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National Labor Relations Board v. Mastro Plastics Corp.

decided: December 9, 1965.

NATIONAL LABOR RELATIONS BOARD, PETITIONER
v.
MASTRO PLASTICS CORPORATION, ET AL., RESPONDENTS. MASTRO PLASTICS CORP. ET AL., PETITIONERS V. NATIONAL LABOR RELATIONS BOARD, RESPONDENT



Lumbard, Chief Judge, and Waterman and Hays, Circuit Judges.

Author: Lumbard

LUMBARD, Ch. J.:

The National Labor Relations Board petitions for enforcement of two supplemental back pay orders directing respondents to pay approximately $164,000 to 70 persons who had been discriminately discharged by respondents in violation of Sections 8(a)(1), (2) and (3) of the National Labor Relations Act, as amended, 29 U.S.C. ยง 158(a)(1), (2) and (3). Respondents have filed a cross-petition for review of those orders. The questions here presented are whether the Board's back pay orders were appropriate and, if so, whether those orders can at this time be enforced against Mastro Industries, Inc. (Mastro), the resulting corporation of a merger which dissolved the original respondents after issuance of the Board's first order. We hold that the orders can properly be enforced against Mastro, and we enforce the Board's orders as to every discriminatee except Isiah Smith.

On March 13, 1953, the Board issued a decision and order, 103 NLRB 511, declaring that Mastro Plastics Corporation and French American Reeds Manufacturing Co., Inc. (respondents), had discriminatorily discharged 77 employees; the order required, inter alia, that the respondents reinstate the discriminatees with back pay. This court enforced that order, 214 F.2d 462 (1954), and the Supreme Court affirmed. 350 U.S. 270, 76 S. Ct. 349, 100 L. Ed. 309 (1955).*fn1

The reinstatement question was resolved prior to the institution of back pay proceedings, see 261 F.2d 147 (1958); therefore, the back pay period for each of the discriminatees is indisputably defined. After reinstatement was offered to all, unsuccessful attempts were made to negotiate the back pay question informally, and on June 14, 1960, the Board's Regional Director for the Second Region issued a formal back pay specification and commenced these supplemental proceedings.

At the back pay hearing, the Board's General Counsel placed in evidence the back pay specification, which computed the net back pay owing to each discriminatee by subtracting from a gross back pay calculation*fn2 the net interim earnings of the discriminatee to the extent that such interim information was available. Testimony of each available discriminatee was offered to establish the interim earnings received and his efforts to find alternative work during the back pay period. Respondents cross-examined the discriminatees.

At the close of the General Counsel's case, respondents moved to dismiss the proceeding, alleging that the Board had failed to make a prima facie case because it did not present evidence that respondents had jobs available for the discriminatees during the back pay period.The trial examiner denied the motion on the ground that respondents had the burden of introducing evidence in support of this defense. Respondents then declined to offer any evidence in defense, preferring to rest on their claim that the Board's case was legally insufficient. Accordingly, the hearing was closed.

The trial examiner's Supplemental Interim Report assessed the testimony of each discriminatee as to whether he had incurred a "willful loss of earnings."*fn3 The examiner concluded that 62 of the discriminatees were entitled to final back pay awards; he also recommended that the back pay claimed in the Board's specification for eight discriminatees who did not testify be placed in escrow until the eight came forward and appeared at a second supplemental hearing.

The Board on review adopted the findings and recommendations of the trial examiner with minor alterations. 136 NLRB 1342 (1942). It reaffirmed its long standing rule that the employer has the burden of proof as to whether a discriminatee incurred a willful loss of earnings and whether the employer would not have had work available for a discriminatee due to factors unrelated to the discriminatory discharge. See, e.g., Brown & Root, Inc., 132 NLRB 486 (1961), enforced, 311 F.2d 447 (8 Cir. 1963); Ohio Pub. Serv. Co., 52 NLRB 725 (1943). The Board took the position that the General Counsel's introduction of the discriminatees' testimony was a "public service" and was not part of his prima facie case.

The Board also adopted the trial examiner's recommendation that eight awards be placed in escrow "to afford the Respondent a reasonable opportunity to examine these claimants." Consequently, the trial examiner held a second supplemental hearing in July 1963, and seven of the eight appeared or testified by deposition. The examiner granted final awards to seven of these claimants,*fn4 including the one who did not testify (Isiah Smith).

The Board adopted, again with minor alterations, the trial examiner's second Supplemental Decision. 145 NLRB 1710 (1964). The Board did not discuss further the burden of proof question nor did it specifically discuss the final award to Isiah Smith, which award we do not enforce for reasons explained below.

Mastro's challenge to the propriety of the back pay orders raises the following questions: whether the General Counsel's case was legally insufficient because he had the burden of proving job availability; whether the General Counsel had the burden of proving that each discriminatee incurred no willful loss of earnings; and whether the latter burden, if it lies to any extent with the General Counsel, was satisfied.

We hold that the Board properly placed on respondents the burden of alleging and proving that jobs were not available for all discriminatees during the back pay period. However, we conclude that the General Counsel had the burden of producing testimony by each available discriminatee that a willful loss of earnings was not incurred. Nevertheless, we find that the burden of persuasion as to willful loss should remain on the employer and, on the facts of this case as disclosed by the discriminatees' testimony, we affirm the award to each discriminatee who testified. Finally, we enforce the back pay orders against Mastro, the successor corporation.

I. The Burden of Proof

Under Section 10(c) of the National Labor Relations Act, as amended, the Board is empowered "to take such affirmative action [against one who has committed an unfair labor practice] including reinstatement of employees with or without back pay, as will effectuate the policies" of the Act. The back pay remedy has the twofold purpose of reimbursing employees for actual losses suffered as a result of a discriminatory discharge and of furthering the public interest in deterring such discharges. Because of "the importance of taking fair account, in a civilized legal system, of every socially desirable factor in the final judgment," it is settled that the Board must consider, in computing a back pay award, whether the employer would have had work available for ...


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