Charter Management, Inc., and Ten Four, Inc. v. National Labor Relations Board, 768 F.2d 1299, 11th Cir. (1985)
Charter Management, Inc., and Ten Four, Inc. v. National Labor Relations Board, 768 F.2d 1299, 11th Cir. (1985)
Charter Management, Inc., and Ten Four, Inc. v. National Labor Relations Board, 768 F.2d 1299, 11th Cir. (1985)
2d 1299
120 L.R.R.M. (BNA) 2361, 54 USLW 2187,
103 Lab.Cas. P 11,559
Before RONEY and HILL, Circuit Judges, and PITTMAN* , District Judge.
PITTMAN, District Judge:
Thereafter, Retail Clerks Local 1063 filed charges against Charter with the
Regional Office of the NLRB. The charges alleged that Charter had violated
the National Labor Relations Act (N.L.R.A.), 29 U.S.C. Sec. 158 (1981), by:
(1) unlawfully interrogating an employee about the employee's union activity;
(2) threatening to discharge an employee because of the employee's support for
the union; (3) discharging twelve employees because of their union organizing
activities; and (4) refusing to recognize and bargain with a union. The Board's
Regional Office proceeded to investigate these alleged unfair labor practices. It
took detailed affidavits from the discharged employees and their witnesses. It
advised Charter that, to avoid the issuance of a complaint, Charter had to
present evidence to show a lawful reason for the discharges. Charter submitted
a lengthy statement along with the affidavits of Mr. Evans and Mr. Smith.
Supplemental affidavits followed, and Mr. Smith submitted to an interview. In
its statement, Charter raised its defenses that no anti-union motive had been
shown, that no prima facie case of unlawful discharge existed, and that the
terminations would have occurred even in the absence of protected union
activities. Following this investigation, the Board's General Counsel issued a
complaint and amended complaint pursuant to the above charges of unfair labor
practices.
Charter then filed an application for an award of attorney's fees and expenses
pursuant to the E.A.J.A., 5 U.S.C. Sec. 504(a)(1). The ALJ found in a
Supplemental Decision and Order that the General Counsel "was substantially
justified in issuing a complaint and litigating the case to conclusion." He noted
that the case required resolution of several credibility issues and the
determination of these issues was made only after a four-day hearing with
numerous witnesses and conflicting testimony. The ALJ thus denied Charter's
application for fees. Charter filed exceptions to this ruling, but the NLRB
affirmed it. Charter was granted leave to appeal to this court.
The portion of the E.A.J.A. under which Charter seeks an award of attorney's
fees provides:
10
11
12
Charter initially contends that the entire course of an agency's conduct should
be scrutinized in determining whether "the position of the agency as a party to
the proceeding was substantially justified." 5 U.S.C. Sec. 504(a)(1). The
inquiry, Charter argues, should not be limited to the agency's "litigation
position" but should include the agency's actions which led to the adversary
proceeding. See Iowa Express Distribution, Inc. v. NLRB, 739 F.2d 1305 (8th
Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 595, 83 L.Ed.2d 704 (1985); but
see Ashburn v. United States, 740 F.2d 843, 847 n. 4 (11th Cir.1984); Spencer
v. NLRB, 712 F.2d 539 (D.C.Cir.1983), cert. denied, --- U.S. ----, 104 S.Ct.
1908, 80 L.Ed.2d 457 (1984) (construing 28 U.S.C. Sec. 2412). This court,
however, need not address this issue in this case, because it will not affect the
outcome of the case. Although the position taken by an agency prior to the
institution of formal proceedings may differ in some cases from the agency's
position at a subsequent adjudicatory hearing, no such difference exists here. In
this case, the General Counsel's litigation position largely was an orderly
presentation of its prelitigation findings. Any shortcomings in the agency's
prelitigation conduct would manifest themselves in the agency's litigation
position, keeping it from being substantially justified. In this case, therefore,
the actions of the General Counsel prior to the issuance of a complaint need not
be independently examined.1
13
Charter next contends that the NLRB abused its discretion by finding that the
General Counsel's position was substantially justified and thus denying an
award of fees. For its position to be substantially justified, Charter argues, the
General Counsel must present evidence which, if credited by the factfinder,
would constitute a prima facie case of unlawful conduct. Even the existence of
a prima facie case is not grounds for the issuance of a complaint, Charter
continues, if it is clear that a known defense will overwhelm the prima facie
case. The mere existence of certain credibility questions, Charter argues, also is
insufficient to warrant the issuance of a complaint or a finding that the General
Counsel's position was substantially justified. It contends that the General
Counsel has an obligation--which it did not meet in this case--to make all
possible credibility determinations prior to issuing a complaint. Application of
these standards to this case, Charter concludes, requires a finding that the
General Counsel's position was not substantially justified.
14
This court disagrees and holds that the NLRB's denial of Charter's application
for fees was not an abuse of discretion. The first two charges in the amended
complaint--the alleged unlawful interrogation and the alleged threats of
termination--hinged on resolving the credibility of conflicting testimony. One
employee testified that her supervisor made various inquiries into her
involvement with the union. Considering these inquiries under the totality of
the circumstances, the General Counsel was not unjustified in believing that
these questions were coercive within the meaning of Sec. 8(a)(1) of the
N.L.R.A., 29 U.S.C. Sec. 158(a)(1) (1982). See TRW-United Greenfield
Division v. NLRB, 637 F.2d 410, 416 (5th Cir.1981). The ALJ found that the
inquiries did not constitute a violation only because he credited Mr. Smith's
version of the incident over the employee's. On the basis of Mr. Smith's
testimony, the ALJ found that the inquiries were not unlawful because they
were made legitimately to determine whether the employee left her duty station.
Likewise, the ALJ credited Mr. Smith's testimony over the directly conflicting
testimony of another employee to find that Mr. Smith did not threaten to
discharge the employee because of his union activity. The ALJ stated in his
Supplemental Decision and Order that he would have found a violation on both
of these charges had he credited the testimony of the employees. The fact that
the ALJ decided that Mr. Smith was more credible than the employees does not
mean necessarily that the General Counsel was wrong to issue a complaint on
the basis of the employees' statements. Thus, the NLRB did not abuse its
discretion in holding that the General Counsel's position on these charges was
substantially justified.
15
The same is true for the charges of wrongful termination and refusal to bargain.
The central issue in the wrongful termination charges was whether Charter's
mass discharge of employees was motivated by anti-union considerations. Since
employers seldom admit anti-union motivation, the General Counsel did not act
unreasonably in refusing to accept Charter's statements at face value. Further,
despite the ALJ's holding, there was evidence that union activity--rather than
the alleged thefts--was the reason for the terminations. Some of the discharged
employees, for example, said they took only small food and beverage items
which they previously had been allowed to take. Those same employees were
assured that the purpose of the polygraph examination was to trace the
disappearance of substantial amounts of merchandise--not small items. The
terminations also did not immediately follow the examinations; they were
delayed several weeks and ultimately occurred almost immediately after the
union's request for recognition. These facts and the employees' testimony
concerning the alleged unlawful interrogation and threat could lead a factfinder
to believe that Charter discharged the employees because of their union activity.
Further, it was only after finding that Charter was not guilty of the first three
alleged violations that the ALJ concluded that Charter had a good faith, lawful
basis on which to refuse to recognize and bargain with the union.
16
The fact that the ALJ believed Charter's witnesses and decided in Charter's
favor does not mean that the General Counsel was not substantially justified in
issuing a complaint and litigating the case. The conflicting statements and the
Honorable Virgil Pittman, U.S. District Judge for the Southern District of
Alabama, sitting by designation
There is strong authority in Ashburn v. United States, 740 F.2d 843, 847 n. 4
(11th Cir.1984), to suggest that the inquiry is always limited to the agency's
litigation position. Charter argues that this authority is dicta and that the issue
at any rate must be reconsidered in light of Congress' recent unsuccessful
attempts to amend the E.A.J.A. For the reasons discussed, this court need not
address these arguments