Source: https://openjurist.org/669/f2d/790
Timestamp: 2019-04-18 22:55:03+00:00

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Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.
Sandra P. Zemm, Chicago, Ill., with whom Zachary D. Fasman, Washington, D. C., was on the brief, for petitioner.
Michael Stein, Atty., N. L. R. B., Washington, D. C., of the bar of the Supreme Court of Texas pro hac vice by special leave of the Court, with whom Elliott Moore, Deputy Associate Gen. Counsel, and Peter Winkler, Atty., N. L. R. B., Washington, D. C., were on the brief, for respondent.
Arthur L. Fox, II, Washington, D. C., entered an appearance for intervenor.
Before BAZELON, Senior Circuit Judge, and WILKEY and WALD, Circuit Judges.
Petitioner, Consolidated Freightways ("Consolidated"), seeks review of a decision of the National Labor Relations Board ("NLRB" or "Board"), 253 N.L.R.B. No. 137 (1981), ordering it to reinstate a former employee, Charles Hennessey, with full backpay. Because we find that the Board failed to address petitioner's argument that Hennessey's refusal of a prior reinstatement offer tolled petitioner's backpay liability, we remand for further proceedings.
Consolidated does not challenge the Board's finding that it violated § 8(a)(1) by discharging Hennessey, Brief for Petitioner 25; nor does it challenge the Board's refusal to defer to the arbitrator's award. Id. Instead, Consolidated argues that by offering Hennessey reinstatement in accordance with the terms of the arbitrator's decision it discharged its legal obligation and stopped the accumulation of backpay liability. In addition, Consolidated argues that since Hennessey refused reinstatement for an admittedly invalid reason (the denial of backpay), Hennessey is entitled to neither a second offer of reinstatement nor backpay which might otherwise have accrued after that refusal. In response, the Board argues that Consolidated's offer of reinstatement was invalid because it was conditioned on accepting a final warning letter. Such a letter, it contends, would have subjected Hennessey to continued discrimination for exercising protected rights. Since this offer was invalid, the Board further argues that there is no need to inquire into Hennessey's reasons for refusing to accept it. Finally, the Board contends that the question whether Hennessey refused reinstatement for invalid reasons was not raised before the Board and therefore cannot be raised on appeal.
In this case, we find that Consolidated's objections before the Board were sufficient to permit it to argue on appeal that Hennessey's improper grounds for refusing reinstatement relieved Consolidated of any obligation to make a subsequent reinstatement offer and, correlatively, tolled Consolidated's backpay liability. In its exceptions to the ALJ's recommendations, Consolidated specifically objected to his failure to find "(t)hat the Charging Party refused the May 1 1979 offer of reinstatement because it did not include an offer of backpay...." Respondent's Exceptions to the Decision and Recommended Order of Administrative Law Judge Dated July 30, 1980 3 (emphasis added). In addition, Consolidated discussed Hennessey's grounds for refusing the reinstatement offer in its brief to the Board. It argued that "the fact that the warning letter did not enter into Hennessey's mind when he rejected (Consolidated's) unconditional offer of reinstatement" was "of great significance," and that it was "anomalous" for the ALJ to "void an otherwise valid offer of reinstatement because of what he perceived as a 'condition' to reinstatement when that alleged 'condition' (the letter) never entered the mind of the Charging Party when he rejected the offer." See Respondent's Brief in Support of its Exceptions to the Decision and Recommended Order of the Administrative Law Judge dated July 30, 1980 16-17.
Having discharged Hennessey for unlawful reasons, it was and is Respondent's responsibility to remedy the unfair labor practices. The facts indicate that Hennessey made statements indicating that his reason for not going back to work was the lack of backpay in the award. Respondent's liability to reinstate Hennessey, however, continues until a proper offer of reinstatement is made.
J.A. 16. In the light of both Consolidated's emphasis on the significance of Hennessey's grounds for refusing Consolidated's offer, and the ALJ and General Counsel's arguments that those grounds were of no importance to the disposition of this case, we find that the Board had adequate notice of the issue raised here on appeal.
Although the question whether Hennessey improperly refused an offer of reinstatement was before the Board, the Board did not address that question in its opinion, relying instead on the findings and conclusions of the ALJ.8 The ALJ, however, had simply assumed that Hennessey's reasons for refusing Consolidated's offer were irrelevant to the determination of Consolidated's backpay liability. Consolidated argues that this assumption is not in keeping with Board precedent and that by failing to distinguish or overrule cases that require an inquiry into an employee's grounds for refusing reinstatement, the Board has acted arbitrarily. Because we find that the Board's policy as to unjustified refusals of reinstatement offers remains unexplained, we remand this issue to the Board to reconsider its opinion.
In stating that Hennessey's reasons for not going back to work were of no importance, the ALJ failed to take account of Board precedent that emphasizes the actual reasons why an employee refuses an offer of reinstatement even when the validity of the offer itself is challenged. In Research Designing Service, Inc., 141 N.L.R.B. 211 (1963), for example, an employee who had been unlawfully discharged refused an offer of reinstatement because of the possibility of being laid off once again. Id. at 224. The trial examiner nonetheless ordered that the employee be reinstated with full backpay since, had he accepted the offer of reinstatement, he would not have been returned to his former status but would rather have been treated as a new employee for seniority and vacation pay purposes. Id. at 230. In reversing this ruling, the Board stressed that the employee "refused the offer of reinstatement for other reasons." Id. at 216 (emphasis in original). The Board therefore ruled that the employer's liability for backpay was tolled by the discharged employee's refusal of an offer of reinstatement.9 Similarly, in L. Ronney & Sons Furniture Manufacturing Co., 97 N.L.R.B. 891 (1951), enf'd as modified, 206 F.2d 730 (9th Cir. 1953), cert. denied, 346 U.S. 937, 74 S.Ct. 377, 98 L.Ed. 425 (1954), the Board tolled an employer's backpay liability for a discharged employee who refused reinstatement because she was working at another job.10 The Board noted that the reinstatement offer was invalid because it was subject to an illegal union-security provision. It nonetheless tolled the employer's backpay liability because it "appear(ed) that (the discharged employee) would not have accepted (the employer's) offer, even had it been unconditional." Id. at 892. Other cases pursue this same inquiry into the reasons why a discharged employee rejected an offer of employment, holding that an employer's backpay liability is tolled when an employee rejects an offer of reinstatement without knowledge of the conditionality of the offer. See, e.g., Hribar Trucking, Inc., 166 N.L.R.B. 745, 756 n.19 (1967), modified on other grounds, 406 F.2d 854 (7th Cir. 1969); Eastern Die Co., 142 N.L.R.B. 601, 604 (1963), enf'd, 340 F.2d 607 (1st Cir. 1965), cert. denied, 381 U.S. 951, 85 S.Ct. 1804, 14 L.Ed.2d 724 (1965); Ekco Products Co., 117 N.L.R.B. 137, 150 (1957).11 In each case, the issue is whether the evidence clearly establishes that the employee would have turned down the offer of reinstatement even if it had not contained the invalid condition. See, e.g., Atlantic Maintenance Co., 134 N.L.R.B. 1328, 1329 (1961), enf'd, 305 F.2d 604 (3d Cir. 1962); id. at 1329 n.1 (Member Rodgers, dissenting).
Although Leroy W. Craw could signal a change of Board policy abandoning any inquiry into the reasons why a conditional offer is refused, the case might also be reconcilable with earlier Board precedent. The offer in Leroy W. Craw plainly stated its invalid conditions and employees who rejected that offer because they had procured "better jobs" might well have gone back to the company if faced with a valid offer. Thus, the ALJ's conclusion may be seen as consistent with an inquiry into whether an employee rejected an offer of reinstatement for reasons other than its invalid conditions.
In contrast, Hennessey's refusal of Consolidated's offer would seem an appropriate case for applying the rule of Research Designing and L. Ronney. The testimony regarding Hennessey's reason for refusing Consolidated's offer was uncontradicted; he would not return without backpay. R. 61. That reason was not valid under Board precedent because it violated Hennessey's duty to mitigate his damages. See National Screen Products Co., 147 N.L.R.B. 746, 748 (1964). On the other hand, while Hennessey was present when the presumably invalid condition on his reinstatement-the final warning letter-was announced, R. 99, 184, Hennessey testified that he had no recollection of being told about that condition, R. 100, and did not learn about it until five weeks later.14 Id. There is therefore no reason to believe that the invalid condition on Consolidated's offer even entered Hennessey's mind when he decided to turn down the offer of reinstatement. Looking to the actual reasons why Consolidated's offer was refused seems especially appropriate when there is every indication that Consolidated acted in good faith.15 Unlike the employer in Leroy W. Craw, who made a conditional offer of reinstatement in violation of an express order from the Board, Consolidated offered Hennessey reinstatement in accordance with the terms of the arbitrator's decree; no Board precedent at that juncture specifically held that this offer would be inadequate; and Hennessey gave no indication that the warning letter bore any significance in his decision not to return to work. It was only after Hennessey filed his charge with the Board, which was several months after the arbitrator's decision, that Consolidated received notice that the warning letter presented any problem at all.
In view of the Board's failure to reconcile its decision in this case with its precedent, and its failure to explain its reasons for abandoning any inquiry into the reasons why a conditional offer is refused, we have no choice but to remand this case to the Board to explicate the circumstances, if any, under which an inquiry into whether an employee would have rejected a valid offer of reinstatement is proper.16 See generally Road Sprinkler Fitters Local No. 669 v. N.L.R.B., 600 F.2d 918, 923 (D.C.Cir.1979); N.L.R.B. v. Madison Courier, Inc., 472 F.2d 1307, 1326 (D.C.Cir.1972); Burinskas v. N.L.R.B., 357 F.2d 822, 827 (D.C.Cir.1966).
Judge Stone: ... As best you can (,) tell me exactly what (the Joint State Committee) told you the results of the grievance hearing were?
Hennessey: Well, sir, they told me that the discharge had been overturned. That the pay claim had been denied. The company was responsible to pick up my pension and health and welfare benefits with full seniority rights.
Judge Stone: Now, was there any thing else said to you at all?
Hennessey: No, sir, not that I remember.
Judge Stone: Did they give you anything in writing?
Hennessey: No, sir. I picked up a copy of the results of the grievance about five weeks later. And it was at that time when I finally realized there had also been a thing where the discharge had been reduced to a final warning letter.
Judge Stone: ... Now, did you know at the time the grievance hearing was over, when you were orally told, did you know at that time there was anything about a warning?
Hennessey: No, sir, I did not.
The ALJ did not make any findings regarding Hennessey's awareness of the final warning letter, presumably because of his conclusion that Hennessey's reason for refusing Consolidated's offer of reinstatement were of no importance.
Because we are remanding this case to the Board to reconsider the significance of Hennessey's motives for refusing Consolidated's offer, we need not reach the question whether Consolidated's good faith reliance on the arbitrator's decree, in itself, would be sufficient to toll backpay liability. We note, however, that resolution of this question depends on whether the Board could properly further the strong national policy in favor of private settlement of labor disputes without abdicating its responsibility to remedy violations of national labor law. See Local Union No. 2188, International Bth'd of Elec. Workers v. N.L.R.B., 494 F.2d 1087, 1091 (D.C.Cir. cert. denied, 419 U.S. 835, 95 S.Ct. 61, 42 L.Ed.2d 61 (1974); Associated Press v. N.L.R.B., 492 F.2d 662, 667 (D.C.Cir.1974). Thus, the Board might well reach different conclusions regarding the employer's right to rely on an arbitrator's decree pending a Board decision on a charged unfair labor practice depending on the nature of the arbitrator's decision and the specific circumstances following its issuance. In this case, among the significant factors the Board would have to consider are (1) the arbitrator ordered reinstatement with a warning letter, (2) Consolidated conformed its offer to the terms of the decree and (3) Hennessey waited two and a half months after the decree before filing his charge with the Board. Although Hennessey filed his charge within the statutory period of six months, and the Board ruled that the offer was improperly conditioned, a more refined consideration of the policy in favor of private settlement might lead the Board to find that Consolidated's good faith reliance on the arbitrator's award should work to suspend its backpay liability. Different considerations would of course be implicated if the arbitrator's award had been plainly conditioned on a surrender of the employee's statutory rights, or if the arbitrator had upheld the discharge, thereby requiring no reinstatement offer at all. In these cases, the Board might find that allowing the arbitration award to reduce the remedy received by a wrongfully discharged employee would seriously compromise the remedial purposes of the Act.

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