Court Opinion

ID: 202901
Source: CourtListenerOpinion
Date Created: 2011-02-07 06:04:29+00
Date Added: 2024-06-11T17:27:32.518009
License: Public Domain

United States Court of Appeals
                        For the First Circuit

No. 06-2540

                   NATIONAL LABOR RELATIONS BOARD,

                             Petitioner,

                                  v.

                     HARDING GLASS COMPANY, INC.,

                             Respondent.

              ON PETITION FOR ENFORCEMENT OF AN ORDER OF
                  THE NATIONAL LABOR RELATIONS BOARD

                                Before

                          Lynch, Circuit Judge,
                     Selya, Senior Circuit Judge,
                       and Lipez, Circuit Judge.

     Christopher W. Young, Attorney, National Labor Relations
Board, with whom Fred B. Jacob, Supervisory Attorney, Ronald
Meisburg, General Counsel, John E. Higgins, Jr., Deputy General
Counsel, John H. Ferguson, Associate General Counsel, and Aileen A.
Armstrong, Deputy Associate General Counsel, were on brief, for
petitioner.
     Robert Weihrauch for respondent.

                           August 17, 2007
            LYNCH, Circuit Judge. The slow grinding of the wheels of

justice is a major theme in this National Labor Relations Board

("NLRB") compliance case.

            In 2006, the NLRB awarded remedies for unfair labor

practices committed by Harding Glass Company ("Harding") in 1993.

Harding Glass Co. (Harding III), 347 N.L.R.B. No. 102, at 2 (Aug.

29, 2006).    Those remedies awarded over $144,000 in back pay to

nine employees and over $360,000 to four union funds, with accrued

interest.    Id.   The Board seeks enforcement; the company says that

enforcement should be denied, arguing that it would be driven out

of business by enforcement of the order and that the sums owed

should, at the least, be discounted for the delay in the resolution

of this matter.

            The case has cautionary lessons for counsel about the

costs of minimalist responses to Board allegations.           Here, the

company failed to comply with the Board's rules for answering

compliance specifications.        Those rules require highly specific

information, going well beyond the requirements for answers in

civil   actions    in   federal    courts.    Additionally,    although

interesting legal issues may lurk as to the limits of the Board's

ability to order payment to union funds, the company has failed to

provide any facts, thus rendering the questions hypothetical.

                                    -2-
           We reject the company's arguments and enforce the Board's

order.   We note that the Board has offered to work with the company

on a payment plan, should that be necessary.

                                        I.

           This    saga,      unfortunately,   has   taken   fourteen   years.

Harding sells and installs glass for automobiles and commercial

buildings in Worcester, Massachusetts.                In October 1993, the

company employed two glaziers and three glassworkers. The glaziers

repaired and installed industrial and commercial glass, while the

glassworkers repaired and replaced automobile glass.                  Glaziers

Local 1044, International Brotherhood of Painters & Allied Trades,

AFL-CIO ("the Union"), represented both sets of employees.

           Several months before the expiration of the then-current

collective bargaining agreement on October 16, 1993, the parties,

at Harding's request, entered into negotiations for a successor

agreement.      The company proposed to reduce the glaziers' pay rate

from   $22.05    per   hour    to   $13.73   per   hour,   while   raising   the

glassworkers' pay rate from $13.23 per hour to $13.73 per hour.

The company also proposed eliminating all contributions to the

Union's health, welfare, pension, and annuity funds; it proposed

replacing only the health fund with another insurance plan.                  The

Union put forward a counterproposal, which Harding rejected.                  On

October 17, the glaziers voted to reject Harding's offer and

                                       -3-
strike.      They established a picket line the next day.                           The

glassworkers initially respected the glaziers' picket line.

            The parties met again on October 22 but failed to reach

an agreement.      On October 23, Harding implemented its final offer.

The company offered the glassworkers the wage and benefit package

it   had   initially   offered     the    Union,       while   at   the    same   time

threatening to replace them.        The three glassworkers resigned from

the Union and resumed working for Harding.                      The two glaziers

maintained their picket line, and the company hired a new glazier

under its new terms and conditions of employment.                   The Union filed

unfair labor practice charges against Harding alleging that the

company had, inter alia, unilaterally implemented its final offer

in the absence of a bona fide impasse in collective bargaining.

            The Board, on March 31, 1995, held that the company had,

by its actions, violated section 8(a)(5) of the National Labor

Relations    Act   ("NLRA")   by    implementing         unilateral       changes    in

employment    conditions   without        a    valid    impasse     in    bargaining.

Harding Glass Co. (Harding I), 316 N.L.R.B. 985, 985 (1995).                      This

court, on March 27, 1996, enforced that portion of the Board's

order.1    NLRB v. Harding Glass Co., 80 F.3d 7, 10 (1st Cir. 1996).

      1
          The court denied enforcement of another portion of the
order, disagreeing with the Board that the economic strike, begun
on October 18, 1993, had been converted to an unfair labor practice
strike on October 25, 1993, the date union representatives informed
the striking glaziers of Harding's implementation of unilateral
changes. NLRB v. Harding Glass Co., 80 F.3d 7, 11, 13 (1st Cir.
1996).

                                         -4-
Under the relevant provisions of the Board's order, the company was

directed to restore all terms and conditions of employment to the

status quo as of October 23, 1993 and to make whole all employees

and union funds for the losses they had suffered.           Harding I, 316

N.L.R.B. at 986.     It is this make-whole obligation for the 1993

events that is the subject matter of the proceedings before us.

            Once it had the enforcement order, the agency did not act

promptly.     The   Regional   Office   did   not   issue    a   Compliance

Specification until July 1, 1997.       Thereafter, it issued a First

Amended Compliance Specification on January 20, 2000.                After

various proceedings, the Board issued an order on August 1, 2002,

granting in large part the General Counsel's motion to strike

portions of Harding's answer for failure to comply with the Board's

rules.   Those rules require respondents who dispute compliance

allegations to provide supporting figures or information.              The

Board, having struck most of Harding's answer, then granted, with

one exception, summary judgment against the company on the pay

rates and the method of back pay calculation alleged by the General

Counsel to apply to the affected employees.           Harding Glass Co.

(Harding II), 337 N.L.R.B. No. 175, at 2-4 (Aug. 1, 2002).             The

Board denied the motion for summary judgment as to employee James

Tritone and left open for litigation the issue of whether Tritone's

back pay should be based on the full contract rate for a glazier,

$22.05 per hour, at the time of Tritone's reinstatement after

                                  -5-
recovering from a work-related injury.               Id. at 2-3.   For the period

in question, from March 28 to April 15, 1994, Harding had paid

Tritone at the rate of $13.73 per hour.                The Board also left open

for litigation the parties' dispute over the date on which the

economic strike ended.           Id. at 3-4.

               In its 2002 order, the Board rejected the company's

affirmative      defense   that     the   amended     compliance   specification

should be dismissed in its entirety because of delay by the

Regional Office.       The Board was not moved by the two-and-a-half-

year     gap    between    the     issuance     of    the   initial   Compliance

Specification and the First Amended Compliance Specification.                The

Board similarly rejected Harding's defense that it was entitled to

offset on the payments due to the union funds for the value of

alternative benefit payments made by the company.                      The Board

ordered that both affirmative defenses be stricken. Id. Thus, the

2002 Board order resolved most, but not all, of the remedial issues

and remanded the remaining matters to an administrative law judge

("ALJ") for hearing.        Id.

               The company, instead of trying to expedite the remaining

proceedings, took the opposite tack.             It did not ask the Board to

enter final judgment in 2002 on the matters then resolved. Rather,

Harding chose to petition for review of the Board's interlocutory

order.     The predictable result was that this court granted, on

                                          -6-
November 25, 2002, the Board's motion to dismiss on the ground that

we lacked jurisdiction because there was no final order.

              Again there was delay by the Regional Office as to the

issues remanded to the ALJ.        The Regional Office, over two years

later, issued a Second Amended Compliance Specification on December

22,   2004.      That   was   updated    by   a   Third   Amended   Compliance

Specification on January 19, 2005.

              On April 12, 2005, the General Counsel filed a motion in

limine to preclude Harding from rearguing issues that had already

been resolved against the company in the underlying unfair labor

practice proceedings.         On April 27, 2005, the ALJ granted the

motion, over the company's objection.

              On June 29, 2005, the ALJ issued a supplemental decision

agreeing with the Regional Director's back pay calculations for the

individual employees as well as for monies due to the union funds.

The ALJ agreed with the Regional Director that the economic strike

ended on June 4, 1996, and that the back pay period for replacement

workers began on the following day, June 5, 1996.             As to the issue

of back pay for Tritone, the ALJ found that he was entitled to the

full contract rate for glaziers, and awarded back pay to Tritone in

the amount of $975.89 plus interest.              In total, the ALJ ordered

Harding to pay lost wages of $144,074.95 plus interest to nine

                                        -7-
employees2 and $360,067.37 plus interest to four union funds.3   The

company sought review by the Board.

            On August 29, 2006, the Board rejected the company's

exceptions, adopted the ALJ's rulings, and directed Harding to pay

the specified amounts plus interest to the employees and the union

funds.   Harding III, 347 N.L.R.B. No. 102, at 1-2.   With respect to

the calculation of Tritone's back pay, the Board agreed with the

ALJ that Tritone was entitled to the contractual glazier rate of

$22.05 per hour for the period from March 28 to April 15, 1994.

Id. at 2.

            On October 25, 2006, the Board petitioned for enforcement

of its order in full.    Harding did not cross-petition for review,

but it did assert in its answer to the enforcement application that

the Board's decision and order "are without foundation in law or

fact and are erroneous as a matter of law" and "are not supported

by substantial evidence on the record as a whole."

                                 II.

A.          The Board's 1995 Order

            On several occasions, Harding has attempted to relitigate

issues already decided against it in the Board's March 31, 1995

     2
          The employees are Robert Mosely, James Tritone, Richard
Poirer, James Gabrielle, Richard VonMerta, David Elworthy,
Christopher Carle, Christopher Pelletier, and Kenneth Bullock.
     3
          The funds are the Health and Welfare Fund, the Pension
Fund, the Annuity Fund, and the Apprenticeship Fund.

                                 -8-
order.    The Board and the ALJ justifiably rejected these efforts.

See Transport Serv. Co., 314 N.L.R.B. 458, 459 (1994) ("Issues

litigated and decided in an unfair labor practice proceeding may

not be relitigated in the ensuing backpay proceeding.").

            To the extent Harding argues before this court that it

did not unilaterally implement its last and final offer in the

absence    of   a   valid   impasse   in    bargaining,   that    argument   is

foreclosed.         The   Board's   1995    order   concluded    that   Harding

implemented unilateral changes without having reached a bona fide

impasse.    Harding I, 316 N.L.R.B. at 985.            A different panel of

this court affirmed that conclusion. Harding Glass Co., 80 F.3d at

10, 13.    We will not reconsider the issue here.         The company is not

free to relitigate in an enforcement proceeding the underlying

finding of liability already decided by this court.

B.          The Board's 2002 Entry of Summary Judgment and Striking
            of Affirmative Defenses

            Harding argues that the Board erred (1) in sua sponte

granting summary judgment for the Regional Director on certain

claims (e.g., dates pertaining to employees' back pay periods and

the status of eight employees as strike replacement workers) which

would otherwise have been litigated; (2) in allowing the Director's

request for summary judgment that two employees, David Elworthy and

Christopher Pelletier, were entitled to the glassworkers' pay rate;

                                      -9-
and (3) in striking the company's affirmative defense of mitigation

of liability to the union funds.4

          What all three claims have in common is Harding's failure

to understand or meet its responsibilities in answering compliance

specifications issued by the Regional Director.       The applicable

rules, contained in the Code of Federal Regulations, provide:

          The answer shall specifically admit, deny, or
          explain each and every allegation of the
          specification,    unless    the   respondent   is
          without   knowledge,     in   which    case   the
          respondent shall so state, such statement
          operating as a denial. Denials shall fairly
          meet the substance of the allegations of the
          specification at issue. . . . As to all
          matters   within     the    knowledge    of   the
          respondent, including but not limited to the
          various factors entering into the computation
          of gross backpay, a general denial shall not
          suffice.     As to such matters, if the
          respondent disputes either the accuracy of the
          figures in the specification or the premises
          on which they are based, the answer shall
          specifically   state     the   basis   for   such
          disagreement, setting forth in detail the
          respondent's position as to the applicable
          premises   and   furnishing     the   appropriate
          supporting figures.

29 C.F.R. § 102.56(b) (emphasis added).

          Harding responded to the Regional Director's compliance

specification with general denials and inadequate explanations. It

did not, for example, in its answers and amended answers dispute

     4
          Harding also argues that it should have been permitted to
introduce evidence regarding its affirmative defense that the delay
in initiating the compliance proceedings resulted in an
impermissible punitive and confiscatory order, and thus the
judgment should be modified. We discuss this claim below.

                                -10-
the running of the back pay period by providing alternate dates and

a rationale.   Nor did it sufficiently explain the basis for its

claim that eight employees were strike replacement workers not

entitled to the earnings and benefits of the 1991-1993 collective

bargaining agreement.   As for the Regional Director's allegation

that Elworthy and Pelletier were glassworkers, it was not enough

for Harding simply to deny that this was so.    As the Board noted,

Harding did not explain what jobs these employees performed, if

they were not glassworkers.   Nor did the company state the basis

for its disagreement with the job classification alleged in the

compliance specification.

          Under the Board's rules, when a respondent fails to deny

allegations with the required specificity, those allegations are

"deemed to be admitted to be true, and may be so found by the Board

without the taking of evidence supporting such allegation[s], and

the respondent shall be precluded from introducing any evidence

controverting the allegation[s]."     Id. § 102.56(c).   Harding had

fair notice of the costs of its evasiveness.         The Board was

justified in striking portions of Harding's answer and awarding

partial summary judgment based on the allegations that were deemed

admitted to be true.

          Harding nonetheless complains of the sua sponte nature of

the Board's award of summary judgment on issues that the Regional

Director was prepared to litigate.    Harding never raised a word of

                               -11-
protest about the sua sponte nature of the ruling to the Board,

though it could have sought reconsideration on this basis. We will

not hear such a procedural objection for the first time.      See 29

U.S.C. § 160(e) ("No objection that has not been urged before the

Board, its member, agent, or agency, shall be considered by the

court, unless the failure or neglect to urge such objection shall

be excused because of extraordinary circumstances."); see also

Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645, 665 (1982);

E.C. Waste, Inc. v. NLRB, 359 F.3d 36, 41 (1st Cir. 2004).

          Somewhat different is Harding's argument that the    Board

erred in requiring it to make contributions of over $360,000 to

four union funds.   The company asserts broadly that it offered

health insurance coverage to the employees during this period and

so it would be a windfall to the funds to pay back to them the full

amount of the contributions Harding withheld. Harding asserts that

it should be able to offset the contributions it made for the

health plan it unilaterally established for employees against the

ordered payments to union funds.

          This court has not addressed this issue, on which the

circuit courts appear to have differing views.       One court of

appeals apparently has taken the view that the company is not

entitled to an offset because it was the company's unlawful choice

to set up a private substitute insurance program.   See Stone Boat

Yard v. NLRB, 715 F.2d 441, 446 (9th Cir. 1983).     Under such an

                               -12-
approach, Harding's contributions to a separate insurance program

are immaterial, and its evidence is irrelevant.

           In NLRB v. Coca-Cola Bottling Co. of Buffalo, 191 F.3d

316 (2d Cir. 1999), the court held that make-whole remedial relief

may include contributions to union funds insofar as the employees

have a future interest in the financial strength of the funds.    Id.

at 324.   Under the Coca-Cola Bottling rationale, the limitation on

the Board's ability to order fund contributions derives from the

"essentially remedial" policies of the NLRA.    Id.; cf. Sure-Tan,

Inc. v. NLRB, 467 U.S. 883, 900 (1984) ("[A] backpay remedy must be

sufficiently tailored to expunge only the actual, and not merely

speculative, consequences of the unfair labor practices.").      This

approach is supported by the Board's view that contributions to

union funds may be ordered, at least where employees have an

interest in the future viability of those funds. See 1849 Sedgwick

Realty LLC, 337 N.L.R.B. 245, 248 n.8 (2001) (stating that the

Board has never "held that fund contributions may be ordered in the

absence of [a future] interest"); Manhattan Eye Ear & Throat Hosp.,

300 N.L.R.B. 201, 201-02 (1990) (adopting order of ALJ that company

make fund contributions on rationale that employees had "a clear

economic stake in the viability of funds to which part of their

compensation [was] remitted"), enforcement denied, 942 F.2d 151 (2d

Cir. 1991).

                                -13-
          In some instances, courts have directed the Board, in

circumstances where the employer provided alternative benefits, to

permit an employer an opportunity to show that payments to union

funds would be punitive, and not remedial.      These courts have

remanded to permit the company to show that such reimbursement

would fail to benefit employees or would result in windfalls to

union funds.   See Grondorf, Field, Black & Co. v. NLRB, 107 F.3d

882, 888 (D.C. Cir. 1997); Manhattan Eye Ear & Throat Hosp. v.

NLRB, 942 F.2d 151, 159-60 (2d Cir. 1991).

          We take no position on the issue because Harding failed

to provide sufficient facts in support of its argument.     At most,

the company asserted that the employees in question were provided

with health and medical insurance at no cost to them.    Harding did

not put forward any other relevant facts.      The company did not

explain how payment to the union funds would fail to benefit

employees or would result in a windfall, nor did it assert the

specific amount it was seeking as an offset.   To the extent (if at

all) the argument is viable, it is the employer who bears the

burden of putting necessary facts into the record.      See Banknote

Corp. of Am., 327 N.L.R.B. 625, 625 (1999); see also 29 C.F.R.

§ 102.56(b)-(c). In the absence of such facts, the company's claim

necessarily fails.

                               -14-
C.        The Board's 2006 Back Pay Award

          The Board has broad remedial powers under section 10(c)

of the NLRA, 29 U.S.C. § 160(c).               Sure-Tan, 467 U.S. at 898-99.

The Board has discretion both to determine that back pay is

appropriate to restore the economic status quo and to compute the

back pay amount.    See Va. Elec. & Power Co. v. NLRB, 319 U.S. 533,

540-41 (1943); Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 198

(1941).

          The only real issue here is the amount of the back pay

award.    Harding     does   not   dispute      the    method   of    calculation.

Rather, it argues that the back pay period should be shorter.                     It

attacks the date of June 5, 1996 as the                      starting point for

calculating back pay for replacement employees.                    The usual rule

applies that the Board's findings must stand unless there is no

substantial evidence supporting them.             See Hosp. Cristo Redentor,

Inc. v. NLRB, 488 F.3d 513, 518-19 (1st Cir. 2007).                    The Board's

choice of date is more than adequately supported by the evidence.

          The   ALJ    picked      June   5,    1996    on   the     basis   of   his

determination that the economic strike ended on June 4, 1996. This

finding was based on a letter dated June 4, 1996 that Harding

received from the Union, which stated that the strike against the

company had concluded by January 1, 1994.               The reasons given were

that (1) all striking employees -- that is, the glaziers -- who

were able to work had found other jobs and were not seeking

                                      -15-
reinstatement with Harding, and (2) the Union had stopped picketing

by that January date.

                 Despite the fact that the Union's position covered all

employees, Harding argued to the Board that the strike was ongoing

because it had not received explicit notice of whether one of the

striking employees, Charles Jones, had unequivocally abandoned his

right       to   future   employment   with   the   company   or     had    made   an

unconditional offer to return to work for Harding.                     The Board

reasonably        rejected   the   company's    argument      that    the    strike

continued beyond June 4, 1996.5               As the company knew from the

Union's letter, Jones fit in the category of those who had found

other employment.          Harding's position is based on a fundamental

misapprehension of labor law.          It is the union that speaks for its

striking employees, and silence from a particular employee can

hardly justify the company's position.              See Metro. Edison Co. v.

NLRB, 460 U.S. 693, 705 (1983) (recognizing that a union may waive

a represented employee's right to strike); Plumbers & Pipefitters

Local Union No. 520 v. NLRB, 955 F.2d 744, 751 (D.C. Cir. 1992)

("Among the rights that may be modified or waived [by the union] is

the right to strike.").         The case on which Harding relies, Service

        5
          The ALJ used the date of the Union's June 4, 1996 letter
as the ending date for the strike, even though the letter's
contents indicated that the strike had ended by January 1, 1994.
The ALJ's use of the June 4, 1996 date therefore favored Harding.

                                       -16-
Elec. Co., 281 N.L.R.B. 633, 636-37 (1986), has very different

facts and is self-evidently inapplicable.

             That leaves the company's objection to the back pay award

to Tritone for the period from March 28 to April 15, 1994.                  The

Board rejected Harding's argument that Tritone, who performed

glazier work when the strike started, was not entitled to back pay

at the full contract glazier's rate because he could not upon

reinstatement perform the same work that he did prior to the

strike.     Harding III, 347 N.L.R.B. No. 102, at 1-2.

             The Board applied its usual rule that an employee is

entitled to reinstatement to the position he was in at the time of

the strike unless the company shows changed circumstances.                   See

Transport Serv. Co., 314 N.L.R.B. at 459; cf. NLRB v. Rockwood &

Co., 834 F.2d 837, 841 (9th Cir. 1987) (holding that economic

striker was "entitled to reinstatement to his former position, to

one    substantially   equivalent,   or     to    one   for   which   he    was

qualified").    The Board found that the work Tritone performed upon

reinstatement was glazier's work, notwithstanding the fact that the

work was not the same as before.          Harding III, 347 N.L.R.B. No.

102, at 1.     The evidence shows that Tritone returned to work in a

"temporary modified duty position," as described in a company

letter dated March 21, 1994. Tritone also testified before the ALJ

that   he   "measure[d]   store   fronts"   for    possible    future      glass

replacement and brought cars back to the workshop during the

                                   -17-
applicable period, and that he performed these same tasks as part

of   his    previous      work   as    a   glazier.      Further,     the   workers'

compensation insurance provided under the collective bargaining

agreement        supported    the     characterization      of     Tritone's     post-

reinstatement work as glazier's work that was entitled to the full

contract rate.       Harding's own Modified-Duty Policy provided "full

wages for an injured employee during recovery" (emphasis added).

Joseph Guiliano, the Union's business manager, also testified that

there      was    never   "an    agreement        with   Harding    Glass   or     its

representatives that Harding could pay the glaziers less than the

full contract rate while they were on any kind of light duty."

Again, the Board's order is more than adequately supported.

D.           Delay

             Harding argues that it should not have to bear the

consequences of the interest payments (at least) accruing during

the long pendency of this action.                 Several different concerns are

raised by the delay in this case.

             First, those primarily hurt by the delay are those

employees who did not receive the back pay or benefits to which

they were entitled.          See NLRB v. J.H. Rutter-Rex Mfg. Co., 396 U.S.

258, 264 (1969) ("Wronged employees are at least as much injured by

the Board's delay in collecting their back pay as is the wrongdoing

employer.").        There is no basis to excuse Harding from providing

the relief which has been ordered.                  Delay in a labor proceeding

                                           -18-
cannot be a basis on which to deny a remedy to the victims of the

company's unfair labor practice.       See NLRB v. Int'l Ass'n of

Bridge, Structural & Ornamental Ironworkers, Local 480, 466 U.S.

720, 724-25 (1984) (per curiam) ("It is well established . . . that

the Court of Appeals may not refuse to enforce a backpay order

merely because of the Board's delay subsequent to that order in

formulating a backpay specification."); J.H. Rutter-Rex, 396 U.S.

at 265 ("[T]he Board is not required to place the consequences of

its own delay, even if inordinate, upon wronged employees to the

benefit of wrongdoing employers.").

          Second, Harding is itself responsible for delay, as this

opinion shows, and so the company has little basis to seek refuge

in equitable arguments.   The company has had the use of the money

the entire time.   It has also had the option of establishing a

reserve to fund its contingent obligation.    In any event, while it

is true that the dollar amounts have risen over time, the company

has the option of trying to work out a payment plan.

          Third, none of this lets the NLRB off the hook for the

extraordinary length of time it took to resolve a relatively simple

labor issue.    Not only has the delay hurt the employees, it

undermines confidence in the agency.    At oral argument, the court

directed Board counsel to file a supplemental memorandum explaining

measures the agency is taking to improve its compliance procedures

to avoid lengthy delays in case processing.   On June 20, 2007, the

                               -19-
Office of the General Counsel filed a letter with us outlining four

measures the agency has taken to reduce delays in compliance

proceedings.   We hope that such egregious delay will not recur.

          We grant the Board's petition for enforcement.

                               -20-