N.L.R.B. v. Master Slack and/or Master Trousers Corp., 84-5387

• Decision Date: 17 September 1985
• Docket Number: No. 84-5387,84-5387
• Citation: 773 F.2d 77
• Parties: 120 L.R.R.M. (BNA) 2514, 103 Lab.Cas. P 11,622 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MASTER SLACK AND/OR MASTER TROUSERS CORP., Hardeman Garment Corp., Morehouse Garment Corp., Lauderdale Garment Corp., and Lobelville Garment Corp., Respondents.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 77

773 F.2d 77

120 L.R.R.M. (BNA) 2514, 103 Lab.Cas. P 11,622

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. MASTER SLACK AND/OR MASTER TROUSERS CORP., Hardeman Garment Corp., Morehouse Garment Corp., Lauderdale Garment Corp., and Lobelville Garment Corp., Respondents.

No. 84-5387.

United States Court of Appeals Sixth Circuit.

Argued April 4, 1985.

Decided Sept. 17, 1985.

Elliott Moore, W. Christian Schumann, Michael David Fox, Deputy Associate Gen. Counsel, N.L.R.B., National Labor Relations Board, Margaret Bezou, argued, Washington, D.C., for petitioner.

Thomas J. Hughes, Jr. (argued), Jackson, Lewis, Schnitzler & Krupman, Ann Bachman Hale, Atlanta, Ga., for respondents.

Before KEITH and KRUPANSKY, Circuit Judges, and COHN, District Judge. ^*

COHN, District Judge.

The National Labor Relations Board (the Board) petitions to enforce a supplemental back pay order directing respondents to make whole 28 discriminatees ¹ who were wrongfully discharged by Hardeman Garment Corp. (Hardeman), a subsidiary of Master Slack and/or Master Trousers Corp. ² Respondents challenge the Board order only as it relates to 11 discriminatees, ³ and do not dispute the back pay awards ordered for the other 17. ⁴ Their primary contention is that the Board erred in holding that certain findings made in the underlying unfair labor practices proceeding precluded respondents from contending in the back pay proceeding that a plant shutdown should cut off the back pay awards. Respondents also contend the Board's back pay awards to two discriminatees ⁵ are not supported by substantial evidence.

For the reasons stated below, we enforce the order only in part.

I. HISTORY

On July 20, 1973, the Amalgamated Clothing and Textile Workers Union, AFL-CIO (the Union), won an election among Hardeman's production and maintenance employees at a plant located in Bolivar, Tennessee. The Union was certified by the Board on January 4, 1974.

Hardeman opposed the Union's certification and continued to operate on the whole as if the Union didn't exist. The Union filed several unfair labor practice charges from 1973 through 1974 over various company practices. The charges were consolidated and a single hearing was held before administrative law judge Thomas A. Ricci. As relevant here Judge Ricci found that Hardeman had violated Section 8(a)(3) of the National Labor Relations Act (the Act), 29 U.S.C. Sec. 158(a)(3), ⁶ in terminating the night shift at the Bolivar plant, which resulted in the lay off of 20 workers, 3 days before the union election.

The Board, after exceptions were filed by both sides to Judge Ricci's order, affirmed this ruling and determined that Hardeman had also violated Sections 8(a)(1) and (5) of the Act, 29 U.S.C. Sec. 158(a)(1) and (5), ⁷ in laying off 8 more employees due to stricter enforcement of absenteeism and tardiness rules after the Union won the election. The Board further found Hardeman had violated Sections 8(a)(1) and (5) in failing to notify and bargain with the Union prior to the layoff of all employees (about 400) when the Bolivar plant was shut down in the fall of 1974 and also in failing to notify and bargain with the Union when the plant was reopened in 1975 and 80 employees were recalled. This court enforced the Board's order. See NLRB v. Master Slack, 618 F.2d 6 (6th Cir.1980).

Judge Ricci, in discussing the appropriate remedy in the unfair labor practices proceeding, found that back pay awards in many cases should continue past the plant shutdown in 1974, even though he had earlier stated, "[t]here is no contention by the General Counsel that the 1974 closing was occasioned by anything other than purely economic factors." In their orders neither Judge Ricci nor the Board stated that back pay awards should run for any particular period; the orders merely stated that wrongfully discharged employees should be made whole "for any loss of pay or any benefits they may have suffered by reason of Respondent's discrimination against all of them." Respondents did not object to Judge Ricci's specific findings made about the length of the back pay periods in either their exceptions to the Board or in the enforcement proceeding before this court.

When the parties were unable to agree on compliance a supplemental hearing was held on June 23 and 24, 1981 before administrative law judge Philip P. McLeod. Judge McLeod rejected the company's argument that the plant shutdown in 1974 should cut off back pay awards for all discriminatees. He concluded the doctrine of res judicata barred respondents from relitigating that issue since Judge Ricci had found that back pay awards in several instances continued past the shutdown. He further concluded that since respondents had acted unlawfully in shutting down and reopening the plant by failing to bargain with the Union the back pay awards should continue past that point.

In this proceeding for enforcement of the Board's back pay order respondents contend Judge Ricci's findings should not preclude relitigation on the effect of the plant shutdown on back pay awards. Respondents also contend there is not substantial evidence in the record to support the back pay awards to Willie Spencer and Margie Wilson.

II. ISSUE PRECLUSION ⁸

We must first determine whether Judge Ricci's general finding that many back pay periods were to continue past the point of the plant shutdown precluded relitigation in the back pay proceeding on the effect of the plant shutdown on back pay awards. Generally, a factual finding which was necessary to support the judgment in a prior proceeding will bar relitigation on that issue in a subsequent proceeding involving the same parties. See Montana v. United States, 440 U.S. 147, 153, 99 S.Ct. 970, 973, 59 L.Ed.2d 210 (1979); Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 and n. 5, 99 S.Ct. 645, 649 and n. 5, 58 L.Ed.2d 552 (1979); Marlene Industries Corp. v. National Labor Relations Board, 712 F.2d 1011, 1015-16 (6th Cir.1983); United States v. Stauffer Chemical Co., 684 F.2d 1174, 1180 (6th Cir.1982), aff'd, 464 U.S. 165, 104 S.Ct. 575, 78 L.Ed.2d 388 (1984). The policies underlying this rule include the preservation of judicial resources and the protection of litigants. Montana, supra, 440 U.S. at 153-54, 99 S.Ct. at 973-74. The findings of agencies made in the course of proceedings which are judicial in nature should be given the same preclusive effect as findings made by a court. United States v. Utah Construction & Mining Co., 384 U.S. 394, 421-22, 86 S.Ct. 1545, 1559-60, 16 L.Ed.2d 642 (1966).

Issue preclusion should only be applied where the identical issue sought to be relitigated was actually determined and necessarily decided in a prior proceeding in which the litigant against whom the doctrine is asserted had a full and fair opportunity to litigate the issue. See Montana, supra, 440 U.S. at 153, 99 S.Ct. at 973; Parklane Hosiery, supra, at 326 n. 5; Marlene Industries, supra, at 1015-16. A factual issue is "necessarily decided" if its determination was necessary to support the judgment entered in the prior proceeding. See 18 Wright, Miller & Cooper, Federal Practice & Procedure Sec. 4421, p. 192; Marlene Industries, supra, at 1015-16.

While the effect of the 1974 shutdown and 1975 reopening of the plant was actually litigated in the underlying unfair labor practices proceeding it was not necessary to the Board's order. Accordingly Judge Ricci's findings cannot preclude relitigation on that issue in the supplemental backpay proceeding.

" 'It is basic to the law of [issue preclusion] that a finding in one proceeding cannot bind tribunals in subsequent cases unless the finding acted as a basis for final judgment in the first.' 'The determination of an issue in an earlier proceeding must be essential to the judgment; it cannot be dicta.' " (citations omitted)

Marlene Industries, supra, at 1015-16. See also Block v. Bourbon County Commissioners, 99 U.S. (4 Otto) 686, 693, 25 L.Ed. 491 (1878); Segal v. American Telephone & Telegraph Co., Inc., 606 F.2d 842, 845 n. 2 (9th Cir.1979); Evans v. Wilkerson, 605 F.2d 369, 372 (7th Cir.1979).

Judge Ricci's finding that back pay periods should continue past the point of the plant shutdown was not essential to either his order or the Board's order; it was mere dicta. The Board's order, like Judge Ricci's order, simply states that respondents "shall ... [m]ake all ... [wrongfully discharged] employees whole for any loss of pay or any other benefits they may have suffered by reason of the respondent's discrimination against all of them." This is typical of orders in unfair labor practices proceedings where the Board simply determines if unfair labor practices have occurred and what remedies would effectuate the purposes of the Act. See NLRB v. Deena Artware, Inc., 361 U.S. 398, 411, 80 S.Ct. 441, 447, 4 L.Ed.2d 400 (1960) (Frankfurter, J., concurring); 29 C.F.R. Sec. 102.45. The exact amount of back pay owing is not stated and is left to be determined in a subsequent back pay proceeding if the parties cannot resolve the amounts owing informally. See Deena Artware, supra; 29 C.F.R. Sec. 102.52. Drawing an analogy from court cases, the unfair labor practices proceeding determines liability; a subsequent back pay proceeding, if necessary, determines damages.

The only factual determinations necessarily decided to enter an order that discharged employees be made whole are (1) that the respondent violated the Act in discharging employees, and, (2) that back pay is an appropriate remedy. See Section 10(c) of the Act, 29 U.S.C. Sec. 160(c). It is not necessary to determine the exact amount of back pay owing nor whether subsequent events would have resulted in layoffs of discharged employees totally apart from the wrongful conduct.

"[Q]uestions relating to the exact amount of back pay owing (including whether ... at some reasonably determinable date employment with [the company] would not have been available...