N.L.R.B. v. Velocity Exp., Inc.

• Decision Date: 17 January 2006
• Docket Number: No. 04-9602.,04-9602.
• Citation: 434 F.3d 1198
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. VELOCITY EXPRESS, INC., Respondent.
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1198

434 F.3d 1198

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. VELOCITY EXPRESS, INC., Respondent.

No. 04-9602.

United States Court of Appeals, Tenth Circuit.

January 17, 2006.

COPYRIGHT MATERIAL OMITTED

Christopher W. Young, Attorney, (Arthur F. Rosenfeld, General Counsel, John E. Higgins, Jr., Deputy General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Meredith L. Jason, Supervisory Attorney, with him on the brief), National Labor Relations Board, Washington, D.C., for Petitioner.

Josef S. Glynias (and Terry L. Potter, on the briefs), Blackwell, Sanders, Peper, and Martin, L.L.P., St. Louis, MO, for Respondent.

Before KELLY, MURPHY, Circuit Judges and ARMIJO,^* District Judge.

PAUL KELLY, JR., Circuit Judge.

This matter is before us on the Petitioner National Labor Relations Board's ("NLRB") application for enforcement of its order against Respondent Velocity Express Inc., f/k/a Corporate Express Delivery Systems ("Velocity"). Velocity contests the calculation of backpay for wrongfully terminated employees. We exercise jurisdiction pursuant to 29 U.S.C. § 160(e), and enforce the order.

Background

Velocity is a company that provides same-day delivery and related services. Edwin and Hildegard Kirk were both Velocity drivers. They owned the vehicles they used for their delivery routes. They were paid flat salaries. From those salaries, Velocity deducted amounts for vehicle insurance and pager service. The Kirks were responsible for payment of any vehicle operating expenses they might incur. Velocity discharged the Kirks in 1999 and each obtained interim employment. Edwin Kirk was self-employed and subsequently obtained a job that paid an hourly wage. Hildegard Kirk was employed during the interim period and received an hourly wage. The NLRB determined that Velocity wrongfully discharged the Kirks in retaliation for their union activities and ordered their reinstatement. Corporate Express Delivery Systems, 332 NLRB 1522, 1532-33 (2000). The NLRB also ordered Velocity to make the Kirks "whole" for any loss of earnings. Id.

In 2002, the D.C. Circuit enforced the NLRB's order and denied Velocity's petition for review. Corporate Express Delivery Sys. v. NLRB, 292 F.3d 777 (D.C.Cir.2002). In doing so, the court held that the Kirks were employees, rather than independent contractors. A supplemental compliance proceeding was initiated to determine the amount of backpay that Velocity owed the Kirks. The NLRB's regional director issued a compliance specification. In it, the regional director calculated each Kirk's gross backpay, with deductions for vehicle insurance and pager services, estimated vehicle operating expenses, severance pay, and interim earnings. The specification calculated Edwin Kirk's interim earnings by subtracting his business expenses from gross receipts. It based Hildegard's gross backpay on her average base pay for 1999.

All parties objected to the specification. Specifically, the Union, the charging party before the NLRB, argued that the specification should not have reduced gross backpay by the operating expenses the Kirks presumably would have incurred, had they continued to be employed at Velocity. Velocity contested (1) the backpay formula's determination of operating expenses, (2) the calculation of Edwin's interim earnings, and (3) the use of average pay rate to determine Hildegard's backpay. A hearing was held on July 22, 2003 before an Administrative Law Judge ("ALJ"). The ALJ issued a supplemental decision and recommended order, dated September 30, 2003. The ALJ determined that the Kirks' gross backpay should be calculated without deduction for vehicle operating expenses but found that the compliance specification was otherwise appropriate. Velocity filed exceptions to the ALJ's recommended order, which the NLRB considered and overruled. In a split decision, the NLRB adopted the ALJ's recommended order on August 31, 2004. It directed Velocity to pay Edwin $136,818.13 and Hildegard $12,000.27 plus interest, less appropriate tax withholdings.

Velocity contends that enforcement of the NLRB's order should be denied because (1) the NLRB's backpay formula was arbitrary and unreasonable and does not approximate what the Kirks would have earned absent discharge, (2) the most accurate backpay calculation is based upon the Kirks' tax returns, (3) the ALJ's rulings at the hearing regarding the appropriate backpay formula and subsequent reversal of those rulings denied Velocity the opportunity to present evidence, and (4) the rate of pay the ALJ used to calculate Hildegard's gross backpay is without support in the evidence.

Discussion

Our standard of review over a NLRB order is well-settled: "We will grant enforcement of an NLRB order when the agency has correctly applied the law and its findings are supported by substantial evidence in the record as a whole." NLRB v. Interstate Builders, Inc., 351 F.3d 1020, 1027 (10th Cir.2003) (quoting Miera v. NLRB, 982 F.2d 441, 444 (10th Cir.1992)); see also 29 U.S.C. § 160(e); Universal Camera Corp. v. NLRB, 340 U.S. 474, 488-90, 71 S.Ct. 456, 95 L.Ed. 456 (1951). Our scope of review is a limited one and an NLRB decision will not be overturned just because an appellate panel may have decided the matter differently. Interstate Builders, 351 F.3d at 1028; Ready Mixed Concrete Co. v. NLRB, 81 F.3d 1546, 1551 (10th Cir.1996) (review is "quite narrow"). We do not re-weigh the evidence or second guess the NLRB's factual inferences. Interior Alterations, Inc. v. NLRB, 738 F.2d 373, 376 (10th Cir.1984); see also Universal Camera, 340 U.S. at 488, 71 S.Ct. 456. Rather, we review only to ensure the NLRB acted within reasonable bounds and substantial evidence supports the order. Interstate Builders, 351 F.3d at 1028 (quoting Ready Mixed Concrete Co., 81 F.3d at 1551). "Substantial evidence is defined as such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. at 1027-28; see also Dickinson v. Zurko, 527 U.S. 150, 162, 119 S.Ct. 1816, 144 L.Ed.2d 143 (1999); Allentown Mack Sales and Servs., Inc. v. NLRB, 522 U.S. 359, 366-67, 118 S.Ct. 818, 139 L.Ed.2d 797 (1998).

We must give "special respect" to the NLRB's choice when we review a remedy imposed for violation of the National Labor Relations Act (NLRA). Monfort v. NLRB, 965 F.2d 1538, 1546 (10th Cir.1992) (citing NLRB v. Gissel Packing Co., 395 U.S. 575, 612 n. 32, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969)). The NLRB's power to order backpay is "a broad, discretionary one, subject to limited judicial review." Fibreboard Corp. v. NLRB, 379 U.S. 203, 216, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964); Monfort, 965 F.2d at 1546; Angle v. NLRB, 683 F.2d 1296, 1301 (10th Cir.1982). It is a "power for the [NLRB], not this court, to wield." Angle, 683 F.2d at 1301 (citing NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 346, 73 S.Ct. 287, 97 L.Ed. 377 (1953)). This deference, however, ends when the order "is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the [NLRA]." Monfort, 965 F.2d at 1546 (quoting Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533, 540, 63 S.Ct. 1214, 87 L.Ed. 1568 (1943)).

It is against this deferential backdrop that we turn to Velocity's arguments against enforcement. We hold that the NLRB's decision not to deduct presumed operating expenses from gross backpay was reasonable. A backpay award is "only an approximation" and the NLRB "has considerable discretion in selecting a method reasonably designed to approximate the amount of pay a wrongfully discharged employee" is entitled to. Angle, 683 F.2d at 1302. Our sister circuits have appropriately described this wide discretion, overturning a backpay order only when the award is "arbitrary or unreasonable." See NLRB v. International Ass'n of Bridge, Structural & Reinforced Iron Wkrs., Local 378, 532 F.2d 1241, 1242-43 (9th Cir.1976); Woodline Motor Freight, Inc. v. NLRB, 972 F.2d 222, 225 (8th Cir.1992).

The NLRB applied its standard formula in calculating the Kirks' backpay — it took the amount of gross pay each would have earned absent wrongful discharge, then subtracted interim earnings and regular withholdings. As noted above, Edwin was paid a flat salary and vehicle operating expenses were not regularly withheld. Nevertheless, Velocity argues that the NLRB also should have deducted vehicle operating expenses the Kirks would have incurred, had they been employed by Velocity. Rejecting this argument, the NLRB relied on settled law that it does not "deduct from the gross backpay those expenses that employees would have incurred had they not been unlawfully discharged." Supplemental D & O at 2 (citing Laborers Local 38 (Hancock-Northwest), 268 NLRB 167 (1983), enf'd. in relevant part, 748 F.2d 1001 (5th Cir.1984) (declining to deduct expenses for transportation, lodging and meals that the discriminatees would have incurred had they been employed during the backpay period); Myerstown Hosiery Mills, 99 NLRB 630, 631 (1952)).

Like the dissent in the supplemental decision and order, Velocity argues that the vehicle operating expenses in this case are direct expenses associated with the work performed (driving the trucks) and should be treated like the insurance and pager service deductions. See Supplemental D & O at 4 (Battista, Chairman, dissenting). It distinguishes prior cases not allowing a deduction as involving an employee's personal and domestic expenses (room, board, transportation, or child care), not work-related expenses. The NLRB rejected this distinction as unsupported by its precedent, and found the application of such a principle, at least as to a reduction in gross backpay based upon interim expenses being less than estimated actual expenses, as unsupported by the evidence. Supplemental D & O at 2-3. The dissent would have compared the expenses in relation to gross pay...