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National Labor Relations Board v. Pan Scape Corp.

decided: October 15, 1979.


On Petition for Enforcement and Cross-Petition for Review of an Order of the National Labor Relations Board.

Before Pell, Sprecher and Bauer, Circuit Judges.

Author: Pell

In this case, the National Labor Relations Board (Board) has petitioned for enforcement, and Pan Scape Corporation (Pan Scape or the Company) has cross-petitioned for review, of a Board order that Pan Scape provide backpay to certain employees previously held to have been illegally discharged. The basis of Pan Scape's remonstration is that it did not receive a fair hearing before the Administrative Law Judge (ALJ) due to his denial of the Company's motions for a continuance and for disqualification.

This is the second time this litigation has come before this court. In the first, we enforced, by an unpublished order (7th Cir., 559 F.2d 1224), the Board's decision*fn1 that the Company had violated sections 8(a)(1) and (3)*fn2 of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) and (3), by discharging the employees of concern here, Richard D. Burton, David R. Jackson, and Robert E. Shreve. In its original order, the Board required that these employees receive backpay as compensation for their unlawful discharge. A controversy arose between the parties over the amount of the backpay due, however, and in an effort to resolve this controversy, the Regional Director of the Board issued, on December 14, 1977, and in accordance with § 102.52 of the Board's Rules and Regulations, a Backpay Specification detailing the Board's position on the backpay amounts owed the employees. The Backpay Specification also included a notice of a hearing to be held on this issue in Indianapolis, Indiana, on March 6, 1977, at 10:00 a. m. and "consecutive days thereafter until concluded." On December 22, 1977, the Company filed its answer to the Board's Specification, objecting to the Board's computation as set forth below. Counsel for the General Counsel of the Board (General Counsel) moved, on February 8, 1978, to strike the Company's answer as not being sufficiently detailed or substantiated as required by section 102.54(b) of the Board's Rules and Regulations,*fn3 and moved that the Board's computation be deemed true and correct pursuant to § 102.54(c).*fn4 This was where matters stood when the hearing was scheduled to begin on March 6, 1978, at 10:00 a. m.

Unfortunately, the hearing did not begin as scheduled because the ALJ was not present at 10:00 a. m. Exactly what delayed the ALJ has not been made entirely clear to this court, but both parties seem to concur that the tardiness was due to transportation problems and the ALJ was blameless. Regardless of the cause of the delay, however, the parties informally agreed to postpone the hearing until 11:00 a. m. When the ALJ had not arrived by that time, the Company contingent left for lunch.

Exactly when the ALJ finally did put in an appearance also is not clear. The Board maintains he arrived about 12:30 p. m. The Company group, on the other hand, maintains that when they returned from lunch at approximately 1:00 p. m., they found the hearing room empty and assumed the ALJ had not yet arrived. They, therefore, left the building, leaving no message as to their destination or where they could be reached. The Company representatives and witnesses returned to Company headquarters in Muncie, about an hour's drive from Indianapolis. Where the Company's counsel went is not clear, but wherever it was, it apparently was not his office in Indianapolis and he appears to have become incommunicado for the remainder of the day.

Later that afternoon, the General Counsel attempted to reach the Company counsel by telephone to inform him of the arrival of the ALJ. Failing to reach him directly, the General Counsel stated on the record that he left an appropriate message with the Company attorney's secretary. The receipt of the message was denied by the Company's counsel on oral argument before this court. A call was also placed, however, to the Company's offices in Muncie, where it was learned that one of the Company's witnesses who had been present with the Company counsel that morning at the hearing room, vice-president Sutton, had returned to Company headquarters at Muncie. Because, as stated above, the Company's counsel could not be reached, neither call was acted upon and the hearing did not go forward on that day. At 4:05 p. m., however, the record was opened for the limited purpose of reciting the above listed events, and instructing the General Counsel to again telephone and telegraph the Company and its counsel that the hearing would resume with or without them at 9:30 a. m. on the following morning, March 7. The record was then closed for the day and the General Counsel made the directed phone calls and sent the appropriate telegrams.

At 9:35 on the morning of the 7th, the hearing was resumed without the presence of the Company or its counsel. The General Counsel stated for the record that he had telephoned the Company and its counsel and had left the above described messages. The message to the Company was left with vice-president Sutton. The hearing was once again recessed until 10:00 a. m., and telephone calls to the Company and its counsel were again made informing them that the hearing would proceed at that time. The Company and its counsel were told that if they intended to participate, the ALJ would accommodate them and would wait a reasonable amount of time for their arrival. Apparently as a result of these last phone calls, counsel for the Company appeared at 10:00 a. m. without witnesses or other Company representatives, and the hearing was resumed.

At the hearing, the ALJ partially granted the General Counsel's motion to strike the Company's Answer to the Board's Specification. The Company, in its answer, had contended (without providing substantiation) that the employees had greater interim income than computed by the Board, that the Board's choices of "representative" (comparative) employees were improper, that the backpay amounts should have been reduced by the amount of unemployment compensation paid to the employees, and that one or more of the employees had been offered reinstatement during the relevant period. The ALJ granted the motion to strike the objections regarding the representative employees for failure to comply with § 102.54(b), and properly granted the motion with regard to the unemployment compensation on the basis of NLRB v. Gullett Gin Co., 340 U.S. 361, 71 S. Ct. 337, 95 L. Ed. 337 (1951). Discriminatees Jackson and Burton testified and were cross-examined by Company counsel, although apparently without conspicuous success, as to their interim earnings.

It was with regard to the alleged offers of reinstatement that we come to the basis of the Company's arguments before this court. The Company's counsel requested that the ALJ grant a continuance until he could obtain the presence of two crucial witnesses: Hull, the president of the Company, and Sutton. When asked by the ALJ why he didn't have his witnesses available at that time, the Company counsel replied that Hull was in "teamster negotiations" but that Sutton ". . . I don't know could probably very well be here today, I don't know . . . I have talked to him. . . ." The ALJ denied the Company's motion, stating:

This matter was noted for hearing yesterday and for consecutive days thereafter. Therefore, the absence from this hearing today is not because of any delay of mind yesterday, but a decision which has been made by Respondent.

Though the ALJ denied the continuance, he offered the Company's counsel the opportunity of telephoning Hull and seeing whether he could arrive at the hearing later that afternoon. The Company's counsel agreed to try, but stated he had unsuccessfully attempted to call Hull the night before, after receiving the telegram, and again that morning after receiving the General Counsel's phone call. After a short recess in the hearing, the Company counsel returned and stated he had been unable to reach Hull, but had talked to vice-president Sutton. Sutton had told the Company's counsel that he (Sutton) did not believe that the Company could get a fair hearing before this ALJ, and, therefore, would not be appearing. The Company's counsel then stated that no further evidence would be offered with regard to the alleged offers of reinstatement, and, in fact, the Company declined to participate further in the hearing. The hearing was therefore concluded with the Board's computation of backpay remaining intact.

In arguing before this court, the Company has basically preserved its arguments made to the ALJ and the Board: first, that the ALJ should have granted the motion for continuance; and second, that the ALJ should have disqualified himself for ...

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