Court Opinion

ID: 2966615
Source: CourtListenerOpinion
Date Created: 2015-09-22 00:52:56.826385+00
Date Added: 2024-06-11T11:43:10.313626
License: Public Domain

PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

HESS MECHANICAL CORPORATION,
Petitioner,

v.                                                                     No. 96-1538

NATIONAL LABOR RELATIONS BOARD,
Respondent.

On Petition for Review of an Order
of the National Labor Relations Board.
(5-CA-24162)

Argued: March 7, 1997

Decided: April 21, 1997

Before WILKINSON, Chief Judge, and RUSSELL and HALL,
Circuit Judges.

_________________________________________________________________

Reversed and remanded by published opinion. Chief Judge Wilkinson
wrote the opinion, in which Judge Russell and Judge Hall joined.

_________________________________________________________________

COUNSEL

ARGUED: Maurice Baskin, VENABLE, BAETJER, HOWARD &
CIVILETTI, L.L.P., Washington, D.C., for Petitioner. Nancy Kessler
Platt, NATIONAL LABOR RELATIONS BOARD, Washington,
D.C., for Respondent. ON BRIEF: John C. Hardwick, Jr., VEN-
ABLE, BAETJER, HOWARD & CIVILETTI, L.L.P., Washington,
D.C., for Petitioner. Frederick L. Feinstein, General Counsel, Linda
Sher, Associate General Counsel, Margery E. Lieber, Assistant Gen-
eral Counsel for Special Litigation, Abby Propis Simms, Supervisory
Attorney, NATIONAL LABOR RELATIONS BOARD, Washington,
D.C., for Respondent.

_________________________________________________________________

OPINION

WILKINSON, Chief Judge:

On March 8, 1994, the Region 5 Director of the National Labor
Relations Board issued a complaint on behalf of the Board's General
Counsel against Hess Mechanical Corporation. The complaint alleged
that Hess had violated sections 8(a)(1) and 8(a)(3) of the National
Labor Relations Act, 29 U.S.C. § 158(a)(1) & (3), by telling
employee Richard Darr not to talk about the union to which he
belonged and by terminating him for engaging in union activities.

Hess prevailed on the merits of the case, but its request for attor-
ney's fees and expenses pursuant to the Equal Access to Justice Act
(EAJA), 5 U.S.C. § 504, was denied by the Board. Hess appeals the
denial, contending that the General Counsel's legal position was not
"substantially justified." We agree. The General Counsel's case is
notable for its flimsiness. The evidence at the time the complaint was
filed indicated that Hess fired Darr for one reason only -- poor per-
formance. Accordingly, we set aside the Board's denial of fees and
remand to the Board for the determination of an appropriate fee award
to Hess.

I.

Richard Darr is a member of the Sheet Metal Workers' Interna-
tional Association (the union). Hess Mechanical Corporation is a non-
union construction contractor. In November 1993, Hess hired Darr
and Ken Burk, another union member, to work on a project at the
National Institutes of Health. The company hired both men with full
knowledge of their long-term union membership. When Darr began
work, he received a copy of Hess' employment policy, which states
that new hires are subject to a 90-day probation period during which
they will be fired if they "do not have the ability to perform the work
or show a lack of interest or motivation."

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Only two days after Darr began work, John Blotner, Darr's fore-
man, began receiving complaints that Darr was not properly perform-
ing his duties and was not getting along with co-workers. In response
to these complaints, Blotner reassigned Darr several times to different
tasks. Each reassignment was followed by further complaints about
Darr's bad attitude, his poor productivity, and his adverse impact on
the productivity of other employees. Both Blotner and Russell Long,
the project superintendent, personally observed Darr's failure to pro-
duce. Blotner noted that Darr was installing approximately half the
amount of air duct that other workers were hanging under the same
working conditions.

On December 3, 1993, Blotner and Long gave Darr a verbal warn-
ing about his unacceptable performance. Even after a second verbal
warning, co-workers continued to complain about Darr's work. Con-
sequently, on December 17, 1993 Long provided Darr with a written
warning which stated, "John Blotner and myself have spoke[n] to
Richard on more than one occasion about his productivity. I have also
received complaints from other lead mechanics about the same prob-
lem. This kind of substandard work will not be tolerated." Although
advised that he was free to disagree with the warning statement, Darr
checked and signed the box on the warning indicating that he agreed
with it. Darr's performance failed to improve, and on January 5, 1994,
he was fired. The written termination notice indicates that he was
fired for poor performance after previous warnings.

On January 18, 1994, the union filed an unfair labor practice
charge with the NLRB, claiming that Hess had fired Darr for engag-
ing in union activities. Darr supplied the Board with an affidavit in
which he claimed that he had talked to co-workers about the union
and had given several employees union cards to sign. Darr further
alleged that Blotner twice told him not to talk about the union and that
Long informed him that he was being fired for discussing the union
with other employees.

Hess submitted a statement denying any knowledge of Darr's
alleged union activities and stating that Darr was terminated solely for
substandard performance. Hess attached to the statement a copy of the
written warning Darr had signed. At the Board's request, the company
also provided a list of thirty-five employees discharged in 1993 for

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performance-related reasons. In addition, the Board and Hess each
took affidavits from six employees which corroborated Darr's poor
job performance. The employees generally indicated that they were
unaware of any union activity; only two were able to state that they
had heard Darr talk about the union.

On March 8, 1994, the Region 5 Director filed a complaint on
behalf of the Board's General Counsel. The complaint asserted that
Hess had violated sections 8(a)(1) and 8(a)(3) of the National Labor
Relations Act by instructing Darr not to speak with employees about
the union and by firing him for union activities. After a one-day hear-
ing, an administrative law judge recommended that the complaint be
dismissed in its entirety. Reviewing the litany of complaints about
Darr's work and his failure to improve despite several warnings, the
ALJ concluded that Hess had terminated Darr for substandard perfor-
mance "in strict accordance with valid, established company policy."
The ALJ found that the only evidence that Darr had engaged in or
was fired for union activity was Darr's own uncorroborated testi-
mony. The ALJ also noted that while Burk testified that he spent 80
percent of his work day openly discussing the union with other
employees, he was never subjected to any adverse company action.

The General Counsel filed no exceptions to the ALJ's decision,
which the Board affirmed. Hess then applied for attorney's fees and
costs pursuant to the Equal Access to Justice Act, 5 U.S.C. § 504,
contending that the General Counsel's position was not "substantially
justified" because Darr's claims were uncorroborated and the pre-
complaint evidence demonstrated that Darr was fired for poor perfor-
mance rather than union activity. A second ALJ denied the request,
concluding that the case depended on credibility determinations that
could be resolved only after a hearing. The Board affirmed, and Hess
appeals.

II.

Under the EAJA, a prevailing party in an adjudication before a fed-
eral agency is entitled to attorney's fees and costs unless "the position
of the agency was substantially justified or [ ] special circumstances
make an award unjust." 5 U.S.C. § 504(a)(1). The test for substantial
justification is one of reasonableness -- did the agency's position

                     4
have a "reasonable basis both in law and fact," or was it "justified to
a degree that could satisfy a reasonable person." Pierce v.
Underwood, 487 U.S. 552, 565 (1988). This standard allows the gov-
ernment some leeway in litigation without permitting it to adopt posi-
tions arbitrarily. The government has the burden of proving
substantial justification, Tyler Business Services v. NLRB, 695 F.2d
73, 75 (4th Cir. 1982), but a Board decision regarding an EAJA award
is entitled to deference if it is based upon substantial evidence, 5
U.S.C. § 504(c)(2).

In a suit alleging retaliation for union activity, the General Counsel
has the burden of proving that the adverse action was based, in whole
or in part, on anti-union animus. NLRB v. Transportation Manage-
ment Corp., 462 U.S. 393, 401-02 (1983) (adopting analytic frame-
work of the NLRB in Wright Line, 251 N.L.R.B. 1083 (1980)). Even
if the General Counsel sustains his burden of proof, the employer can
avoid liability by demonstrating that it would have taken the same
action regardless of any improper motive. Id.

A.

The Board first argues that the General Counsel acted reasonably
in issuing the complaint because the case could not have been
resolved without the ALJ's determination as to Darr's credibility.
"The General Counsel was . . . substantially justified in proceeding
with the case through issuance of the ALJ's decision. No evidence
was produced at the hearing which sufficiently established the
Employer's defense without the need for any credibility resolutions
to be made."

We disagree. We are hard pressed to determine how the ALJ could
have credited Darr's testimony in the face of overwhelming evidence
that Hess harbored no anti-union animus and had fired Darr solely for
poor performance. Hess hired Darr and Burk with full knowledge of
their long-standing union membership. Burk testified that he spent 80
percent of his work day openly organizing, yet he admits that Hess
never took action against him as a result. The best and only evidence
the Board can find to corroborate Darr's testimony is isolated state-
ments in two employee affidavits which suggest that Darr spoke with
some employees about the union. Although the Board now relies on

                    5
these statements, the Board's own estimate of their probative value is
clear from its failure to introduce them at the hearing. However, even
assuming Darr did conduct union activity, his testimony was still the
only evidence that Hess either was aware of the alleged activity or
fired Darr because of it.

Undisputed evidence established that Darr's performance was inad-
equate and that his discharge was entirely in accordance with valid
company policy. The record is replete with statements from Darr's
co-workers criticizing his poor work habits. One stated that Darr
"seemed not to care about his work" and "didn't do a good job." Oth-
ers voiced similar concerns. "There was a lot of complaints about the
work wasn't getting done fast enough" because of Darr; he "was hold-
ing up the work." "People still complained after several warnings."
"Richard has the attitude like an `I don't care' attitude. . . . We like
to do our work, and we like to take pride in our work. Of course, we
have to get our work done. This wasn't happening." Illustrating
Darr's poor productivity, Blotner testified:

          [F]or example, we had teams working on the floor. And you
          have two guys, let's say they are hanging six VAV boxes
          and the trunk lines in a day and you got somebody doing
          half of that work under the same conditions. There is really
          no reason for that. There is going to be a slight difference
          in there because something might be in the way of some-
          body, but that is not acceptable to hang half of the amount
          under the same conditions that the other guys are working.

In short, Darr simply was not pulling his own weight. The employ-
ment policy which Darr received stated that new employees who did
not perform adequately would be fired. Furthermore, Darr himself
acknowledged in writing that he had been warned about his lack of
productivity more than once. Despite the warnings, Darr's perfor-
mance never improved. The General Counsel never disputed Darr's
substandard productivity, the warnings he received, or Hess' estab-
lished employment policy. In light of this record, we do not see how
the ALJ could have accepted Darr's testimony that he was fired for
union activities. Even if Darr's testimony had been fully credited,
Hess could not have been held liable because the undisputed evidence

                    6
abundantly demonstrated that Hess would have fired Darr regardless
of any anti-union sentiment.

B.

The Board further asserts that the pre-complaint evidence support-
ing Hess was insufficient to warrant dismissal of the unfair labor
practice charge. "[P]rior to issuance of[the] Complaint, the General
Counsel was left with conflicting evidence about the extent of Darr's
organizing activities, and with less than conclusive evidence about the
Employer's proffered reason for the discharge."

To the contrary, the weakness of the General Counsel's case was
obvious even before the complaint was filed. Darr's affidavit was the
only pre-complaint evidence that Hess was aware of Darr's alleged
union activities or that the company fired him because of those activi-
ties. The General Counsel also faced uncontroverted evidence which
supported Hess' defense. The written warning signed by Darr, the list
of employees terminated due to poor performance, and the employee
affidavits establishing Darr's lack of productivity indicated that Hess
would have fired Darr in any event, and the General Counsel had no
evidence to suggest otherwise.

The Board's assertion that the pre-complaint evidence was not
"conclusive" misses the mark. The point is that the relevant evidence
before the General Counsel was substantial, and all of it indicated that
Hess had a valid defense. Under such circumstances, no reasonable
party would have proceeded with the complaint without further inves-
tigation to ensure that the defense could be challenged. The record is
devoid of any indication, for example, that the General Counsel ever
questioned Darr regarding his poor performance or verified Darr's
claim that he gave union cards to several workers. Additional inquiry
in this case, of course, would have uncovered only mounting evidence
favoring Hess. The EAJA does not tell an agency how to handle a
case, but the General Counsel cannot decline to conduct further
inquiry and then plead his own failure to investigate as reason to con-
clude that his position was substantially justified.

In sum, we cannot find substantial evidence in the record to support
the Board's determination that the General Counsel was substantially

                    7
justified in filing the complaint against Hess. Given the deference due
the Board and the significance of its statutory mission, we do not
casually intervene in a collateral dispute over fees and costs. We also
do not think that the government's loss of a case routinely means that
its position was substantially unjustified. As exemplified in the EAJA
and Fed. R. Civ. P. 11, however, the processes of litigation presup-
pose some reasonable investigation before the filing of a complaint.
As the Supreme Court has noted in the context of Rule 11, "[b]aseless
filing puts the machinery of justice in motion, burdening courts and
individuals alike with needless expense and delay. Even if the care-
less litigant quickly dismisses the action, the harm. . . has already
occurred." Cooter & Gell v. Hartmarx Corp. , 496 U.S. 384, 398
(1990).

In this case, the General Counsel went forward with a complaint
on the basis of a single, uncorroborated affidavit and in the face of
a wall of adverse evidence. In a civil action with a similar record, this
would border on conduct sanctionable under Rule 11. It certainly can-
not meet the higher standard imposed by Pierce v. Underwood, where
the Court explicitly warned that "[t]o be`substantially justified'
means, of course, more than merely undeserving of sanctions for friv-
olousness." Pierce, 487 U.S. at 566. Finally, we note that the failure
of courts to enforce the EAJA would only benefit parties who seek
to drive up company costs by forcing them to defend against meritless
unfair labor practice charges. To hold this complaint "substantially
justified" would condone the conversion of Board processes into a
mechanism of harassment.

III.

For the foregoing reasons, we set aside the Board's denial of fees
and remand to the Board for the determination of an appropriate fee
award to Hess.

REVERSED AND REMANDED

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