Unpublished Disposition, 912 F.2d 468 (9th Cir. 1982)

MEMORANDUM^** 

In 1980, Alaska Cummins Services, Inc., a now defunct corporation, discharged seven employees in violation of the National Labor Relations Act. 29 U.S.C.A. Sec. 160. In a supplemental decision, Joseph Blackard and Mat-Su, Inc. were held derivatively liable for backpay due to those employees. The issue on this petition for review and cross application for enforcement is whether there is substantial evidence on the record considered as a whole to support the National Labor Relations Board's decision. 29 U.S.C.A. Sec. 160(f); Universal Camera Corp. v. NLRB, 340 U.S. 474, 95 L. Ed. 456, 71 S. Ct. 456 (1951).

Derivative Liability

Although there is evidence to the contrary, the Board correctly argues that there is substantial evidence to support its decision that Blackard and Mat-Su are jointly and severally liable for the backpay as a single employer and/or the alter egos of Alaska Cummins.

Before and after the brief life of Alaska Cummins, Blackard operated from headquarters in Anchorage where he conducted a number of businesses. Through Mat-Su, incorporated in 1971, he ran a fleet of trucks which were serviced in a shop in Fairbanks by Mat-Su-employed mechanics. Blackard later expanded shop operations to the public under the name of Groves Truck and Trailer. Alaska Cummins, which continued to conduct business in the name of Groves Truck & Trailer, was formed in April 1979 when Blackard acquired a Cummins engine distributorship. In 1981, while the appeal of the unfavorable labor practice decision was pending before the National Labor Relations Board, Alaska Cummins was dissolved.

The record reveals that Blackard had control, domination, and manipulation of Mat-Su, Alaska Cummins, and Arctic Mack, acting as president of all three corporations. Mat-Su stock is owned by Blackard and his wife. Alaska Cummins stock was originally owned gratuitously by Blackard's son, but was transferred to the father without charge by the son prior to Alaska Cummins' dissolution. Upon its formation, Arctic Mack's stock was issued to Blackard.

Mat-Su's truck fleet was serviced in Fairbanks by equipment later used by Alaska Cummins and its successor, Arctic Mack. Although subsequently expanded, the same business was conducted and many of the same customers were served by the same workforce.

Billings and accountings were under Blackard's control in Anchorage. Mat-Su funds were utilized throughout to administer the businesses. There is no evidence of interest charges which would support an arm's length transaction between the companies.

When Blackard gained an ownership interest in the premises occupied by the businesses, reduced rents were charged. Upon the transfer of Arctic Mack on June 25, 1982, Blackard waived a $319,000 indebtedness due to Mat-Su and continued to charge Arctic Mack's buyer reduced rents. One company after the other succeeded to the role of its forerunner.

The decision of the Board is thus supported by substantial record evidence.

Calculation of Lost Pay

Blackard and Mat-Su challenge the wages as calculated by the Board to be due and owing to three of the discharged employees. As to all three, they argue that the cut-off date for computations should be the 1982 date when Arctic Mack was transferred, not the 1984 date when it ceased operations. Since neither Blackard nor Mat-Su previously contested the computation cut-off date, their challenge is untimely. See, NLRB v. Dane County Dairy, 795 F.2d 1313, 1320-21 (7th Cir. 1986); NLRB v. W.S. Hatch Co., Inc., 475 F.2d 558, 562 (9th Cir. 1973).

The Board calculated the amount due Charles Buchanan at $29,794. Buchanan was gainfully employed during 14 of the 17 quarters. Although his earnings of $118,602 during the period in question exceeded the $109,304 that he would have earned had he remained in continuous employment with Alaska Cummins and Arctic Mack, he is nonetheless due backpay as computed by the Board. Loss of pay is determined by deducting net earnings from other employment from a sum equal to that which an employee would normally have earned for each quarter if not discharged. Earnings in one particular quarter have no effect upon backpay liability for any other quarter. F.W. Woolworth Co., 90 NLRB 289 (1950). See also, NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 345-52 (1952), sanctioning the Board's use of the quarterly method.

The Board calculated the amount due Afton Clifford at $62,209. Clifford is entitled to compensation despite allegations that he effectively removed himself from the job market. The Board's conclusion that this discharged employee used due diligence in the search for work and in attempts to mitigate damages is reasonably supported by the evidence. The principle of mitigation of damages by seeking work does not require success, but only a good faith effort. Cashman Auto Co. v. NLRB, 223 F.2d 832, 836 (1st Cir. 1955); cited with approval, Carter of Cal., d/b/a Carter's Rental, 250 NLRB 344 (1980). The employer bears the burden of establishing that substantially equivalent employment was available and that the employee willfully refused to accept it. See, NLRB v. Mastro Plastics Corp., 354 F.2d 170, 175 (2d Cir. 1965), cert. denied, 384 U.S. 972 (1966).

The Board calculated the amount due Larry Glover at $67,264. Glover has not been located. The Board order requires Blackard and Mat-Su to escrow for one year the sum determined by the Board to be due to Larry Glover. The Board's policy of requiring backpay to be escrowed for a reasonable period of time when a discharged employee cannot be located must be upheld as reasonable under the applicable standard of review.

Blackard and Mat-Su's petition for review is DENIED and the National Labor Relations Board's cross-appeal for an order of enforcement is GRANTED.