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Parties Involved:
McKenzie Engineering Company
Respondent
National Labor Relations Board
Petitioner

Document Text:

United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

Nos. 01-3602/4021 

___________

McKenzie Engineering Company, *

*

Petitioner/Cross-Respondent, * On Petition for Review and

* Cross-Application for Enforcement

v. * of an Order of the National Labor

* Relations Board.

National Labor Relations Board, *

*

Respondent/Cross-Petitioner. *

___________

Submitted: October 20, 2003

 Filed: June 28, 2004

___________

Before MORRIS SHEPPARD ARNOLD, BOWMAN, and MURPHY, Circuit

Judges.

___________

BOWMAN, Circuit Judge.

In this labor case, the National Labor Relations Board (Board) has petitioned

to enforce its make-whole order against McKenzie Engineering Company and

McKenzie Engineering has appealed from that order. This is the fourth time we have

waded into this dispute between McKenzie Engineering, certain union carpenters, and

the National Labor Relations Board. See McKenzie Eng'g Co. v. NLRB, 303 F.3d

902 (8th Cir. 2002) (denying petition to enforce Board's order finding that McKenzie

Engineering committed unfair labor practice by repudiating pre-hire agreement);

Carpenters Fringe Benefit Funds v. McKenzie Eng'g Co., 217 F.3d 578 (8th Cir.

2000) (reversing district court judgment entered in favor of carpenter union in their

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ERISA action for fringe-benefit contributions); McKenzie Eng'g Co. v. NLRB, 182

F.3d 622 (8th Cir. 1999) (granting enforcement of Board's order finding that

McKenzie committed unfair labor practices and remanding for determination of

remedy). In this petition to enforce its make-whole order and McKenzie's appeal

from that order, the only issues are the extent of the back pay due to four discharged

union carpenters (and their replacements) and what fringe benefits McKenzie owes

the fired employees (and their replacements). We have jurisdiction under § 10(e) of

the National Labor Relations Act ("the NLRA") (29 U.S.C. § 160(e) (2000)) and, for

the reasons set forth below, grant enforcement of the order as it relates to the

replacement workers, deny enforcement of the order as it relates to the wrongfully

discharged employees, and remand the case to the Board for recalculation of the backpay and fringe-benefit awards in a manner not inconsistent with this opinion.

In McKenzie Engineering Company v. NLRB ("McKenzie I"), 182 F.3d 622

(8th Cir. 1999), we upheld the Board's determination that McKenzie committed

certain unfair labor practices under the NLRA. In particular, we upheld the Board's

conclusion that McKenzie violated the NLRA in three respects when it: discharged

four union carpenters in violation of §§ 8(a)(3) and (1) of the Act (29 U.S.C.

§§ 158(a)(1), (3)); repudiated the union's collective bargaining agreement in violation

of §§ 8(a)(1), (5); and discouraged other employees from joining the union by using

economic coercion and took other coercive actions in violation of § 8(a)(1). Id. at

626–28. The Board's order contained a make-whole remedy and we determined that

McKenzie's obligations to the discharged employees and their replacements should

be determined during the compliance phase of the agency proceedings. Id. at 629.

On remand, the parties disagreed as to the amount of back pay owed by the company

and, following a hearing, the Board issued an order that found the wrongfully

discharged employees would have continued to work for the company to the present

day. Therefore, under the Board's order the company owes the four discharged

employees back pay for the period from November 1995 until it rehires them.

McKenzie also owes three of these employees fringe benefits from the time they were

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fired until the collective bargaining agreement expired on April 30, 1997. Finally,

the company owes back pay and fringe benefits to the non-union workers it hired to

replace the fired workers in an amount equal to the difference between the union and

non-union scale. The award for the non-union workers ends with the expiration of

the collective bargaining agreement as well. In its appeal, McKenzie argues that our

prior, related decisions bar a part of these back-pay and fringe-benefit awards because

of the doctrines of claim and issue preclusion. McKenzie also urges that the award

of back pay should be limited to thirty-one weeks (the length of McKenzie

employees' average tenure) or that the award should end with the expiration of the

collective bargaining agreement.

We review appeals from the NLRB with deference and will affirm a Board

order or grant a petition to enforce an order if the Board has correctly applied the law

and, on the record as a whole, there is sufficient evidence to support the order and

findings. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951); Wright

Elec., Inc. v. NLRB, 200 F.3d 1162, 1166 (8th Cir. 2000). We consider McKenzie's

challenges to the order in turn.

McKenzie first urges that our decision in McKenzie Engineering Company v.

NLRB, 303 F.3d 902 (8th Cir. 2002) ("the Crescent Bridge case") precludes part of

the award issued by the National Labor Relations Board. Specifically, the company

argues that because we denied enforcement of the Board's order in the Crescent

Bridge case and concluded that a different carpenters' union could not claim any right

to the work done on McKenzie's Crescent Bridge project, the Board is barred in this

proceeding by the doctrines of claim and issue preclusion from awarding back pay to

the fired employees (and their replacements) for work they otherwise would have

done on the Crescent Bridge project. We disagree. The doctrine of issue preclusion

holds that "once a court has decided an issue of fact or law necessary to its judgment,

that decision may preclude relitigation of the issue in a suit on a different cause of

action involving a party to the first case." Allen v. McCurry, 449 U.S. 90, 94 (1980);

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see also Tyus v. Schoemehl, 93 F.3d 449, 453 (8th Cir. 1996) (listing requirements

for preclusion to apply), cert. denied, 520 U.S. 1166 (1997). For its part, the doctrine

of claim preclusion prohibits a party to litigation from raising a claim or defense in

a later proceeding that should have been raised in an earlier proceeding. See Rivet

v. Regions Bank of La., 522 U.S. 470, 476 (1998). For at least two reasons, neither

of these doctrines can be raised defensively in the manner that McKenzie urges.

First, these res judicata doctrines cannot logically be raised as a defense against

liability that was established by a decision in existence prior to the decision claimed

to have preclusive effect. Such is the case here, where in McKenzie I we enforced

a NLRB decision that the Company committed certain unfair labor practices and we

remanded for a determination of what the remedy should be. McKenzie I established

the Company's liability, and all that remained to be determined was the nature and

extent of the remedy and not if there would be a remedy. Consequently, our later

decision in the Crescent Bridge case cannot preclude the eventual award of back pay

to employees where the illegality of the Company's conduct was already established

even if the nature and extent of the remedy remained to be determined. Second, the

Crescent Bridge case, which considered potential unfair labor practices against a

different union and did not consider whether the four fired employees would have

worked on the Crescent Bridge project, did not resolve any factual or legal questions

that could preclude the award of back pay for work on that project. See Tyus, 93 F.3d

at 453 (requiring identity of issue or fact for preclusion to apply). Accordingly, we

reject this claim. 

McKenzie also contends that our decision in Carpenters Fringe Benefit Funds

v. McKenzie Engineering Company, 217 F.3d 578 (8th Cir. 2000) ("the ERISA case")

has a similar preclusive effect with regard to the award of fringe benefits in the

present case. Specifically, McKenzie urges that a portion of the current fringe-benefit

award is precluded by our decision in the ERISA case that the carpenters union had

not proved the existence of an obligation to make fringe-benefit contributions for

work done on certain company projects. We conclude that an award in this case is

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1

To the extent McKenzie argues to the contrary, we conclude that the entirety

of the award for the replacement workers should be enforced.

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not precluded for the same reasons stated above. In fact, we flagged this issue in the

ERISA case and noted that:

our decision rejecting the claim for contributions to the Funds is narrow.

The NLRB has determined that McKenzie committed an unfair labor

practice in firing four Local 410 carpenters from the Keokuk project.

The Board's compliance proceedings, which are not yet complete, will

no doubt result in a back pay award for those employees, and that award

may well include pension benefit contributions to the Funds on their

behalf. Unlike the Funds' overbroad claim in this case, that type of

award would clearly be consistent with McKenzie's contractual

obligation to make contributions for work "covered by [the Local 410]

Agreement."

Id. at 585 n.2. Consequently, we reject McKenzie's preclusion claim.

McKenzie next claims that the length of the back-pay award for the discharged

union workers is not supported by substantial evidence.1

 Instead, McKenzie contends

that the award either should be limited to the average length of its employees' tenure

(thirty-one weeks) or should end with the expiration of Local 410's collective

bargaining agreement on April 30, 1997. 

We reject McKenzie's argument that the award should end with the expiration

of thirty-one weeks. As the ALJ noted, there is abundant evidence in the record to

support the conclusion that the fired employees would (or could) have continued their

employment with the company beyond thirty-one weeks. For instance, the company

president, Robert McKenzie, testified in the ERISA case that, if they had not been

discharged, these fired employees would have continued to work on other company

projects, which continued beyond the thirty-one-week limit proposed by the company.

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2

In addition, McKenzie's claim to a thirty-one-week limit must be rejected

because the document purporting to demonstrate that McKenzie's employees worked

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McKenzie Eng'g Co., 336 N.L.R.B. 336, 337 (Sept. 28, 2001) (Supplemental

Decision). Moreover, McKenzie stipulated to the reasonableness of the Board's

method of computing back pay by using the amount of work done by the replacement

workers. Thus, it is relevant that the replacement workers all were employed with the

company for longer than thirty-one weeks and, in fact, two were the longest-serving

employees listed in McKenzie's exhibit. There also is substantial evidence in the

record to support the conclusion that workers such as the four at issue did have longterm employment relationships with several different employers over time. The

record supports the conclusion that these employees may not work continuously for

one employer and instead move from project to project, all the while consistently

working for only a few employers. Thus, over time, employees, such as the four at

hand, can achieve significant tenures with any one employer. Indeed, the specifics

of the present case demonstrate this for, by Robert McKenzie's own admission, Mark

Spiekermeier worked for the company for twenty-two months over a four-year period

prior to being fired illegally. NLRB Compliance Tr. at 190–91; see also id. at 145

(testimony of Mark Spiekermeier that he worked for McKenzie "off and on for four

years" prior to being fired). Further, there was evidence that, after they were fired,

the three still-living employees each worked for a single employer in excess of the

thirty-one weeks proposed as a limit by the company. For his part, Donald Patterson

worked for the Des Moines County Historical Society starting in December of 1996

and worked for them regularly from the third quarter of 1997 until the record ends in

September of 2000. App. at 192–93. Fred Arnold had a similar long-term

relationship with Allied Construction, where he worked a total of 90 weeks between

1996 and the end of the record in 2000. App. at 195–245. Mark Spiekermeier also

worked for Allied Construction for some 110 or more weeks before the record ends.

App. at 246–97. Accordingly, we must reject the company's claim that the award be

limited to thirty-one weeks.2

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only thirty-one weeks on average suffers from certain defects. First, the document

covers only the period from 1995–2000 and thus does not include employees such as

Mark Spiekermeier in the average (we have already noted that Spiekermeir worked

for McKenzie far in excess of thirty-one weeks between 1991–1995). Besides being

incomplete temporally, the company's list is incomplete in that it omits employees

who were members of other, competing unions. We therefore conclude that the ALJ

properly discounted the company's calculation of its employees' average tenure.

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We also reject McKenzie's claim that the back-pay award for the discharged

union workers should end with the expiration of the collective bargaining agreement

on April 30, 1997. In support of this argument, the company maintains that the fired

employees were union members, did not accept non-union work after being fired, and

would not have accepted non-union work from McKenzie after the collective

bargaining agreement expired. As we already noted, all of the replacement workers

worked on at least some of the subsequent McKenzie projects, whether "union" or

not. Moreover, certain of these replacement workers gained union membership,

obtained waivers from the union whose members ordinarily would have worked these

jobs, and/or joined a second union. Thus, the expiration of the collective bargaining

agreement had little impact on the replacement workers, whose experiences are an

important measure of the back pay owed under the parties' stipulation. Finally,

whatever remaining uncertainty exists regarding whether—in the absence of the

company's bad acts—the collective bargaining agreement would have been renewed

or the fired workers would have worked on McKenzie's subsequent, non-union

projects is to be resolved against the company. NLRB v. Madison Courier, Inc., 472

F.2d 1307, 1321 (D.C. Cir. 1972). Therefore, we reject McKenzie's effort to limit the

award to the time of the collective bargaining agreement's expiration.

Nevertheless, we conclude that the Board's order, which assumes that each of

the three still-living employees would have worked full-time for McKenzie until the

present day, is not supported by substantial evidence. In fact, the assumptions

underlying the Board's calculations reveal that the award cannot possibly be proper

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for there is no evidence that any non-supervisory employee has ever worked

continuously for McKenzie for as long as the now 400-plus weeks that the Board's

order assumes. The assumption, therefore, that each of these employees would have

had a record-setting tenure with the company is unwarranted. The assumption is also

unwarranted because, as the company points out, none of these employees has held

a single job for anywhere near this length of time in past years. Thus, the Board's

award does not tend to set the wronged workers in, as nearly as possible, the situation

they would have been in if the company had not acted wrongly. Phelps Dodge Corp.

v. NLRB, 313 U.S. 177, 194 (1941). Rather, this speculative award is a windfall for

the employees and is unduly punitive to the employer insofar as it is based on

assumptions supported by neither McKenzie's past history as an employer, nor these

workers' past employment histories. Local 60, United Bhd. of Carpenters v. NLRB,

365 U.S. 651, 655 (1961) (noting Board's authority is remedial, not punitive). We

may modify a Board order that goes beyond the remedial powers granted by the

NLRA. NLRB v. J.S. Alberici Constr. Co., 591 F.2d 463, 470 n.8 (8th Cir. 1979).

Although there is not substantial evidence to support the extent of the Board's

award, there is evidence to support the conclusion that each of the fired employees

would have worked for McKenzie for substantial lengths of time had they not been

fired. We already have noted that the record reveals that employees such as the ones

McKenzie illegally discharged do have long-term employment relationships with

several different employers and can, over time, achieve significant tenures with any

one employer. Ante at 6. We conclude that the record will support an award of back

pay based on the amount of time the employees spent working for the employer with

whom they had the longest tenure following their dismissal. For example, the record

reveals that Donald Patterson worked for the Des Moines Historical Society for 169

weeks out of the 255 possible weeks between his dismissal (November 1, 1996) and

the end of the third quarter of 2000. Based on this work record, Patterson should

receive back pay (and fringe benefits until April 30, 1997) for sixty-six percent of the

time (169 divided by 255) expended by McKenzie on subsequent projects until

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3

Our imposition of this back-pay formula is consistent with our recognition that

the Board's power "to award back pay 'is a broad discretionary one, subject to limited

judicial review.'" Woodline Motor Freight, Inc. v. NLRB, 972 F.2d 222, 225 (8th Cir.

1992) (quoting NLRB v. Rutter-Rex Mfg. Co., 396 U.S. 258, 262–63 (1969)). We

are also cognizant that "[i]n many instances, it is impossible to precisely determine

the amount of backpay that should be awarded. 'In such circumstances the Board may

use as close approximations as possible, and may adopt formulas reasonably designed

to produce such approximations.'" Id. (quoting NLRB v. Brown & Root, Inc., 311

F.2d 447, 452 (8th Cir. 1963)). The Board applies three basic formulas to compute

back pay, but recognizes that "there is no fixed method for calculating back pay."

NLRB Casehandling Manual, Pt. III–Compliance Proceedings § 10532.1. In this

case, we merely determine that the record will not support an award of back pay that

is based on the assumption that the discharged employees would have worked on

every subsequent McKenzie project, no matter where that project was located,

especially where the illegally discharged employees' work history suggests otherwise.

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McKenzie offers him reemployment. On remand, the Board shall take additional

evidence on the fired employees' work histories and issue a back-pay award that is not

inconsistent with this opinion. An award that follows our suggested formula will be

based more strictly on the work histories of the discharged employees (which appear

to reflect the McKenzie labor pool as a whole) and will be more precisely "tailored

to expunge only the actual, and not merely speculative, consequences of the unfair

labor practices." Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 900 (1984) (emphasis in

original).3

 An award calculated in accordance with our suggested formulation also

more precisely fulfills § 10(c)'s goal of making these employees whole and restoring

the situation to that which would have occurred but for McKenzie's unfair labor

practices. 29 U.S.C. § 160(c); Phelps Dodge Corp., 313 U.S. at 194.

For the foregoing reasons, the petition to enforce the order of the Board is

granted as to the replacement workers and denied as to the wrongfully discharged

union employees. The case is remanded to the Board for recalculation of the extent

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of the back-pay and fringe-benefit awards with respect to the wrongfully discharged

union employees in a manner that is not inconsistent with this opinion.

______________________________

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