Florence Printing Company v. NLRB

• Decision Date: 21 March 1967
• Docket Number: No. 10634.,10634.
• Citation: 376 F.2d 216
• Parties: FLORENCE PRINTING COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. Charleston Typographical Union No. 43, Intervenor.
• Court: U.S. Court of Appeals — Fourth Circuit

376 F.2d 216 (1967)

FLORENCE PRINTING COMPANY, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent Charleston Typographical Union No. 43, Intervenor.

No. 10634.

United States Court of Appeals Fourth Circuit.

Argued December 9, 1966.

Decided March 21, 1967.

J. W. Alexander, Jr., Charlotte, N. C. (Alvin A. Coleman, Jr., Florence, S. C., Blakeney, Alexander & Machen, Charlotte, N. C., and Wright, Scott, Blackwell & Powers, Florence, S. C., on brief), for petitioner.

Wayne S. Bishop, Attorney, N.L.R.B. (Arnold Ordman, General Counsel, Dominick L. Manoli, Associate General Counsel, Marcel Mallet-Prevost, Asst. General Counsel, and Solomon I. Hirsh, Attorney, N.L.R.B., on brief), for respondent.

George Kaufmann, Washington, D. C. (Gerhard P. Van Arkel, Washington, D. C., on brief), for intervenor.

Before SOBELOFF, BOREMAN and WINTER, Circuit Judges.

WINTER, Circuit Judge:

In Florence Printing Co. v. N.L.R.B., 333 F.2d 289 (4 Cir. 1964), we enforced an order of respondent which, inter alia, required petitioner to reinstate certain striking employees with back pay and interest. The striking employees had applied for reinstatement on July 7, 1963, but were not reinstated until approximately one year later. Even then, petitioner refused reemployment to one, and its refusal was upheld by the Board.¹ The Board's order, which petitioner now asks us to set aside and which the Board asks us to enforce, directed petitioner to pay certain designated amounts to twelve of the formerly striking employees as back pay and interest for the period July 7, 1963 to the date of reinstatement.² We think the Board's order should be enforced.

Enforcement of the order is resisted, in whole or in part, on three grounds. First, the striking employees, against whom unfair labor practices were previously found to have been directed, received, during the time petitioner refused to reinstate them, strike benefits paid by their union from a trust fund established for that purpose. It is contended that the amount of their back pay awards should be reduced by the amounts of the strike benefits. The wages that they would have earned, had they been reinstated on July 7, 1963 have been stipulated, as have the amounts of strike benefits.³ Second, it is contended that as a question of law Glenn Johnson, one of the striking employees, forfeited his right to back pay by refusing a specific job offer in Rock Hill, South Carolina, a town one hundred miles distant from the place of his employment with petitioner. Third, it is contended that all of the employees wilfully incurred a loss of earnings and should, therefore, be denied back pay. This contention is grounded upon the assertion that the record discloses other job opportunities in Florence during the period in question, that it was the burden of General Counsel to the Board to present proof to explain why the strikers did not avail themselves of these opportunities and that he failed to meet that burden. We consider these contentions seriatim.

— SET-OFF OF STRIKE BENEFITS —

Before dealing with the legal question presented, we must first state additional facts. The benefits were paid from a trust fund established and administered by the international union and funded by a one per cent assessment on the earnings of active members.⁴ By the international union's constitution and by-laws, benefits from the fund were payable only during strikes, lockouts and shutdowns. Benefits were scaled from 60% of regular pay for members having dependents to 40% for members not having dependents, with minimum weekly benefits of $36.00 and $24.00, respectively. To be entitled to benefits, a member was required to report daily "to the proper officer of the subordinate union while the strike continues." Further, a striker refusing work while out on strike "shall be debarred from all benefits under this law, and for each day's work performed in excess of one shift one-fourth of the members' regular strike benefits for that week shall be deducted." Reserving its right to claim otherwise, the union reported benefits paid to the Internal Revenue Service as "income," and presumably withheld income taxes in appropriate cases. There was evidence before the trial examiner that strikers, on days that they did not have other employment, were required to picket and that strike benefits would be paid to strikers who were ill and were unable to report or picket.

Petitioner contends that the strike benefits were compensation for picketing services, so that the strike benefits were "earnings" to be set off against petitioner's liability for back pay. The examiner made an express factual finding, adopted by the Board, that there was an absence of evidence to show that services were rendered in exchange for the benefits, and hence concluded, as a legal question, that set-off was not proper. From our examination of the record as a whole, we find no factual basis to conclude that strike benefits were paid as a condition precedent to, or in compensation for, picketing. True, picketing was required of strikers not otherwise gainfully employed, but the constitution and by-laws of the international union, not controverted by any other substantial evidence,⁵ established that a striker's first obligation was to seek interim employment to reduce the drain on the strike benefit funds of the international union. We think the Board's factual conclusion was correct.

Whether, as a legal question, strike benefits which are not shown to be "earnings" should be set off against an award for back pay, in diminution thereof, has been directly decided in one case cited to us, N.L.R.B. v. Rice Lake Creamery Company, 112 U.S.App.D.C. 323, 365 F.2d 888 (1966). As a matter of policy, the Board has adopted the common law "loss of earnings" rule, under which the measure of an employee's recovery is the earnings which he has lost, less any other earnings which he has obtained or wilfully refused to obtain. Knickerbocker Plastic Co., Inc., 132 N.L.R.B. 1209 (1961); Kartarik, Inc., 111 N.L.R.B. 630 (1955); L. B. Hosiery Co., Inc., 99 N.L. R.B. 630 (1952); Columbia Picture Corp., 82 N.L.R.B. 568 (1949). Since Standard Printing Company of Canton, 151 N.L.R.B. 963 (1965), strike benefits have been treated as an element not to diminish the amount of back pay award. In the case at bar, the Board, in applying the common law loss of earnings rule, again deemed the strike benefits as "collateral," having no effect to diminish an award for back pay. From the Rice Lake and other decided case in analogous situations, we think the Board reached the correct legal conclusion.

National Labor Rel. Bd. v. Gullett Gin Co., 340 U.S. 361, 71 S.Ct. 337, 95 L.Ed. 337 (1951), is the controlling authority. There, the question was raised as to whether the Board must deduct from back pay awards to discriminatorily discharged employees sums paid to them as unemployment compensation by a state agency. In concluding that the Board was not required to give effect to such a set-off, the Court placed its decision on two grounds. Repeating its holding in Marshall Field & Co. v. National Labor Relations Board, 318 U.S. 253, 63 S.Ct. 585, 87 L.Ed. 744 (1943), it held that benefits received by employees under a state employment compensation act were plainly not "earnings." In the Marshall Field case the Court did not have before it the question of whether the Board had authority to make such an order, but that question was presented in the Gullett Gin case; and, as a second ground of the Court's opinion in the latter, it held that the Board had authority to adopt the policy of refusing to give effect to a set-off because the benefits were collateral and not direct.⁶ Earlier, in National Labor Relations Board v. Brashear Freight Lines, 127 F.2d 198 (8 Cir. 1942), it had been held that the amount of back pay ordered should not be reduced by the value of groceries furnished a striker and his family by the union at irregular intervals. In N.L.R.B. v. Rice Lake Creamery Company, supra, it was flatly held that the Board, in the exercise of its discretion, properly refused to deduct the amounts of strike benefits from gross back pay when some benefits were paid after picketing ceased and when the amount of the benefits was not entirely related to the hours of picketing. 365 F. 2d p. 893.

The only decision remotely in conflict with these cases is our own decision in National Labor Rel. Board v. Moss Planing Mill Co., 224 F.2d 702 (4 Cir. 1955), in which we held that workmen's compensation payments should reduce the amounts payable under a back pay award. Notwithstanding the decision in Gullett Gin and the discussion contained therein concerning the fact that unemployment compensation benefits were financed by a state tax on employers, we thought that the fact that workmen's compensation benefits came from the employer through the medium of his agent, his insurance carrier, would unjustly enrich an employee if the benefits were not applied in diminution of the back pay award. That case has no application here, because, indisputably, the strike benefits were financed solely by an assessment on the employees. Employees receiving strike benefits receive back only their own contributions and those of fellow-employees.

Because strike benefits are funded solely by employee assessments, and because we find no evidence that any service on the part of the employee was required as a condition precedent to the receipt of strike benefits, we think that they must be treated like unemployment compensation benefits and governed by the decision in the Gullett Gin case. Gullett Gin also disposes of another of petitioner's contentions, namely, that some employees may be made more than whole. In an individual case that may be so, yet — to mention only one possible collateral loss — we are aware that we are living in an age where consumer goods are generally acquired on credit. A protracted strike in...