Court Opinion

ID: 3034867
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:51:43.533881+00
Date Added: 2024-06-11T11:40:51.400512
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                Nos. 01-3602/4021
                                  ___________

McKenzie Engineering Company,        *
                                     *
      Petitioner/Cross-Respondent,   * On Petition for Review and
                                     * Cross-Application for Enforcement
      v.                             * of an Order of the National Labor
                                     * Relations Board.
National Labor Relations Board,      *
                                     *
      Respondent/Cross-Petitioner.   *
                                ___________

                             Submitted: October 20, 2003
                                 Filed: June 28, 2004
                                 ___________

Before MORRIS SHEPPARD ARNOLD, BOWMAN, and MURPHY, Circuit
      Judges.
                        ___________

BOWMAN, Circuit Judge.

      In this labor case, the National Labor Relations Board (Board) has petitioned
to enforce its make-whole order against McKenzie Engineering Company and
McKenzie Engineering has appealed from that order. This is the fourth time we have
waded into this dispute between McKenzie Engineering, certain union carpenters, and
the National Labor Relations Board. See McKenzie Eng'g Co. v. NLRB, 303 F.3d
902 (8th Cir. 2002) (denying petition to enforce Board's order finding that McKenzie
Engineering committed unfair labor practice by repudiating pre-hire agreement);
Carpenters Fringe Benefit Funds v. McKenzie Eng'g Co., 217 F.3d 578 (8th Cir.
2000) (reversing district court judgment entered in favor of carpenter union in their
ERISA action for fringe-benefit contributions); McKenzie Eng'g Co. v. NLRB, 182
F.3d 622 (8th Cir. 1999) (granting enforcement of Board's order finding that
McKenzie committed unfair labor practices and remanding for determination of
remedy). In this petition to enforce its make-whole order and McKenzie's appeal
from that order, the only issues are the extent of the back pay due to four discharged
union carpenters (and their replacements) and what fringe benefits McKenzie owes
the fired employees (and their replacements). We have jurisdiction under § 10(e) of
the National Labor Relations Act ("the NLRA") (29 U.S.C. § 160(e) (2000)) and, for
the reasons set forth below, grant enforcement of the order as it relates to the
replacement workers, deny enforcement of the order as it relates to the wrongfully
discharged employees, and remand the case to the Board for recalculation of the back-
pay and fringe-benefit awards in a manner not inconsistent with this opinion.

       In McKenzie Engineering Company v. NLRB ("McKenzie I"), 182 F.3d 622
(8th Cir. 1999), we upheld the Board's determination that McKenzie committed
certain unfair labor practices under the NLRA. In particular, we upheld the Board's
conclusion that McKenzie violated the NLRA in three respects when it: discharged
four union carpenters in violation of §§ 8(a)(3) and (1) of the Act (29 U.S.C.
§§ 158(a)(1), (3)); repudiated the union's collective bargaining agreement in violation
of §§ 8(a)(1), (5); and discouraged other employees from joining the union by using
economic coercion and took other coercive actions in violation of § 8(a)(1). Id. at
626–28. The Board's order contained a make-whole remedy and we determined that
McKenzie's obligations to the discharged employees and their replacements should
be determined during the compliance phase of the agency proceedings. Id. at 629.
On remand, the parties disagreed as to the amount of back pay owed by the company
and, following a hearing, the Board issued an order that found the wrongfully
discharged employees would have continued to work for the company to the present
day. Therefore, under the Board's order the company owes the four discharged
employees back pay for the period from November 1995 until it rehires them.
McKenzie also owes three of these employees fringe benefits from the time they were

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fired until the collective bargaining agreement expired on April 30, 1997. Finally,
the company owes back pay and fringe benefits to the non-union workers it hired to
replace the fired workers in an amount equal to the difference between the union and
non-union scale. The award for the non-union workers ends with the expiration of
the collective bargaining agreement as well. In its appeal, McKenzie argues that our
prior, related decisions bar a part of these back-pay and fringe-benefit awards because
of the doctrines of claim and issue preclusion. McKenzie also urges that the award
of back pay should be limited to thirty-one weeks (the length of McKenzie
employees' average tenure) or that the award should end with the expiration of the
collective bargaining agreement.

       We review appeals from the NLRB with deference and will affirm a Board
order or grant a petition to enforce an order if the Board has correctly applied the law
and, on the record as a whole, there is sufficient evidence to support the order and
findings. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951); Wright
Elec., Inc. v. NLRB, 200 F.3d 1162, 1166 (8th Cir. 2000). We consider McKenzie's
challenges to the order in turn.

       McKenzie first urges that our decision in McKenzie Engineering Company v.
NLRB, 303 F.3d 902 (8th Cir. 2002) ("the Crescent Bridge case") precludes part of
the award issued by the National Labor Relations Board. Specifically, the company
argues that because we denied enforcement of the Board's order in the Crescent
Bridge case and concluded that a different carpenters' union could not claim any right
to the work done on McKenzie's Crescent Bridge project, the Board is barred in this
proceeding by the doctrines of claim and issue preclusion from awarding back pay to
the fired employees (and their replacements) for work they otherwise would have
done on the Crescent Bridge project. We disagree. The doctrine of issue preclusion
holds that "once a court has decided an issue of fact or law necessary to its judgment,
that decision may preclude relitigation of the issue in a suit on a different cause of
action involving a party to the first case." Allen v. McCurry, 449 U.S. 90, 94 (1980);

                                          -3-
see also Tyus v. Schoemehl, 93 F.3d 449, 453 (8th Cir. 1996) (listing requirements
for preclusion to apply), cert. denied, 520 U.S. 1166 (1997). For its part, the doctrine
of claim preclusion prohibits a party to litigation from raising a claim or defense in
a later proceeding that should have been raised in an earlier proceeding. See Rivet
v. Regions Bank of La., 522 U.S. 470, 476 (1998). For at least two reasons, neither
of these doctrines can be raised defensively in the manner that McKenzie urges.
First, these res judicata doctrines cannot logically be raised as a defense against
liability that was established by a decision in existence prior to the decision claimed
to have preclusive effect. Such is the case here, where in McKenzie I we enforced
a NLRB decision that the Company committed certain unfair labor practices and we
remanded for a determination of what the remedy should be. McKenzie I established
the Company's liability, and all that remained to be determined was the nature and
extent of the remedy and not if there would be a remedy. Consequently, our later
decision in the Crescent Bridge case cannot preclude the eventual award of back pay
to employees where the illegality of the Company's conduct was already established
even if the nature and extent of the remedy remained to be determined. Second, the
Crescent Bridge case, which considered potential unfair labor practices against a
different union and did not consider whether the four fired employees would have
worked on the Crescent Bridge project, did not resolve any factual or legal questions
that could preclude the award of back pay for work on that project. See Tyus, 93 F.3d
at 453 (requiring identity of issue or fact for preclusion to apply). Accordingly, we
reject this claim.

      McKenzie also contends that our decision in Carpenters Fringe Benefit Funds
v. McKenzie Engineering Company, 217 F.3d 578 (8th Cir. 2000) ("the ERISA case")
has a similar preclusive effect with regard to the award of fringe benefits in the
present case. Specifically, McKenzie urges that a portion of the current fringe-benefit
award is precluded by our decision in the ERISA case that the carpenters union had
not proved the existence of an obligation to make fringe-benefit contributions for
work done on certain company projects. We conclude that an award in this case is

                                          -4-
not precluded for the same reasons stated above. In fact, we flagged this issue in the
ERISA case and noted that:

      our decision rejecting the claim for contributions to the Funds is narrow.
      The NLRB has determined that McKenzie committed an unfair labor
      practice in firing four Local 410 carpenters from the Keokuk project.
      The Board's compliance proceedings, which are not yet complete, will
      no doubt result in a back pay award for those employees, and that award
      may well include pension benefit contributions to the Funds on their
      behalf. Unlike the Funds' overbroad claim in this case, that type of
      award would clearly be consistent with McKenzie's contractual
      obligation to make contributions for work "covered by [the Local 410]
      Agreement."

Id. at 585 n.2. Consequently, we reject McKenzie's preclusion claim.

       McKenzie next claims that the length of the back-pay award for the discharged
union workers is not supported by substantial evidence.1 Instead, McKenzie contends
that the award either should be limited to the average length of its employees' tenure
(thirty-one weeks) or should end with the expiration of Local 410's collective
bargaining agreement on April 30, 1997.

       We reject McKenzie's argument that the award should end with the expiration
of thirty-one weeks. As the ALJ noted, there is abundant evidence in the record to
support the conclusion that the fired employees would (or could) have continued their
employment with the company beyond thirty-one weeks. For instance, the company
president, Robert McKenzie, testified in the ERISA case that, if they had not been
discharged, these fired employees would have continued to work on other company
projects, which continued beyond the thirty-one-week limit proposed by the company.

      1
        To the extent McKenzie argues to the contrary, we conclude that the entirety
of the award for the replacement workers should be enforced.

                                         -5-
McKenzie Eng'g Co., 336 N.L.R.B. 336, 337 (Sept. 28, 2001) (Supplemental
Decision). Moreover, McKenzie stipulated to the reasonableness of the Board's
method of computing back pay by using the amount of work done by the replacement
workers. Thus, it is relevant that the replacement workers all were employed with the
company for longer than thirty-one weeks and, in fact, two were the longest-serving
employees listed in McKenzie's exhibit. There also is substantial evidence in the
record to support the conclusion that workers such as the four at issue did have long-
term employment relationships with several different employers over time. The
record supports the conclusion that these employees may not work continuously for
one employer and instead move from project to project, all the while consistently
working for only a few employers. Thus, over time, employees, such as the four at
hand, can achieve significant tenures with any one employer. Indeed, the specifics
of the present case demonstrate this for, by Robert McKenzie's own admission, Mark
Spiekermeier worked for the company for twenty-two months over a four-year period
prior to being fired illegally. NLRB Compliance Tr. at 190–91; see also id. at 145
(testimony of Mark Spiekermeier that he worked for McKenzie "off and on for four
years" prior to being fired). Further, there was evidence that, after they were fired,
the three still-living employees each worked for a single employer in excess of the
thirty-one weeks proposed as a limit by the company. For his part, Donald Patterson
worked for the Des Moines County Historical Society starting in December of 1996
and worked for them regularly from the third quarter of 1997 until the record ends in
September of 2000. App. at 192–93. Fred Arnold had a similar long-term
relationship with Allied Construction, where he worked a total of 90 weeks between
1996 and the end of the record in 2000. App. at 195–245. Mark Spiekermeier also
worked for Allied Construction for some 110 or more weeks before the record ends.
App. at 246–97. Accordingly, we must reject the company's claim that the award be
limited to thirty-one weeks.2

      2
      In addition, McKenzie's claim to a thirty-one-week limit must be rejected
because the document purporting to demonstrate that McKenzie's employees worked

                                         -6-
       We also reject McKenzie's claim that the back-pay award for the discharged
union workers should end with the expiration of the collective bargaining agreement
on April 30, 1997. In support of this argument, the company maintains that the fired
employees were union members, did not accept non-union work after being fired, and
would not have accepted non-union work from McKenzie after the collective
bargaining agreement expired. As we already noted, all of the replacement workers
worked on at least some of the subsequent McKenzie projects, whether "union" or
not. Moreover, certain of these replacement workers gained union membership,
obtained waivers from the union whose members ordinarily would have worked these
jobs, and/or joined a second union. Thus, the expiration of the collective bargaining
agreement had little impact on the replacement workers, whose experiences are an
important measure of the back pay owed under the parties' stipulation. Finally,
whatever remaining uncertainty exists regarding whether—in the absence of the
company's bad acts—the collective bargaining agreement would have been renewed
or the fired workers would have worked on McKenzie's subsequent, non-union
projects is to be resolved against the company. NLRB v. Madison Courier, Inc., 472
F.2d 1307, 1321 (D.C. Cir. 1972). Therefore, we reject McKenzie's effort to limit the
award to the time of the collective bargaining agreement's expiration.

       Nevertheless, we conclude that the Board's order, which assumes that each of
the three still-living employees would have worked full-time for McKenzie until the
present day, is not supported by substantial evidence. In fact, the assumptions
underlying the Board's calculations reveal that the award cannot possibly be proper

only thirty-one weeks on average suffers from certain defects. First, the document
covers only the period from 1995–2000 and thus does not include employees such as
Mark Spiekermeier in the average (we have already noted that Spiekermeir worked
for McKenzie far in excess of thirty-one weeks between 1991–1995). Besides being
incomplete temporally, the company's list is incomplete in that it omits employees
who were members of other, competing unions. We therefore conclude that the ALJ
properly discounted the company's calculation of its employees' average tenure.

                                        -7-
for there is no evidence that any non-supervisory employee has ever worked
continuously for McKenzie for as long as the now 400-plus weeks that the Board's
order assumes. The assumption, therefore, that each of these employees would have
had a record-setting tenure with the company is unwarranted. The assumption is also
unwarranted because, as the company points out, none of these employees has held
a single job for anywhere near this length of time in past years. Thus, the Board's
award does not tend to set the wronged workers in, as nearly as possible, the situation
they would have been in if the company had not acted wrongly. Phelps Dodge Corp.
v. NLRB, 313 U.S. 177, 194 (1941). Rather, this speculative award is a windfall for
the employees and is unduly punitive to the employer insofar as it is based on
assumptions supported by neither McKenzie's past history as an employer, nor these
workers' past employment histories. Local 60, United Bhd. of Carpenters v. NLRB,
365 U.S. 651, 655 (1961) (noting Board's authority is remedial, not punitive). We
may modify a Board order that goes beyond the remedial powers granted by the
NLRA. NLRB v. J.S. Alberici Constr. Co., 591 F.2d 463, 470 n.8 (8th Cir. 1979).

       Although there is not substantial evidence to support the extent of the Board's
award, there is evidence to support the conclusion that each of the fired employees
would have worked for McKenzie for substantial lengths of time had they not been
fired. We already have noted that the record reveals that employees such as the ones
McKenzie illegally discharged do have long-term employment relationships with
several different employers and can, over time, achieve significant tenures with any
one employer. Ante at 6. We conclude that the record will support an award of back
pay based on the amount of time the employees spent working for the employer with
whom they had the longest tenure following their dismissal. For example, the record
reveals that Donald Patterson worked for the Des Moines Historical Society for 169
weeks out of the 255 possible weeks between his dismissal (November 1, 1996) and
the end of the third quarter of 2000. Based on this work record, Patterson should
receive back pay (and fringe benefits until April 30, 1997) for sixty-six percent of the
time (169 divided by 255) expended by McKenzie on subsequent projects until

                                          -8-
McKenzie offers him reemployment. On remand, the Board shall take additional
evidence on the fired employees' work histories and issue a back-pay award that is not
inconsistent with this opinion. An award that follows our suggested formula will be
based more strictly on the work histories of the discharged employees (which appear
to reflect the McKenzie labor pool as a whole) and will be more precisely "tailored
to expunge only the actual, and not merely speculative, consequences of the unfair
labor practices." Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 900 (1984) (emphasis in
original).3 An award calculated in accordance with our suggested formulation also
more precisely fulfills § 10(c)'s goal of making these employees whole and restoring
the situation to that which would have occurred but for McKenzie's unfair labor
practices. 29 U.S.C. § 160(c); Phelps Dodge Corp., 313 U.S. at 194.

      For the foregoing reasons, the petition to enforce the order of the Board is
granted as to the replacement workers and denied as to the wrongfully discharged
union employees. The case is remanded to the Board for recalculation of the extent

      3
        Our imposition of this back-pay formula is consistent with our recognition that
the Board's power "to award back pay 'is a broad discretionary one, subject to limited
judicial review.'" Woodline Motor Freight, Inc. v. NLRB, 972 F.2d 222, 225 (8th Cir.
1992) (quoting NLRB v. Rutter-Rex Mfg. Co., 396 U.S. 258, 262–63 (1969)). We
are also cognizant that "[i]n many instances, it is impossible to precisely determine
the amount of backpay that should be awarded. 'In such circumstances the Board may
use as close approximations as possible, and may adopt formulas reasonably designed
to produce such approximations.'" Id. (quoting NLRB v. Brown & Root, Inc., 311
F.2d 447, 452 (8th Cir. 1963)). The Board applies three basic formulas to compute
back pay, but recognizes that "there is no fixed method for calculating back pay."
NLRB Casehandling Manual, Pt. III–Compliance Proceedings § 10532.1. In this
case, we merely determine that the record will not support an award of back pay that
is based on the assumption that the discharged employees would have worked on
every subsequent McKenzie project, no matter where that project was located,
especially where the illegally discharged employees' work history suggests otherwise.

                                         -9-
of the back-pay and fringe-benefit awards with respect to the wrongfully discharged
union employees in a manner that is not inconsistent with this opinion.
                       ______________________________

                                       -10-