decision plainly

"embodie[d] a finding that [Cobb] unlawfully refused to hire."

Locke Decision, 2001 WL 473984, at *4-5. We agree with

ALJ Locke's assessment. In the "Findings and Conclusions"

section of the Herzog decision, under the first subheading

entitled "Unlawful Refusal to Hire Allegations," ALJ Herzog

stated:

The General Counsel contends, and I find, that [Cobb]

refused to hire Union applicants in violation of section

8(a)(1) and (3) of the Act. [Cobb's] refusal to hire took

place both directly and indirectly as [Cobb] utilized [the

Texas Employment Commission] as an effective "graveyard" for Union applicants and refused to hire or consider the Union applicants who directly applied or interviewed with [Cobb].

__________

2 Cobb reads the Board's declaration that "[i]t is axiomatic ...

that the finding of an unfair labor practice is presumptive proof that

some back pay is owed" to be erroneous as a matter of law because

not all unfair labor practice findings warrant backpay. Cobb Br. at

16-17. But the Board's statement, when read in conjunction with

its adoption of ALJ Locke's conclusion that ALJ Herzog had, in

fact, determined that Cobb refused to hire the union applicants, is a

correct statement of the law.

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Herzog Decision at 11 (emphasis added).3 While Herzog's

decision is at times imprecise, he referred more than once to

Cobb's "refusal to hire" the Union applicants. See, e.g.,

Herzog Decision at 11-13. Moreover, his individual treatment of each Union applicant, rather than a general review of

the applicants as a group, further indicates that he considered

each applicant's circumstances in finding a refusal to hire.

See id. at 15-17. In addition, Herzog ordered instatement

and backpay awards, remedies that follow from a refusal to

hire finding. Id. at 21.4

Even if ALJ Herzog did not explicitly determine that all of

the Union applicants would have been hired, Cobb was required to file a timely exception to the remedy imposed. In

__________

3 The "refused to hire or consider" language used here suggests

Herzog found both types of violations, not only an unlawful refusal

to consider.

4 Cobb responds by citing Board authority and circuit precedent

which, it claims, support its right to raise the suitability for hire

issue in the compliance proceeding. See Cobb Br. at 19-20 (citing

Southwest Merch. Corp. v. NLRB, 53 F.3d 1334 (D.C. Cir. 1995),

and Great Lakes Chem. Corp. v. NLRB, 967 F.2d 624 (D.C. Cir.

1992)). At the outset, we agree with Cobb that if ALJ Locke or the

Board had thought that the issue was unresolved, it could have

been considered at the compliance proceeding. The cited cases

indicate that ALJs have sometimes reserved the question whether

an employer would have hired particular discriminatees for the

compliance proceeding. This does not mean, however, that an

employer is entitled to raise a discriminatee's suitability for hire

whether or not the ALJ reserved the issue at the liability stage.

Moreover, the procedural posture of both Southwest Merch. and

Great Lakes Chem. materially differs. Having concluded that the

Southwest Merch. and Great Lakes Chem. employers had not had

the opportunity to challenge whether particular employees would

have been hired, we further concluded, based on Board policy, that

the employers would have the opportunity in subsequent compliance

proceedings. See Southwest Merch., 53 F.3d at 1345; Great Lakes

Chem., 967 F.2d at 629-30. In Southwest Merch. and Great Lakes

Chem., the Board had issued reinstatement orders to broad classes

of employees without considering the suitability of individual employees, reserving that issue for the compliance proceeding.

failing to do so, Cobb waived its right to raise the suitability

for hire issue. See Board's Rules and Regulations, 29 C.F.R.

s 102.48(a) ("[I]f no exceptions are filed ..., the findings,

conclusions, and recommend[ed] order shall ... be adopted

by the Board and all objections to them shall be deemed

waived for all purposes."); see also 29 C.F.R. 102.46(g) ("No

matter not included in exceptions or cross-exceptions may

thereafter be urged before the Board, or in any further

proceeding."). The fact that ALJ Herzog reserved for the

compliance proceeding only the amount of backpay question

also put Cobb on notice that the suitability issue had been

decided, requiring Cobb to except thereto or risk waiver. See

Herzog Decision at 20-21.

Cobb additionally claims that the Board itself should have

reanalyzed the case, or remanded to the ALJ to so analyze, in

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light of the FES decision, which clarified the elements of

refusal to hire and refusal to consider cases. See FES,

supra. In essence, Cobb seeks yet another route by which to

reintroduce the question whether it would have hired the

Union applicants. Again, however, Cobb failed to properly

raise the issue before the Board; accordingly, it is precluded

from raising it here. Section 10(e) of the Act provides, in

pertinent part, that "no objection that has not been urged

before the Board ... shall be considered by the court, unless

the failure or neglect to urge such objection shall be excused

because of extraordinary circumstances." 29 U.S.C. s 160(e).

There are no extraordinary circumstances here. Even

though FES postdated ALJ Locke's decision by two years,

the Board issued its decision in this case one year after FES.

Moreover, section 102.48(d)(1) and (2) of the Board's Rules

and Regulations, 29 C.F.R. 102.48(d)(1) and (2), provides that

any material error included in a Board decision can be

contested by a motion for "reconsideration, rehearing, or

reopening of the record." Even if Cobb could not have made

a FES argument before issuance of the Board decision, its

failure to move to reconsider (or reopen the record) bars it

from raising the issue on appeal. See Int'l Ladies' Garment

Workers v. Quality Mfg. Co., 420 U.S. 276, 281 n.3 (1975);

Epilepsy Found. v. NLRB, 268 F.3d 1095, 1102 (D.C. Cir.

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2001) (failure to move to reconsider issue precludes judicial

review of issue); Glaziers Local 558 v. NLRB, 408 F.3d 197,

203 (D.C. Cir. 1969) (alleged misstatement of fact not brought

to Board's attention by motion for reconsideration waived on

appeal).

B. Amount of Backpay Award

Cobb makes a variety of arguments challenging the amount

of the backpay award. First, Cobb contends that the start

date used to calculate backpay relies on the first day any

employee was hired for the prison construction project rather

than the first day a "newly-hired" employee was hired. See

Cobb Br. at 33-34. It contends this was error because it had

a policy of preferring current employees to new applicants

and thus the Union applicants' start day for backpay purposes should be the date the new-hires began. Cobb's position, however, relies on hiring policies that ALJ Herzog

conclusively determined "systematically exclude Union members from consideration for employment," Herzog Decision at

17.

Cobb also argues that the Board's calculation of backpay

for pipefitter Union applicants is flawed because it should

have used the date(s) on which Cobb hired pipefitters as the

benchmark rather than the date(s) on which it hired plumbers. While it appears Cobb is correct that pipefitters may, at

times, perform different services from plumbers, we agree

with ALJ Locke's determination that Cobb did not meet its

burden of demonstrating that pipefitter applicants would not

have been hired as plumbers. Locke Decision, 2001 WL

473984, at *4-5. That employees in these positions performed roughly the same work at the Amarillo and Dalhart

sites, that the apprenticeship programs for both positions are

the same and that several requirements listed in Cobb's job

descriptions for the positions are the same, see Cobb Position

Description for "Plumber" and "Pipefitter," all suggest that

the Board reasonably concluded that the backpay periods for

the pipefitter discriminatees should begin when Cobb hired

non-Union applicants as plumbers.

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On the other hand, Cobb's argument that the plumber

discriminatees would not have been hired on the dates that

plumber helpers were hired because Cobb had a policy of not

hiring plumbers to be plumber helpers has merit. In rejecting the argument, the Board relied on testimony that plumber applicants would have taken plumber helper jobs had those

positions been offered to them, see In re Cobb Mechanical

Contractors, Inc., 333 NLRB No. 142, 2001 WL 473984, at

*1. But Cobb contends that the plumber applicants would

not have been offered the plumber helper jobs on those dates

based on company policy. Several Cobb officials testified

that the policy was long-standing and was intended to prevent

overqualified plumbers from leaving plumber helper positions

as soon as they were offered a higher paying plumber position elsewhere. See, e.g., Testimony of Paula McKinney, Tr.

101 p 12-23; Testimony of Jerry Bitner, Tr. 141-42. ALJ

Locke concluded that Cobb's policy seemed "disingenuous"

because, in light of Cobb's anti-union animus, it would welcome the turnover of Union employees. Locke Decision, 2001

WL 473984, at *9. In computing the backpay amount, however, Locke had to determine when the Union applicants

would have been hired had Cobb had no anti-union animus.

We remand this issue to the Board to reconsider Cobb's

argument.

The final question involves the correct end date of the

backpay periods. In Dean General Contractors, 285 NLRB

573, 1987 WL 89852 (1987), the Board employed a rebuttable

presumption that an unlawfully discharged employee in the

construction industry would have been transferred to a new

project upon the termination of the project for which he had

been employed initially. We too have recognized that the

employer has the burden to rebut the presumption that an

employee will be transferred to another project. See Tualatin Electric, Inc. v. NLRB, 253 F.3d 714, 718 (D.C. Cir. 2001)

(Board properly applied Dean presumption to discharged

employees' backpay award calculations). In Tualatin, we

also iterated the principle that "the party who has acted

unlawfully should bear the burden of producing evidence for

the purpose of limiting its damages." Id. ALJ Locke apUSCA Case #01-1259 Document #691186 Filed: 07/23/2002 Page 11 of 12
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plied the Dean presumption and determined that Cobb had

"not met its burden of proving that the discriminatees would

not have been transferred to its other jobs." See Locke

Decision, 2001 WL 473984, at *13. Locke considered whether Cobb's policy of favoring transferees over "new hires"

rebutted the presumption and reasonably concluded that the

policy "would support the opposite conclusion." Id. Cobb,

however, faults Locke for failing to consider evidence that

only two newly-hired journeymen plumbers and pipefitters at

the Amarillo and Dalhart sites transferred to other projects.

Absent discrimination, the Union applicants would have been

similarly situated to the newly-hired journeymen plumber and

pipefitters because both groups would have been first time

Cobb employees. In its brief the Board contends that Cobb

is comparing the discriminatees to the wrong group of Cobb

employees and that reliance upon generalized factors such as

high turnover is impermissible. See Board Br. at 41-44.

ALJ Locke, however, failed completely to address Cobb's

evidence. We therefore conclude that Cobb's evidence that

only two newly-hired employees on the Amarillo and Dalhart

projects transferred to another Cobb project merits remand

for the Board to reconsider which, if any, of the Union

applicants would have transferred to a new Cobb project.

For the foregoing reasons, we deny Cobb's petition and

grant the Board's cross-application for enforcement excepting

the two issues we remand to the Board for reconsideration

consistent with this opinion.

So ordered.

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