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National Labor Relations Board v. United Contractors Inc. and Jmco Trucking

decided: February 1, 1980.


Application for Enforcement of an Order of the National Labor Relations Board

Before Cummings, Circuit Judge, Wisdom, Senior Circuit Judge,*fn* and Cudahy, Circuit Judge.

Author: Wisdom

This case is before the Court on the application of the National Labor Relations Board for enforcement of its Supplemental Decision and Order regarding the amount of back pay to be awarded to three employees of the respondent. In an earlier proceeding the National Labor Relations Board determined that United Contractors and JMCO Trucking (JMCO) constituted a single employer/respondent within the meaning of the Act. The Board held that JMCO had committed unfair labor practices by discharging three employees and by bypassing the employees' union to deal directly with the workers. United Contractors, Inc., 220 N.L.R.B. 463 (1975). This Court affirmed the Board's order. United Contractors, Inc. v. NLRB, 7 Cir. 1976, 539 F.2d 713, Cert. denied, 1977, 429 U.S. 1061, 97 S. Ct. 785, 50 L. Ed. 2d 777. An administrative law judge subsequently accepted the General Counsel's back pay formula and award. The Board adopted as its order the supplemental order of the administrative law judge. United Contractors, Inc., 238 N.L.R.B. No. 123 (1978). We decline to enforce the Board's order and remand the case for another hearing because the administrative law judge and the Board ignored uncontradicted evidence that the Board's back pay formula was inapplicable in this case.


In September 1974 Milan Mix, Guy Bourdo, and Percy Williams were all truck-driver employees of JMCO and members of Local No. 200 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America. In June and September 1974 Mix and Bourdo filed grievances with the union because they were dissatisfied with their employer's new compensation plan that paid drivers a percentage of the amount JMCO charged users of its truck services. The employees made their own contributions to the Teamsters' welfare and pension funds. After the union pressed Jim Mews (president of both JMCO and United Contractors) about the grievance, he discharged all three employees, stating that he had no use for their services until the "union problems" were straightened out.

The union filed an unfair labor practice charge with the Board on October 11. The Board issued a complaint on December 30, charging that the company had engaged in discriminatory layoffs against union employees and had refused to bargain with the union. On January 24, 1975, JMCO offered reemployment to Bourdo and Mix. They agreed to return on February 4. Williams was reinstated about July 25.

After this Court enforced the Board's original order, the Regional Director issued a Back Pay Specification and Notice of Hearing stating that its back pay estimates were based on the "average weekly wage" of the discharged employees. " "Average weekly wage' was determined by multiplication of the contractual hourly wage rate and the average number of hours which would have been worked by the discriminatee, per week, absent the discriminatory conduct. For the layoff period, the average number of weekly work hours was projected from the hours actually worked by each discriminatee in the months preceding and following the layoffs."*fn1 Under this formula the company owed $14,643.89.*fn2 The Notice stated that an answer was required within 15 days.

The company's answer denied all of the Board's allegations but was little more than a general denial. The company raised two affirmative defenses: Insufficient work existed to employ Williams, and all three discharged employees had received interim earnings that should decrease their awards.

The Board then amended its Back Pay Specification, adding $1,895.85 in contributions due to the Milwaukee Area Truck Drivers Health and Welfare Fund.*fn3 The company filed a supplemental answer stating specifically the basis for its position. More particularly, the company asserted that "seasonal" variations in JMCO's business rendered the Board's average weekly hours figure inappropriate. Instead, "the appropriate measure would be based upon the availability of work, if any, for the periods in question and . . . the proper computation would be the hourly rate of the parties involved times the number of hours of available work for those parties during the periods in question." Under this standard, $1,200 in back pay should be awarded because that amount was earned by individuals hired to replace the discharged employees. The answer repeated the affirmative defenses.

The administrative law judge conducted a hearing on September 12, 1977. He found that the company had failed "to set forth in its answer the basis of its disagreement with the figures themselves" and that this failure "operates as an admission that the figures are accurate". The applicable Board rule is set forth in the margin of this opinion.*fn4 * * *

The company contends that it did not admit the accuracy of the Board's figures and that it set forth reasons why they were inappropriate. But none of its arguments demonstrated that the Board's figures, all of which were derived from company records, were inaccurate. The heart of the company's contentions is that the Board's formula should not be applied in this case where the work is irregular.

There is no doubt that the Board has a broad discretionary power to determine back pay. NLRB v. Seven-Up Bottling Co., 1953, 344 U.S. 344, 346, 73 S. Ct. 287, 288, 97 L. Ed. 377. "(I)n many cases it is difficult for the Board to determine precisely the amount of back pay which should be awarded to an employee. In such circumstances the Board may use as close approximations as possible, and may adopt formulas reasonably designed to produce such approximations." NLRB v. Brown & Root, Inc., 8 Cir. 1963, 311 F.2d 447, 452. "If the Board was not arbitrary in the selection of a formula, its choice may not be rejected." NLRB v. Charley Toppino & Sons, Inc., 5 Cir. 1966, 358 F.2d 94, 97. "(T)he burden is upon the employer 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., 8 Cir. 1963, 311 F.2d 447, 454; Accord, NLRB v. Mastro Plastics Corp., 2 Cir. 1965, 354 F.2d 170, 178, Cert. denied, 1966, 384 U.S. 972, 86 S. Ct. 1862, 16 L. Ed. 2d 682.

The Board found that JMCO engaged primarily in road construction in Wisconsin. 220 N.L.R.B. at 463. During the winter months when road construction was infeasible or impossible, it undertook demolition work. The company contended that it employed fewer full-time workers during this season, and that trucks were often idle.

The administrative law judge disagreed that the company was a seasonal employer. He cited testimony by Mix that (1) seasonable layoffs in the past had lasted for one or two weeks and had been given for deer hunting, and (2) Mix performed other work, primarily truck repair, on occasion during prior winter slack periods. He also cited testimony by the discharged employees that they noticed trucks operating during the layoff period.

We cannot say that the Board's determination that the company was not a seasonal employer is clearly erroneous. The evidence did indicate that some demolition was performed during the winter months. We do find, however, that it ignored evidence demonstrating that employment was irregular and that economic factors may have ...

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