* 

### This order and judgment is not binding precedent, except under the doctrines of

law of the case, res judicata, and collateral estoppel. This court generally disfavors the citation of orders and judgments; nevertheless, an order and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.

UNITED STATES COURT OF APPEALS Filed 4/22/96 TENTH CIRCUIT

INTERMOUNTAIN RURAL ELECTRIC ASSOCIATION, Petitioner/Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner. No. 95-9529 (Board Case No. 27-CA-10711)

ORDER AND JUDGMENT *



### Before PORFILIO , BARRETT , and LUCERO , Circuit Judges.

These cross appeals raise issues relating to an awa rd of approximately $3,000 in backpay to two linemen who work for Intermountain Rural Electric Association (the Compa ny). The remedy was generated after the National Labor Relat ions Board- 2 -

found the Company violated section 8(a)(5) and (1) of the National Labor Relations Act (NLRA), 29 U.S.C. § 15 8(a)(5) and (1), by unilaterally changing the procedure for sel ecting employees for overtime. Intermountain Rural Elec. Ass’n, 305 N.L.R.B. 783 (1991)( IREA I) , review denied, enforcement granted , Intermountain Rural Elec. Ass’n v. NLRB, 984 F.2d 1562 (10th Cir. 1993)( IREA II ). On its cross appeal, we enforce the Board’s
order. The Company is a rural electric cooperative providi ng electrical services to customers in the area surrou nding its facility in Sedalia, Colorado. The International B rotherhood of Electrical Workers, Local 111, AFL-CIO (the Union), represents the linemen, employees who construct, maintain and service the electrical lines. The Company and the Union have a longstanding collective bargaining agreement. Under that agreem ent, the Company called linemen for overtime work in inverse order of the total amount of overtime the employee had worked th e prior year so that linemen who had worked the least hours woul d be called first by dispatchers. For the purpose of this case , linemen may be called for two types of overtime: callout overtime- employees are called to return to work during weekday evening s and nights in response to unforeseen emergencies such as poweroutages; and, standby overtime- linemen assigned to be “on call” during weekends and holidays earn two hours each day for b eing on call;- 3 -

and, in case emergency work has to be performed andthey are called, they earn additional standby overtime. Ca llout overtime is not mandatory, and a lineman called may refuse t he overtime assignment without penalty. In practice, an overtime committee made up of emplo yees oversaw the allocation of overtime. Until the chan ge in late 1988, the committee assigned callout and standby ov ertime at the beginning of each calendar year on the basis of sen iority. More senior employees could select the holidays and week ends they wanted to work and then swap schedules if they were later unable to work. On December 14, 1988, however, during negotiations over a new collective bargaining agreement, the Company a nnounced it would instruct its dispatchers to use an alphabetic al rotation procedure exclusively to schedule callout and standby overtime. Then, when an emergency arose during the evening oron weekends, the dispatcher would call the next name alphabetica lly on the list. Linemen could still refuse callout time, but the alphabet, not seniority, controlled standby overtime. This unilateral change during the collective bargai ning process was deemed an unfair bargaining practice in IREA I , and enforced in IREA II
. That finding carried with it a remedial order to restore the overtime procedures previouslybargained for and for backpay to be awarded to specific employees who suffered- 4 -

as a consequence of the unilateral change. The Company did not challenge either order. However, after the General Counsel submitted a Compliance Specification alleging the C ompany owed approximately $13,724 plus interest in backpay to f our employees, the Company objected, contending it owed no money t o any employee because of its change in overtime call procedures. The issue was brought to trial before an administra tive law judge upon the General Counsel’s amended Compliance Specification which reduced the amount of backpay allegedly owed to $10,225.84. At the hearing, the General Counsel called Robert C ervone, an NLRB field examiner, who explained how he arrived a t a “representative period” by including as potential b ackpay claimants all linemen who had been employed consist ently for the three years prior to 1988 and at least into the fir st calendar quarter of 1991. Only overtime actually worked by those linemen was included in the backpay computations. The formula then compared the average percentage of total overtime h ours each such lineman worked during that three-year period. It a lso compared the percentage of overtime worked before and after 1988. Mr. Cervone calculated the difference between the repre sentative percentage and each quarterly percentage after the change, converting the difference into hours and multiplyin g by the overtime pay rate to determine the backpay owed. G iven that the total number of overtime hours had not changed - th e Company- 5 -

still called linemen to approximately the same numb er of calls - Mr. Cervone could then determine how the new systemimpacted an employee’s total number of overtime hours while als o taking into consideration employees’ refusing callout overtime. After the hearing, however, the General Counsel sub mitted a brief to which he appended an amended calculation r educing the total amount of overtime he claimed was owed to $3, 993.30. Unfortunately, the brief itself is not in the recor d before us; therefore, we cannot be certain of its contents. About those contents, however, the Board stated in its order: [T]he General Counsel took account of the Responden t’s evidence concerning the similarly situated unit employees and, deleting the hours for employees Kog an and Keefe, recomputed the representative percentage s and submitted these revised backpay figures to the judge. Although the ALJ granted the General Counsel’s requ est the record remain open to permit submission of rebuttal to the Company’s expert, the General Counsel did not add a ny more evidence. He then moved to close the record. The Company filed no objection to the General Counsel’s appended brie f, nor did it attempt to otherwise object before the ALJ to its c ontents. The ALJ dismissed the amended backpay specification , finding the General Counsel’s posthearing attachmen ts should be stricken from the record because they were not prop erly introduced; that this unfair labor practice did not warrant the usual presumption that backpay was owed; and the Ge neral- 6 -

Counsel’s formula to calculate backpay was not “rea sonably designed to produce approximate awards due.” The General Counsel took exception, and after briefing, the Boa rd reversed the ALJ’s decision. The Board defined “the single backpay issue” before it as “the extent of the loss suffered by certain unit employees when [the Company] changed its procedure for selecting e mployees for callout overtime ... and standby overtime.” The Bo ard rejected the ALJ’s characterization of the General Counsel’s posthearing brief as an amended specification of new evidence, stating the attachments are recalculations of the backpay figur es based on the evidence about the composition of the bargainin g unit the Company submitted at the hearing. The Board statedthis was not “new evidence” but an arithmetic adjustment in ligh t of the record. This adjustment did not necessitate reopen ing the record, and the Company could hardly claim surprise or prejudice by having the General Counsel agree with one of its arguments. Next, the Board disagreed with the ALJ’s finding th at the award of backpay for other unfair labor practices a scribed to the Company in this case negated the presumption ofbackpay in this instance. Reversing the ALJ, the Board held t he unilateral action changing the callout system “created the pot ential loss of income to employees” which is distinct from othe r losses.- 7 -

The Board found the Company did not carry its burde n through the testimony of its expert, Dr. Bien. The Board concluded this testimony did not “amount to an affi rmative conclusion that the differences were not caused by the selection procedure change, so it does not rebut the presumpt ion [requiring backpay awards.]” Finally, the Board rejected the ALJ’s conclusion th e General Counsel’s proposed formula was not reasonab ly calculated to correctly establish the losses at issue. Had th e Company not changed the procedure, the loss would not have ensu ed, the Board stated, permitting it to construe uncertainties aga inst the wrongdoer. La Favorita, Inc. , 313 N.L.R.B. 902 (1994), review denied, enforcement granted , 48 F.3d 1232 (10th Cir. Jan. 27, 1995) (unpublished disposition). The Board found the General Counsel’s formula adequately considered the vagarie s of the voluntariness of overtime, and the three-year repre sentative time period produced a “fairly accurate picture of the amount of overtime.” The Board rejected the ALJ’s reliance o n the hearsay testimony of Company supervisors, finding: “Such va gue and speculative testimony is insufficient to defeat the presumption that backpay is due because of the unlawful reducti on in offered overtime.” The Board also found the General Counse l’s method took into account the technological changes that mi ght have reduced the number of overtime hours available. “B y calculating- 8 -

each employee’s overtime during the backpay period as a percentage of the total available during that perio d, variance in the actual number of hours is taken into account .” The Board did not fault the use of total types of overtime fr om which to calculate the specific losses. It noted the Compan y did not keep records compiling overtime by category and nev er suggested the General Counsel examine five and one-half years of employee time cards. “Because the [Company] was urging that callout and standby overtime did not constitute a substantial p ortion of the total [hours] worked, it was required to do more th an gesture vaguely in the direction of thousands of employee t imecards.” Thus, the Board affirmed the award of $2,123.04 in backpay to Gerald Fedders and $1,870.26 to Mitchell Eveleth. On appeal, the Company essentially argues because b ackpay was not calculated with absolute precision, the res ulting award, arrived at after the hearing, amounts to a “penalty ” imposed without due process. The backpay formula, it insis ts, arbitrarily and unreliably figured overtime based o n factual inaccuracies, forcing the Company to pay employees for not working. Nonetheless, because we must give considerable defe rence to the Board’s construction of the National Labor Rela tions Act,
IREA II , 984 F.2d at 1566, we must agree with the conclusi ons of the Board. Under the very deferential standard of review to- 9 -

which the Board’s judgments are entitled, its findi ngs of fact must be upheld “if they are supported by substantia l evidence in the record considered as a whole.” Monfort, Inc. v. NLRB , 965 F.2d 1538, 1540 (10th Cir. 1992) (citing Universal Camera Corp.
v. NLRB , 340 U.S. 474, 488 (1951)). In this review, we mu st consider both the findings of the ALJ and the Board , recognizing the wider experience and combined knowledge of the three members of the Board’s panel. We stated in Ann Lee Sportswear, Inc. v.
NLRB , 543 F.2d 739 (10th Cir. 1976), “The Board, of cou rse, is not bound by the findings and conclusions of an Adm inistrative Judge, and is free to draw its own inferences, as w ell as conclusions, when its broader experience and expert ise indicates that such is in order.” Id . at 743 (citations omitted). Moreover, while a Court of Appeals “might disagree with the Board’s interpretation of the evidence in a given c ase, we are not free to substitute our view of the facts for th e Board’s when it is supported by some credible evidence in t he record that is not outweighed by evidence opposed to the B oard’s view.” NLRB v. Cell Agric. Mfg. Co ., 41 F.3d 389, 393-94 (8th Cir. 1994). We stated in Angle v. NLRB, 683 F.2d 1296 (10th Cir. 1982): The purpose of a backpay order is to vindicat e the public policy of the Act by making any employee who le for any losses suffered because of an employer’s unfair labor practice. The Board’s power to order backpay is a broad discretionary one, subject to limited judicial revi ew.- 10 -

Id. at 1301 (citations and quotation marks omitted). A finding the employer has committed an unfair labo r practice which creates a potential for loss “is pre sumptive proof that some backpay is owed by the employer.” NLRB v. Mastro Plastics Corp
. , 354 F.2d 170, 178 (2d Cir. 1965), cert. denied , 384 U.S. 972 (1966). Moreover, it is the burden of the employer “to establish facts which would negative . .. or ... mitigate that liability.” NLRB v. Brown & Root, Inc
. , 311 F.2d 447, 454 (8th Cir. 1963). “We will not disturb a b ackpay order “‘unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be s aid to effectuate the policies of the Act.’” 88 Transit Lines, Inc. v.

NLRB , 55 F.3d 823, 825 (3d Cir. 1995) (quoting Fibreboard Paper Prod. Corp. v. NLRB , 379 U.S. 203, 216 (1964) quoting Virginia
Elec. & Power Co. v. NLRB , 319 U.S. 533, 540 (1943)). With these principles in mind, we briefly turn to t he issues raised by the Company in this appeal. The C ompany contends the Board erred by reversing the ALJ’s ord er striking the General Counsel’s post-hearing brief. The Comp any offers several reasons for its position: (1) the new calcu lations were an attempt by the General Counsel to rehabilit ate its only witness who had been discredited by the ALJ; (2) th e amended1 Later, however, Mr. Eveleth changed his opinion a nd

stated he would probably have earned about ten perc ent of the figure the General Counsel’s formula attributed to him.

2Yet, the Company does not explain why it did not call Mr. Fedder to testify. Nevertheless, it urges the Boar d improperly rejected this testimony as speculative hearsay. - 11 - calculations have serious flaws the Company was una ble to address on cross-examination; and, (3) even if the amended calculations “applied the correct data,” they were based on faulty assumptions because no employee actually los t overtime work. Second, the Company argues the backpay formula didnot adequately take personal variables into account. T he Company states when backpay was calculated by comparing the difference between the relative percentages of overtime workedbefore and after the change, the formula did not adequately co nsider employee refusals or unavailability or personal cha nges of any sort in responding to a callout. The Company point s to testimony of Mr. Eveleth, one of the backpay awarde es, that he would have been disinclined to accept overtime beca use of his increased family responsibilities during the period

. 1 The Company also relies on a supervisor's testimony abo ut the other employee, Mr. Fedder, and his overtime availabilityin support of its contention. 2 Third, the Company challenges the General Counsel's lumping all overtime work together to make his computation. Finally,- 12 -

the Company maintains, the formula did not consider : (1) the behavior of individual employees with respect to th eir ability or willingness to accept overtime; (2) callout proc edures prior to December 1988; and (3) the number and identity o f employees in a group of employees whose relative overtime was compared. Having examined the record, we find nothing leadingus to the conclusion the Company was deprived of due proc ess. If we correctly understand the facts, the only purpose ofthe General Counsel’s attachment to his brief was to lower the amount of backpay he claimed due to reflect the elimination o f two employees from those eligible for compensation. Th is calculation was not based upon a theory new to the proceedings. Indeed, it was the formula over which the litigatio n occurred. We must uphold the Board’s holding on this issue. As for the remaining issues, we believe 88 Transit Linesis particularly illuminative because it also involves a supplemental backpay proceeding following an order enforcing an earlier NLRB finding. In that case, the NLRB foundthe employer discriminated against its employees by unilaterallyreplacing the transit run schedule which had been in effect f or many years with a new one that reduced the number of runs empl oyees could work. In that case, too, the ALJ recommended amend ing the General Counsel’s backpay calculation by not awardi ng backpay to fourteen replacement workers who had been hired dur ing the- 13 -

backpay period because they had no losses to be res tored to them. It also recommended treating as interim earn ings any amount by which post-unfair labor practice earnings exceeded employee earnings during the base-period year. The Board rejected both suggestions. On appeal, the Third Circuit agreed, rejecting eachof the Company’s three claims of error, issues mirroring t hose before us here. The court rejected the Company’s characte rization of the award of backpay to the fourteen employees hire d after the schedule change as punitive. 55 F.3d at 826. In o ur case, the Company asserts a similar argument, contending gran ting backpay to the two linemen who voluntarily refused some cal lout time based solely on applying the formula is a penalty. The Third Circuit, holding to the contrary, reasoned the chan ge in schedule caused a loss of work for the entire barga ining unit. “The Board correctly found that the remedy was to i nure to the benefit of the entire bargaining unit. The award o f backpay to the fourteen replacement employees was not “‘puniti ve or confiscatory’” and was “‘reasonably adapted to the situation that call[ed] for the redress.’” Id
. (citations omitted). The employer’s second argument about the duty of employee/discriminatees to mitigate damages and tha t gross backpay must be reduced by interim earnings to deri ve a net backpay award was also rejected. “It is true that mitigation- 14 -

of loss of earnings is a cardinal principle in the development of remedial orders under the National Labor Relatio ns Act.” Id. at 826-27. However, the court continued, in that c ase, the excess was attributable to fluctuations in the amou nt of available work during the applicable time period ra ther than to the restoration of lost work by the employer. The Third Circuit observed: “The Company has provided us with no auth ority for its argument that it can avoid the payment of backpay l iability for its discriminatory schedule change simply because d iscriminatees happened to do better financially during the backpa y period than during the base-year period.” Id. at 827. In our case, the Company takes a similar tack contending the two li nemen have reaped a windfall by being paid for not working. In sum, we find no support in the cases for the Company's assertion the change in overtime resulted in no bac kpay. We agree with the Third Circuit that the injury was to the bargaining unit, and the Company should not be able to profit from its unfair labor practice. A backpay award is only an approximation of what is owed. SeeLa Favorita , 313 N.L.R.B. at 903. Thus, to urge the calculation is incorrect bec ause it didn't properly account for the technological impro vements or correspond to precise statistical principles is ina pposite. The General Counsel’s formula does not have to achieve perfection; it need only be non-arbitrary.- 15 -

Having concluded the record contains substantial ev idence supporting the conclusions of the Board, we then ap ply the rule ofAnn Lee Sportswear, where we stated when it comes to crafting remedies, we should look to the expertise of the Bo ard over that of an ALJ. 543 F.2d at 743. The Board’s "broader experience and expertise" are entitled to considerable weight. Id. Upon that basis, the Company’s PETITION FOR REVIEW IS DENIED, and the
Board’s ORDER is ENFORCED
.

ENTERED FOR THE COURT

John C. Porfilio Circuit Judge