NLRB v. Midwestern Personnel ( 2007 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 06-2836
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
v.
MIDWESTERN PERSONNEL SERVICES, INC.,
Respondent.
____________
On Petition for Enforcement of an Order
of the National Labor Relations Board.
Nos. 25-CA-25503-2, 25-CA-25823-3 &
25-CA-25978-5
____________
ARGUED JANUARY 11, 2007—DECIDED NOVEMBER 8, 2007
____________
Before BAUER, FLAUM and ROVNER, Circuit Judges.
ROVNER, Circuit Judge. After finding that Midwest-
ern Personnel Services, Inc. (“Midwestern”) violated the
National Labor Relations Act (“NLRA”), the National
Labor Relations Board (“Board”) ordered Midwestern to
reinstate striking employees and to make each of them
whole. The Board calculated the amount of back-pay
Midwestern owed to each employee, and Midwestern
disputed some of the findings. Midwestern also con-
tended that it was denied due process during the compli-
ance hearing. For the reasons stated below, we affirm
the Board’s findings in all respects and grant the Board’s
petition for enforcement of its order.
2 No. 06-2836
The facts of this case are set out in detail in our opinion
enforcing the Board’s original order regarding reinstate-
ment and back-pay. NLRB v. Midwestern Pers. Servs., Inc.,
322 F.3d 969, 971-76 (7th Cir. 2003). Midwestern leased
cement and transport truck drivers to various businesses
from its locations in Indiana and Kentucky. The Board
found that Midwestern violated Section 8(a)(1) of the
NLRA, see 29 U.S.C. § 158(a)(1), by instructing employees
to designate Chauffeurs, Teamsters, and Helpers Local
Union No. 836 (“Local 836”) as their collective-bargaining
representative and threatening them with discharge if
they did not. See Midwestern Pers. Servs., Inc., 331
N.L.R.B. 348 (2000). In addition, the Board found that
Midwestern violated Section 8(a)(2) of the NLRA, see
29 U.S.C. § 158(a)(2), by assisting and supporting
Local 836 and by recognizing it in the absence of the
uncoerced support of a majority of employees. Thereafter,
a majority of Midwestern’s employees expressed support
for Chauffeurs, Teamsters, and Helpers Local Union
No. 215 (“the Union”) as their collective-bargaining
representative. After Midwestern refused to recognize and
bargain with the Union, the employees engaged in a strike.
The Board subsequently found that Midwestern vio-
lated Section 8(a)(1) of the NLRA again by threatening
employees with discipline, loss of employment, and legal
action if they engaged in a strike. It also found that
Midwestern violated Sections 8(a)(3) and (1) of the NLRA
by failing and refusing to reinstate the strikers immedi-
ately upon their unconditional offer to return to work. The
Board directed Midwestern to offer reinstatement to all of
the striking employees and to make each whole for any
loss of earnings suffered as a result of Midwestern’s
unlawful conduct. We entered judgment enforcing the
Board’s order in full. Midwestern, 322 F.3d at 972.
The Board then instituted compliance proceedings to
determine the amount of back-pay due and to consider
No. 06-2836 3
Midwestern’s other contentions regarding compliance
with the enforced order. See 29 C.F.R. §§ 102.52-102.59.
The Board issued a compliance specification alleging the
amount of back-pay due to twenty-six discriminatees.
The Board held a three-day hearing before an adminis-
trative law judge (“ALJ”). The ALJ determined the
specific amount of back-pay due each of the strikers,
considering the nature of any interim employment secured
and whether the employee had engaged in a reasonably
diligent job search during periods of unemployment. The
ALJ found that all affected discriminatees had met this
standard for the back-pay periods. The ALJ tolled back-
pay for periods in which particular discriminatees were
unavailable for work or employed. Midwestern filed
exceptions to the ALJ’s findings and conclusions. After
considering Midwestern’s exceptions, the Board issued
its Supplemental Decision and Order affirming the ALJ’s
supplemental decision and adopting the ALJ’s order
regarding the amount of back-pay due to the twenty-six
discriminatees.
Midwestern now contends that the Board’s Supple-
mental Decision and Order should not be enforced as to
eleven particular discriminatees. According to Midwest-
ern, those eleven strikers did not satisfy their duty to
mitigate their wage losses by making a reasonably dili-
gent effort to secure interim employment, and the ALJ’s
findings are not supported by substantial evidence.
Midwestern also argues that it was denied due process
during the administrative hearing. In the administrative
proceedings, Midwestern did not challenge the ALJ’s
findings with respect to fourteen of the twenty-six employ-
ees, and it has since conceded that one other employee,
Wade Carter, made a good faith effort to secure other
employment. Therefore, we summarily affirm the Board’s
order with respect to the fifteen employees whose back-
pay awards are unchallenged, see 29 U.S.C. § 160(e);
4 No. 06-2836
Masiongale Elec.-Mech., Inc. v. NLRB, 323 F.3d 546, 557
(7th Cir. 2003), and address the other eleven employees
in turn. For the reasons given below, we find that the
factual findings made by the ALJ and the Board are
supported by substantial evidence and that the order
for back-pay should be enforced.
A.
Midwestern first argues that the Board misapplied the
law when it rejected Midwestern’s mitigation defense. The
Board’s findings on this defense, Midwestern asserts, are
not supported by substantial evidence. The NLRA autho-
rizes the Board to fashion appropriate remedial orders
to correct the effects of unfair labor practices. 29 U.S.C.
§ 160(c). The Board may order affirmative action includ-
ing reinstatement, with or without back-pay, to effectuate
the NLRA’s policies. See Sure-Tan, Inc. v. NLRB, 467 U.S.
883, 898-99 (1984); NLRB v. United Contractors, Inc., 614
F.2d 134, 136 (7th Cir. 1980). The Board’s exercise of its
discretion in formulating such remedies is subject to
only limited judicial review. See Fibreboard Corp. v.
NLRB, 379 U.S. 203, 216 (1964); J. Huizinga Cartage Co.
v. NLRB, 941 F.2d 616, 622 (7th Cir. 1991). We will
affirm and enforce the Board’s findings if they are sup-
ported by substantial evidence and if the Board’s con-
clusions have a reasonable basis in law. FedEx Freight E.,
Inc. v. NLRB, 431 F.3d 1019, 1025 (7th Cir. 2005); Del Rey
Tortilleria, Inc. v. NLRB, 976 F.2d 1115, 1118 (7th Cir.
1992). The substantial evidence test “requires not the
degree of evidence which satisfies the court that the
requisite fact exists, but merely the degree that could
satisfy the reasonable fact finder.” FedEx, 431 F.3d at
1025-26 (quoting ATC Vancom of Cal. v. NLRB, 370 F.3d
692, 695 (7th Cir. 2004)) (emphasis in original).
No. 06-2836 5
Discriminatees are required to mitigate their damages
by seeking interim employment after an unlawful dis-
charge. Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 198-
200 (1941). However, discriminatees are only required
to make an “honest good faith effort” to seek other em-
ployment. Golay & Co. v. NLRB, 447 F.2d 290, 295 (7th
Cir. 1971); NLRB v. Int’l. Bhd. of Elec. Workers, 992 F.2d
990, 993 (9th Cir. 1993). And discriminatees need only
follow their customary method for obtaining work, and
need only seek interim employment that is “substantially
equivalent” to their previous positions. Ferguson Elec. Co.,
330 N.L.R.B. 514, 518 (2000), overruled in irrelevant part
by Oil Capitol Sheet Metal, Inc., No. 17-CA-19714, 2007
N.L.R.B. LEXIS 203 (May 31, 2007). Midwestern has
the burden of demonstrating that the challenged employ-
ees were not making adequate efforts to mitigate their
damages by securing other employment. See Graefenhain
v. Pabst Brewing Co., 870 F.2d 1198, 1203 n.3 (7th Cir.
1989); Sprogis v. United Airlines, Inc., 517 F.2d 387, 392
(7th Cir. 1975). Moreover, the finding of an unfair labor
practice is presumptive proof that some back-pay is owed.
NLRB v. NHE/Freeway, Inc., 545 F.2d 592, 593 (7th Cir.
1976).
The discriminatees commenced an unfair labor prac-
tices strike on January 17, 1998. The back-pay period
began on March 27, 1998, when the Union made an
unconditional offer to return to work on behalf of the
strikers, and Midwestern refused to reinstate them. The
back-pay period ended on December 31, 1999, when
Midwestern ceased doing business in the area.
1. Henry Langdon
Midwestern contends that Langdon failed to mitigate his
damages throughout the entire back-pay period and
therefore is not entitled to any back-pay. Midwestern
6 No. 06-2836
asserts that Langdon relied solely on the Union’s looking-
for-work list, which provided him with only brief and
sporadic employment opportunities.
Most of the discriminatees used the Union’s looking-for-
work list as a way of finding other employment during
the back-pay period. The Union provided listings of
available opportunities to work as truck drivers in the
construction industry. In order to use the list, the
discriminatees were required to sign the list at least
every 30 days.
Immediately after Midwestern refused to reinstate
Langdon, he signed onto the list. He secured six jobs
in 1998 through the list, one of which lasted six months.
The record also shows that Langdon did not rely solely on
the Union’s list. Langdon did seek and obtained other
work on his own, including one job that was more diffi-
cult than the one he held while employed by Midwestern
because it required prolonged periods away from home.
See Kawasaki Motors Mfg. Corp. v. NLRB, 850 F.2d 524,
528 (9th Cir. 1988) (stating that discriminatee need
only seek employment “substantially equivalent to”
former job and is not required to “seek or retain a job
more onerous than the job from which he or she was
discharged”). Langdon also registered with the Indiana
unemployment agency, and registering with a state
unemployment agency is prima facie evidence of a rea-
sonable job search. See Golay, 447 F.2d at 295; Allegheny
Graphics, 320 N.L.R.B. 1141, 1145 (1996). Ultimately,
however, work obtained through the Union’s list provided
sufficient employment for Langdon and several other
discriminatees throughout the back-pay period. The Board
has held that seeking employment through a union’s
referral system may constitute a reasonably diligent
search. See Big Three Indus. Gas & Equip. Co., 263
N.L.R.B. 1189, 1198 (1982). Therefore, substantial evi-
dence supports the Board’s finding that Langdon was
No. 06-2836 7
reasonably diligent in his efforts to mitigate his wage
losses.
2. Gregory Harris
Midwestern claims that Harris also did not attempt to
seek employment except through the Union list during
the fourth quarter of 1998 and the first quarter of 1999
and is thus not entitled to any back-pay during this time.
Midwestern also asserts that Harris is not entitled to
back-pay following his employment at DMI Furniture,
which he voluntarily quit during the second quarter of
1999.
Harris, like Langdon, sought and obtained work from
the Union’s list, as well as other sources, throughout
the back-pay period. Harris applied for jobs he found
on his own, through friends, and with the help of the
Indiana unemployment agency’s veteran’s assistance
program. The job he left required him to cut timber,
which was more dangerous than the position he held at
Midwestern. See Kawasaki, 850 F.2d at 529. Substantial
evidence therefore supports the finding that Harris
fulfilled his duty to mitigate damages.
3. Randy Leinenbach
Midwestern asserts that Leinenback failed to mitigate
his damages throughout the back-pay period and is
therefore entitled to no back-pay. Midwestern also chal-
lenges Leinenbach’s lack of response to its recall offer.
Leinenbach applied for work through the state unem-
ployment office and independently made other applica-
tions throughout the back-pay period. Leinenbach person-
ally asked the owners of several small trucking companies
on numerous occasions for a job as a driver. He also was
8 No. 06-2836
self-employed, detailing trucks, and in 1999, working
for his parents’ company in the same capacity. The fact
that Leinenbach initially was unsuccessful at obtaining
work does not establish that he failed to conduct a search
with reasonable diligence, see Chem Fab Corp, 275
N.L.R.B. 21, 21 (1985), and Midwestern has submitted no
evidence to show that Leinenbach failed to seek employ-
ment adequately. See NLRB v. Mastro Plastics Corp., 354
F.2d 170, 179 (2d Cir. 1965) (“Unless in taking substan-
tially equivalent or self-employment the discriminatee
willfully forewent greater earnings, his back pay should
not be reduced beyond the interim earnings he in fact
received.”). Finally, Leinenbach was not obliged to re-
spond to Midwestern’s recall offer because the undis-
puted finding of the Board was that the position offered
was not equivalent to his previous one. See Clean Soils,
Inc., 317 N.L.R.B. 99, 110 (1995). Thus, substantial
evidence supports the Board’s findings as to Leinenbach.
4. Scott Taylor
Midwestern asserts that Taylor did not mitigate his
damages during a six-month period during the fall quarter
of 1998 and the first quarter of 1999, and that he was
unable to identify any job search he made during this
time. The record does not bear Midwestern out. Taylor
recalled eight specific employers to whom he applied,
either on his own or through the Indiana unemployment
agency, during the relevant six-month period—a difficult
season for construction work. See Local 3, IBEW, 315
N.L.R.B. 1266, 1266 (1995) (“The sufficiency of a discrim-
inatee’s efforts to mitigate back-pay are determined with
respect to the back-pay period as a whole and not based on
isolated portions of the back-pay period.”). In addition, he
obtained a position with Sterling Boilers during this
time. In the second quarter of 1999, Taylor secured
No. 06-2836 9
employment with Concrete Supply and continued to work
there throughout the remainder of the back-pay period.
Substantial evidence therefore supports the finding that
Taylor made a reasonably diligent search for employment.
5. Randall Underhill
Midwestern contends that Underhill is not entitled to
any back-pay for the second, third, and fourth quarters of
1999 after he turned down its offer to work at the
Owensboro plant. Underhill explained that he declined
the position because he lacked access to transportation.
Midwestern asserts that this explanation establishes
that Underhill had removed himself from the job market
at that time.
As the Board found, Midwestern’s offer was not a valid
offer of reinstatement. Midwestern’s letter offered em-
ployment only at the Owensboro plant, but Underhill had
previously worked at the Boonville plant, which was
within walking distance of his home. The offer also
would require that Underhill work at a lower rate of pay
with no seniority and no insurance. Therefore, the posi-
tion was not substantially equivalent to the one Underhill
held before the strike, and Underhill was under no obliga-
tion to accept it. See Clean Soils, 317 N.L.R.B. at 110.
Moreover, Underhill did continue to seek other employ-
ment throughout the challenged period, and successfully
found work with one employer at that time. Substantial
evidence supports the Board’s award to Underhill.
6. David Wyatt
Midwestern contends that Wyatt failed to mitigate his
damages throughout all four quarters of 1999. Midwestern
asserts that Wyatt relied only on the Union list for that
10 No. 06-2836
period and in addition failed to accept its offer of rein-
statement in the second quarter of 1999. The record
demonstrates, however, that Wyatt sought work through
the Union list, the Indiana unemployment agency, and
his own job applications. Wyatt specifically recalled the
names of ten employers where he sought work. Finally,
Midwestern’s offer of reinstatement did not offer Wyatt
substantially equivalent employment; therefore Wyatt
was not obliged to accept it, and substantial evidence
supports the Board’s findings.
7. Gerald Fickas
Midwestern claims that Fickas failed to mitigate his
damages during the second, third, and fourth quarters of
1998 and the first quarter of 1999. Again, the record does
not support Midwestern’s claim. Fickas searched for
work through the Union’s list, friends, and want ads in
the local newspaper. He submitted at least one applica-
tion on his own before the Union referred him to a job
that he accepted with D. J. Transportation. When work
dried up there, Fickas went to work for J. H. Rudolph.
Fickas was subsequently laid off during the rainy season;
he returned to D. J. Transportation and worked for that
company until he was recalled by J. H. Rudolph. These
efforts demonstrate reasonable diligence and support
the Board’s ruling.
8. Robert Linendoll
Midwestern contends that Linendoll removed himself
from the job market in the fourth quarter of 1998 because
he did not remain on the Union list, and as a result is
not entitled to back-pay for that quarter. However, the
record shows that Linendoll did continue to seek employ-
ment through the Union’s list and on his own, and in
No. 06-2836 11
fact worked two different jobs during this time. Contrary
to Midwestern’s claim, Linendoll did remain in contact
with the Union during the period he was seeking em-
ployment. The one exception is for a three-week vacation
which Linendoll took, and the Board subtracted from his
back-pay award to account for this. Thus, substantial
evidence supports the Board’s findings.
9. Christopher Pentecost
Midwestern claims that Pentecost failed to mitigate his
damages during the entire back-pay period. The record
does not support Midwestern’s assertion and instead
reveals that Pentecost successfully obtained jobs through
the Union’s list, as well as on his own and with the help
of relatives, all while working other menial jobs, includ-
ing trash collecting at farms. He also registered with the
state unemployment agency and looked for work from
other union halls. See Amshu Assocs., Inc., 234 N.L.R.B.
791, 794 (1978) (discriminatee made reasonably diligent
search for work where he consulted friends, relatives,
associates; contacted local union; registered with state
unemployment agency; responded to help wanted ads).
This evidence supports the Board’s finding that Pentecost
exercised reasonable diligence.
10. Gary Williams
Midwestern claims that Williams failed to mitigate his
damages during the entire back-pay period. Midwestern
argues that because Williams only sought work outside
the trucking industry, earning less than what he made
working for Midwestern, it should not be required to make
up the difference. The record shows that Williams con-
tinued to work as a truck driver during the back-pay
period and took lower-paying positions only when he failed
12 No. 06-2836
to find better work. Moreover, he never stopped looking
for higher-paying positions and switched jobs to obtain
higher wages. In any event, the Board has established that
an employee “who accepts appropriate employment at
lower pay is not required to search for a better job.” Tilden
Arms Mgmt. Co., 307 N.L.R.B. 13, 15 (1992); see also
Sioux Falls Stock Yards, 236 N.L.R.B. 543, 570 (1978).
The evidence supports the Board’s decision regarding
Williams.
11. Timothy Cronin
Midwestern argues that Cronin voluntarily quit his
employment at J. H. Rudolph in the third quarter of 1998
and is not entitled to any back-pay for the period thereaf-
ter. However, the record shows that Cronin was frustrated
working for J. H. Rudolph because changes in weather
meant that the quantity of work he was able to obtain
fluctuated drastically. Cronin quit his job to pursue
steadier work closer to home, where he was guaranteed
a forty-hour work week. He continued to seek other
work while employed, and eventually found a job that
paid him a higher wage. This evidence provided adequate
support for the Board’s award to Cronin.
B.
Midwestern next contends that the ALJ and the Board
deprived it of administrative due process by refusing to
allow it to present evidence relevant to the mitigation
issue. Midwestern complains that the ALJ unreasonably
restricted testimony by its expert witness, Dr. Malcolm
Cohen, not allowing it to expand upon his written report.
Midwestern introduced evidence by its expert to
show that work was plentiful in Indiana and Kentucky,
No. 06-2836 13
and therefore the challenged discriminatees failed to
exercise reasonable diligence in seeking work. The ALJ cut
short Cohen’s testimony at the compliance hearing
when it appeared that he would offer no testimony that
did not simply echo the findings in his report. The
Board found that Midwestern failed to show that Cohen
could have provided probative testimony beyond the
contents of his report.
Our review of the record convinces us that the ALJ was
well within his discretion to limit the testimony as cumula-
tive. See Tuf-Flex Glass v. NLRB, 715 F.2d 291, 298 (7th
Cir. 1983). The transcript of the compliance hearing
demonstrates that Midwestern had ample opportunity
to question Cohen concerning any probative evidence not
contained in his report. It is unclear even from Midwest-
ern’s proffer of further testimony what Cohen could have
said that would be relevant to the issues at hand. For
example, the data collected was statewide, and thus the
report did not provide specific data for the relevant
geographical areas. In addition, Cohen’s analysis did not
include any data regarding the pool of applicants, any
insight into whether the discriminatees would have been
able to secure positions had they applied, or any informa-
tion regarding the hours, wages, and locations of the
supposedly available positions. In general, it is reason-
able for the Board to reject expert testimony regarding
generalized labor market analysis as evidence that particu-
lar discriminatees failed to perform a reasonably dili-
gent search. See UFCW, Local 1357, 301 N.L.R.B. 617,
621 (1991); Delta Data Sys. Corp., 293 N.L.R.B. 736, 737
(1989). Finally, Midwestern has not shown that it was
prejudiced by the exclusion of the expert’s testimony. See
Fisher v. Bowen, 869 F.2d 1055, 1057 (7th Cir. 1989)
(remand not necessary “unless there is reason to believe
that the remand might lead to a different result”).
14 No. 06-2836
For the foregoing reasons, we conclude that the ALJ’s
findings and decision, as adopted and modified by the
Board, are supported by substantial evidence. The Board’s
petition for enforcement of its order is GRANTED.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—11-8-07