JH Rutter Rex Manufacturing Co., Inc. v. NLRB

• Decision Date: 12 March 1973
• Docket Number: No. 71-3260.,71-3260.
• Citation: 473 F.2d 223
• Parties: J. H. RUTTER REX MANUFACTURING COMPANY, INC., Petitioner-Cross Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.
• Court: U.S. Court of Appeals — Fifth Circuit

473 F.2d 223 (1973)

J. H. RUTTER REX MANUFACTURING COMPANY, INC., Petitioner-Cross Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.

No. 71-3260.

United States Court of Appeals, Fifth Circuit.

January 16, 1973.

Rehearing and Rehearing Denied March 12, 1973.

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COPYRIGHT MATERIAL OMITTED

Daniel Lund, Henry J. Read, New Orleans, La., for petitioner.

Marcel Mallet-Prevost, Asst. General Counsel, N. L. R. B., Washington, D. C., Stanley J. Brown, Atty., N. L. R. B., Charles M. Paschal, Director, Region 16, N. L. R. B., New Orleans, La., for respondent.

Before COLEMAN, GOLDBERG and GODBOLD, Circuit Judges.

Rehearing and Rehearing En Banc Denied March 12, 1973.

GOLDBERG, Circuit Judge:

This case involves the propriety of a back-pay order issued by the N. L. R. B. against petitioner, J. H. Rutter Rex Manufacturing Company, Inc. The genesis of the back pay claim is the company's failure to reinstate various employees who had participated in an unfair labor practice strike in 1954. This is the fifth time this case has appeared before this Court and hopefully, it will be the last.¹

The background chronology of this judicial marathon is as follows: In April, 1954, there was a strike at petitioner's plant that lasted for one year.² On February 13, 1956, the N.L.R.B. issued a decision holding that the company had violated §§ 8(a)(1) and 8(a)(5) of the N.L.R.A. and that therefore the strike had been an unfair labor practice strike. 115 N.L.R.B. 388. The Board's order of mandatory reinstatement of all the strikers was enforced by this court. N. L. R. B. v. J. H. Rutter Rex Mfg. Co., Inc., 5 Cir. 1957, 245 F.2d 594. Included in that order was a requirement that Rutter Rex make whole any striker for lost earnings resulting from the company's failure to offer reinstatement. See § 10(c) of the N.L.R.A., 29 U.S.C. § 160(c). Many of the strikers were denied timely reinstatement and to remedy this the Board undertook the preparation of a back-pay specification.

Four years later, in November, 1961, following a lengthy investigation, the Board issued the first back-pay specification and notice of hearing. The specification consisted of the back-pay claims of all strikers who had been denied reinstatement for any part of the period in question. An attempt by Rutter Rex to have the proceedings permanently enjoined because of the four year delay was denied by this court. N. L. R. B. v. J. H. Rutter Rex, 5 Cir. 1962, 305 F.2d 242. Extensive hearings were then held on the claims in the specification, and in June of 1964 the trial examiner issued his initial findings. Two years later, in June of 1966, the Board adopted most of the trial examiner's findings and issued its first supplemental decision and order of back-pay liability. 158 N.L.R.B. 1414.³

This court, reviewing the Board's initial back-pay order, modified that order by terminating petitioner's back-pay liability as of July 30, 1959. N. L. R. B. v. J. H. Rutter Rex Mfg. Co., Inc., 5 Cir. 1968, 399 F.2d 356. The primary justification for the modification was that the prolonged delay of the Board in issuing the order prejudiced the company's ability to defend the claims and that equity therefore required that an appropriate limit be put on the liability. On appeal, the Supreme Court reversed this court's modification and held, in essence, that the claimants should not be penalized for the Board's delay. N. L. R. B. v. J. H. Rutter Rex Mfg. Co., Inc., 1969, 396 U.S. 258, 90 S.Ct. 417, 24 L.Ed.2d 405. In April, 1970, this court, on remand from the Supreme Court, issued its judgment enforcing the Board's original back-pay order.

Following entry of the final order in the above proceedings, which involved the first back-pay order Rutter Rex I, the Board's Regional Director began preparation of a second back-pay specification for those claimants whose back-pay claims extended beyond June, 1961. The second back-pay specification and notice of hearing was issued on November 30, 1970. A hearing on the specification was held in February and March of 1971, and the trial examiner's decision issued in June, 1971. On November 5, 1971, the Board issued its order granting supplemental back-pay to 33 claimants who had not been offered reinstatement until after June, 1961. 194 N.L.R.B. No. 6 (1971). Six of the claims extended beyond 1963 and the remaining twenty-seven were for a period of only two years or less.⁴

On November 17, 1971, Rutter Rex filed a petition in this court for review of the Board's second supplemental back-pay order. On December 27, 1971, the Board filed a cross application for enforcement of its order. In seeking to have this court set aside the back-pay order for the post-1961 period, the company raises the following contentions of error: (1) The Board failed to consider its own delay in setting the second back-pay award; (2) the punitive nature of the hearing, particularly the Board's refusal to produce various Board records, denied the company a fair hearing; and (3) the evidence failed to support the awards to many of the claimants. With the exception of the Board's failure to produce certain notes relating to the Watford claim, we reject each of the company's assertions.

I. The Board's Delay

As it did in Rutter Rex I, the company is alleging that the Board's delay prejudiced its ability to defend and that, therefore, the delay should somehow allow it to escape its liability to the claimants. Specifically, the company claims that the Board erred in refusing to even consider the delay as a factor. In support of its argument, the company continually refers to Justice Marshall's words in Rutter Rex I, in which he said that the opinion was limited to the "circumstances of this case." 396 U.S. at 259, 90 S.Ct. 417. Therefore, the company argues, the delay should have been considered anew in the second back-pay proceeding. We reject the company's argument for two reasons.

First, there is no indication that the Board did not, in fact, consider the delay.⁵ Indeed, there is ample evidence to the contrary. The trial examiner ordered the general counsel to explain the delay in issuing the second specification. Only after the examiner considered and accepted the explanation was the delay factor rejected.

Secondly, we explicitly find that the Board was correct in refusing to allow the administrative delay to prejudice the claimants. In Rutter Rex I, the Supreme Court rejected the identical claim on almost identical facts, stating:

"We do not mean that delay in the administrative process is other than deplorable. It is deplorable if, as the Court of Appeals thought, the company was hampered in the presentation of its defenses to the back-pay specification by the delay. It is even more deplorable if, as seems clear, innocent employees had to live for some years on reduced incomes as a combined result of the delay and the company\'s illegal failure to reinstate them. It may be that the company could have, through the courts, compelled earlier Board action. But the Court of Appeals exceeded the narrow scope of review provided for the Board\'s remedial orders when it shifted the cost of the delay from the company to the employees in this case."

396 U.S. at 265-266, 90 S.Ct. at 421.

In this second back-pay order we find the case against allowing the delay factor to prejudice the claimants to be even stronger than in Rutter Rex I. Before commencing the second back-pay specification, the Board wisely waited until after the first back-pay order was approved by the courts. Had the Court of Appeals decision limiting back-pay liability to the pre-1959 period been accepted by the Supreme Court, a fortiori, a post-1961 back-pay specification would have been of dubious legality. We cannot fault the Board for waiting until after the first back-pay order was finalized before beginning the second specification. In addition, the company had been on notice from the time of the 1966 Board order that post-1961 back-pay remained to be computed.⁶ The fact that the company did not offer reinstatement to some of the claimants until 1970 provides further justification for the Board's waiting until it did to begin the second back-pay specification. As the Board points out, "If the Board had held the second hearing prior to the May, 1970 reinstatement of the last striker, yet a third hearing would have to have been held after their backpay periods had been tolled by offers of reinstatement."

The delay that has taken place in the adjudication of these claims is most unfortunate. Some of the fault obviously lies with the sluggish internal operations of the Board. The company, however, in failing to reinstate as ordered by the Board and by appealing the initial order is also very much to blame. Certainly, it would be both unjust and inconsistent with the Supreme Court's decision in Rutter Rex I to require that the otherwise entitled claimants pay the price for the delay, which was in no way caused by them. We find that the Board was correct in rejecting this defense.

II. Denial of a Fair Hearing

The primary focus of the company's claim that it was denied a full and fair hearing before the Board is the refusal of the Board to allow the company access to certain Board files that might have aided the company in impeaching some or all of the back-pay claimants. We discern three somewhat distinct objections made by the Company: (A) The general failure of the Board to follow its normal procedure of collecting statements from the back-pay claimants and later making them available to the employer; (B) The Board's overruling of a subpoena duces tecum by which the company sought access to the Board's investigative files, and the continued refusal of the general counsel to produce these files upon request; and (C) The Board's refusal to allow Witness Lacey, a former Board compliance officer, to refresh his recollection while testifying by referring to his...