St. George Warehouse, (2007)

St. George Warehouse and Merchandise Drivers Local No. 641, International Brotherhood of Teamsters.1 Cases 22–CA–23223, 22–CA–23259, and 22–CA–23270

September 30, 2007

SUPPLEMENTAL DECISION AND ORDER REMANDING

By Chairman Battista and Members Liebman, Schaumber, Kirsanow, and Walsh

On October 30, 2002, Administrative Law Judge Margaret M. Kern issued the attached Supplemental Decision. The Respondent filed exceptions and a supporting brief.2

The Board has considered the Supplemental Decision and the record in light of the exceptions and brief and has decided to affirm the judge’s rulings, findings, and conclusions only to the extent consistent with this Supplemental Decision and Order Remanding.

The issue in this backpay proceeding is which party bears the burden of production when a respondent contends that a discriminatee has failed to mitigate damages by making a reasonable effort to find work.3 It is well settled that backpay liability may be mitigated if the discriminatee neglected to make reasonable efforts to find interim work.4 “The defense of willful loss of earnings is an affirmative defense, and the employer bears the burden of proof.”5

We reaffirm that a respondent has the burden of persuasion as to the contention that a discriminatee has failed to make a reasonable search for work. However, we reach a different conclusion with respect to a part of the burden of going forward with evidence. The contention that a discriminatee has failed to make a reasonable search for work generally has two elements: (1) there were substantially equivalent jobs within the relevant geographic area, and (2) the discriminatee unreasonably failed to apply for these jobs. Current Board law places on the respondent-employer the burden of production or going forward with evidence as to both elements of the defense. As to the first element, we reaffirm that the respondent-employer has the burden of going forward with the evidence. However, as to the second element, the burden of going forward with the evidence is properly on the discriminatee and the General Counsel who advocates on his behalf to show that the discriminatee took reasonable steps to seek those jobs. They are in the best position to know of the discriminatee’s search or his reasons for not searching. Thus, following the principle that the burden of going forward should be placed on the party who is the more likely repository of the evidence, we place this burden on the discriminatee and the General Counsel.

In the instant case, the Respondent has met its burden as to the first element of the defense by presenting sufficient evidence of comparable employment opportunities in the relevant job market. The discriminatees and General Counsel have not met the burden as to the second element because no evidence was presented concerning the nature and extent of the discriminatees’ job searches. Because existing Board law did not impose such an obligation on the General Counsel, we remand the case to the judge to reopen the record and permit the parties to produce evidence consistent with this decision.

i. background

In the underlying unfair labor practice proceeding,6 the National Labor Relations Board (the Board) found that the Respondent, which performs warehousing services from its facility in Kearney, New Jersey, violated Section 8(a)(1) and (3) of the Act when it discharged Leonard Sides, a forklift operator, and Jesse Tharp, a warehouse worker. The Board ordered the Respondent, inter alia, to make Sides and Tharp whole. On May 28, 2002,7 the Regional Director issued a compliance specification setting forth the amount of backpay assertedly owed to Sides and Tharp. The backpay period for the two employees began in March 1999 and ended on September 1, 2000. In a July 17 letter, the General Counsel advised the Respondent that Tharp was currently incarcerated in Florida. In that letter, the General Counsel also provided the Respondent with the name and address of the prison where Tharp was being held.

The backpay hearing was held on October 8. The General Counsel relied solely on the amended compliance specification and called no witnesses and introduced no evidence of the discriminatees’ mitigation efforts. The Respondent did not challenge the General Counsel’s method of calculating the backpay amounts for Tharp and Sides or the manner in which the General Counsel arrived at the figures in the compliance specification. The Respondent claimed, however, that the discriminatees failed to mitigate their damages. In this regard, the Respondent asserted that both Sides and Tharp made insufficient efforts to seek interim employment.

In support of its case, the Respondent called Donna Flannery, a vocational employability specialist. Flannery conducted a labor market study in the New Jersey area to determine the availability of jobs for warehousemen, forklift operators, and similar occupations during the backpay period. Flannery examined published sources such as the Dictionary of Occupational Titles, Occupational Employment Statistics, Projections 2008, and New Jersey Employment and Population in the 21st Century, as well as want ads in local newspapers. She also performed an analysis of the transferability of job skills. Flannery concluded that a sufficient number of comparable jobs were advertised as open and available during the backpay period for warehouse workers and forklift operators. Flannery made the following observation:

It is also my opinion, based upon the information presented, that neither of these two job seekers made a diligent effort to seek and obtain new employment. It appears, from the information presented, that job efforts did not even consist of a minimal amount of effort to locate employment. Minimally, the advertisements could have been reviewed for openings. There were plenty of resources available, at no cost, such as assistance in reviewing/composing cover letters and resumes, and they could have sought openings through internet job sites, explored industrial directories for companies with suitable openings, researched magazines or publications in the warehouse industry for leads, and networked through job fairs and open houses.

Flannery had not interviewed Tharp or Sides, and neither discriminatee was present at the hearing. No one who had any knowledge of their actual efforts to find employment testified. The General Counsel called no witnesses and relied solely on the amended compliance specification.8

ii. the judge’s decision

The Respondent argued to the judge that it did not bear the burden of producing evidence as to whether the discriminatees searched for work. It asserted that once it had shown that a significant number of comparable jobs were available in the relevant market, the burden shifted to the General Counsel to establish that they had made reasonable efforts to find work. The judge rejected this argument and held that the entire burden of showing that the discriminatees failed to mitigate their damages rests exclusively on the Respondent; under no circumstances does it shift back to the General Counsel. Applying this principle, the judge concluded that the Respondent failed to produce facts sufficient to show, by a preponderance of the evidence, that the discriminatees failed to mitigate their damages. The judge found that Sides worked in two out of the seven quarters covered by the backpay period and that Tharp worked in four out of seven. Even accepting testimony by the Respondent’s specialist that jobs were available during those periods when Sides and Tharp were unemployed, the judge found no evidence that they failed to seek out such jobs. The judge held that the specialist’s testimony that neither Sides nor Tharp made even a “minimal amount of effort to locate employment” was “devoid of any factual support” in the record, given that she did not interview the discriminatees or anyone who had knowledge of their job search efforts.9

iii. the respondent’s contention

The Respondent acknowledges that it bears the burden of persuasion as to whether the discriminatees failed to mitigate damages by seeking interim employment. However, the Respondent asserts that once it establishes, as it did here, that suitable work was available for the discriminatees, the General Counsel properly should bear the initial burden of producing evidence concerning the discriminatees’ efforts to seek work.

iv. analysis

The relevant legal principles have been set out in many cases. We first briefly review these principles. We then set out the principle we modify today and our reasons for this change.

1. Controlling Legal Principles

   “A back pay order is a reparation order designed to vindicate the public policy of the statute by making the employees whole for losses suffered on account of an unfair labor practice.” Nathanson v. NLRB, 344 U.S. 25, 27 (1952). When loss of employment is caused by a violation of the Act, a finding by the Board that an unfair labor practice was committed is presumptive proof that some backpay is owed. Arlington Hotel Co., supra at 855. In compliance proceedings, the General Counsel bears the burden of proving the amount of gross backpay due. NLRB v. Brown & Root, 311 F.2d 447, 454 (8th Cir. 1963); Kawasaki Motors Mfg. Corp. v. NLRB, 850 F.2d 524, 527 (9th Cir. 1988). Once the General Counsel has met this burden, the respondent may establish affirmative defenses that would reduce its liability, including willful loss of earnings. Florida Tile Co., 310 NLRB 609 (1993), enfd. mem. 19 F.3d 36 (11th Cir. 1994); NLRB v. Brown & Root, supra.

   Longstanding remedial principles establish that backpay is not available to a discriminatee who has failed to seek interim employment and thus incurred a willful loss of earnings. See, e.g., Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 198 (1941); NLRB v. Mastro Plastics Corp., 354 F.2d at 175.10 In this regard, the NLRB Casehandling Manual (Part Three) Compliance Section...