Tubari Ltd., Inc. v. N.L.R.B., s. 91-3434

• Decision Date: 19 March 1992
• Docket Number: Nos. 91-3434,91-3490,s. 91-3434
• Citation: 959 F.2d 451
• Parties: 139 L.R.R.M. (BNA) 2809, 60 USLW 2612, 121 Lab.Cas. P 10,059 TUBARI LTD., INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent. NATIONAL LABOR RELATIONS BOARD, Petitioner, v. TUBARI LTD., INC., Respondent.
• Court: U.S. Court of Appeals — Third Circuit

Page 451

959 F.2d 451

139 L.R.R.M. (BNA) 2809, 60 USLW 2612,

121 Lab.Cas. P 10,059

TUBARI LTD., INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. TUBARI LTD., INC., Respondent.

Nos. 91-3434, 91-3490.

United States Court of Appeals, Third Circuit.

Argued Feb. 10, 1992.

Decided March 19, 1992.

Stephen J. Edelstein (argued), Schwartz, Pisano, Simon & Edelstein, Livingston, N.J., for Tubari, Inc.

Jerry M. Hunter, Gen. Counsel, D. Randall Frye, Acting Deputy Gen. Counsel, Aileen A. Armstrong, Deputy Associate Gen. Counsel, Charles Donnelly, Supervisory Atty., David Seid, Atty. (argued), N.L.R.B., Washington, D.C., for the N.L.R.B.

Before: GREENBERG and COWEN, Circuit Judges, and GREEN, District Judge. ^*

OPINION OF THE COURT

GREENBERG, Circuit Judge.

This case, before us on a petition for review and application for enforcement of a decision and order of the National Labor Relations Board, requires us to determine whether unlawfully-discharged, unskilled employees satisfied their duty to mitigate damages by accepting from their union 66% of their former salary as "wages" for picketing without otherwise searching for interim employment. We will grant the petition for review and will set aside the decision and order which found that the discriminatees had reasonably mitigated their damages.

I. BACKGROUND

The case is not complicated and the historical facts are not in dispute. Inasmuch as the employer, Tubari Ltd., Inc., violated sections 8(a)(1), (2) and (3) of the National Labor Relations Act (the Act), 29 U.S.C. §§ 158(a)(1), (2) & (3), by unlawfully discharging and/or refusing to reinstate 19 of its employees, the Board ordered the employees' reinstatement and further ordered Tubari to pay them lost earnings and benefits, 287 N.L.R.B. 1273 (1988). We entered a judgment enforcing its order. NLRB v. Tubari Ltd., 869 F.2d 590 (3d Cir.1989) (table). Because the parties disputed the amount of backpay due the discriminatees, a hearing was held on the issue before an administrative law judge. The Board issued a compliance specification deducting from the backpay monies received by the discriminatees for picketing activities. Tubari then filed an answer asserting that the At the hearing, a Board compliance officer testified that the discriminatees each received $150.00 per week from the Fur Workers Union Local 3, United Food and Commercial Workers, AFL-CIO, together with $25 per week lunch money. As a condition for receiving the money, the union required the discriminatees to picket from 7:30 a.m. to 3:00 p.m. every day, a circumstance that led the compliance officer to deem the $150 as "interim earnings" rather than strike benefits. While the Board's General Counsel stipulated that none of the discriminatees searched for other interim employment, the administrative law judge nevertheless determined that they had reasonably mitigated damages and were thus entitled to backpay.

discriminatees were not entitled to any backpay since they failed to conduct a diligent search for suitable interim employment.

On June 26, 1991, the Board issued a supplemental decision and order agreeing with the administrative law judge. Tubari Ltd., Inc., 303 N.L.R.B. No. 86 (1991). The Board found that the picketing "was true employment in the sense that the discriminatee/picketers worked regular hours and were paid a specific weekly wage plus lunch expenses. These were not mere strike benefits." Id. at 6. In finding that the discriminatees had properly mitigated their losses, the Board deemed it significant that they were unskilled laborers and opined that picketing would not excuse skilled workers from seeking employment in another trade. Id. at 4-5.

Tubari has filed a petition to review the Board's order pursuant to 29 U.S.C. § 160(f) and the Board has filed a cross-petition for enforcement of its order pursuant to section 160(e).

II. DISCUSSION

A.

The Board may "take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of [the Act]" to remedy an employer's unfair labor practices. 29 U.S.C. § 160(c). Because of its expertise in resolving labor disputes, see NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 346-47, 73 S.Ct. 287, 289, 97 L.Ed. 377 (1953), the Board enjoys wide discretion in fashioning remedial orders. Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 216, 85 S.Ct. 398, 406, 13 L.Ed.2d 233 (1964); Kenrich Petrochemicals, Inc. v. NLRB, 907 F.2d 400, 405 (3d Cir.) (in banc), cert. denied, --- U.S. ----, 111 S.Ct. 509, 112 L.Ed.2d 522 (1990). In particular, a reviewing court will not disturb a backpay order " '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.' " Fibreboard, 379 U.S. at 216, 85 S.Ct. at 406 (quoting Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533, 540, 63 S.Ct. 1214, 1218, 87 L.Ed. 1568 (1943)); Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 194, 61 S.Ct. 845, 852, 85 L.Ed. 1271 (1941).

While the Board is entitled to deference, we exercise plenary review over questions of law. NLRB v. Louton, Inc., 822 F.2d 412, 414 (3d Cir.1987). The Board's findings of fact will be overturned if there is no substantial evidence in the record, considered as a whole, to support them. Id.; see also 29 U.S.C. § 160(e) ("findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive"). While we do not substitute our judgment for that of the Board, we may modify an order to ensure that it effectuates the policies of the Act. NLRB v. Future Ambulette, Inc., 903 F.2d 140, 144 (2d Cir.1990).

After the amount of backpay has been established, the burden shifts to the employer to produce evidence that would mitigate its liability. Lundy Packing Co. v. NLRB, 856 F.2d 627, 629 (4th Cir.1989); Iron Workers Local 118, etc. v. NLRB, 804 F.2d 1100, 1102 (9th Cir.1986); NLRB v. Pilot Freight Carriers, Inc., 604 F.2d 375, 377 (5th Cir.1979). An employer may meet this burden (and thus be entitled to a deduction The type of work the employee must seek depends upon his or her abilities. Generally, the employee must seek interim employment "substantially equivalent" to the position of which he or she was unlawfully deprived and that employment must be suitable to a person of like background and experience to the employee. NLRB v. Madison Courier Inc., 472 F.2d 1307, 1318 (D.C.Cir.1972) (Madison Courier I ) (citing NLRB v. Miami Coca-Cola Bottling Co., 360 F.2d 569, 575 (5th Cir.1966)); accord Standard Materials, Inc. v. NLRB, 862 F.2d 1188, 1192-93 (5th Cir.1989). ¹ While the reasonableness of an employee's efforts in seeking interim employment is normally determined by such factors as the economic climate and the employee's skills, qualifications and age, Lundy Packing, 856 F.2d at 629, if the employee has exercised no diligence whatsoever "the circumstance of a scarcity of work and the possibility that none would have been found even with the use of diligence is irrelevant." Madison Courier I, 472 F.2d at 1319 (quoting American Bottling Co., 116 N.L.R.B. 1303, 1307 (1956)).

                from gross backpay) by, inter alia, establishing that the employee has willfully incurred losses through unjustifiably refusing adequate interim employment.  Phelps Dodge, 313 U.S. at 198-200, 61 S.Ct. at 854-55.   Further, an employer need not establish that the employee would have secured such employment, for the employer meets its burden on the mitigation issue by showing that the employee has withdrawn from the employment market.   Accordingly, where the employer demonstrates that an employee did not exercise reasonable diligence in his or her efforts to secure employment, then it has established that the employee has not properly mitigated his or her damages.  Iron Workers, 804 F.2d at 1102;  Pilot Freight Carriers, 604 F.2d at 377
                

B.

Tubari's argument is straightforward. It argues that the discriminatees' acceptance of $150 per week, roughly 66% of their weekly wage at Tubari, did not excuse them from their duty to search for interim employment. Therefore, since the discriminatees did not even attempt to seek other work, they failed to mitigate damages and are not entitled to backpay. The Board responds that there is a recognized distinction between the receipt of strike benefits, which are not deductible from backpay, and payment in return for picketing. In the Board's view, the latter can in certain circumstances constitute reasonable interim employment for mitigation purposes.

Tubari in turn suggests that, for policy reasons, picketing is an impermissible form of interim employment for mitigation purposes, a public policy contention that we will address first. The mitigation doctrine is "rooted in an ancient principle of law," Ford Motor Co. v. EEOC, 458 U.S. 219, 231, 102 S.Ct. 3057, 3065, 73 L.Ed.2d 721 (1982) (footnote omitted). But in the context of unfair labor practices discharges the doctrine is infused with federal labor law; hence the vindication of private rights is subordinate to public policy. See Kenrich Petrochemicals, 907 F.2d at 406; NLRB v. Madison Courier, Inc., 505 F.2d 391, 398 (D.C.Cir.1974) (Madison Courier II ). As Justice Frankfurter noted in Phelps Dodge, the mitigation doctrine as applied in labor law furthers "the healthy policy of promoting production and employment." 313 U.S. at 200, 61 S.Ct. at 855. See also Madison Courier I, 472 F.2d at 1317. Accordingly, while lawful picketing may be a proper means of combating a particular employer's unfair labor practices, it cannot fairly be said that picketing is activity which promotes production and employment.

However, the fact that a discriminatee's securing of picketing employment is inherently a questionable method of mitigation, does not necessarily indicate that...