### 2001 D e c i sion s O p inion s of the U nit e d

S t a t e s C our t of Appe al s for the Thir d C ir c uit

3-16-2001 

# Atl a n t ic Limou sine v

. NL RB

P r e c e de n t i al or N on-P r e c e de n t i al :

D ock e t 99-5609

F o l lo w thi s a nd a dd it ion al w ork s a t : h tt p://d i g it alc ommon s .l a w

. v i l l a no v a

. e du/thir dc ir c uit_2001

Thi s de c i sion i s br ou gh t t o y ou for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t a t e s C our t of Appe al s for the Thir d C ir c uit a t V i l l a no v a

U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. I t h as be e n a c c e pt e d for inclusion in 2001 D e c i sion s b y a n a uthor i z e d a dmini s tr a t or of V i l l a no v a

U niv e r sit y S choo l of L a

w Di g it al R e posit or y

. F or mor e infor m a t ion, p le as e c on t a ct Be n j a min

. C a rl s on@l a

w

. v i l l a no v a

. e du

. 

### R e c omme nde d C it a t ion

" Atl a n t ic L imousine v

. NLR B " (2001). 2001 D e cisio n s

. P a pe r 50.
h tt p://d i g it alc ommon s .l a

w

. v i l l a no v a

. e du/thir dc ir c uit_2001/50Filed March 16, 2001

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 99-5609 and 99-5725

ATLANTIC LIMOUSINE, INC.,
Petitioner No. 99-5609

v.

NATIONAL LABOR RELATIONS BOARD, Respondent

NATIONAL LABOR RELATIONS BOARD,
Petitioner No. 99-5725

v.

ATLANTIC LIMOUSINE, INC., Respondent

On Petition for Review of an Order of the
National Labor Relations Board

and Cross-Application for Enforcement (NLRB Docket Nos. 4-CA-21505, 4-CA-21552, 4-CA-21697, and 4-CA-21740)

Argued December 1, 2000

Before: BECKER, Chief Judge, RENDELL, and MAGILL,* Circuit Judges

(Opinion Filed: March 16, 2001)

___________________________________________________ ______________

* Honorable Frank J. Magill, Senior Judge of the Un ited States Court of Appeals for the Eighth Circuit, sitting by designat ion.Angelo J. Genova, Esq. [ARGUED]

Brian O. Lipman, Esq.
GENOVA, BURNS & VERNOIA 354 Eisenhower Parkway Plaza II, Suite 2575 Livingston, NJ 07039
Counsel for Atlantic Limousine

Jeffrey Horowitz, Esq. [ARGUED] Aileen A. Armstrong, Esq. Frederick C. Havard, Esq. Margaret A. Gaines, Esq. Fred B. Jacob, Esq.
National Labor Relations Board

1099 14th Street N.W. Washington, DC 20570-0001

Counsel for NLRB

OPINION OF THE COURT

RENDELL, Circuit Judge.

Atlantic Limousine, a limousine service providing s ervices primarily to hotels and casinos in Atlantic City, N ew Jersey, has petitioned this court for review of the Or der of the National Labor Relations Board awarding backpay in the amount of $22,507.74 plus interest to V ictor Jenki ns, and $17,296.73 plus interest to Henry Purcell, both of whom
were limousine drivers for Atlantic. The Boar d has crossapplied for enforcement of the same order .

Specifically, Atlantic challenges the amount of tip s the Board determined the two had earned, arguing that: (1) federal tax policy requires that the amount of tips Purcell
and Jenkins declared on their income tax r eturns f or those periods be dispositive on the issue of their past i ncome; and (2) there was a lack of substantial evidence in sup port of the Board's backpay award. In addition, Atlantic co ntends that Jenkins failed to mitigate his damages because he was unavailable for work during the seven months betwee n his
termination and his reinstatement. Because we find both
that the Board's reliance on the evidence adduced w as

2proper, and that there was substantial evidence to support

the Board's findings regarding both backpay and mitigation, we will deny the petition for review an d enforce

the order of the Board.

I. Procedural History

On March 4, 1995, the Board found that Atlantic had engaged in unfair labor practices in violation of 2 9 U.S.C. 158(a)(3) and (4) of the National Labor Relations A ct ("Act") by discharging four and suspending one of its emplo yees for their union activities.1 Once the Board finds t hat an employer has committed an unfair labor practice, it has broad discretion under the Act to or der the wrongd oer "to take such affirmative action including r einstateme nt of employees with or without backpay, as will ef fectu ate the policies of [the Act]." 29 U.S.C. S 160(c). The pur pose of the backpay remedy is to "mak[e] the employees whole fo r losses suffered on account of an unfair labor pract ice," Nathanson v. NLRB, 344 U.S. 25, 27 (1953), by r est oring "the situation, as nearly as possible, to that whic h would have [been] obtained but for the illegal discrimina tion." Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 194 (1941 ).

On May 28, 1997, the Board filed a compliance specification outlining the amount of backpay that should be paid to the aggrieved employees under the Boar d 's March 4, 1995 remedial order. Atlantic challenged t he compliance specification, and a hearing was held be fore an Administrative Law Judge ("ALJ"). The ALJ upheld th e backpay award, and the Board affir med its decision . We
now review the Board's order.

II. Background

The standard formula the Board employs in arriving at a compliance specification is based on the ear nings of the claimant in a representative period prior to the ba ckpay

___________________________________________________ ______________

1. Although the proceeding before the Board involve d five claimants, after the Board's decision, the parties enter ed into neg otiations and three of those employees settled. This appeal, therefor e, o nly addresses the backpay awards for Purcell and Jenkins.

3period. The Board then applies the averages of thos e

earnings to the backpay period. Atlantic does not c hallenge the formula used. Rather, it contends that the aver age weekly tip earnings used in the formula were incorr ect because they exceeded the amounts reported on the employees' tax returns and were unsupported by the
evidence.

Atlantic's drivers can be tipped in a variety of wa ys. Certain corporate and business clients have a contr actual relationship with Atlantic, and are billed for serv ices with charges that include a preset gratuity for the driv er, which is distributed in the next paycheck. These tips ar e referred to as "tips on the bill." The drivers can also rece ive tips in cash or they can be added to a payment by cr edit c ard. Because tips on the bill and credit car d tips are reflected in amounts transmitted directly to Atlantic, the only tip amounts disputed on appeal are the claimants' cash tips, since the drivers receive them directly fr om custo mers without receipts showing the amount given.

Atlantic requires its drivers to submit weekly time sheets indicating the number of hours they worked and the specific runs they made. These sheets also have a s pace at
the bottom for the drivers to record the amount of cash tips they received, though the General Manager for Atlan tic, Leon Geiger, testified that most drivers do not pro vide any information regarding their cash tips on their time sheets. Atlantic processes the timesheets and generates wee kly tip declarations reflecting credit car d tips, tips on the bill, and the cash tips reported on the time sheets. These ti p declaration reports are then distributed to the dri vers for their review and signature. The employees are instr ucted not to sign a tip declaration report if the tip amo unt
indicated is incorrect.

Jenkins and Purcell claimed that they ear ned more in tips than reported in payroll and tax documents. Je nkins testified that he earned approximately $450 per wee k in tips, while Purcell claimed to have ear ned anywher e from $300 to $480 per week. Both admitted they had not accurately reported these earnings to the Internal Revenue Service ("IRS"). Jenkins had reported annual tip in come to the IRS that reflected an average of $158 per week during

4this time, and Purcell, $115. Jenkins also testifie d that he

would submit only the carbon copy of the time sheet to Atlantic, omitting his cash tips, but that he would record his cash tips on the original copy in a column list ed as "Added Tips." He submitted the original copy of the time
sheet for the last week he had worked for Atlantic in order to demonstrate this practice. This original copy r eflected cash tip earnings of $430 for that week. That docum ent was the only one submitted by Jenkins in support of his claim of higher tip levels. Purcell did not pr ovid e any documentation.

Jenkins also testified regarding his search for int erim employment. He indicated that he searched for emplo yment during the seven months he was unemployed by applyi ng to two limousine companies approximately two weeks after he was terminated, answering newspaper ads for jobs at three casinos, and sending out many resumes. During those seven months, he was caring for his mother , who was
ill. He stated that because his mother was sick and he was her caretaker, he was only available for work in th e evening hours, though he explained that his time restrictio n did not prevent him from being able to work full-time. He a lso emphasized that he searched for employment during t he entire period in question. He posited that the reas on he could not find another limousine job right away was

because he was "blackballed."

Seeking to counter the testimony of Jenkins and Pur cell, Atlantic provided payroll recor ds for 1992 and 199 3 reflecting credit card tips, tips on the bill, and any cash tips declared by employees to Atlantic. Atlantic ur ged that these records, along with the tax retur ns filed by Jenki ns and Purcell, should form the basis for deter mining its backpay liability.

On February 26, 1998, the ALJ issued its Supplement al Decision awarding Jenkins and Purcell $360 and $325 per week in backpay, respectively, which wer e the amou nts set forth in the Board's compliance specification. Firs t, the ALJ ruled that claimants may assert tip income that had not been reported in their tax returns. While the ALJ recognized that both claimants had failed to r epor t all of their tip earnings to the IRS, he found that an adm ission of

5underreporting tips to the IRS does not pr eclude s uch tips

from being included in a backpay award. The ALJ als o determined that "both the employees and the Respond ent had offsetting interest [sic] in under reporting ac tual
income." ALJ Dec. at 4.

The ALJ stated its conclusion: "While the evidence is less than overwhelming, under these circumstances, I am not persuaded that the compliance figures for weekly ti ps of $360 for Jenkins and $325 for Purcell ar e unreason able or inaccurate." Id. The ALJ further noted that "[t]he reported tips, relied upon by [Atlantic], clearly are not an accurate reflection of the actual tip income r eceived." Id. The ALJ also found the testimony of Jenkins and Purcell to be "believable." Id. Finally, the ALJ concluded that t here was "a sound and reasonable basis for [awar ding] the f igures set forth in the compliance specification," and that At lantic had not offered convincing evidence that Jenkins and Pu rcell

had earned less. Id.

The ALJ next turned to the issue of the mitigation of damages, finding that Jenkins testified cr edibly t hat he began to search for work immediately after his term ination. The ALJ found that despite the fact that Jenkins ha d no interim earnings, this lack of success did not indi cate a "willful failure or an unreasonable search for empl oyment." Id. In addition, the ALJ rejected Atlantic's conten tion that
Jenkins was unavailable for work due to his need to care for his mother.

On April 30, 1999, the Board issued its Supplementa l Decision and Order affirming the ALJ's conclusion t hat "the gross backpay computations in the backpay specifica tions are the most accurate possible estimates of backpay and that [Atlantic] has failed to establish any r eason able alternative basis for a diminution of damages." Id. The Board agreed that "Victor Jenkins' lack of interim earnings for the backpay period of May 31, 1993, through Jan uary 17, 1994, was not indicative of an unreasonable sea rch for employment related to his care for his mother . . . . " Supp. Dec. at 1. It also held that the ALJ's analysis of the issue of whether or not to consider evidence of underr ep orted tips was in accord with Board precedent, and noted that the IRS would receive a copy of its decision. Id. at 2. On e member

6of the three member panel dissented because he woul d not

have allowed the discriminatees to claim income not reported to the IRS, and because he believed that J enkins did not make an adequate search for employment duri ng the time period in question.

III. Discussion

We have appellate jurisdiction pursuant to 29 U.S.C

. S 160 (e) and (f). The Board's findings of fact in a backpay proceeding will be upheld unless the recor d, consi dered as a whole, shows no substantial evidence to support t hose findings. 88 Transit Lines, Inc. v. NLRB , 55 F.3d 823, 825 (3d Cir. 1995). "While we do not substitute our jud gment for that of the Board, we may modify an or der to e nsure that it effectuates the policies of the Act." Tubar i Ltd., Inc. v. NLRB, 959 F.2d 451, 453 (3d Cir . 1992). With re spect to legal questions, we exercise plenary review, althou gh we give due deference to the Board's expertise in labo r matters. 88 Transit, 55 F.3d at 825.

A. Backpay Determination

Atlantic presented the Board with the income tax re turns of Jenkins and Purcell, and urged that itfind those records to be conclusive as to the amount of tips ear ned b y each of them, because to not do so would be to ignor e fede ral tax policy. The Board rejected this reasoning, and on a ppeal, Atlantic argues that this decision is err oneous. T o support its argument, Atlantic relies on two Supr eme Court cases, our precedent, and its view of the policy implicati ons of the Board's ruling.2

___________________________________________________ ______________

2. By asserting that the discriminatees' testimony should have been rejected because their testimony was inconsistent w ith their sworn tax returns, Atlantic may also be claiming, but has nev er explicitly urged, that the discriminatees should be "estopped" from a sserting higher income, having earlier misreported their true incom e. While a policy of judicial estoppel has evolved that can apply in the event a litigant seeks to assert a position inconsistent with one made in connection with a previous judicial proceeding, e.g., In re Chambers Dev. Co., 148 F.3d 214, 229 (3d Cir. 1998), we know of no basis for cr afting a theory of estoppel based upon sworn statements in a tax retur n and will not explore such a theory sua sponte.

7First, Atlantic points to Southern Steamship Co. v. NLRB,

316 U.S. 31 (1942). There, employees engaged in a s trike in response to the shipowner's unfair labor practices, and the shipowner terminated five of the strikers. Id. at 3 4-35. The Board ordered the shipowner to r einstate the five men with backpay. Id. at 36. The Supreme Court, however, determined that under maritime law, the type of str iking conduct in which they engaged was illegal,3 and it reversed the order of reinstatement. Id. at 40, 48.

The Supreme Court expressed the need to limit the Board's discretion in enforcing the policies of the Act when the Board's remedial action contravened important Congressional policy. Id. at 46. In r eaching its c onclusion
that the claimants' violation of the maritime laws precluded the relief they sought under the Act, the Court mad e the following observation, which Atlantic argues suppor ts its position:

It is sufficient for this case to observe th at the Board
has not been commissioned to effectuate the policies of the Labor Relations Act so single-mindedly t hat it may wholly ignore other and equally important Congressional objectives. Frequently the ent ire scope of Congressional purpose calls for careful acco mmodation of one statutory scheme to another, and it i s not too much to demand of an administrative body tha t it
undertake this accommodation without excessi ve emphasis upon its immediate task.

Id. at 47.

Essentially, the issue before the Supreme Court was whether the labor policy prohibiting an employer fr om firing an employee for striking in response to an unfair l abor

___________________________________________________ ______________

3. The Court stated:

It may hardly be disputed that each of the s trikers resisted the captain and other officers in the free and l awful exercise of their authority and command, within the meaning of S 293, or that they combined and conspired to that end, within t he meaning of S 292. Deliberately and persistently they defied di r ect commands to perform their duties in making r eady for th e departure from port.

Id. at 40.

8practice can apply, let alone prevail, when the str ike is

illegal under a competing federal scheme. In the ca se before us, by contrast, the issue does not involve a compe ting policy that runs counter to an award of backpay. Un like in Southern Steamship, the policies sought to be advan ced here are not diametrically opposed to one another. In fact, the policies, to the extent they do compete, can be accommodated, and in fact have been accommodated he r e. The Board's basing its finding on the evidence befo re it, consistent with its procedure for fixing and awardi ng backpay, while at the same time notifying the IRS o f its decision, recognizes the existence and equal import ance of both policies -- enforcing our nation's tax laws an d making
the discriminatees' whole. If the Board had chosen to award

the amount stated on the tax returns for the sole r eason that the discriminatees would have to "reap what th ey had sown," it would have ignored the remedial underpinn ings of the law, and rewarded Atlantic, the of fending part y.

Moreover, we submit that while federal tax policy discourages underreporting of income, and favors punishing those who do, federal tax policy would ap pear to have no interest in limiting a backpay awar d. In f act, it could be said that it has the opposite inter est be cause once Jenkins and Purcell receive an awar d (that is not limited by reference to reported income), they will have to pa y tax on what they receive, paying the federal gover nment m ore than if the award had been limited to their r eported in come.4

Here, despite Atlantic's contentions, we conclude t hat no federal policy is relegated to a lesser status. The IRS will have the information necessary to prosecute the discriminatees if it so chooses, and will reap tax revenue. And Atlantic will have to "make whole" two employee s

___________________________________________________ ______________

4. Backpay awards for violations of the Act would a ppear to be the type of non-tort recovery that is taxable. See Commissio ner of Internal Revenue v. Schleier, 515 U.S. 323, 337 (1995) (hold ing that settlement for backpay in age discrimination case was not excl udable from taxpayer's reported gross income because"[r]ecovery for back wages does not satisfy the critical requirement [of the IRS ta x code] of being on account of any personal injury," nor is it "based u pon tort or tort type rights.")

9against whom it wrongly discriminated, fulfilling t he

purpose of the Act.

Atlantic also relies on Sure-T an, Inc. v. NLRB, 46 7 U.S. 883, 886 (1984), but we do not find this decision particularly relevant to the instant situation. The re, the Board had determined that the employer committed an unfair labor practice by requesting that the Immigr ation and Naturalization Service investigate certain empl oyees who were involved in a union campaign. Id. at 888. Because some of these employees were undocumented aliens, they fled the country to avoid deportation. Id. at 887. The Board awarded backpay, subject to the empl oyees' legal availability to work. Id. at 889.

On appeal, the Court of Appeals for the Seventh Cir cuit modified the backpay award by ordering that the agg rieved employees be guaranteed a minimum of six months' backpay. Id. at 890. The court reasoned that becaus e some of the employees may not have been lawfully availab le for employment, without the backpay minimum, they would not receive any backpay at all. Id. The Supreme Cou rt reversed the backpay modification, stating:"The pro bable unavailability of the Act's more effective remedies in light of the practical workings of the immigration laws, how ever, simply cannot justify the judicial arrogation of re medial authority not fairly encompassed within the Act." I d. at 904. The key to the Court's reversal of the modific ation was the Court of Appeals' imposition of a minimum awar d "without regard to the employees' actual economic l osses or legal availability for work . . . . plainly exceed[ ing] its limited authority under the Act." Id. at 904-05. And, while the Board in the instant case surely shar ed the same c oncern as the court of appeals in Sure-T an, that is, prov iding a financial disincentive to the employer against r ep etition of similar discrimination, id. at 904, her e, unlike i n Sure-Tan, the award of backpay does reflect the discriminatee s' actual loss, consistent with the remedial scheme.

Atlantic also maintains that the Board's decision i s contrary to our precedent. We do not agr ee. We hav e previously upheld an award of backpay when it was b ased
on evidence of income in an amount differ ent from that declared by the claimant to the IRS. In NLRB v. Lou ton, Inc.,

10822 F.2d 412, 414 (3d Cir. 1987), we upheld the Boa rd's

backpay award where the recor d showed substantial evidence to support the tip income awarded. 5 In do ing so, we rejected the employer's argument that the tip in come evidence was "of no value" since it dif fered from the amount
the discriminatees had declared to the IRS. Id.

Moreover, while we note Atlantic's ar gument that awarding backpay based on unreported tips rewards t he discriminatees for their dishonesty to the IRS, Atl antic fails to recognize that we would be rewar ding the employ ers' tax dishonesty if we were to disregard evidence of the employees' actual, more substantial reportable inco me. That is, if we rely on reported income that concede dly did not accurately reflect the employee's ear nings, we would actually be rewarding employers who, as noted by th e ALJ,6 have benefitted from paying a lesser amount of employment-related taxes as a result of the underre porting.
This benefit is in addition to the benefit that Atl antic would reap, in contravention of backpay policy, by having to pay aggrieved employees less in backpay than they actua lly

would have earned.

Lastly, Atlantic contends that if we reject its pro posed rule that we should disregard evidence that differs from an employee's tax returns, we would be guaranteeing th at all discriminatees seeking backpay will lie about their earnings. However, Atlantic ignor es the fact that this deception will probably be quite costly in other wa ys. By testifying that they had underreported their income to the IRS, Purcell and Jenkins subjected themselves to prosecution for tax evasion. Therefor e, any incent ive that they might have to lie to inflate their income is c ountered

___________________________________________________ ______________

5. We acknowledge that, as we discuss below, the di scriminatees provided more documentary support in Louton than in the instant case, and we note that it is unclear whether the employer 's argument in that case was based on policy considerations. However , the distinction is immaterial, where, as here, we have nonetheless det ermined that the discriminatees' credible testimony (and supporting document) are
sufficient to meet the "substantial evidence" stand ard.

6. "[T]he lower the reported earnings [of an employ ee are], the lower the employer's payroll tax liability [is]." ALJ Dec. at 4.

11by the fear, and very real possibility, of criminal charges.

We noted this in Louton, when we found that the emp loyees' claims were actually strengthened by the fact that they had maintained the veracity of their tip claims in the face of potential prosecution for tax evasion or perjury. 8 22 F.2d at

414.

Accordingly, we reject Atlantic's contention that t he evidence regarding the discriminatees' unr eported tips in the Board's backpay award should be disr egarded be cause it undermines federal tax policy.

B. Substantial Evidence Determination

As noted above, the Board's findings of fact in a b ackpay proceeding will be upheld unless the recor d, consi dered as a whole, shows no substantial evidence to support t hose findings. 88 Transit, 55 F.3d at 825. Substantial e vidence
has been defined as evidence that a reasonable mind would accept as adequate to support an agency's conclusio n. Broome v. U.S. Dept. of Labor, 870 F .2d 95, 102 (3 d Cir. 1989). We will not disturb a backpay or der "unless it can be shown that the order is a patent attempt to achieve ends other than those which can be fairly said to ef fec tuate the policies of the Act." 88 Transit, 55 F.3d at 825.

In Louton, we held that "the recor d, when consider ed as a whole, shows substantial evidence to support the Board's findings." 822 F.2d at 414. In that case, the Board 's decision was based on documented tip evidence of th e discriminatees, the ALJ's determination that the discriminatees were credible, the fact that the discriminatees' testimony was bolstered by their fa cing prosecution for perjury or tax evasion due to their admission that they had underreported their tips to the IRS, and the employer's failure to submit gr oss re ceipts in order to demonstrate that the tips being claimed we re reasonable. Id.

In the instant case, the discriminatees' claims wer e proven, for the most part, through their own testim ony, and accordingly, the outcome was affected by their cred ibility. In Louton, we stressed the importance of the ALJ's reliance on the demeanor of the discriminatees during their

12testimony regarding their tip income, noting that w here

credibility determinations are based on the ALJ's assessment of demeanor, those determinations are en titled to great deference as long as relevant factors are considered and resolutions explained. Id.; see also NLRB v. Le e Hotel Corp., 13 F.3d 1347, 1351 (9th Cir . 1994) (enforci ng Board's order basing backpay award on amount of tip income which differed from amount r eported on inco me tax returns where ALJ found employees' testimony credib le based on both corroborative evidence and potential ramifications of the discriminatees' testimony). In the instant case, while the documentary evidence was no t comparable to the submissions in Louton, the ALJ cr edited the discriminatees' testimony, harkening back to ou r stated view in Louton regarding the importance of credibil ity and
the deference we should afford the ALJ's determinat ions in the absence of any evidence indicating otherwise. 8 22 F.2d at 414; Lee Hotel, 13 F.3d at 1351 ("The ALJ's cred ibility
determinations should not be reversed unless inhere ntly incredible or patently unreasonable").

In addition, Jenkins presented the original copy of the time sheet he had submitted for the week of May 19, 1993, which indicated he had made $430 in cash tips that week. He acknowledged that the carbon copy of that time s heet, which was submitted to Atlantic, did not reflect an y cash tips. Thus, he asserted that this document corr obo rates his testimony that he would leave the space for cash ti ps blank on the copy of the time sheet he gave to his employ er, while keeping another for himself where he recor ded his tips. This document is the only written proof of the unre ported tips earned. As we have noted, the ALJ concluded th at while the evidence was not "overwhelming," the Boar d had
"established a sound and reasonable basis for the f igures set forth in the compliance specification . . . ." and he was not persuaded that the figures were"unreasonable or
inaccurate." ALJ Dec. at 4.

In a backpay proceeding, once the Board's General Counsel demonstrates the gross amount of backpay th at the claimant is due, the burden shifts to the emplo yer to demonstrate that no backpay is due or that the amou nt due had been improperly determined. 88 Transit Line s, 55

13F.3d at 827; Angle v. NLRB, 683 F .2d 1296, 1301 (1 0th Cir.

1982); NLRB v. United Bhd. of Carpenters & Joiners of Am., Local 1913, 531 F.2d 424, 426 (9th Cir . 1976). If there is substantial evidence supporting the Board's conclus ion that
Atlantic has not met its burden "to establish facts which would negative the existence of liability . . . . o r which would mitigate that liability," we must uphold the Board's conclusion. 88 Transit Lines, 55 F .3d at 827; see also Angle, 683 F.2d at 1302 (granting the Board's order for enforcement where employer did not pr esent necessa ry "sufficient credible evidence" to support assertion s that Board's calculations were wrong); Carpenters, 531 F .2d at 426 (upholding Board's conclusion where employer ha d "not met its burden of negativing the General Couns el's findings").

Atlantic submitted evidence that it contends was pr oof of
the discriminatees' income. It relied on the tax re turn evidence, which, as we have mentioned, could be sai d to cut both ways. Even though the tax retur ns contrad ict the discriminatees' claims, the fact that their swor n testimony that they underreported their income exposed them t o tax evasion and perjury charges actually bolsters their credibility. Louton, 822 F.2d at 414. Aside from it s assertion that disregarding tax evidence under mines an impor tant congressional policy, which we have rejected, Atlan tic presented no basis for concluding that the employee s' tax returns, rather than their testimony, r eflected th e actual
amount of their income. Atlantic also submitted the weekly signed tip declarations, urging that these for ms w ere the employees' "oaths" that they had declar ed all the cash tips they had earned, and that they should have to stand by what they declared. However, the evidence in this r egard was conflicting. Jenkins testified that David Geige r, one of Atlantic's owners, had actually instructed him not to enter his cash tips on the carbon copy of the time sheet that he
submitted. Jenkins stated that the time sheet was e ven returned to him once when he mistakenly wrote his c ash tips on that form. Further, Leon Geiger testified, and Atlantic does not dispute, that most workers did no t write in any cash tips on their time sheets. It seems obv ious that Atlantic was aware that most employees wer e earnin g, but simply not declaring, their cash tips. Hence, we do not take

14issue with the ALJ's finding that Atlantic's positi on that the

time sheets actually reflected total tips was nothi ng more than a "fiction." ALJ Dec. at 3.

Atlantic also attacks the quality of the evidence t hat Jenkins and Purcell have produced to support their claims of tips earned, contending that they lack corr obor ation. However, we do not regard that as dispositive. Rath er, we deem it fairly common for employees not to keep r e cords of the tips they earn. Further, as a practical matter, it would probably be difficult for Purcell and Jenkins to br ing forward witnesses to corroborate their actual tip i ncome and earnings, given the fact that if their co-worke rs testified that they too had declared lower cash tips than wha t they actually had earned and reported, they would be sub jecting themselves to prosecution for tax fraud. And, the i ssue before us under the substantial evidence standard i s whether a reasonable mind would accept the evidence as adequate, not whether it could have been bolster ed through corroboration or additional testimony.

Atlantic complains that there really is no defense an employer can present to overcome the discriminatees ' assertions, but we disagree. Atlantic could have le veled further attacks on the employees' credibility, kept the type of records that would have rebutted these types of claims, or produced witnesses to attack the claimants' stor ies.
Atlantic did not submit other evidence which would tend to disprove the discriminatees' claims. As in Louton, where we noted the company's failure to produce gr oss recei pts which
would have allowed the ALJ to ascertain whether the tips asserted by the discriminatees were reasonable, 822 F.2d at 414, here, Atlantic did not introduce r eceipts of total sales from which we could glean how much the drivers shou ld have earned in tips. Atlantic's urging that the
discriminatees should be foreclosed based on their tax returns and purported tip declarations does not con vince
us that the Board's decision lacks substantial evid entiary
support.

Atlantic's attacks on the employees' proof, and its excuses for lack of evidence, cannot distract us fr om the fact that the burden of proof is on the employer, a s the wrongdoer, to establish facts to dispute the claim of the

15aggrieved employee. NLRB v. Brown & Root, Inc., 311 F.2d

447, 454 (8th Cir. 1963). Once Jenkins and Purcell had presented their case, the onus for the pr oduction of witnesses was not on the claimant, but rather , on Atlantic. In Hacienda Hotel and Casino v. Willow Bowe , 279 N .L.R.B. 601, 602 (1986), the ALJ had the benefit of the tes timony of the discriminatee's co-workers, and yet these wi tnesses were produced not by the discriminatee, but by her employer, who submitted the conflicting testimony i n an effort to at least limit the discriminatee's backpa y to the lesser amount testified to by the plaintiff 's fell ow waitresses.7 Id. at 604. Here, Atlantic did not pr oduce similar testimony, and, as we have explained, the evidence it did intr oduce was not really persuasive on the issue.

The Board's dissent also questioned the ALJ's
calculations because both the ALJ's award and the compliance specification concluded that backpay sho uld be
in an amount that differed from both what Atlantic alleged the discriminatees earned, and what the discriminat ees themselves claimed to have earned. Yet, as observed by the Board, the tip amounts for Jenkins and Pur cell use d in the compliance specification and adopted by the ALJ ar e only approximations that "fall within the middle range o f the tip income claimed by the discriminatees in their testi mony." Supp. Dec. at 2. This methodology, while a bit impr ecise,
does not render the award invalid. See Buncher v. N LRB, 405 F.2d 787, 790 (3d Cir. 1968) (en banc) (stating that Board seeks only "approximation" of backpay owed an d thus specification was not objectionable on gr ound of inconsistencies with work histories of some employe es). Also, in Hacienda Hotel, 279 N.L.R.B. at 605, when quantifying the amount of backpay, the Board attemp ted to resolve significant testimonial conflict over the a mount of tips cocktail waitresses received, and arrived at a reasonable approximation based on the evidence befo re it.

___________________________________________________ ______________

7. We note that while conflicting testimony lends s upport to an employer's assertion that an employee is lying abou t the amount of tips earned, this type of evidence is also not dispositi ve. In Hacienda Hotel, the Board upheld the backpay award even though it e xceeded both the
discriminatee's tax returns and the amounts testifi ed to by the other
witnesses.

16In doing so, the Board noted that "exactitude is no t

possible . . . ." Id. We agr ee that such approxima tions are not improper.

We therefore find that, viewing the record as a who le, the Board's order of backpay was supported by substanti al
evidence.

C. Substantial Evidence of Mitigated Damages

Atlantic also contends that by failing to make r ea sonable efforts to obtain interim employment, Jenkins did n ot mitigate his damages and Atlantic is, therefor e, n ot obligated to pay Jenkins back wages. See Tubari , 9 59 F.2d at 454 (holding that where employee has not exercis ed reasonable diligence in efforts to secur e employme nt, employer has established that employee did not pr o perly mitigate damages). Once the amount of backpay has b een established, the burden to produce evidence of a fa ilure to mitigate is on the employer. Id. at 453. This burde n is heavy: "A discharged worker is not held to the high est standard of diligence in his or her efforts to secu re comparable employment; reasonable exertions ar e sufficient." NLRB v. Mercy Peninsula Ambulance Serv ., 589 F.2d 1014, 1018 (9th Cir. 1979); see also NLRB v. W estin Hotel, 758 F.2d 1126, 1130 (6th Cir . 1985) ("[A] w rongfullydischarged employee is only requir ed to make a rea sonable effort to mitigate damages, and is not held to the highest standard of diligence"); Fabi Fashions, Inc. v. Loc al 107, 291 N.L.R.B. 586, 587 (1988) ("[I]n seeking to mitigate loss of income a backpay claimant is held . . . only to`rea sonable exertions in this regard, not the highest standard of diligence' . . . . The principle of mitigation of d amages does not require success, it only requir es an honest go od faith effort . . . .") (quoting NLRB v. Ar duini Mfg. Cor p., 394 F.2d 420, 423 (1st Cir. 1968)). Once again, we r eview t he factual determination of the Board regar ding Jenkins' due diligence in seeking interim employment under the standar d o f substantial evidence. Westin Hotel, 758 F.2d at 113 0.

We find that Jenkins' testimony supports the Board' s determination that his search for employment was no t unreasonable. Jenkins did testify that during the s even

17month period in question, he was caring for his mot her,

who was ill. Atlantic argues that this r esponsibil ity made him unavailable for work. However, Jenkins testifie d on redirect examination that during the entir e seven months, he continued to seek employment in a variety of way s. Jenkins also noted that he was still caring for his mother when he did find a position, which supports his ar gument that would have accepted full-time work throughout the seven month period in question. Based on his testim ony as a whole, we agree with the Board that ther e is sub stantial
evidence that Atlantic has not met its burden of establishing that Jenkins' lack of interim ear ning s was indicative of an unreasonable search for employment , and therefore, we find that Atlantic has not establishe d the affirmative defense of failure to mitigate his dama ges.

IV. Conclusion

For the foregoing reasons we will deny the Petition for
Review of the Order of the National Labor Relations Board and grant the Cross-Application for Enfor cement of the
Order of the National Labor Relations Boar d.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

18