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Inc. v. National Labor Relations Board

United States Court of Appeals, Sixth Circuit

December 26, 2019

Lou's Transport, Inc.; T.K.M.S., Inc., Petitioners/Cross-Respondents,
National Labor Relations Board, Respondent/Cross-Petitioner.

          Argued: June 20, 2019

          On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board; No. 07-CA-10257.


          Steven A. Wright, STEVEN A. WRIGHT, P.C., Shelby Township, Michigan, for Petitioners/Cross-Respondents.

          Steven Bieszczat, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-Petitioner.

         ON BRIEF:

          Steven A. Wright, Sandra L. Wright, Amy D. Comito, STEVEN A. WRIGHT, P.C., Shelby Township, Michigan, for Petitioners/Cross-Respondents.

          Steven Bieszczat, Elizabeth Heaney, Linda Dreeben, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-Petitioner.

          Before: BOGGS, MOORE, and STRANCH, Circuit Judges.



         In 2016, we held that Petitioners Lou's Transport, Inc. and T.K.M.S., Inc. (collectively, Lou's or the Company) violated the National Labor Relations Act (NLRA or the Act) by terminating Michael Hershey. See Lou's Transp., Inc. v. NLRB, 644 Fed.Appx. 690 (6th Cir. 2016). More than three years after that decision (and more than six years after the wrongful termination), Lou's continues to dispute the amount of back pay that Hershey is owed.

         An administrative law judge (ALJ) entered a back pay order against Lou's, and the National Labor Relations Board (NLRB or the Board) upheld the order in its entirety. Lou's petitions for review, raising numerous challenges to the NLRB's calculations and order. The Board has broad discretion to resolve factual disputes and to select formulas to calculate uncertain figures such as back pay. Because the Board did not abuse that discretion, we DENY the Company's petition for review and GRANT the General Counsel's cross-petition for enforcement.

         I. BACKGROUND

         Our prior decision sets out the facts, which are briefly summarized here. Michael Hershey worked as a truck driver for Lou's under a collective bargaining agreement (CBA) from July 2012 until he was fired in March 2013. Lou's Transp., 644 Fed.Appx. at 691-92. In January 2013, Hershey used a company radio to "discuss[] the poor working conditions" at Lou's with another driver. Id. at 691. Thereafter, "Hershey began displaying hand-written signs in his truck regarding the working conditions and other unrelated matters." Id. at 692. At a safety meeting in March, Hershey "stated that the drivers were upset because of the dangerous road conditions." Id. Two days later, Lou's managers searched Hershey's truck, found 16 signs, and fired him. Id. We upheld the Board's finding that Hershey was terminated at least in part because of the January radio conversation. Id. at 697. We also "conclude[d], without deciding, that the radio conversation was concerted protected activity" under the NLRA, citing the Company's failure to contest that argument in administrative proceedings. Id. at 695.

         In November 2015, while the appeal before our court was pending, the NLRB Regional Director issued an initial Compliance Specification, laying out the methodology for calculating the back pay award. For over a year after the appeal was decided, the parties went back and forth, with Lou's filing answers and raising objections, and the Director requesting further documentation and amending its calculations. All in all, the Director issued four amended specifications, the last of which was dated August 14, 2017. A damages hearing was scheduled for September 18, 2017. Citing the addition of retirement benefits to the Third Amended Compliance Specification (dated August 3, 2017), Lou's moved to postpone the hearing and requested extra time to file its answer. The Chief ALJ granted Lou's a three-day extension but rejected the motion to reschedule, explaining that the "time has long past" to resolve the issue of damages suffered by Mr. Hershey because of the Company's discrimination.

         When the hearing began on September 18, the ALJ granted the General Counsel's motion to correct mathematical errors in the Fourth Amended Compliance Specification, without objection from Lou's. Lou's amended its answer, also without objection. The ALJ then heard testimony from three witnesses: Hershey; a Company general manager, David Laming; and an NLRB field examiner, Daniel Molenda, who had performed the back pay calculations. Molenda testified that Lou's owed Hershey a total of $49, 817. That figure was based on four categories: (1) Hershey's "adjusted net back pay," the projected earnings at Lou's had Hershey not been fired, less his interim earnings at other positions and an assumed contribution to his retirement account; (2) foregone bonuses awarded to Lou's employees; (3) expenses incurred at Hershey's interim employment; and (4) the lost value of Hershey's retirement account.

         In January 2018, the ALJ issued a decision adopting Molenda's calculations. Lou's appealed, and the NLRB affirmed on all grounds. Lou's petitions for review, raising each of the arguments considered and rejected by the ALJ and the Board. The General Counsel cross-petitions for enforcement of the Board's order.

         II. ANALYSIS

         The NLRA includes a "broad command" that, "upon finding that an unfair labor practice has been committed, the Board shall order the violator 'to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies' of the Act." NLRB v. J.H. Rutter-Rex Mfg. Co., 396 U.S. 258, 262 (1969) (quoting 29 U.S.C. § 160(c)). The remedial power the NLRB derives from this NLRA provision is "a broad, discretionary one, subject to limited judicial review." NLRB v. Jackson Hosp. Corp., 557 F.3d 301, 306 (6th Cir. 2009) (quoting Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 216 (1964)). We may not disturb the Board's back pay 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." NLRB v. Overseas Motors, Inc., 818 F.2d 517, 520 (6th Cir. 1987) (quoting Fibreboard, 379 U.S. at 216).

         The Supreme Court has identified "ends" that effectuate the Act. Back pay is both "a remedy designed to restore, so far as possible, the status quo that would have obtained but for the wrongful act" and also a "punishment for an unfair labor practice." Rutter-Rex Mfg., 396 U.S. at 265; see also NLRB v. Mastro Plastics Corp., 354 F.2d 170, 175 (2d Cir. 1965) ("The back pay remedy has the twofold purpose of reimbursing employees for actual losses suffered as a result of a discriminatory discharge and of furthering the public interest in deterring such discharges."). Though back pay awards "somewhat resemble compensation for private injury, . . . it must be constantly remembered that [the back pay remedy is] created by statute . . . to aid in achieving the elimination of industrial conflict. [It] vindicate[s] public, not private rights." Va. Elec. & Power Co. v. NLRB, 319 U.S. 533, 543 (1943).

         The choice of a calculation method is likewise committed to the NLRB's sound discretion. Because "[a] back pay award is only an approximation, necessitated by the employer's wrongful conduct[, ] . . . there may be several equally valid methods of computation, each yielding a somewhat different result." Overseas Motors, 818 F.2d at 520 (quoting Bagel Bakers Council of Greater N.Y. v. NLRB, 555 F.2d 304, 305 (2d Cir. 1977) (per curiam)). The Board "is required only to adopt a formula which will give a close approximation of the amount due," and choosing "to proceed by one method rather than another hardly makes out a case of abuse of discretion." Id. at 520-21 (second quote quoting Bagel Bakers Council, 555 F.2d at 305). "Any formula which approximates what discriminatees would have earned had they not been discriminated against is acceptable if it is not unreasonable or arbitrary in the circumstances." La Favorita, Inc., 313 N.L.R.B. 902, 902 (1994).

         The factual findings underpinning those calculations must be upheld "as long as those findings are supported by substantial evidence in the record as a whole." NLRB v. S.E. Nichols of Ohio, Inc., 704 F.2d 921, 923 (6th Cir. 1983) (per curiam); see also Airgas USA, LLC v. NLRB, 916 F.3d 555, 560 (6th Cir. 2019). This threshold "is not high." Biestek v. Berryhill, 139 S.Ct. 1148, 1154 (2019). Substantial evidence "means-and means only-'such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.'" Id. (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).

         We consider Lou's objections in light of these standards.

         A. Gross Back Pay

         The first step in calculating a back pay award is determining the gross back pay, "the amount of money that the employee would have earned had the employer not violated the National Labor Relations Act." Jackson Hosp., 557 F.3d at 307. The burden of establishing the amount of gross back pay ...

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