In the

United States Court of Appeals

For the Seventh Circuit

Nos. 99-2828 & 99-3049

United States Can Company,

Petitioner, Cross-Respondent,

v.

National Labor Relations Board,

Respondent, Cross-Petitioner,

and

United Steelworkers of America, afl-cio-clc,

Intervening Respondent.

Petition to Set Aside, and Cross-Petition to Enforce,

an Order of the National Labor Relations Board.

Argued September 20, 2000--Decided June 19, 2001

 Before Coffey, Easterbrook, and Evans,

Circuit Judges.

 Easterbrook, Circuit Judge. A long time

has passed since United States Can Co. v.

NLRB, 984 F.2d 864 (7th Cir. 1993),

enforced the Labor Board’s substantive

decision in this case, 305 N.L.R.B. 1127

(1992). Now we’re at the remedy stage;

the Board has ordered the employer to

fork over about $1.5 million in back pay,

plus pension credits and other fringe

benefits, plus more than a decade’s worth

of interest, to 28 employees who between

1987 and 1989 were denied opportunities

to transfer to other plants in lieu of

layoffs. See 1999 NLRB Lexis 310, slightly

modifying the ALJ’s decision at 1998 NLRB

Lexis 268. We shall cut to the chase;

exhaustive recitations of events may be

found in the decisions just cited.

 The Board concluded in 1992 that, when

United States Can Co. acquired four

packaging plants, it also acquired a

collective bargaining agreement governing

labor relations at those plants. As a

result, U.S. Can was obliged for the

duration of the agreement (which expired

early in 1989) to offer employees laid

off as a result of a plant closing the
opportunity to transfer to vacant

positions at other plants under an InterPlant Job Opportunity Program (ipjo). The

Board’s order left open the calculation

of back pay for employees who could have

used the ipjo (had U.S. Can honored its

obligation) to remain on the payroll for

a while. Because U.S. Can eventually

closed all four acquired plants,

transfers would have postponed but not

prevented the employees’ need to find

work elsewhere.

 U.S. Can’s principal contention in this

court--that the 28 employees would not

have transferred even if offered the

chance--goes nowhere given the standard

of review. We must enforce the Board’s

decision if substantial evidence on the

record as a whole supports it. Universal

Camera Corp. v. NLRB, 340 U.S. 474

(1951). This decision is supported by the

employees’ testimony. Each was asked

whether he or she would have transferred

if given the opportunity; each answered

yes; the Board believed these answers.

Such a decision is all but invulnerable.

Anderson v. Bessemer City, 470 U.S. 564,

570 (1985). U.S. Can grumbles that the

Board shifted the burden of persuasion,

forcing it to disprove the possibility

that the employees would have

transferred. That’s not what happened.

Once the employees testified that they

would have moved, U.S. Can had an

opportunity to persuade the Board not to

believe that testimony. Extending such an

opportunity does not "shift the burden of

proof"; the Board chose in the end to

credit the employees because they are

believable, not because U.S. Can failed

to carry some burden.

 What U.S. Can did in an effort to

undercut the employees’ position was

offer the testimony of a labor economist,

David S. Evans, that the employees did

not have much to gain by transferring.

Evans began with the salary each could

have earned at a new plant following an

ipjo transfer. He subtracted what the

employee would give up: unemployment

compensation, supplemental unemployment

benefits (sub) under the collective

bargaining agreement, and pension

benefits for which many of the laid-off

employees were eligible. (Access to ipjo

transfers depended on seniority, and it

is not surprising that the most senior

employees in a closed plant were eligible
for either early or regular retirement.)

According to Evans, the difference

between the wages (and increases in

future pension benefits) these 28

employees would have received and the

benefits they would have surrendered was

just about the minimum wage. What kind of

person, U.S. Can asks, will move to

another part of the country to take a

minimum-wage job when low-paying work is

available close to home? One answer might

be "the kind who work in packaging

plants"; after all, these 28 swore that

they would do this. It is not as if Evans

calculated that their returns from ipjo

transfers would be negative, so that

moving would be irrational.

 And the employees may have been better

economists than Evans, for their net

wages would have been well above the

minimum. Evans assumed that if the

employees moved then sub and unemployment

benefits would vanish. Not so. These

payments would be deferred until the next

layoff, when employees would enjoy them

(less the time value of the delay) even

if they took ipjo transfers. Although

afuture layoff was not certain, the

probability was high given the ongoing

consolidation in the industry. Evans,

however, implicitly assumed that the

probability was zero and that

transferring employees never would

receive unemployment or sub payments to

make up for what they would lose by

transferring. Employees themselves would

not have made that error. Similarly with

pension payments, which not only would be

deferred but also would increase as the

employees made additional contributions

to their pension accounts. For an

employee eligible to retire, the decision

to work another year at a distant plant

is no different from the decision to work

another year locally. The employee gives

up the pension benefit that could have

been received immediately, getting in

return a salary plus pension

contributions that increase the monthly

benefit later; delay in retirement

increases the monthly benefit for the

further reason that actuarial tables

predict that the pension will be paid out

for fewer months. Whether the exchange is

sensible depends on what the person will

earn in the interim, on the rate of

interest implicit in the pension plan

(that is, how fast do monthly benefits

increase if the employee postpones their
commencement?), and on how long the

employee expects to live after

retirement. U.S. Can did not demonstrate

that none of these 28 employees could

have deemed it sensible to work another

year.

 U.S. Can would have done better to

examine its predecessor’s experience in

operating the ipjo program. When

Continental Can, whose business U.S. Can

acquired, closed a plant and offered

transfers, what happened? If no one

accepted, then U.S. Can would have had

powerful support for the proposition that

the testimony of these 28 employees

should not be believed. The Board should

place what people do above what they say,

for talk is cheap (and employees who know

that a "yes" answer to the question

"would you have moved?" will bring a

large financial reward, without any risk,

will find that this sways their beliefs

about what they would have done a decade

earlier, even if they are trying to be

candid). Whether these 28 would have

declined transfers is not dispositive; if

they had said no, then the opportunity

would have fallen through the seniority

table until all eligible employees had

been offered the chance to transfer. Only

if vacancies would have remained at open

plants after all eligible employees at

the closed plants had a chance to move

would U.S. Can be off the hook. A look at

Continental Can’s experience would have

revealed whether that happened. But at

oral argument counsel for U.S. Can

replied that it had not examined

Continental Can’s experience (or at least

had not put this experience in the

record). What is in the record, Evans’

flawed calculation, fell well short of

the evidence needed to disable the Board

from crediting the employees’ testimony.

 On to the calculation of back pay.

According to U.S. Can, the back-pay

period should not start until the union

filed its unfair-labor-practice charge,

or perhaps until the General Counsel of

the Board commenced the unfair labor

practice proceeding. U.S. Can concedes

that both the union’s charge and the

General Counsel’s complaint were timely

but contends that it is inequitable to

require it to afford back pay for earlier

conduct. The idea that judicial notions

of equity trump the statutory timeliness

rules in cases commenced by the United
States (or one of its agencies) runs

headlong into Occidental Life Insurance

Co. v. EEOC, 432 U.S. 355 (1977), and

Costello v. United States, 365 U.S. 265,

281 (1961), which hold that equitable

principles such as laches play little if

any role in the federal government’s

litigation. See also NLRB v. P*I*E

Nationwide, Inc., 894 F.2d 887, 893 (7th

Cir. 1990). Cf. NLRB v. Ironworkers, 466

U.S. 720 (1984) (long administrative

delay, while back pay accumulates, does

not prevent enforcement of the Board’s

award); NLRB v. J.H. Rutter-Rex

Manufacturing Co., 396 U.S. 258 (1969)

(same); Reich v. Sea Sprite Boat Co., 50

F.3d 413 (7th Cir. 1995) (reserving

question whether laches ever applies to

the federal government’s cases). There’s

an additional problem here: U.S. Can did

not establish prejudice from the delay.

If it had allowed the employees to make

ipjo transfers as soon as the union

complained, then it might have had a good

claim that delay in making the complaint

caused injury by requiring it to pay

twice for the same work (one payment to

the person actually hired to do the job,

the other in back pay to the employee who

might have transferred). But U.S. Can dug

in its heels and refused to transfer the

employees. Its back-pay obligation

therefore would have been the same had

the union and the General Counsel acted

immediately.

 The Board awarded as back pay the gross

wages the 28 employees would have earned

at other plants, had they transferred and

worked until those plants too were

closed. It refused to give U.S. Can

credit against this award for

supplemental unemployment benefits and

pension benefits that the employees

received in lieu of wages. Whether to net

out sub and pension benefits divided the

Board: Chairman Truesdale and Member Fox

were the majority; Member (now Chairman)

Hurtgen dissented. Member Hurtgen

concluded that sub and pension benefits,

unlike unemployment benefits, see NLRB v.

Gullett Gin Co., 340 U.S. 361 (1951),

fall outside the collateral-source

doctrine because they are provided by the

employer rather than a third party.

(These are noncontributory, definedbenefit pension plans.) He concluded:

[The] benefits at issue are not part of a

governmental program that is broadly
applicable to employees generally and

aimed at addressing a general "policy of

social betterment." [Language quoted from

Gullet Gin.] Rather, the pension and sub

payments came from employer-sponsored

private benefit programs. These benefit

programs, which inure solely to the

benefit of [U.S. Can’s] employees, are

sponsored and funded by [U.S. Can], and

[U.S. Can] is responsible for

administering the payments to its

employees. Thus, there are no overriding

social policy considerations that support

the discriminatees’ retention of these

payments. To the contrary, the relevant

"policy" consideration is that the

discriminatees should not receive a

double-recovery windfall. [A footnote

here continues: "In F&W Oldsmobile, [272

N.L.R.B. 1150 (1984)], the judge,

affirmed by the Board, spoke, generically

of benefits, without distinguishing

between governmental and private

benefits. Indeed, it does not appear from

the decision in that case that the

distinction was even argued. Since the

distinction is made by the Supreme Court

in Gullett, I shall follow the Court’s

teaching and not that of F&W."]

 Faced with this challenge based on the

Supreme Court’s reasoning in Gullett Gin,

the majority of the Board did not respond

in the text of its opinion but did drop

this footnote:

In accord with Board and judicial

precedent cited and fully discussed in

the judge’s decision, we affirm the

judge’s conclusion that [U.S. Can] is not

entitled to an offset for retirement

benefits and supplemental unemployment

benefits paid to discriminatees during

the backpay period. Although funded as

part of the benefits earned by employees,

the trusts are, as the judge correctly

found, separate and distinct entities

from [U.S. Can]. The dissent would

effectively overrule the precedent cited

by the judge. We decline to do so.

 That the majority relegated to a

footnote the only significant issue in

the case is bad; that it gave no reasons

is worse. Member Hurtgen made a serious

argument; the majority did not give a

serious answer. Nor did the ALJ’s opinion

tackle this subject, except to claim that

cases such as F&W Oldsmobile support the

outcome. We have no idea why the majority
thought it important that the payments

come from "separate and distinct

entities" that are funded 100% by the

employer. If an employer arranged for

wages to be paid by a parent, subsidiary,

or corporate affiliate-- "separate and

distinct entities" all--would the Board

conclude that these payments should be

ignored when computing back pay? Surely

not. Why, then, does it matter that

fringe benefits such as sub and pension

payments are funneled through separate

entities? Why not treat wages and fringe

benefits identically for this purpose

(especially when the employer is liable

if the "separate and distinct entity"

does not pay in full)? The Board did not

say.

 The idea behind the collateral-benefits

doctrine, which originated in tort law,

is that damages measured by the injury

are essential to deterrence. See Steven

Shavell, Economic Analysis of Accident

Law sec.sec. 6.6.7, 10.3 (1987). Suppose

A negligently trips B, who incurs $10,000

in medical expenses. Suppose further that

B had medical insurance covering these

costs. To deduct the insurance proceeds

from A’s damages not only would give the

tortfeasor the benefit of the victim’s

expense on insurance but also would

curtail deterrence. Why should A take

care in the future if his victims bear

their own loss? If the government rather

than B supplies the insurance, the

analysis is the same. B paid for the

coverage through taxes, and giving A the

benefit would reduce if not eliminate A’s

incentive to take care. That’s a central

point of Gullett Gin, which held that

unemployment insurance benefits are

within the scope of the collateral-source

doctrine. Although employers pay a tax

that funds some of these benefits, some

come from general revenues and all are

portable; it would be a mistake to say

that the employer that laid off a worker

fully pays for the resulting benefits and

therefore takes the employee’s whole loss

into account when deciding what to do.

 Contrast unemployment benefits, whose

level and eligibility criteria are out of

the employer’s hands, with severance

benefits. Think of an employer that

promises its workers that, if they are

discharged, it will pay six months’ wages

in a lump sum. An employer discharges a

worker and pays the promised benefit. Six

months later the Labor Board concludes
that the discharge was unlawful and

orders the worker reinstated. How much

back pay should the employer be required

to tender to make the employee whole?--

for make-whole remedies are the NLRB’s

financial tool. 29 U.S.C. sec.160(c);

Sure-Tan, Inc. v. NLRB, 467 U.S. 883,

900-01 (1984); NLRB v. Strong, 393 U.S.

357, 359 (1969). The answer is zero. The

employer already has paid six months’

wages, and once restored to the payroll

the employee will not have missed a dime.

The employee loses nothing tomorrow

either, because the employer’s promise to

pay severance benefits remains; if the

employer makes a lawful discharge in the

future, the employee gets another check

for six months’ wages. (This restoration

proviso is important, lest the employer

be able to appropriate the value of a

fringe benefit promised to its workers.

We return to this subject toward the end

of the opinion.)

 Now suppose that instead of paying six

months’ wages as a flat benefit, the

employer coordinates severance benefits

with unemployment compensation (as many

pensions are coordinated with Social

Security retirement benefits) and pays

only the difference between six months’

wages and any unemployment benefit the

former employee receives. Per Gullett

Gin, the unemployment benefits--which

come from the public fisc--are not

deducted from a back-pay award. But the

severance benefit surely would be

deducted. And that still would be true if

the employer’s severance package lasted

not a flat six months, but until the

employee found a new job. The amount of

back pay the employee would receive would

remain the wages lost, less other

payments (including the severance benefit

from the employer).

 One more step and the hypothetical

becomes the actual case. Suppose that

instead of paying the severance benefit

from general corporate funds, the

employer sets up a second entity--call it

the Severance Benefits Administrator--

that disburses the money. Instead of

making an unfunded severance-benefit

promise, the employer writes a check to

the Administrator every month to cover

the actuarial cost of its severance

promises. Advance funding of promises

reduces the cash-flow drain if the

employer should decide to close a plant
or lay off many employees at once. But

from the employee’s perspective it is a

detail whether a promise is funded in

advance or met on a pay-as-you-go basis,

and whether the Administrator is

incorporated separately from the

employer. It is all the same--the same

benefits, the same source, and, one would

suppose, the same legal consequences. Yet

we have now described the sub program,

which is a severance benefit, coordinated

with the unemployment insurance system

and administered through a separate

entity.

 If ordinary severance benefits are

offset against back-pay obligations--

something that the Board concedes is

proper-- then sub payments also must be

offset. Pension promises are

fundamentally the same; severance

benefits with a longer payout. It is

impossible to see why unfunded benefits

would be offset, while funded benefits

administered by a separate entity would

not be offset. This distinction is the

nub of the Board’s decision, yet the

Board offered no logical support. The

make-whole goal of putting the employees

in the position they would have occupied,

but for the employer’s unfair labor

practice, is unaffected by whether the

benefits are funded or unfunded, paid

directly from the employer’s treasury or

disbursed by an intermediary.

 The Board’s majority did refer to

"judicial precedent cited and fully

discussed in the [ALJ’s] decision". Here

is what the ALJ had to say about pension

benefits (adding later that sub payments

are identical in principle):

[I]t is well-settled that "application of

the collateral source rule depends less

upon the source of funds than upon the

character of the benefits received."

Haughton v. Blackships, Inc., 462 F.2d

788, 790 (5th Cir. 1972). Thus, the mere

fact that an employer contributes money,

either by paying premiums, making

contributions, etc., to the fund from

which benefits are derived does not

establish that the fund is not a

collateral source. Id. Also, Blake v.

Delaware and Hudson Railway Company, 484

F.2d 204, 206 (2nd Cir. 1973); Phillips

v. Western Company of North America, 953

F. 2d 929, 929 (5th Cir. 1992); Molzof v.

United States, 6 F.3d 461, 465 (7th Cir.
1993); Russo v. Matson Navigation

Company, 486 F.2d 1018, 1020 (9th Cir.

1993). As was more succinctly stated in

Folkestad v. Burlington Northern, Inc.,

813 F.2d 1377, 1381 (9th Cir. 1987),

"courts have been virtually unanimous in

their refusal to make the source of the

premiums the determinative factor in

deciding whether thebenefits should be

regarded as emanating from the employer

or from a ’collateral source.’"

Respondent’s assertion, therefore, that

the benefits should be found not to be

collateral because it alone funds the

pension trust account is without merit.

Further, while Respondent may fund the

pension trust, under ERISA the trust

remains a separate and distinct entity

independent from Respondent. See, NLRB v.

Amax Coal Co., 453 U.S. 322, 332-333

(1981); Doyne v. Union Electric Company,

953 F.2d 447, 451 (8th Cir. 1992);

Garland-Sherman Masonry, 305 NLRB 511,

513 (1991). As the source of pension

benefits received by the discriminatees

was the trust fund and not the

Respondent, said payments were clearly

from a collateral source and not

deductible from backpay.

1998 NLRB Lexis 268 at *36-37. Most of

these cases concern insurance. It is

economically irrelevant whether the

employer pays an employee $1 per hour

extra, and the employee uses the money to

buy health insurance, or whether instead

the employer offers health insurance as a

fringe benefit. (The difference may be

vital for tax purposes, but these do not

concern us here.) The insurance, like the

wages, becomes the employee’s asset.

Severance benefits cannot be conceived

that way. It is therefore not surprising

that, whatever may be the rule in the

ninth circuit (the source of the lengthy

quotation from Folkestad), this circuit

has concluded that severance benefits and

their economic equivalents in pension

packages must be offset when calculating

make-whole awards. See, e.g., Orzel v.

Wauwatosa Fire Department, 697 F.2d 743,

756 (7th Cir. 1983) (dictum); Kossman v.

Calumet County, 849 F.2d 1027, 1032 (7th

Cir. 1988). Although, as the Board’s

appellate brief (though not the Board’s

or ALJ’s opinion) notes, we held in EEOC

v. O’Grady, 857 F.2d 383, 389-91 (7th

Cir. 1988), that particular pension

benefits should not be deducted from a

make-whole award of back pay, we
emphasized in O’Grady that the benefits

in question came from a state agency

other than the employer, making them more

like Social Security retirement benefits.

The benefits in this case, by contrast,

come ultimately from the employer’s

resources.

 What is economically important for

deterrence is not whether benefits pass

through an intermediary but how the

wrongdoer’s actions affect the victim’s

well-being, and whether those costs are

brought home fully to the wrongdoer. What

is important for compensation is not

whether benefits pass through a financial

intermediary, but whether the victim is

put in the same position he would have

occupied had his rights been respected.

So we set the financing arrangements

aside and ask the important questions

directly. The employer would indeed gain

from its wrong--and the employee would

lose out--if the employer were allowed to

subtract, from the back-pay obligation,

pension and welfare benefits that serve

as deferred compensation for work

performed. See Hunter v. Allis-Chalmers

Corp., 797 F.2d 1417, 1428-29 (7th Cir.

1986). That is why health insurance is

treated as a collateral source even when

the employer provides insurance as a

fringe benefit. Likewise with sub and

pension benefits. A direct offset would

permit the employer to appropriate a

portion of the employee’s own economicbenefits package. Deterrence would be

reduced, and the employee would be worse

off to boot. U.S. Can therefore is wrong

to say that it is entitled to a dollarfor-dollar offset. That’s the same

mistake David Evans made, a fallacy we

discussed above. Think back to our first

hypothetical, the lump sum severance

payment. Allowing a simple offset would

be equivalent to permitting the employer

to treat the severance benefit as wages

(canceling the back-pay obligation for

the six months of unemployment), without

restoring that benefit when the employee

was lawfully let go. If the employer is

to deduct the benefit from the back-pay

obligation, it must restore the benefit

for later use; otherwise the employee’s

fringe benefit has vanished into the

employer’s pocket.

 Here’s a concrete illustration. Suppose

that Alex Baugh, one of the employees not

offered the opportunity to transfer,
would have moved to a new plant on

January 1, 1988, and been laid off on

January 1, 1990, if all of his

entitlements under the collective

bargaining agreement had been honored.

Instead Baugh retired at the start of

1988 and began collecting both sub and

pension benefits. (These are not the

actual details for Baugh; we are

simplifying for illustrative purposes.)

The Board held that Baugh is entitled to

about $90,000, representing the wages he

could have earned during 1988 and 1989,

plus pension credits and interest, on top

of the unemployment, SUB, and pension

benefits that he actually received. U.S.

Can wants to proceed as follows: deduct

from the gross wages that Baugh would

have received during these years the sub

payments that effectively guaranteed him

his full pay through July 1, 1988, and

then subtract all of the pension benefits

he received during those years, cutting

the total to about a quarter of the

Board’s actual award. Just as the Board

erred in saying that sub and pension

benefits must be ignored, so U.S. Can

errs in saying that they must be deducted

dollar for dollar. Suppose that Baugh had

worked at another plant through the end

of 1989 and then been laid off. He would

have been entitled to sub payments for the

first six months of 1990, plus higher

monthly pension benefits (increased not

only by the contributions made to his

account during 1988 and 1989, but also

because he would have been two years

older on retirement). U.S. Can’s approach

effectively strips Baugh of the sub

payments--he does not keep what he

received in 1988, and he does not get

them in 1990 either. Moreover, U.S. Can’s

calculation takes away the two years of

pension benefits in 1988 and 1989 without

higher monthly benefits in 1990, an

increase that Baugh would have received

had he worked through the end of 1989.

(The Board’s position suffers from the

same problem in reverse. Under the

Board’s award Baugh is entitled to keep

the pension benefits he received in 1988

and 1989, plus receive pension credits as

if he had worked in those years and thus

could retire in 1990 with higher monthly

benefits.)

 Pension and sub offsets are therefore

considerably more complex than either the

Board or U.S. Can supposes. Everyone’s

rights are respected if, and only if, the
offset puts each employee in the position

he would have occupied had the collective

bargaining agreement been respected--and

that position is one in which the

benefits are deferred but not

obliterated. To make this concrete: U.S.

Can is entitled to offset the sub payments

from its back-pay obligation only if it

also restores those benefits as of the

time each employee finally would have

left its employ. It is entitled, in other

words, to the time value of the money: in

Baugh’s (hypothetical) case it would make

sub payments in 1990 rather than 1988, and

thus would gain two years of interest on

the obligation. With respect to pension

benefits, the employer may deduct them

from back-pay obligations during the time

they were actually received, only if the

employer also recalculates the payments

for later months and increases them to

the level they would have achieved had

retirement been deferred. We suspect that

U.S. Can would not reduce its net payouts

all that much by these recalculations.

Many employers therefore might be content

to disregard sub and pension benefits,

just as the Board did in this case. But

the Board may not deprive an employer of

its opportunity to make the more accurate

calculation we have described, a

calculation that fully respects the

employer’s entitlements as well as each

employee’s.

 The Board’s order is enforced, subject

to the proviso that if within 30 days

U.S. Can informs the Board that it wishes

to offer actuarial calculations along the

lines we have described, the Board must

reopen the record and make new back-pay

awards using the methods approved in this

opinion.