Court Opinion

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Opinions of the United
1995 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

6-12-1995

88 Transit Lines v NLRB
Precedential or Non-Precedential:

Docket 94-3492

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Recommended Citation
"88 Transit Lines v NLRB" (1995). 1995 Decisions. Paper 164.
http://digitalcommons.law.villanova.edu/thirdcircuit_1995/164

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UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

                     No. 94-3492

               88 TRANSIT LINES, INC.,
                                  Petitioner

                          v.

          NATIONAL LABOR RELATIONS BOARD,
                                 Respondent

     On Petition for Review of an Order of the
          National Labor Relations Board
           (NLRB Docket No. 6-CA-21380)

                     No. 94-3550

          NATIONAL LABOR RELATIONS BOARD,
                                 Petitioner

                          v.

               88 TRANSIT LINES, INC.,
                                  Respondent

       On Application for Enforcement of an
    Order of the National Labor Relations Board
            (NLRB Docket No. 6-CA-20490)

  Submitted Pursuant to Third Circuit LAR 34.1(a)
                Monday, May 1, 1995

    Before:   SLOVITER, Chief Judge, MANSMANN and
                ALITO, Circuit Judges

                (Filed:   May 3, 1995)
Bruce D. Bagley
McNees, Wallace & Nurick
Harrisburg, PA 17108-1166

          Attorney for Petitioner/Cross-Respondent

Frederick L. Feinstein
   General Counsel
Linda Sher
   Acting Associate General Counsel
Aileen A. Armstrong
   Deputy Associate General Counsel
Charles P. Donnelly
Nancy B. Hunt
National Labor Relations Board
Washington, DC 20570-0001

          Attorneys for Respondent/Cross-Petitioner

                         OPINION OF THE COURT

SLOVITER, Chief Judge.

          88 Transit Lines, Inc. (the "Company") has petitioned

this court for review from a final order of the National Labor

Relations Board entered in supplemental backpay proceedings (88

Transit Lines, Inc., 314 N.L.R.B. 324 (1994)) and the NLRB has

cross-applied for enforcement of the same order.

                                  I.

          The supplemental backpay proceeding followed our

decision enforcing an earlier NLRB finding that the Company

discriminated against its employees when, shortly after a

          representation election conducted at the Company's

facility, the Company replaced its transit run schedule which had

been in effect for many years, Schedule B, with a Schedule C,

thereby decreasing the total number of fixed transit runs by one

and eliminating run 14, reducing the number of transit runs which
were open for bids, and making the fixed runs subject to

discretionary assignment by the Company rather than open for bids

based on seniority.   The Board found that the scheduling change

violated 29 U.S.C. §§ 158(a)(1) and (3) and ordered the Company

to "make employees whole for any losses they may have suffered as

a result of these unlawful actions" and this court entered

judgment enforcing the order.   See 88 Transit Lines, Inc., 300
N.L.R.B. 177 (1990), enforced, 937 F.2d 598 (3d Cir. 1991).

          When the parties failed to agree on the amount of

backpay, the Regional Director issued a backpay specification

alleging the amount owed to the discriminatees.   Following a

hearing, an ALJ recommended amending the backpay specification in

two aspects.   First, the ALJ recommended not awarding backpay to

fourteen replacement workers who had been hired during the

backpay period, reasoning that "such employees have no losses to

be restored to them, since they were not employed at the time of

the elimination of run 14."   Second, the ALJ recommended treating

as interim earnings any amount by which post-unfair labor

practice earnings exceeded employee earnings during the base-

period year.

          The Board refused to adopt these recommended amendments

to the backpay specification.   It ordered backpay for all twenty-

three employees, including the fourteen replacement employees,

and refused to reduce their gross backpay by post-unfair labor

practice earnings which exceeded the base period earnings because

to do so would "inappropriate[ly] appl[y] . . . the interim

earnings' concept to a case involving a violation other than
discharge from employment, and . . . effectively resolve[]

uncertainties in favor of the wrongdoer."   The Board ordered

backpay to be calculated in accordance with the original

specification, plus interest and less tax withholdings required

by law.

           This court has jurisdiction under 29 U.S.C. § 160(e)

and (f).   On questions of law, appellate review of the Board's

decision is plenary, although that decision is entitled to

deference due to the Board's expertise in labor matters.     NLRB v.

Louton, Inc., 822 F.2d 412, 414 (3d Cir. 1987).   The Board's

findings of fact in a backpay proceeding will be overturned if

the record, considered as a whole, shows no substantial evidence

to support those findings.   Universal Camera Corp. v. NLRB, 340
U.S. 474 (1951).   We will not disturb a backpay order "'unless it

can be shown that the order is a patent attempt to achieve ends

other than those which can fairly be said to effectuate the

policies of the Act.'"   Fibreboard Paper Prods. Corp. v. NLRB,

339 U.S. 203, 216 (1964) (quoting Virginia Elec. & Power Co. v.

NLRB, 319 U.S. 533, 540 (1943)).

                               II.

           It is undisputed that the backpay specification issued

by the Regional Director correctly designated the backpay period

to be between November 29, 1987, when the Company first

instituted the schedule change, and August 18, 1991, when the

Company restored run 14, a total of 194 weeks.    Both parties also

agree that the implementation of schedule C represented a loss to

the bargaining unit of 2-3/4 hours of work per day, or 13-3/4
hours per week, and that the wage rate for the discriminatees was

$6.75 per hour.

          In arguing that the Board's order is not supported by

substantial evidence and an abuse of discretion, the Company

raises essentially three claims of error:     (1) the Board erred in

finding that the fourteen replacement drivers were entitled to

compensation; (2) the Board erred in declining to treat as

interim earnings the amount by which the discriminatees' post-

unfair labor practice annual earnings exceeded their base-period

year earnings with the Company; and (3) the ALJ's post-hearing

amendment of the backpay specification denied the Company

procedural due process.1

          The Company argues that the fourteen replacement

drivers are not entitled to compensation for backpay because they

were hired after the schedule change went into effect and, thus,

they suffered no change in their schedules entitling them to

compensation.     By way of analogy, it relies on Systems

Management, Inc. v. NLRB, 901 F.2d 297 (3d Cir. 1990), to argue

1
 . The Company also argues that the backpay specification failed
to establish any loss of earnings by any employee during the
backpay period and was therefore speculative and an undeserved
windfall to the employees. The Company agrees that a compliance
officer may employ a formula other than one of the standard
formulae when application of the standard formula is not
feasible. In this case, the General Counsel specified the names
of the twenty-three discriminatees and the number of hours each
worked during the backpay period and, applying the backpay
formula, calculated that each discriminatee lost $4.04 per week
for each week worked during the backpay period. The backpay
formula adopted by the Board is reasonable in light of the nature
of the violation and is entitled to our deference. See NLRB v.
Seven-Up Bottling Co., 344 U.S. 344, 346-47 (1953).
that the Board's award of backpay to the fourteen replacement

drivers was punitive rather than compensatory because it "cannot

be considered a restoration to any status quo ante, as no status

quo ante existed for these employees."    Id. at 308 (quotation

omitted).

            The Company's reliance on Systems Management, however,

is misplaced.    In Systems Management, this court enforced a cease

and desist order and a make-whole order where a successor

employer failed to offer employment to its predecessor's

employees or to recognize their bargaining representative, Local

29, and instead contracted with another union, Local 327, at a

substantially lower wage rate.   Id. at 301.   The court declined

to enforce a backpay award for new hires affiliated with Local

327 who "if anything . . . were beneficiaries of [the employer's]

discriminatory conduct, because the result of [the employer's]

decision not to employ the Local 29 workers culminated in the

employment of the Local 327 workers."    Id. at 308.

            This case presents quite different facts.   The fourteen

replacement employees were hired to replace original bargaining

unit employees who departed in the normal course of business.

Therefore, the replacement employees cannot be said to be the

"beneficiaries" of the discriminatory conduct.    Rather, the

change in schedule caused a loss of work for the entire

bargaining unit.    The Board correctly found that the remedy was

to inure to the benefit of the entire bargaining unit.     The award

of backpay to the fourteen replacement employees was not

"'punitive or confiscatory'" and was "'reasonably adapted to the
situation that call[ed] for the redress.'"    See Frito-Lay, Inc.

v. NLRB, 585 F.2d 62, 68 (3d Cir. 1978) (quoting NLRB v.

Townhouse T.V. & Appliances, Inc., 531 F.2d 826, 830 (7th Cir.

1976)).

           The Company's second argument is that the Board's

refusal to deduct post-unfair labor practice earnings which

exceeded base-year earnings from the gross backpay violated the

long-standing principle that discriminatees must mitigate damages

and that gross backpay must be reduced by interim earnings to

derive a net backpay award.   The Company refers us to a leading

case on the mitigation doctrine, NLRB v. Madison Courier, Inc.,

472 F.2d 1307 (D.C. Cir. 1972), as well as to NLRB guidelines.

           This argument must also fail.   It is true that

mitigation of loss of earnings is a cardinal principle in the

development of remedial orders under the National Labor Relations

Act.   See Tubari Ltd. v. NLRB, 959 F.2d 451, 454 (3d Cir. 1992).

In this case, however, the higher post-unfair labor practice

earnings by bargaining unit members were attributable to

fluctuations in the amount of available work during the

applicable time period rather than to the restoration of lost

work by the Company.   It is reasonable to assume that but for the

Company's discriminatory conduct and the elimination of transit

run 14, the earnings of the bargaining unit employees might have

been still higher.   Thus, the higher post-unfair labor practice

earnings were not interim earnings which need be deducted from

gross backpay.   The Company has provided us with no authority for

its argument that it can avoid the payment of backpay liability
for its discriminatory schedule change simply because

discriminatees happened to do better financially during the

backpay period than during the base-year period.2    The burden was

on the Company "to establish facts which would negative the

existence of liability to a given employee or which would

mitigate that liability."   NLRB v. Brown & Root, Inc., 311 F.2d
447, 454 (8th Cir. 1963).   Accord Buncher v. NLRB, 405 F.2d 787,

789-90 (3d Cir. 1968) (in banc), cert. denied, 396 U.S. 828

(1969).   This it has not done.    We find the Company's argument

that the gross backpay should be reduced by the excess earnings

to be without merit.3

                                  III.

2
 . The Company argues that the Board erred when it suggested in
its Supplemental Order that the interim earnings principle
applies only with respect to employees who have been unlawfully
discharged. It cites Ironton Publications, Inc., 313 N.L.R.B.
1208 (1994), as an example of a case where the Board's backpay
order was reduced by interim earnings for a part-time employee
whose hours were discriminatorily reduced but who was not fired.
We do not read the Board's Supplemental Order to mean that
reduction for interim earnings is never appropriate in a non-
discharge case. Rather, we limit our holding to approval of the
Board's rejection of the need to reduce backpay by interim
earnings in this case, where the employees continued to work for
the same company and there was no showing that they would not
have absorbed the hours stipulated to have been lost by the
unfair labor practice.
3
 . The Company's final argument is that the ALJ's post-hearing
amendment of the backpay specification did not afford the Company
an adequate opportunity to produce evidence of employee interim
earnings. In light of our holding that the backpay award need
not be reduced by what the Company characterizes as "interim
earnings," consideration of the Company's contentions on this
issue is unnecessary.
          For the reasons set forth, we will deny the Petition

for Review of the Order of the National Labor Relations Board

issued on July 12, 1994 and grant the Cross-Application for

Enforcement of the Order of the National Labor Relations Board

issued on July 12, 1994.