1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-12-1995

88 Transit Lines v NLRB

Precedential or Non-Precedential:

Docket 94-3492

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Recommended Citation

"88 Transit Lines v NLRB" (1995). 1995 Decisions. Paper 164.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/164
 UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT 

 

No. 94-3492 

 

88 TRANSIT LINES, INC., 

 Petitioner

 

v. 

NATIONAL LABOR RELATIONS BOARD, 

 Respondent

 

On Petition for Review of an Order of the 

National Labor Relations Board 

 (NLRB Docket No. 6-CA-21380) 

 

No. 94-3550 

 

NATIONAL LABOR RELATIONS BOARD, 

 Petitioner

v. 

88 TRANSIT LINES, INC., 

 Respondent

 

On Application for Enforcement of an 

Order of the National Labor Relations Board 

(NLRB Docket No. 6-CA-20490) 

 

Submitted Pursuant to Third Circuit LAR 34.1(a) 

Monday, May 1, 1995 

Before: SLOVITER, Chief Judge, MANSMANN and 

ALITO, Circuit Judges

(Filed: May 3, 1995) 
Bruce D. Bagley 

McNees, Wallace & Nurick 

Harrisburg, PA 17108-1166 

 Attorney for Petitioner/Cross-Respondent 

Frederick L. Feinstein 

 General Counsel 

Linda Sher 

 Acting Associate General Counsel 

Aileen A. Armstrong 

 Deputy Associate General Counsel 

Charles P. Donnelly 

Nancy B. Hunt 

National Labor Relations Board 

Washington, DC 20570-0001 

 Attorneys for Respondent/Cross-Petitioner 

 OPINION OF THE COURT

SLOVITER, Chief Judge. 

 88 Transit Lines, Inc. (the "Company") has petitioned 

this court for review from a final order of the National Labor 

Relations Board entered in supplemental backpay proceedings (88 

Transit Lines, Inc., 314 N.L.R.B. 324 (1994)) and the NLRB has 

cross-applied for enforcement of the same order. 

 I. 

 The supplemental backpay proceeding followed our 

decision enforcing an earlier NLRB finding that the Company 

discriminated against its employees when, shortly after a 

 representation election conducted at the Company's 

facility, the Company replaced its transit run schedule which had 

been in effect for many years, Schedule B, with a Schedule C, 

thereby decreasing the total number of fixed transit runs by one 

and eliminating run 14, reducing the number of transit runs which 
were open for bids, and making the fixed runs subject to 

discretionary assignment by the Company rather than open for bids 

based on seniority. The Board found that the scheduling change 

violated 29 U.S.C. §§ 158(a)(1) and (3) and ordered the Company 

to "make employees whole for any losses they may have suffered as 

a result of these unlawful actions" and this court entered 

judgment enforcing the order. See 88 Transit Lines, Inc., 300 

N.L.R.B. 177 (1990), enforced, 937 F.2d 598 (3d Cir. 1991). 

 When the parties failed to agree on the amount of 

backpay, the Regional Director issued a backpay specification 

alleging the amount owed to the discriminatees. Following a 

hearing, an ALJ recommended amending the backpay specification in 

two aspects. First, the ALJ recommended not awarding backpay to 

fourteen replacement workers who had been hired during the 

backpay period, reasoning that "such employees have no losses to 

be restored to them, since they were not employed at the time of 

the elimination of run 14." Second, the ALJ recommended treating 

as interim earnings any amount by which post-unfair labor 

practice earnings exceeded employee earnings during the baseperiod year. 

 The Board refused to adopt these recommended amendments 

to the backpay specification. It ordered backpay for all twentythree employees, including the fourteen replacement employees, 

and refused to reduce their gross backpay by post-unfair labor 

practice earnings which exceeded the base period earnings because 

to do so would "inappropriate[ly] appl[y] . . . the interim 

earnings' concept to a case involving a violation other than 
discharge from employment, and . . . effectively resolve[] 

uncertainties in favor of the wrongdoer." The Board ordered 

backpay to be calculated in accordance with the original 

specification, plus interest and less tax withholdings required 

by law. 

 This court has jurisdiction under 29 U.S.C. § 160(e) 

and (f). On questions of law, appellate review of the Board's 

decision is plenary, although that decision is entitled to 

deference due to the Board's expertise in labor matters. NLRB v. 

Louton, Inc., 822 F.2d 412, 414 (3d Cir. 1987). The Board's 

findings of fact in a backpay proceeding will be overturned if 

the record, considered as a whole, shows no substantial evidence 

to support those findings. Universal Camera Corp. v. NLRB, 340 

U.S. 474 (1951). We will not disturb a backpay order "'unless it 

can be shown that the order is a patent attempt to achieve ends 

other than those which can fairly be said to effectuate the 

policies of the Act.'" Fibreboard Paper Prods. Corp. v. NLRB, 

339 U.S. 203, 216 (1964) (quoting Virginia Elec. & Power Co. v. 

NLRB, 319 U.S. 533, 540 (1943)). 

II. 

 It is undisputed that the backpay specification issued 

by the Regional Director correctly designated the backpay period 

to be between November 29, 1987, when the Company first 

instituted the schedule change, and August 18, 1991, when the 

Company restored run 14, a total of 194 weeks. Both parties also 

agree that the implementation of schedule C represented a loss to 

the bargaining unit of 2-3/4 hours of work per day, or 13-3/4 
hours per week, and that the wage rate for the discriminatees was 

$6.75 per hour. 

 In arguing that the Board's order is not supported by 

substantial evidence and an abuse of discretion, the Company 

raises essentially three claims of error: (1) the Board erred in 

finding that the fourteen replacement drivers were entitled to 

compensation; (2) the Board erred in declining to treat as 

interim earnings the amount by which the discriminatees' postunfair labor practice annual earnings exceeded their base-period 

year earnings with the Company; and (3) the ALJ's post-hearing 

amendment of the backpay specification denied the Company 

procedural due process.1 

 The Company argues that the fourteen replacement 

drivers are not entitled to compensation for backpay because they 

were hired after the schedule change went into effect and, thus, 

they suffered no change in their schedules entitling them to 

compensation. By way of analogy, it relies on Systems 

Management, Inc. v. NLRB, 901 F.2d 297 (3d Cir. 1990), to argue 

 

1. The Company also argues that the backpay specification failed 

to establish any loss of earnings by any employee during the 

backpay period and was therefore speculative and an undeserved 

windfall to the employees. The Company agrees that a compliance 

officer may employ a formula other than one of the standard 

formulae when application of the standard formula is not 

feasible. In this case, the General Counsel specified the names 

of the twenty-three discriminatees and the number of hours each 

worked during the backpay period and, applying the backpay 

formula, calculated that each discriminatee lost $4.04 per week 

for each week worked during the backpay period. The backpay 

formula adopted by the Board is reasonable in light of the nature 

of the violation and is entitled to our deference. See NLRB v. 

Seven-Up Bottling Co., 344 U.S. 344, 346-47 (1953). 
that the Board's award of backpay to the fourteen replacement 

drivers was punitive rather than compensatory because it "cannot 

be considered a restoration to any status quo ante, as no status 

quo ante existed for these employees." Id. at 308 (quotation 

omitted). 

 The Company's reliance on Systems Management, however, 

is misplaced. In Systems Management, this court enforced a cease 

and desist order and a make-whole order where a successor 

employer failed to offer employment to its predecessor's 

employees or to recognize their bargaining representative, Local 

29, and instead contracted with another union, Local 327, at a 

substantially lower wage rate. Id. at 301. The court declined 

to enforce a backpay award for new hires affiliated with Local 

327 who "if anything . . . were beneficiaries of [the employer's] 

discriminatory conduct, because the result of [the employer's] 

decision not to employ the Local 29 workers culminated in the 

employment of the Local 327 workers." Id. at 308. 

 This case presents quite different facts. The fourteen 

replacement employees were hired to replace original bargaining 

unit employees who departed in the normal course of business. 

Therefore, the replacement employees cannot be said to be the 

"beneficiaries" of the discriminatory conduct. Rather, the 

change in schedule caused a loss of work for the entire 

bargaining unit. The Board correctly found that the remedy was 

to inure to the benefit of the entire bargaining unit. The award 

of backpay to the fourteen replacement employees was not 

"'punitive or confiscatory'" and was "'reasonably adapted to the 
situation that call[ed] for the redress.'" See Frito-Lay, Inc. 

v. NLRB, 585 F.2d 62, 68 (3d Cir. 1978) (quoting NLRB v. 

Townhouse T.V. & Appliances, Inc., 531 F.2d 826, 830 (7th Cir. 

1976)). 

 The Company's second argument is that the Board's 

refusal to deduct post-unfair labor practice earnings which 

exceeded base-year earnings from the gross backpay violated the 

long-standing principle that discriminatees must mitigate damages 

and that gross backpay must be reduced by interim earnings to 

derive a net backpay award. The Company refers us to a leading 

case on the mitigation doctrine, NLRB v. Madison Courier, Inc., 

472 F.2d 1307 (D.C. Cir. 1972), as well as to NLRB guidelines. 

 This argument must also fail. It is true that 

mitigation of loss of earnings is a cardinal principle in the 

development of remedial orders under the National Labor Relations 

Act. See Tubari Ltd. v. NLRB, 959 F.2d 451, 454 (3d Cir. 1992). 

In this case, however, the higher post-unfair labor practice 

earnings by bargaining unit members were attributable to 

fluctuations in the amount of available work during the 

applicable time period rather than to the restoration of lost 

work by the Company. It is reasonable to assume that but for the 

Company's discriminatory conduct and the elimination of transit 

run 14, the earnings of the bargaining unit employees might have 

been still higher. Thus, the higher post-unfair labor practice 

earnings were not interim earnings which need be deducted from 

gross backpay. The Company has provided us with no authority for 

its argument that it can avoid the payment of backpay liability 
for its discriminatory schedule change simply because 

discriminatees happened to do better financially during the 

backpay period than during the base-year period.2 The burden was 

on the Company "to establish facts which would negative the 

existence of liability to a given employee or which would 

mitigate that liability." NLRB v. Brown & Root, Inc., 311 F.2d 

447, 454 (8th Cir. 1963). Accord Buncher v. NLRB, 405 F.2d 787, 

789-90 (3d Cir. 1968) (in banc), cert. denied, 396 U.S. 828 

(1969). This it has not done. We find the Company's argument 

that the gross backpay should be reduced by the excess earnings 

to be without merit.3

III. 

 

2. The Company argues that the Board erred when it suggested in 

its Supplemental Order that the interim earnings principle 

applies only with respect to employees who have been unlawfully 

discharged. It cites Ironton Publications, Inc., 313 N.L.R.B. 

1208 (1994), as an example of a case where the Board's backpay 

order was reduced by interim earnings for a part-time employee 

whose hours were discriminatorily reduced but who was not fired. 

We do not read the Board's Supplemental Order to mean that 

reduction for interim earnings is never appropriate in a nondischarge case. Rather, we limit our holding to approval of the 

Board's rejection of the need to reduce backpay by interim 

earnings in this case, where the employees continued to work for 

the same company and there was no showing that they would not 

have absorbed the hours stipulated to have been lost by the 

unfair labor practice. 

3. The Company's final argument is that the ALJ's post-hearing 

amendment of the backpay specification did not afford the Company 

an adequate opportunity to produce evidence of employee interim 

earnings. In light of our holding that the backpay award need 

not be reduced by what the Company characterizes as "interim 

earnings," consideration of the Company's contentions on this 

issue is unnecessary. 
 For the reasons set forth, we will deny the Petition 

for Review of the Order of the National Labor Relations Board 

issued on July 12, 1994 and grant the Cross-Application for 

Enforcement of the Order of the National Labor Relations Board 

issued on July 12, 1994.