Unpublished Disposition, 859 F.2d 924 (9th Cir. 1987)

MEMORANDUM^** 

The National Labor Relations Board (NLRB or Board) petitions for enforcement of a Supplemental Decision and Order issued July 22, 1987 against Lionel G. Sullivan and Ralph A. Fattore, a partnership, doing business as Downtown Toyota (Company). The Board determined the Company had violated the National Labor Relations Act (Act) by, inter alia, unlawfully discharging employee Michael Heller for his union activities and awarded him $19,786 in net backpay due, plus interest. The Company, in its petition for review, challenges the formula used by the Board for computing Heller's backpay on several grounds.

* Lionel G. Sullivan and Ralph A. Fattore are partners and co-owners of an entity known as Downtown Toyota in Oakland, California. On October 31, 1983 the Company terminated employees Michael Heller, Robert Stokes and Frank Sheehan. On September 30, 1985, the NLRB issued a Decision and Order in which it determined that the Company had violated section 8(a) (1) and (3) of the National Labor Relations Act, 29 U.S.C. § 158(a) (1) (1982), by discharging Heller and Stokes and by subsequently refusing to rehire Heller because it knew or suspected their respective roles in a union organizing campaign. Sullivan and Fattore, 276 N.L.R.B. 999, 1022 (1985). The Board found the Company's unfair labor practices to have been "serious, extensive and pervasive" and ordered the Company to make Heller and Stokes whole for any loss of earnings as a result of their respective discharges, to make an offer of reinstatement to Heller, and to cease and desist from any other activity in violation of the Act. 276 N.L.R.B. 1022-23.

On March 27, 1986, the parties signed a stipulation waiving the Company's right to contest the Board's decision and order, in exchange for a supplemental proceeding to determine the amount of backpay due Heller and Stokes. The Administrative Law Judge (ALJ) after a hearing, issued his Supplemental Decision February 11, 1987. The ALJ determined that Stokes, who was reinstated six days after his discharge, was due $648; the Company does not dispute or seek review of this portion of the order, which has been paid. The ALJ concluded the General Counsel's backpay formula and determination for Heller "was not unreasonable or punitive," and ordered that the Company pay Heller $19,786 plus interest. On July 22, 1987, the Board adopted the recommended order of the ALJ in its entirety. On September 17, 1987, the NLRB petitioned for enforcement of its July 22, 1987 Supplemental Decision and Order. On October 29, 1987, the Company answered the NLRB's application for enforcement and petitioned for modification of the Order of the Board.

II

It is well established that the Board enjoys broad discretion in calculating backpay, subject only to limited judicial review. Kawasaki Motors Manufacturing Corp. v. NLRB, 850 F.2d 524, 527 (9th Cir. 1988); Alfred M. Lewis, Inc. v. NLRB, 681 F.2d 1154, 1156 (9th Cir. 1982). The Board's findings of fact in a backpay proceeding are to be upheld as long as they are supported by substantial evidence, considering the record as a whole. Kawasaki, 850 F.2d at 527; NLRB v. United Bhd. of Carpenters & Joiners of America, Local 1913, 531 F.2d 424, 426 (9th Cir. 1976).

III

The Company's principal objection is that the Board should have computed Heller's gross backpay on the same basis as it did for his co-employee Stokes. The Board examined Stokes' earnings during the three months preceding his discharge to determine his average daily earnings ($108) and applied that figure to his backpay period of six days [$108 X 6 = $648]. Heller's backpay claim, on the other hand, was computed through a percentage formula rather than a per diem average. Specifically, the Board determined that Heller was entitled to the same percentage of total commissions earned by the appropriate employee bargaining unit during the backpay period¹  as the percentage of total commissions Heller earned while employed by the Company from January 1983--October 1983, the period immediately preceding his unlawful discharge. The Board found Heller earned 21.18 percent of commission earnings of the appropriate unit during the January-October 1983 period and applied this percentage to the total commissions earned by the unit during each quarter of Heller's backpay period of approximately 11 months. Following a deduction of Heller's undisputed interim earnings during the backpay period, the Board's formula yielded $19,786 as the total net backpay due Heller.

The Company argues the Board's percentage formula overestimates what Heller would have earned during the backpay period. As an alternative, it suggests the application of the per diem average formula used for Stokes, an approach which yields a net backpay due amount of $4,845.29.

The Board's percentage formula for computing Heller's backpay is reasonable and will be enforced. The record amply supports the inference that, absent his unlawful discharge, Heller's personal improvement would have kept pace with the overall improvement in the unit's earnings. The Board's choice of the percentage formula, given both the extended length of Heller's backpay period and the unit's enhanced prosperity through 1984, was justified and appropriate under the circumstances of this case. The Board is "vested with broad discretion in selecting a backpay formula," NLRB v. Carpenters Union, Local 180, 433 F.2d 934, 935 (9th Cir. 1970), and thus, as the ALJ correctly noted, different methods may be utilized in computing different discriminatees' backpay, accord, Bagel Bakers Council of Greater New York v. NLRB, 555 F.2d 304, 305 (2d Cir. 1977). The Board's choice of one formula over the other, where the formula chosen had a rational basis, fails to state a case for abuse of discretion.

The Company makes two additional claims. It argues first, that the Board's percentage formula inadequately factored in the increase in employees during 1984, a change which it contends contributed to the increased total earnings for that year. The Company cites to the compliance officer's compilations of the dealership's commission earnings, based on the Company's own records, to support its claim that 16 employees earned commissions in 1983 and 21 earned commissions in 1984. See ER 1 and 2. The record indicates, however, that 5 of the 22 employees listed on the compliance officer's worksheet (Michael Heller, Hardenberg, Larking, Sheehan and Stokes) are credited with no earnings during any quarter of 1984. [ER 1, 2]. Accordingly, substantial evidence supports the Board's finding that the employee bargaining unit remained substantially unchanged during the 1983-84 period.

Finally, the Company contends the Board's use of a percentage formula gave insufficient consideration to the "voluntary restriction agreement" governing the importation of foreign cars. Because such agreements were unknown in 1950, the year in which the NLRB issued its seminal decision in F.W. Woolworth Co., 90 N.L.R.B. 289 (1950), the Company urges the court to disregard Woolworth 's quarter-by-quarter method of net backpay computation in favor, it appears, of the Board's former lump sum method of computing net backpay established in Pennsylvania Greyhound Lines, Inc., 1 N.L.R.B. 1, 51 (1935), enf'd, 303 U.S. 261 (1938).

The Company's argument is frivolous. The Woolworth approach has been the norm for the NLRB for close to forty years, and sound reasons existed for its adoption. See Woolworth, 90 N.L.R.B. at 292. Nor is the difference between the net backpay due under the Woolworth formula, $19,786, and that due under Greyhound, $11,791, so great that it can be described as "oppressive and therefore not calculated to effectuate a policy of the Act." NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 349 (1953). To the extent any doubts existed as to which formula was better designed to make Heller "whole" for his unlawful discharge, those uncertainties are better resolved against the employer. Kawasaki, 850 F.2d at 531; Lewis, 681 F.2d at 1157 (employer should not be allowed to benefit from the uncertainty caused by its discrimination).

IV

The Board's order of July 22, 1987 awarding backpay to Michael Heller is supported by substantial evidence and well within its discretion. The petition for modification denied. The petition for enforcement is granted.

ENFORCED.