NLRB v. Nickey Chevrolet Sales, Inc.

• Decision Date: 27 February 1974
• Docket Number: No. 72-1314.,72-1314.
• Citation: 493 F.2d 103
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. NICKEY CHEVROLET SALES, INC., Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

493 F.2d 103 (1974)

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. NICKEY CHEVROLET SALES, INC., Respondent.

No. 72-1314.

United States Court of Appeals, Seventh Circuit.

Argued February 13, 1973.

Decided February 27, 1974.

Marcel Mallet-Prevost, Asst. General Counsel, Paul J. Spielberg, Atty., N.L. R.B., Washington, D.C., for petitioner.

Ray E. Poplett, Chicago, Ill., for respondent.

Before FAIRCHILD and PELL, Circuit Judges, and CAMPBELL,^* Senior District Judge.

FAIRCHILD, Circuit Judge.

The present proceeding arises out of a judgment of this court, entered March 11, 1971, finding respondent Nickey in civil contempt for disobeying a decree of this court entered May 4, 1965. Our 1965 decree enforced an N.L.R.B. order, and ordered respondent to cease and desist from discouraging union membership by discriminating in hiring, tenure or other conditions of employment or interfering with its employees in the exercise of their right to self-organization.

Our 1971 judgment, entered after a proceeding initiated before us by the Board, found that respondent, by discharging its employee Sergott on October 4, 1969, wilfully violated the 1965 decree and became guilty of contempt of this court and its decree. We provided, among other things, that respondent shall purge itself of said contempt by reinstating Sergott "and making him whole for all pay and benefits lost due to the discrimination against him, together with 6% interest thereon. . . ." The discharge of Sergott was never the subject of an unfair labor practice proceeding before the Board.

Respondent reinstated Sergott March 24, 1971. Whether respondent then offered or tendered any amount of back pay is not clear, but in any event agreement on the amount necessary to comply with our 1971 judgment was not reached. The Board might then have asked this court to find that respondent had not purged itself so as to escape the penalties we prescribed in the event of respondent's default. Resolution of the dispute over the amount to be paid would then, either upon petition by the Board, or by respondent, perhaps accompanied by a tender, have been a function of this court, doubtless performed through a special master appointed by us.

The Board, however (and apparently at all times with the acquiescence of respondent), proceeded to make an administrative determination of the amount of back pay required. The regional director issued a back pay specification, respondent answered, a hearing was held before a trial examiner, General Counsel filed exceptions, the Board reversed the examiner in part, and issued an order, 195 NLRB No. 76, requiring respondent to pay Sergott $20,606.09, less tax withholding, and plus interest. The Board seeks enforcement of this order by a further decree of this court.

The procedural problem is that the foundation for a determination of the amount of back pay in Sergott's case is not a Board remedial order in a statutory unfair labor practice proceeding requiring respondent to reinstate Sergott and pay him back pay, but is an order of this court requiring respondent to do so in order to remedy an event which was never the subject of an unfair labor practice proceeding before the Board. As well be seen, we think there was no statutory authority for the back pay order entered by the Board, nor for the Board's petition to this court for enforcement of that order, and that any legal stature which the Board's back pay order has must be predicated upon the 1971 decree of this court, together with respondent's acquiescence in, and failure to object up to the time of oral argument before this court to the form of procedure followed.

After oral argument, the parties supplied supplemental memoranda. The Board argues that our 1971 judgment "tracks closely the language of a typical Board order of reinstatement and back pay, and appears to contemplate, if necessary, the usual back pay proceedings before the Board." In other words, it appears to be the Board's position that the similarity of the function of determining the amount of back pay in this case to the function regularly performed by the Board in other instances is to be given controlling significance.

It is true that the Board's authorization under 29 U.S.C. § 160(c) to "take . . . affirmative action including reinstatement of employees with or without back pay" has been construed to include the conduct of proceedings to determine the amount of back pay following court enforcement of a Board order directing payment of back pay in general terms. See Nathanson v. National Labor Relations Board, 344 U.S. 25, 29, 73 S.Ct. 80, 83, 97 L.Ed. 23, 30 (1952); National Labor Relations Board v. Bird Mach. Co., 174 F.2d 404, 405 (1st Cir., 1949); Wallace Corporation v. National Labor Relations Board, 159 F.2d 952, 954 (4th Cir., 1947); National Labor Rel. Board v. New York Merchandise Co., 134 F.2d 949 (2d Cir., 1943).

It is the ordinary practice of the Board not to consider the amount of back pay until its general remedial order has been enforced by the court on its merits, in order to avoid unnecessary efforts if enforcement be denied. See N. L.R.B. v. Deena Artware, 361 U.S. 398, 411, 80 S.Ct. 441, 447-449, 4 L.Ed.2d 400, 409-410 (separate opinion) (1960); Nathanson, supra; New York Merchandise Co., supra. The Board has promulgated rules establishing the procedures for back pay proceedings subsequent to court enforcement of its orders. 29 C. F.R. § 101.16.

Courts have approved this procedure on the theory that the order of the Board requiring reinstatement and back pay clearly contemplates further administrative determination on its part; that the initial order is analogous to an interlocutory judgment fixing liability but not determining damages; and that the enforcement decree is analogous to an affirmance of such interlocutory judgment on appeal. After enforcement, the prior administrative proceedings resume and the exact amount of back pay due is determined.¹ If the supplemental Board order embodying this specific amount of back pay comes before the court again either for enforcement under § 10(e) or for review under § 10(f), an even more restricted judicial inquiry may be in order than is called for by the "substantial evidence test." In reviewing the Board's choice of a formula for computing back pay the Supreme Court has stated that the Board's order "`should stand unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act.'" citations omitted National L. R.B. v. Seven-up Bottling Co., 344 U.S. 344, 346-347, 73 S.Ct. 287, 289, 97 L.Ed. 377, 381-382 (1953).

The procedural stance of the instant case is quite different. Here, the Board did not commence another unfair labor practice predicated upon the discharge of Sergott, but chose, instead, to seek a judicial determination of the unlawfulness of his discharge in a contempt action.² In such an original proceeding before the court of appeals or its master, the Board must prove, much like a prosecutor in a criminal action, except by clear and convincing evidence, that the respondent has failed to comply with the decree of the court. See, e. g., N.L.R.B. v. Laney & Duke Storage Warehouse Co., 424 F.2d 109, 112 (5th Cir., 1970); Alamo Express, Inc., supra. In contrast, at an enforcement proceeding the Board defends its order as supported by the record made before the Board.

The Board relies on the procedure followed by this court in N.L.R.B. v. My Store, Inc., 468 F.2d 1146 (7th Cir., 1972), cert. denied 410 U.S. 910, 93 S.Ct. 965, 35 L.Ed.2d 271. There this court gave effect to the Board's back pay determination as an appropriate administrative proceeding within the Board's province. The Board had ordered reinstatement and back pay to a class of employees in an unfair labor practice proceeding; this court enforced; later this court found the employer in contempt for failure to make proper offers of reinstatement; after reinstatement, the court found the purgative terms of the contempt order had been satisfied, and remanded to the Board to determine back pay. Although the sequence of the proceedings is indeed similar to that in the instant case, we think there is a significant difference. In My Store, the back pay determination, although following a contempt adjudication, was a continuation of the original unfair labor practice proceeding, and a filling out of the Board's original remedial order.

Respondent's obligation to pay back pay to Sergott arose solely from the order of this court, and not from an order of the Board. If the Board, after an appropriate unfair labor practice proceeding, had ordered respondent to pay back pay to Sergott, the Board would, as held in the decisions above cited, have had authority to determine the amount in a further proceeding. Absent such underlying Board order, we think there was no authority for the Board's determination of the amount of back pay. The determination would be a nullity, and, unhappily, a waste of effort unless respondent's acquiescence makes possible a degree of salvage.

If the Board had been proceeding within its authority, the test on judicial review would be whether its findings were "supported by substantial evidence on the record considered as a whole." 29 U.S.C. § 160(e). Under the present circumstances, that test does not apply, because the statute did not confer the authority to make the determination, nor do we think that respondent's acquiescence could do so.

Respondent does, however, suggest in argument that the Board's determination could be treated as that of a special master and adopted by this court except where clearly erroneous.

It is, of course, improbable that we would have appointed the Board, or one of its examiners, our special master, in view of the Board's status as a litigant, albeit one not seeking the vindication of a private interest. The Board relies on the...