NLRB v. Pepsi Cola Bottling ( 2001 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
NATIONAL LABOR RELATIONS BOARD, 
Petitioner,
v.
 No. 00-1970
PEPSI COLA BOTTLING COMPANY OF
FAYETTEVILLE, INCORPORATED,
Respondent.

On Application for Enforcement of an Order
of the National Labor Relations Board.
(11-CA-14889, 11-CA-15034, 11-CA-15181, 11-CA-15281,
11-CA-15383, 11-CA-15556)
Argued: May 8, 2001
Decided: July 25, 2001
Before NIEMEYER, WILLIAMS, and KING, Circuit Judges.
Enforcement denied and case remanded with instructions by pub-
lished opinion. Judge Williams wrote the opinion, in which Judge
Niemeyer and Judge King joined.
COUNSEL
ARGUED: Scott Matthew Wich, CLIFTON, BUDD & DEMARIA,
L.L.P., New York, New York, for Pepsi. William M. Bernstein,
NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for
Board. ON BRIEF: Thomas W. Budd, CLIFTON, BUDD &
DEMARIA, L.L.P., New York, New York, for Pepsi. Leonard R.
2 NLRB v. PEPSI COLA BOTTLING CO.
Page, Acting General Counsel, John H. Ferguson, Associate General
Counsel, Aileen A. Armstrong, Deputy Associate General Counsel,
NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for
Board.
OPINION
WILLIAMS, Circuit Judge:
In this case, the Pepsi-Cola Bottling Company of Fayetteville, Inc.,
(Pepsi), appeals from an order of the National Labor Relations Board
(NLRB) ordering the payment of backpay to employees Christopher
Hyatt and Robert Munn. Because Pepsi was prevented from introduc-
ing relevant evidence at the compliance proceeding which is neces-
sary to evaluate the amount of Pepsi’s backpay liability with respect
to Hyatt, and because the NLRB has not explained adequately its use
of a "representative employee" formula to calculate the amount of
backpay due to Munn, we decline to enforce the NLRB’s order,
instead remanding for further proceedings.
I.
In the underlying unfair labor practices case, the NLRB’s order
required Pepsi, among other things, to reinstate and pay backpay to
employees Hyatt and Munn. Pepsi-Cola Bottling Co. of Fayetteville,
315 NLRB 882 (1994) (NLRB I). This portion of the NLRB’s order
was enforced by this Court in 1996. NLRB v. Pepsi-Cola Bottling Co.
of Fayetteville, No. 95-1924, 1996 U.S. App. LEXIS 23936 (4th Cir.
Sept. 10, 1996). On May 29, 1997, the NLRB’s Regional Director
issued a compliance specification, subsequently amended, setting the
amount of backpay owed to Hyatt and Munn. In its answer, Pepsi
challenged the compliance specification in several respects.
A hearing on the specification was held before an administrative
law judge (ALJ) to resolve the issues presented. On February 9, 1998,
the ALJ issued his supplemental decision, affirming the compliance
specification for Hyatt, but setting aside the specification for Munn
and recalculating the backpay owed to him. On exceptions from the
NLRB v. PEPSI COLA BOTTLING CO. 3
ALJ’s decision, the NLRB affirmed the ALJ’s findings with respect
to Hyatt, but reversed with respect to Munn, finding that the Regional
Director’s "representative employee" method of calculating the
amount Munn would have earned had he remained at Pepsi should
have been used and was erroneously rejected by the ALJ in favor of
an average percentage pay increase approach. Pepsi-Cola Bottling Co.
of Fayetteville, 330 NLRB No. 153 (2000) (NLRB II).
A.
The backpay period for Hyatt began on December 30, 1992, when
Hyatt was unlawfully discharged by Pepsi. Hyatt’s backpay period,
according to the NLRB, ended on May 12, 1997, when Pepsi rein-
stated him to his former position as a bulk route salesman. Between
his discharge and reinstatement, Hyatt worked for several employers,
including a Coca-Cola bottler and a firm known as D.K. Taylor. Pepsi
asserts that after his reinstatement, Hyatt was terminated by Pepsi for
failing a drug test, but the ALJ deemed this information irrelevant and
did not permit inquiry into either Pepsi’s drug testing policies or
Hyatt’s alleged failure of a Pepsi drug test.
In determining the amount of earnings Hyatt lost, the NLRB’s
Regional Director, in a finding upheld by the ALJ and the NLRB,
applied a "representative employee" formula. Using information pro-
vided by Pepsi, the Regional Director initially identified a group of
Pepsi’s bulk route salesmen whose earnings approximated Hyatt’s at
the time of discharge. For each year of the backpay period, the aver-
age annual earnings of a representative group were calculated; these
earnings were converted to a quarterly basis, and Hyatt was awarded
the difference between his quarterly interim earnings during the
period between his wrongful termination and reinstatement, and what
he "would have" earned had he remained at Pepsi according to the
representative employee calculation. (J.A. at 130.)
After his initial, wrongful termination from Pepsi, Hyatt took a job
at Coca-Cola. In November of 1995, Hyatt resigned from his position
at Coca-Cola after he failed a drug test. The NLRB asserts that Hyatt
was, in fact, discharged, because, it posits, the only alternative to res-
ignation was discharge. NLRB compliance officer Bradshaw stated
that it "was [his] understanding" that Hyatt resigned involuntarily
4 NLRB v. PEPSI COLA BOTTLING CO.
because he faced termination after failing a drug test. (S.A. at 46.)
Bradshaw then stated that he was not competent to testify as to the
circumstances surrounding Hyatt’s separation from Coca-Cola and
apologized for giving testimony regarding this issue. Hyatt himself
was asked by Pepsi’s attorney why he was "fired by Coke," and
responded, "I failed a drug test." (J.A. at 58.) Then Hyatt clarified his
testimony, stating that he did not supply the unemployment authori-
ties with information regarding his separation from Coca-Cola "be-
cause actually I felt I wasn’t terminated from any job that I left." (J.A.
at 62.) After the ALJ summarized his testimony as being "that he
wasn’t terminated from any job, that he voluntarily quit," Hyatt
responded, "Yes, sir." (J.A. at 62.) Asked again whether he voluntar-
ily quit his Coca-Cola job, he again said, "Yes, sir." (J.A. at 61-62.)
After his departure from Coca-Cola, Hyatt was unemployed for
approximately two weeks before accepting employment at a company
known as D.K. Taylor at a lower pay rate than he earned at Coca-Cola
but with more job responsibilities. The NLRB, in its backpay calcula-
tion, treated Hyatt as receiving earnings during his two-week period
of unemployment at the rate he would have received had he remained
at Coca-Cola. Beginning from Hyatt’s start date at D.K. Taylor, how-
ever, the NLRB included as interim earnings only the actual earnings
from Hyatt’s lower-paying D.K. Taylor job. Thus, Pepsi’s backpay
liability reflects the reduction in earnings Hyatt suffered when he left
Coca-Cola. Under the NLRB’s calculation, the backpay owed Hyatt
is $60,905.
B.
Robert Munn’s backpay period began on November 22, 1991,
when he was unlawfully discharged while he was still in his proba-
tionary period and earning $7.50 an hour as a mechanic. His backpay
period ended on November 28, 1996, when Pepsi offered him rein-
statement. As with Hyatt, the Regional Director, in an approach
rejected by the ALJ but reinstated by the NLRB, applied a "represen-
tative employee" formula to determine the backpay owed Munn. The
representative employee formula involved examining, on a quarterly
basis, the earnings of mechanics considered comparable to Munn in
terms of earnings at the time of their discharge; each quarter, the earn-
ings of a pool of representative employees were averaged and the
NLRB v. PEPSI COLA BOTTLING CO. 5
result was deemed to reflect what Munn would have earned had he
remained at Pepsi. The NLRB determined that Munn was owed back-
pay of $18,871.64.
II.
The NLRB’s interpretations of the Act are entitled to deference if
they are reasonable, even if the NLRB’s reading of the Act is not "the
best way to read the statute." Holly Farms Corp. v. NLRB, 517 U.S.
392, 409 (1996) (emphasis omitted). "If the [NLRB’s] legal interpre-
tations are ‘rational and consistent with the Act,’ they will be upheld
by reviewing courts." Sam’s Club v. NLRB, 173 F.3d 233, 239 (4th
Cir. 1999) (quoting Fall River Dyeing & Finishing Corp. v. NLRB,
482 U.S. 27, 42 (1987)) (internal citation omitted). "When we review
mixed questions [of fact and law], the [NLRB’s] application of legiti-
mate legal interpretations to the facts of a particular case should be
upheld if they are supported by substantial evidence based upon the
record as a whole." Sam’s Club, 173 F.3d at 239. Substantial evidence
review must consider evidence that detracts from as well as supports
the NLRB’s findings, and substantial evidence is "such relevant evi-
dence as a reasonable mind might accept as adequate to support a
conclusion." Id. (internal quotation marks omitted). A reviewing court
engaged in substantial evidence review may not "displace the
[NLRB’s] choice between two fairly conflicting views" of the evi-
dence, "even though the court would justifiably have made a different
choice had the matter been before it de novo." Universal Camera
Corp. v. NLRB, 340 U.S. 474, 488 (1951).
The Supreme Court has read 29 U.S.C.A. § 160(c) (West 1998) to
"vest[ ] in the [NLRB] the primary responsibility and broad discretion
to devise remedies that effectuate the policies of the Act, subject only
to limited judicial review." Sure-Tan, Inc. v. NLRB, 467 U.S. 883,
898-99 (1984). "In fashioning its remedies under [the Act], . . . the
[NLRB] draws on a fund of knowledge all its own, and its choice of
remedy must therefore be given special respect by reviewing courts."
NLRB v. Gissell Packing Co., 395 U.S. 575, 612 n.32 (1969). The
NLRB’s chosen remedy in a backpay case must be enforced "unless
it is arbitrary, capricious, or manifestly contrary to the statute." Coro-
net Foods, Inc. v. NLRB, 158 F.3d 782, 788 (4th Cir. 1998) (internal
quotation marks omitted). However, the findings of the NLRB are not
6 NLRB v. PEPSI COLA BOTTLING CO.
to be "mechanically accepted" by the courts; instead, this Court is
"obligated to scrutinize the whole record, taking into account what-
ever fairly detracts from the evidence relied upon by the [NLRB]." Id.
at 789 (internal quotation marks omitted). Reviewing courts must "en-
sure that the [NLRB’s] findings are not based on speculation or suspi-
cion, as these register no weight on the substantial evidence scale."
Id. (internal quotation marks omitted).
III.
Upon voluntarily resigning without good cause, an individual’s
entitlement to backpay is tolled because the individual has failed to
mitigate damages. NLRB v. Hopcroft Art & Stained Glass Works,
Inc., 692 F.2d 63, 64 (8th Cir. 1982), citing Phelps Dodge Corp. v.
NLRB, 313 U.S. 177 (1941) (stating that "willful loss of earnings" dis-
qualifies an individual from receiving backpay). Where an employee
justifiably or reasonably quits interim employment, he does not forfeit
his right to backpay. NLRB v. Ryder Sys., Inc., 983 F.2d 705 (6th Cir.
1993). The effect of an unjustified resignation is "that the amount the
employee would have earned had he not quit is to be offset for the
remainder of the backpay period." Hopcroft Art, 692 F.2d at 65.
Where an employer "demonstrates that an employee did not exercise
reasonable diligence in his or her efforts to secure interim employ-
ment, then it has established that the employee has not properly miti-
gated his or her damages." Tubari Ltd., Inc. v. NLRB, 959 F.2d 451,
454 (3d Cir. 1992). An employee who willfully loses employment by
engaging in "deliberate or gross misconduct" is not entitled to back-
pay for a resulting earnings loss. Ryder Systems, Inc., 302 NLRB 608,
610 (1991), enforcement granted, 983 F.2d 705 (6th Cir. 1993).
A.
Pepsi argues, first, that Hyatt failed to mitigate his damages by
immediately accepting a lower-paying position with D.K. Taylor
rather than continuing to look for a higher-paying job, and thus, is
entitled to no backpay whatsoever following his departure from Coca-
Cola. Pepsi bases its argument on Tubari, which held that employees
who immediately accepted employment as union picketers, at roughly
66% of their prior wages, after being wrongfully terminated, failed to
demonstrate that they exercised reasonable diligence in locating suit-
NLRB v. PEPSI COLA BOTTLING CO. 7
able alternative employment and thus, were entitled to no backpay
whatsoever. Tubari, 959 F.2d at 458-59. Pepsi’s argument fails
because it bears the burden of showing that Hyatt removed himself
from the labor market, Lundy Packing Co. v. NLRB, 856 F.2d 627,
629 (4th Cir. 1988), and Pepsi developed no evidence that other,
higher-paying jobs were available or that the job Hyatt accepted was
not appropriate. Further, Tubari itself notes that "a discriminatee who
accepts suitable alternative employment, even at a lower wage, has no
continuing duty to search for a more lucrative job," demonstrating
that the simple fact of lower pay does not suffice to preclude a finding
that a discriminatee has found suitable alternative employment.
Tubari, 959 F.2d at 458.
Additionally, Tubari did not involve a situation in which an
employee initially found suitable alternative employment but then
failed to exercise reasonable diligence in finding such employment
after unjustifiably quitting his or her suitable alternative job. Com-
plete preclusion from backpay eligibility may be appropriate in the
case of an employee who never attempted to obtain a suitable job,
because it is impossible to know how much the employee would have
earned if he had diligently searched for an appropriate job. Here,
however, we do know, in a sense, how much Hyatt would have
earned had he diligently searched for suitable alternative employment,
because we know how much he earned at Coca-Cola. We thus con-
clude that the rule in Hopcroft Art — that an employee who has
unjustifiably quit is entitled to the difference between his prior earn-
ings and the earnings he would have obtained had he not quit suitable
alternative employment — should be invoked here. If Hyatt unjustifi-
ably quit or was terminated for gross misconduct, he is entitled to the
difference between his Pepsi and Coca-Cola earnings until the date of
either his reinstatement at Pepsi or, as we discuss below, the date on
which he would have been validly terminated by Pepsi, whichever is
earlier.
B.
Next, Pepsi argues that no substantial evidence supports the
NLRB’s finding that Hyatt was functionally terminated because he
was given the choice between termination and resignation. While the
standard of review on this issue is quite deferential to the NLRB, this
8 NLRB v. PEPSI COLA BOTTLING CO.
Court must take into account the evidence that contradicts, as well as
evidence that supports, the NLRB’s findings and must not mechani-
cally affirm the NLRB’s conclusions. Coronet Foods, Inc. v. NLRB,
158 F.3d 782, 788 (4th Cir. 1998). The NLRB argues that it was enti-
tled to credit (1) the fact that when Hyatt was asked why he was
"fired," he responded that he had failed a drug test, and (2) the testi-
mony of a NLRB compliance officer that it was his "understanding"
that Hyatt had been given a choice between quitting and being fired.
We note that the NLRB’s compliance officer testified in virtually the
next breath that he was not competent to testify as to the circum-
stances surrounding Hyatt’s resignation, but instead, he could testify
only as to the method of calculating backpay, reducing significantly
the probative value of his testimony on the issue of whether Hyatt was
terminated or rather, voluntarily quit. As to Hyatt’s statement, "be-
cause I failed a drug test," in response to a question asking him why
he was "fired," it bears noting that a few pages later in Hyatt’s testi-
mony, he stated instead that he quit voluntarily and was not termi-
nated by Coke. (S.A. 61-62.) In light of Hyatt’s conflicting testimony
on this issue, it certainly cannot be said that the NLRB adduced
strong evidence that Hyatt was, in effect, discharged by Coca-Cola.
A reasonable trier of fact could conclude, however, that Hyatt was
given an ultimatum to quit or face termination and that, in stating that
he resigned "voluntarily," Hyatt simply meant that he could have
forced Coca-Cola to terminate him by refusing to resign. Given that
our review of the NLRB’s factual findings is limited by the substan-
tial evidence standard, we believe the NLRB’s resolution of this fac-
tual issue was supported by "such relevant evidence as a reasonable
mind might accept as adequate" to support the NLRB’s conclusion.
Sam’s Club, 173 F.3d at 239.
Pepsi argues in the alternative that, even if Hyatt did not voluntar-
ily quit, he was discharged for sufficiently egregious misconduct as
to preclude the availability of enhanced backpay for his wage losses
when he left Coca-Cola. The NLRB argues that Pepsi waived this
issue by failing to raise it below as required by 29 U.S.C.A. § 160(e)
(West 1998). The NLRB’s claim of waiver is not well-founded. Pepsi
asserted in its objection to the compliance specification that "[o]n
information and belief . . . Hyatt was discharged from at least one
interim employer because of his use of illegal drugs, thereby incurring
a willful loss of interim earnings." (S.A. at 79.) The NLRB cites no
NLRB v. PEPSI COLA BOTTLING CO. 9
authority in favor of its apparent assertion that the specific cases
relied upon by Pepsi in support of this general proposition must have
been cited to the NLRB to avoid waiver of this issue. While consider-
ation of the NLRB’s waiver argument is hampered by the fact that the
Joint Appendix provided by the parties does not include Pepsi’s list
of exceptions to the NLRB from the ALJ’s decision, an examination
of the majority and dissenting NLRB opinions reveals that the NLRB
itself explicitly split on the issue that the NLRB now claims was not
presented to it. See NLRB II, 330 NLRB No. 153, 2000 WL 339963,
at *4, *5 (2000).
In its Supplemental Decision, the NLRB determined that a dis-
charge for any reason other than "moral turpitude" does not constitute
a willful loss of earnings causing backpay to be calculated as if the
employee had retained his prior job. Id. at *3. The NLRB then rea-
soned that because Pepsi presented no evidence surrounding the drug
test incident other than Hyatt’s failure of the test, the evidence did not
establish moral turpitude. The NLRB’s opinion leaves open the possi-
bility that, for example, on-the-job intoxication that endangers
coworkers could constitute "moral turpitude" but concludes that fail-
ing a drug test, without more, does not rise to the requisite level of
misconduct. Id. Pepsi argues that this Court’s decision in Brady v.
Thurston Motor Lines, 753 F.2d 1269 (4th Cir. 1985), compels a find-
ing that an employee who is discharged for cause "voluntarily
remove[s] himself from the labor market . . . and forfeit[s] his right
to back pay." Id. at 1277. Brady, however, was a Title VII backpay
case that did not involve the deference to the NLRB that we must
afford in this case, although it frequently cited NLRA case law as pro-
viding comparable principles. In Title VII cases, the courts set the
backpay amount in the first instance, and no deference is due to any
agency’s method of calculating backpay. It cannot be said that the
NLRB’s "moral turpitude" standard is such an unreasonable approach,
in light of the purposes of the Act, as to be reversible by this Court.
Holly Farms Corp. v. NLRB, 517 U.S. 392, 409 (1996) (stating that
reasonable NLRB interpretations of the Act must be upheld even if
they are not "the best way to read the statute" (emphasis omitted)).
While the NLRB bears the burden of proof of showing the reason-
ableness of an employee’s decision to voluntarily quit, see Minette
Mills, Inc., 316 NLRB 1009, 1010 (1995), in general, the claim of a
willful loss of earnings is an affirmative defense that the employer
10 NLRB v. PEPSI COLA BOTTLING CO.
bears the burden of proving. See Lundy Packing Co., 856 F.2d at 629(4th Cir. 1988); Florence Printing Co. v. NLRB, 376 F.2d 216, 223
(4th Cir. 1967). As a result, Pepsi bears the burden of proving that
Hyatt’s discharge was based upon gross misconduct. See Ryder Sys-
tem, Inc., 983 F.2d at 712. Pepsi had a full opportunity to question
Hyatt regarding the circumstances surrounding his discharge from
Coca-Cola and could have subpoenaed documents and witnesses to
further develop the record regarding the circumstances of his dis-
charge but produced no evidence other than the bare fact that Hyatt
failed a drug test. The record does not reflect, for example, whether
Hyatt used drugs in temporal proximity to his working hours, what
kind of substances Hyatt may have consumed, or whether Hyatt’s
conduct ever evidenced the kind of workplace intoxication that could
endanger himself or others. On these facts, the NLRB’s conclusion
that the record does not support a finding of moral turpitude is not
unreasonable.
Pepsi argues further that the ALJ committed clear legal error in not
allowing Pepsi to inquire into Hyatt’s apparent failure of a drug test
at Pepsi following his reinstatement, and to inquire generally into the
nature of Pepsi’s drug testing policies during the relevant period. It
may be that Pepsi had a drug testing regime similar to that of Coca-
Cola at the time Hyatt failed the Coca-Cola drug test; the ALJ’s
emphatic rejection of Pepsi’s attempt to inquire into Hyatt’s later
alleged failure of a Pepsi drug test, following his reinstatement,
clearly would be interpreted by a reasonable litigant as foreclosing
such a line of inquiry. Yet information regarding Pepsi’s drug testing
program was of great relevance to this case. It is clear that an individ-
ual’s backpay liability ends when that individual would have other-
wise been terminated from employment in a legally permissible
manner. Dockbuilders Local Union No. 1456, 316 NLRB 257, 259
(1995) (stating that the backpay period ends when employment would
have been validly terminated due to an economic layoff). Thus, if at
the time he failed the Coca-Cola drug test, Hyatt would have failed
the Pepsi drug test, and if Pepsi had a policy of terminating individu-
als who fail a drug test, Hyatt would have been properly terminated
by Pepsi on that date, and Pepsi’s backpay liability should end at the
time he would have been legitimately terminated from Pepsi. We thus
conclude that it is necessary to remand for additional factual findings
NLRB v. PEPSI COLA BOTTLING CO. 11
regarding the nature of Pepsi’s drug testing policy during the relevant
period.
IV.
The NLRB’s choice of a method for calculating backpay is
reviewed for substantial evidence. Coronet Foods, Inc. v. NLRB, 158
F.3d 782, 789-800 (4th Cir. 1998). Put differently, the NLRB’s
method of calculating backpay must be upheld unless "the method
selected [is] arbitrary or unreasonable in the circumstances involved."
Woodline Motor Freight, Inc. v. NLRB, 972 F.2d 222, 225 (8th Cir.
1992) (internal quotation marks omitted). The NLRB’s General
Counsel submitted a compliance specification that calculated Munn’s
backpay amount on the basis of a "representative employee" formula.
The ALJ rejected the General Counsel’s approach, finding that the
representative employee formula led to a conclusion that at the end
of his probationary period, Munn would have received a 16.7% pay
increase, which the ALJ deemed excessive in light of the evidence;
the ALJ concluded that Munn would not have received a pay increase
of this magnitude at the end of his probationary period. Indeed, the
ALJ noted that this increase would have resulted in Munn earning
more than either his supervisor or other employees who had worked
at Pepsi for a longer period of time in the same job. NLRB II, 330
NLRB No. 153, 2000 WL 339963, at *10. The NLRB reversed the
ALJ without challenging any of these factual findings, stating simply
that the representative employee formula "has long been used by the
[NLRB]," and thus, the ALJ’s decision to use a set annual average
wage increase approach rather than a representative employee
approach "was neither justified nor necessary." Id. at *2. The NLRB
did not respond to the ALJ’s legal conclusion, derived from the
NLRB’s precedents, that where there is a dispute as to the proper
backpay formula, the ALJ must choose the "most accurate" formula,
e.g. the formula that best captures the likely actual amount of wages
lost due to illegal termination. See Coronet Foods, 158 F.3d at 800;
Woodline Motor Freight, 305 NLRB 6 (1991). Nor did the NLRB
find that the representative employee formula was more accurate than
the annual-percentage approach, which the ALJ found to be the most
accurate approach. Moreover, the NLRB has in the past acknowl-
edged that it is appropriate to reject backpay formulas that are inter-
12 NLRB v. PEPSI COLA BOTTLING CO.
nally consistent but unreflective of the realities of the events involved.
East Wind Enter., 268 NLRB 655, 656 (1984).
The background legal principle against which we must review the
NLRB’s approach is that "the back pay provisions of the NLRA . . .
are compensatory and remedial in purpose, not punitive." Brady v.
Thurston Motor Lines, 753 F.2d 1269, 1278 (4th Cir. 1985). Thus,
while the NLRB’s choice of a method for calculating backpay con-
cerns a matter uniquely within the NLRB’s competence and should
be given a wide berth by reviewing courts, an explicitly punitive
method of calculation is contrary to the purposes of the Act; backpay
is not a form of punitive damages. If the NLRB had determined,
based upon substantial evidence, that a representative employee for-
mula would in this case be a more accurate method of calculating
Munn’s backpay, we would be bound to uphold that finding. As it is,
however, the NLRB has upheld all ALJ findings not explicitly
reversed — including the ALJ’s straightforward finding that the pay
increases contemplated by the representative employee formula
exceeded those which Munn actually would have received had he
remained at Pepsi. Thus, the NLRB may have decided that the repre-
sentative employee approach overcompensates Munn and is less accu-
rate than a percentage increase approach, but should be used
nevertheless, because it has "long been used," even though more than
a decade of NLRB precedent indicates that it should not be used when
it is less accurate than another alternative. We must, in these circum-
stances, deny enforcement of this portion of the NLRB’s order and
remand for the NLRB to clarify the apparently irreconcilable tension
between the NLRB’s decision to implicitly affirm the ALJ’s factual
finding that the representative employee approach produced less accu-
rate results and the NLRB’s determination that this approach should
be used to calculate backpay.
V.
In sum, we affirm the NLRB’s findings that Hyatt was construc-
tively discharged by Coca-Cola and that Pepsi did not carry its burden
of showing that his constructive discharge was caused by an offense
involving moral turpitude. We further affirm the NLRB’s rejection of
Pepsi’s contention that Hyatt voluntarily removed himself from the
labor market by taking a lower-paying job after his separation from
NLRB v. PEPSI COLA BOTTLING CO. 13
Coca-Cola. We deny enforcement on the present record and remand,
however, for further development of the record regarding Pepsi’s drug
testing policies, and the circumstances of Hyatt’s failure of the Coca-
Cola drug test insofar as they bear on the question of whether Hyatt
would have failed a Pepsi drug test and been terminated by Pepsi for
this reason at some point* had he not been terminated earlier by Pepsi
in violation of the Act. We further deny enforcement on the record
before us and remand the calculation of Munn’s backpay amount to
the NLRB for reconsideration, so that the NLRB can resolve the
apparent tension between its use of the representative employee for-
mula and the lack of any finding that this formula is more accurate
than the alternative used by the ALJ in this case.
REMANDED WITH INSTRUCTIONS
*If Pepsi indeed had a drug testing policy similar to Coca-Cola’s, and
likely would have terminated Hyatt for failing such a test, it still may be
the case that Pepsi would not have tested Hyatt at exactly the same time
Coca-Cola did; for example, perhaps Coca-Cola tests monthly while
Pepsi tests only every three months. Hyatt’s backpay entitlement ends
only when and if Pepsi likely would have tested him, he likely would
have failed, and Pepsi likely would have validly terminated him.