Del Rey Tortilleria, Inc. v. N.L.R.B., AFL-CI

• Decision Date: 22 October 1992
• Docket Number: 91-2286,Nos. 91-1934,AFL-CI,I,s. 91-1934
• Parties: 142 L.R.R.M. (BNA) 2120 DEL REY TORTILLERIA, INC., Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner, and Local 76, affiliated with the International Ladies' Garment Workers' Union,ntervenor-Respondent, Intervenor-Cross-Petitioner.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1115

976 F.2d 1115

142 L.R.R.M. (BNA) 2120

DEL REY TORTILLERIA, INC., Petitioner, Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner, and Local 76, affiliated with the International Ladies' Garment

Workers' Union, AFL-CIO, Intervenor-Respondent,

Intervenor-Cross-Petitioner.

Nos. 91-1934, 91-2286.

United States Court of Appeals, Seventh Circuit.

Argued Jan. 6, 1992.

Decided Oct. 22, 1992. ^*

Donald S. Shire, Sol. Gen., Dept. of Labor, Office of Sol., Washington, D.C., Elizabeth Kinney, N.L.R.B., Region 13, Chicago, Ill., Aileen A. Armstrong, Nancy J. Gottfried (argued), N.L.R.B., Appellate Court, Enforcement Litigation, Washington, D.C., for petitioner.

Irving M. Geslewitz, Much, Shelist, Freed, Denenberg, Ament & Eiger, Chicago, Ill. (argued), for respondent.

William A. Widmer, III, Carmell, Charone, Widmer, Mathews & Moss, Chicago, Ill., for intervenor-petitioner.

ORDER

On consideration of the grant of the petition for rehearing, this court withdrew its opinion in this case issued on July 17, 1992, to allow circulation to the entire court pursuant to Circuit Rule 40(f). As a result of that circulation,

IT IS ORDERED that the opinion of this court originally issued on July 17, 1992, and withdrawn on October 16, 1992, is hereby reissued and amended by the addition of the following footnote on page 1115, noted after reissue date:

Before BAUER, Chief Judge, CUDAHY and KANNE, Circuit Judges.

KANNE, Circuit Judge.

In this case the National Labor Relations Board ("the Board") asks us to enforce its order requiring Del Rey Tortilleria, Inc. ("the Company") to pay backpay to two employees it discharged. The Company cross-petitions for review of that order, in part on the ground that it is inconsistent with Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 104 S.Ct. 2803, 81 L.Ed.2d 732 (1984). Because we agree with the Company that the Board's order is inconsistent with Sure-Tan, we deny enforcement.

On June 7, 1985, following the filing of an unfair labor practice charge by Local 76, affiliated with the International Ladies' Garment Workers' Union, AFL-CIO ("the Union"), the Board's Regional Director for Region 13 issued an unfair labor practice complaint against the Company. The complaint alleged, inter alia, that the Company had discharged employees Bernardo Bravo and Nicolas Paredez ¹ in violation of the Act.

Later that month, the Board's General Counsel, the Company and the Union reached a settlement. In the settlement stipulation, the Company did not admit to engaging in any unfair labor practices, but agreed to reinstate and make whole Bravo and Paredez. The Company also waived all further proceedings except a compliance hearing to determine any issues relating to reinstatement and backpay. In accordance with the stipulation, the Board sought enforcement of its order in this court. On September 23, 1986, we entered judgment in favor of the Board, enforcing its order.

After the stipulation, the Company contested the employees' entitlement to reinstatement and backpay on several grounds, and also contested the amount of backpay owed to the employees. The Company's principal argument was that the employees had no entitlement to backpay under the Immigration and Nationality Act ("INA"), 8 U.S.C. § 1101, et seq., because they were undocumented aliens. Shortly thereafter, the Regional Director issued a Backpay Specification and Notice of Hearing seeking reinstatement and liquidated amounts of backpay for the two employees. At the hearing before an administrative law judge, the parties stipulated that Bravo and Paredez were undocumented aliens during their employment with the Company. Moreover, Bravo and Paredez testified that they had applied for legalization under the Immigration Reform and Control Act of 1986 ("IRCA"), 8 U.S.C. §§ 1101 et seq., based on their beliefs that they qualified for legalization. ²

On December 7, 1988, the ALJ issued her decision. She concluded that Bravo and Paredez were entitled to full backpay for all periods after their termination and before the Company offered reinstatement, notwithstanding their undocumented alien status. In her opinion, the ALJ relied on Local 512, Warehouse and Office Workers' Union v. NLRB, 795 F.2d 705 (9th Cir.1986), which held that Sure-Tan' § remedial holding applied only to aliens who are not present within the United States. She therefore found that undocumented aliens who remain in the United States are eligible to receive backpay. The ALJ further found that such aliens were entitled to reinstatement and backpay unless the employer could prove their illegal presence by means of a final INS deportation order. Because the Company had not met that burden, the ALJ ruled that Bravo and Paredez must be presumed to have been legally present at all times and entitled to the full panoply of Board remedies. The ALJ determined that Bravo and Paredez should be awarded backpay for the periods in which they were available for work.

On March 27, 1991, the Board issued its supplemental decision and order, adopting the recommended order of the ALJ. This appeal followed.

Section 10(c) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 160(c), authorizes the Board to remedy the effects of unfair labor practices by ordering violators "to take such affirmative action, including ... backpay, as will effectuate the policies of th[e] Act...." The backpay remedy under the Act is designed to restore "the situation, as nearly as possible, to that which would have obtained, but for the illegal discrimination." Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 194, 61 S.Ct. 845, 852, 85 L.Ed. 1271 (1941).

In a backpay proceeding, the General Counsel has the burden to show the gross amounts of backpay due. When it has done so, the Company has the burden to produce evidence to mitigate its backpay liability. NLRB v. P*I*E Nationwide, Inc., 923 F.2d 506, 513 (7th Cir.1991); NLRB v. Brown & Root, 311 F.2d 447, 454 (8th Cir.1963).

Initially, we note that our review of the Board's factual findings and legal conclusions is limited. We must uphold the Board's factual findings if they are supported by substantial evidence on the record as a whole. Kankakee-Iroquois County Employers' Ass'n v. NLRB, 825 F.2d 1091, 1093 (7th Cir.1987); Lapham-Hickey Steel Corp. v. NLRB, 904 F.2d 1180, 1184 (7th Cir.1990); see also Universal Camera v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951). The Board's legal conclusions also warrant deference. On review, we " 'must uphold the legal conclusions of the Board unless they are irrational or inconsistent with the National Labor Relations Act.' " NLRB v. Augusta Bakery Corp., 957 F.2d 1467, 1471 (7th Cir.1992) (quoting Aqua-Chem, Inc. Cleaver-Brooks Div. v. NLRB, 910 F.2d 1487, 1490 (7th Cir.1990)). We must uphold a remedial order of the Board " '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 [NLRA].' " Id. (quoting Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 216, 85 S.Ct. 398, 406, 13 L.Ed.2d 233 (1964)).

As it did before the Board, the Company argues that the employees are not entitled to any backpay as a matter of law because they are undocumented aliens. The Company claims that the Board's decision disregards the Supreme Court's holding concerning the backpay remedy in Sure-Tan, while the Board counters that its decision is entirely consistent with Sure-Tan. Because the decision in Sure-Tan is dispositive, we will examine it at some length.

In Sure-Tan, after a Board election for Union certification, the companies involved (petitioners in the Supreme Court) informed the INS that several of their employees were undocumented aliens. 467 U.S. at 887, 104 S.Ct. at 2806. After an investigation by the INS, five of the employees agreed to voluntarily depart the United States. Id. The Board concluded that the companies had engaged in an unfair labor practice by informing the INS of the employees' undocumented status " 'solely because the employees supported the Union.' " Id. at 888, 104 S.Ct. at 2807 (quoting Sure-Tan, Inc., 234 N.L.R.B. 1187 (1978)). As a remedy, the Board found that the deported employees should be entitled to receive reinstatement with backpay, id. at 889, 104 S.Ct. at 2807, but it left until compliance proceedings the determination of whether the employees had in fact been available for work. Id.

This court modified the Board's order, and concluded that the Board should consider awarding the employees six months backpay. NLRB v. Sure-Tan, 672 F.2d 592, 606 (7th Cir.1982). In so ruling, we reasoned that awarding six months backpay would better effectuate the policies of the Act, by deterring the employer from future violations. Id. The Supreme Court reversed.

The Supreme Court first held that undocumented aliens are "employees" within the meaning of the NLRA. Sure-Tan, 467 U.S. at 891-94, 104 S.Ct. at 2808-09. Turning to the remedial order, the Court stated that it generally approved the Board's course of action in ordering "the conventional remedy of reinstatement with backpay leaving until the compliance proceedings more specific calculations as to the amounts of backpay, if any, due these employees." Id. at 902, 104 S.Ct. at 2814 (emphasis added). The Court agreed with our holding that "the implementation of the Board's traditional remedies at the compliance proceedings must be conditioned upon the employees' legal readmittance to the United States." Id. at 902-03, 104 S.Ct. at 2814. The Court further explained that: "in computing backpay, the employees must be deemed 'unavailable' for work (and the accrual or backpay therefore tolled) during any period when they were not lawfully entitled to be present and employed in the United States." Id. at 903, 104 S.Ct. at 2814 (emphasis added). ³ Finally, the Supreme Court stated: "[w]e share the Court of Appeals' uncertainty...