East Island Swiss Products, Inc.

National Labor Relations Board - Board Decisions

Nov 29, 1976

226 N.L.R.B. 1207 (N.L.R.B. 1976)

EAST ISLAND SWISS PRODUCTS 1207
East Island Swiss Products, Inc. and Jack Tracht.
Case 29-CA-4700
November 29, 1976
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS PENELLO
AND WALTHER
On June 30, 1976, Administrative Law Judge Wil-
liam F. Jacobs issued the attached Decision in this
proceeding. Thereafter, the General Counsel filed ex-
ceptions and a supporting brief, and Respondent
filed an answering brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and briefs
and has decided to affirm the rulings, findings, and
conclusions of the Administrative Law Judge and to
adopt his recommended Order.
ORDER
were present and participated in the hearing. Respondent
filed a brief. Based upon the entire record, including my
observation of the witnesses and after due consideration of
Respondent's beef and the closing arguments of both
counsel, I make the following:
FINDINGS OF FACT
I THE BUSINESS OF THE RESPONDENT
Respondent, a New York corporation, with its principal
office and place of business in Deer Park, New York, is
engaged in the manufacture, distribution, and sale of ma-
chine parts. During the year immediately preceding is-
suance of complaint, Respondent, in the course and con-
duct of its business operations, manufactured, sold, and
distributed at its Deer Park plant products valued in excess
of $50,000 which products were shipped from said plant in
interstate commerce to points located outside the State of
New York. The complaint alleges, the answer admits, and I
find that Respondent is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act.
It. THE LABOR ORGANIZATION INVOLVED
United Brotherhood of Industrial Workers, Local 424,
herein called the Union, is and has been at all times mate-
nal herein, a labor organization within the meaning of Sec-
tion 2(5) of the Act.'
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and hereby
orders that the complaint be, and it hereby is, dis-
missed in its entirety.
DECISION
STATEMENT OF THE CASE
WILLIAM F. JACOBS, Administrative Law Judge: This case
was heard at Plainview, New York, on April 21, 1976. The
charge was filed on November 12, 1975, by Jack Tracht, an
individual, herein called Tracht. Complaint issued on Feb-
ruary 27, 1976, alleging that East Island Swiss Products,
Inc., herein called Respondent, violated Section 8(a)(1) and
(4) of the National Labor Relations Act, as amended, by
discharging Tracht and failing and refusing to reinstate
him because he filed a charge and gave testimony under
the Act and because he refused to agree to return to Re-
spondent any backpay to which he might be entitled to
receive from Respondent pursuant to the Order of the
Board in the case of East Island Swiss Products, Inc., 220
NLRB 175. On March 8, 1976, Respondent filed its an-
swer, generally denying all allegations. Both the complaint
and the answer were amended at the hearing and stipula-
tions offered and received so as to result in a substantial
narrowing of the issues.
Representatives of General Counsel and Respondent
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. Background
The Charging Party herein, Jack Tracht, was first em-
ployed by Respondent in April 1973 and continued his
employment until April 1974. At that time he was dis-
charged, whereupon he filed a charge with the National
Labor Relations Board alleging his discharge to be in vio-
lation of Section 8(a)(1) and (3) of the Act. Following an
investigation by Region 29, complaint issued based on said
allegations. At the hearing subsequently held, Tracht ap-
peared and testified as a witness for the General Counsel.
The Decision rendered by Administrative Law Judge De-
nison on January 28, 1975, was in favor of the General
Counsel and included among its recommendations that
Tracht be reinstated with backpay. Upon receipt of this
Decision, Respondent, in early February, reinstated Tracht
in order to limit its backpay liability while awaiting the
Board's Decision on its exceptions. It did not, however,
pay Tracht the backpay due him as there was, and still is,
some dispute as to the amount owed.
Meanwhile, both General Counsel and Respondent hav-
ing filed exceptions to Administrative Law Judge
Denison's Decision, the Board issued its Decision and Or-
der on September 10, 1975. The Board sustained the Ad-
ministrative Law Judge's Decision with respect to his find-
ing a violation but disagreed with his recommended
' Based upon the facts described infra , and upon the previous findings in
East Island Swiss Products , 220 NLRB 175
226 NLRB No. 188
1208 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
remedy. In forming a new and proper remedy the Board
noted that, when Tracht first applied for work with Re-
spondent in 1973, he had already been suspended by his
previous employer, the U.S. Post Office, for suspicion of
appropriating funds. On his application Tracht properly
noted that the Post Office had been his former employer
but left blank the space requiring him to state the reason
for leaving his former employer. In early 1974, after having
been in Respondent's employ for almost a year, Tracht was
prosecuted for misappropriating Post Office funds, was
convicted on that charge of a misdemeanor, and was sen-
tenced to 3 months in prison and a $500 fine. When he
took leave of absence to stand trial, Tracht told Respon-
dent that he was merely hunting for a job in Brazil, and
when he took leave of absence to be sentenced, he told
Respondent he was taking off for personal reasons. Re-
spondent did not learn of Tracht's suspension, prosecution,
or conviction until cross-examination at the hearing in 220
NLRB 175 on August 29, 1974. The original hearing was in
recess from August 29 until October 7, 1974, when, upon
resumption, Respondent offered Tracht reinstatement
without backpay if he would return within a week's time.
But Tracht could not do so since he was still then in prison
serving the sentence that began for him shortly after testi-
fying on August 29.
In relying on the above facts to modify the Administra-
tive Law Judge's remedy, the Board noted that "there are
counterbalancing considerations in this case which we
think strongly weigh in favor of ordering something less
than such a full remedy." The Board reasoned:
It seems clear here that but for Tracht's participa-
tion in union activities, he would have continued in
Respondent's employ at least until such time as Re-
spondent acquired information of his prior employ-
ment-related misconduct. It is therefore appropriate,
in remedying Respondent's unlawfully motivated dis-
charge of Tracht, to order Respondent to make Tracht
whole from the date of his discharge to the date it
acquired this information (which as previously noted
was the date of the hearing in this case) On the other
hand, it is not at all clear that Respondent would have
voluntarily retained Tracht after it acquired such in-
formation And it is also true that Tracht was respon-
sible for concealing such information by failing to
complete the appropriate space in the application
form, thereby making it impossible for Respondent to
establish that it would have never hired Tracht had it
known of his prior misconduct from the outset. Under
these circumstances, and particularly considering the
seriousness and employment-related nature of
Tracht's criminal offense, we do not believe that Re-
spondent should have the burden of establishing that
it would not have continued Tracht upon obtaining
this information. Accordingly, we will not order Re-
spondent to offer Tracht reinstatement to his former
job, nor will we order Respondent to make Tracht
whole since the time it learned of Tracht's misconduct
on his prior job
In deciding that Respondent should not be required to
reinstate Tracht, the Board noted that the parties had con- but I do not consider the matter critical to the Decision
sidered reinstatement during settlement discussions at the
hearing and, in a footnote to its Decision, commented:
We recognize that, as noted earlier, Respondent of-
fered Tracht reinstatement at the hearing if he agreed
to give up any right to backpay he might otherwise
have. However, that offer of reinstatement in an effort
to settle the case cannot be fairly equated with a free
and voluntarily made determination by Respondent
that Tracht's prior misconduct was not of such a seri-
ous nature as to warrant his immediate termination.
Indeed, considering the employment-related nature
and seriousness of Tracht's previous misconduct-in
addition to the fact that he concealed it, as well as
lying to Respondent as to why he needed a leave of
absence to complete his sentence-it would not have
been at all unreasonable for Respondent to have dis-
continued his employment, apart from his union activ-
ities and also the legal considerations injected into the
situation by the complaint herein.
B. Events Following Issuance of the Board 's Decision
Immediately on receipt of the Board's Decision which,
as noted above, issued on September 10, 1975, Hyman
Gorenstein, one of Respondent's officers, and later its pres-
ident, discussed the Decision with Respondent's attorney,
with his partner, and with the Regional Office, in order to
determine if Respondent was within its rights in terminat-
ing Tracht in accordance with the Board's Decision and
the remedy provided in connection therewith. After being
assured that he was not obligated to retain Tracht as an
employee, Gorenstein, as required by contract, contacted
Shop Steward Victor Rosenheim by telephone and advised
him of his intention to terminate Tracht. Rosenheim re-
quested that Gorenstein reconsider. Arrangements were
made for a meeting the following day, probably Thursday
September 11, 1975.2 Rosenheim then contacted the Union
to make certain that a union representative would be pre-
sent at the forthcoming meeting.
The following day Gorenstein met with Tracht, Rosen-
heim, and Joe Sherick, the union business agent. The pur-
pose of the meeting, according to both Rosenheim and
Gorenstein, was to make certain that Tracht was not un-
lawfully terminated. Before Gorenstein called Tracht into
his office, however, he discussed the matter with Rosen-
heim and Sherick and advised them both of his intention to
terminate Tracht. Rosenheim and Sherick asked Goren-
stein what could be done to keep Tracht employed, point-
ing out that his prison record, the times, and the situation
would make it difficult for Tracht to find other employ-
ment. They pleaded for Gorenstein to reconsider. Goren-
stein did not immediately commit himself to a decision but
gave the matter additional thought.
Later, Gorenstein called Tracht into his office and in the
presence of Rosenheim and Sherick told him that the
Board's Decision had been rendered, that Tracht had won
part of the case and lost part. He explained that, according
2 The record is somewhat confused as to the precise dates of these events
EAST ISLAND SWISS PRODUCTS
to the Decision, Tracht would receive about 4 months'
backpay but that Respondent had the right to terminate
him and intended to do so. Sherick again asked Gorenstein
to reconsider his decision to terminate Tracht while the
latter stated that inasmuch as he had been working for
Respondent for 9 months he did not know whether or not
Respondent did, in fact, have the right to terminate him.
Sherick then drew Gorenstein into a separate office where
he continued to urge Gorenstein to find some way of con-
tinuing Tracht's employment. At Sherick's and
Rosenheim's urging, Gorenstein finally agreed that, al-
though he still did not want Tracht working for him, he
was willing to retain him in his then current position with
his seniority rights provided he would be willing to give up
whatever money he had coming under the Board's Deci-
sion as a quid pro quo. According to Gorenstein, Sherick
and Rosenheim both appeared to consider the offer a good
one. This offer was then presented to Tracht who turned it
down despite Rosenheim's urging him to accept reinstate-
ment at any cost. Tracht continued to insist that he had
employment rights while Gorenstein insisted, showing
Tracht the Board's Decision, that according to his lawyers
he was free to terminate Tracht. Sherick advised Tracht
that in his opinion Gorenstein was correct in his view of
the legalities. Gorenstein stated that he did not want to fire
Tracht but the only way he would be willing to retain him
would be if Tracht agreed to pay back to Respondent the
money which would be awarded to him as backpay under
the Board's Decision. Under cross-examination Gorenstein
explained his position by stating that he wanted something
in return for doing something which he legally did not have
to do.
Tracht then attempted to break the apparent stalemate
by offering to receive the backpay owed him in install-
ments or in the alternative to accept a 25-cent-per-hour
wage increase in lieu of the backpay. Gorenstein refused
both counteroffers, explaining that granting a wage in-
crease to Tracht would be unfair to the other employees.
Rosenheim and Sherick then engaged Tracht in a separate
conversation in Gorenstein's absence during which they
continued to urge Tracht to accept the offer of reinstate-
ment at that time and let the backpay issue await further
developments. Nothing was decided by the time Goren-
stein returned so it was suggested that Tracht think about
Gorenstein's proposal overnight and make a decision the
following day, Friday, September 12.
The next day, Tracht went to Gorenstem's office. He
advised Gorenstein that his offer was not acceptable
Since Gorenstein admitted at the hearing that he had given
Tracht the alternative of paying back the backpay or being
terminated there is no basic dispute as to the reason for
termination.3 Tracht was paid the wages due for the previ-
ous week or two and left the employ of Respondent. There
is no evidence that during the 9 months of Tracht's reem-
ployment his work was other than satisfactory.
3 The specific content of the discussion between Gorenstein and Tracht
which took place on Friday, September 12, concerning possible installment
payments, proof of waiver , and other extraneous matters which were the
subject of testimony , I find to be irrelevant to the Decision to be rendered
herein
1209
C. Positions of the Parties-Issue
General Counsel contends that Respondent violated
Section 8(a)(1) and (4) when, following the issuance of the
Board's Order providing for backpay without reinstate-
ment, Respondent offered to permit the dischargee to re-
main in its employ provided he renounce his claim to the
backpay due him under the Board's Order. General Coun-
sel argues that the offer of reinstatement amounted to a
condonation of Tracht's criminal record and that Respon-
dent's insistence that Tracht renounce his right to backpay
undermines the remedial processes of the Board's Order
and thereby undermines the Act itself.
Respondent contends that he did not violate the Act
when, after issuance of the Board's Order, the union repre-
sentatives pleaded that he continue to employ the dischar-
gee and Respondent , succumbing to their entreaties,
agreed to keep the dischargee in his employ provided he
renounce his claim to the backpay ordered as remedy by
the Board.
The issue, then, is whether, under the circumstances of
the instant case, Respondent violated the Act by offering
to retain the dischargee in his employ only on condition
that he renounce the backpay due him under the Board's
Order when that order specifically stated that reinstate-
ment was not required.
Analysis and Conclusions
The facts as outlined above are not in dispute . The ques-
tion to be decided is strictly a legal issue General Counsel
appears to argue that the initial offer of reinstatement at
the hearing and the subsequent actual reinstatement of
Tracht following Administrative Law Judge Denison's De-
cision should somehow be regarded as condonation of
Tracht 's criminal prosecution . I do not agree. In fact the
Board itself dealt with the initial offer of reinstatement in
its Decision when it noted that "an offer of reinstatement
in an effort to settle the case cannot be fairly equated with
a free and voluntarily made determination by Respondent
that Tracht's prior misconduct was not of such a serious
nature as to warrant his immediate termination ." Aside
form the fact that I am obviously bound by the Board's
conclusion on this aspect of the case, I wholeheartedly
agree with its rationale . I would also underline the fact that
Respondent at the time of these settlement discussions ap-
peared to be primarily interested in economizing, in at-
tempting to save the expenses connected with the backpay
aspect of the case , a fact which sheds light on subsequent
events.
When Administrative Law Judge Denison rendered his
Decision providing for reinstatement and backpay, Re-
spondent determined to limit its liability by offering rein-
statement to Tracht while holding actual payment of back-
pay in abeyance , pending the Board's rulings on its
exceptions . Respondent had a perfect right to do this, Na-
tional Screen Products Co., 147 NLRB 746 (1964) and its
decision to proceed in this manner casts no shadow on
either its certitude as to the merit of its case or its attitude
toward the employability of Tracht in light of his past
criminal record . No evidence was presented during the
1210 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
hearing which would convince me that a contrary view is
more appropriate.
During the period of Tracht's reemployment, he appar-
ently did his job well and there is no indication from the
evidence in the record that Respondent was displeased
with his performance. On the other hand, there is no evi-
dence in the record which would require a finding to the
contrary. In fact, nothing changed from the time of
Tracht's reemployment following issuance of the Adminsi-
trative Law Judge's Decision until the Board's Decision
was rendered.
When the Board rendered its Decision that Respondent
owed Tracht backpay but was not obligated to reinstate
him, the situation vis-a-viz one another was the same as if
Respondent never reemployed Tracht in February in order
to limit its liability. Thus, Tracht had a legitimate claim to
backpay but because of the Board's Order was not entitled
to reinstatement. The Board had made it clear that Re-
spondent was not required to employ Tracht inasmuch as
his criminal record was such as to permit Respondent to
reject him as an employee despite Tracht's earlier termina-
tion for protected activities. If Respondent was free to re-
fuse employment to Tracht at the time it learned of
Tracht's criminal record, that option was still a viable one
at the time the Board issued its Decision on September 10.
Therefore, at that point in time, Respondent was free to
terminate Tracht and, for all intent and purposes, did so on
or about September 10 or 11, when it advised Tracht and
the Union of its intention to do so. Tracht and Respondent
stood at arms length. Tracht was entitled to backpay; Re-
spondent was entitled to be free of the onus of employing
an employee saddled with a criminal record-both by
Board order. At this point, the union representatives re-
quested, even pleaded, that Respondent reemploy Tracht.
Respondent's president, after initially refusing reinstate-
ment to Tracht, finally agreed but only if, as a quid pro quo,
Tracht would surrender his claim to the backpay owed to
him by Respondent. The offer, if accepted, would have
amounted to a settlement or agreement whereby Tracht
would have received in return for an uncertain amount of
money to which he was entitled, a job which the Board
found he was not entitled. Respondent would have given
up its right to be free of an employee which the Board had
found undesirable in return for an unspecified amount of
money which the Board had found the Respondent owed
to Tracht. From the record there is nothing to indicate
continued animosity toward Tracht based on Tracht's fil-
ing of the charge in 220 NLRB 175 or his testimony in
connection with that case, and it appears that Respondent
agreed, after some persuasion from the Union's representa-
tives, to accept Tracht along with his substantial impedi-
ments as an employee, though not obligated to do so, but
only if it could obtain some benefit in return; namely, a
canceling of the debt it had incurred as a result of its unfair
labor practices. Although case law is clear that an em-
ployer may not condition continued employment of a dis-
criminatee on repayment of backpay to which the Board
has found the employee entitled, where the employee is
also entitled to reinstatement, Lakeland Bus Lines, Incorpo-
rated, 124 NLRB 123 (1959); set aside 278 F.2d 888 (C.A.
3, 1960); N L.R B v. O. H Lawley, et al, d/b/a Coal City
Cooperage Company, 182 F.2d 798 (C.A. 5, 1950), I find, as
in the instant case, that once the Board has determined
that the dischargee no longer has a vested right to his job,
the employer and dischargee should be free to bargain
through offer and acceptance a new set of relationships,
one to the other, and that such bargaining in no way un-
dermines the Act. For if the dischargee accepts reinstate-
ment in lieu of money owed him, he does so voluntarily
and has bargained to a position of his own choosing and, if
he rejects the offer, he is precisely in the position he was
placed in by the Board's Order. I recommend that the case
be dismissed in its entirety.
CONCLUSIONS OF LAW
1. The Respondent is an employer engaged in commerce
within the meaning of Section 2(6) and (7) of the Act.
2. The Union is an labor organization within the mean-
ing of Section 2(5) of the Act.
3. Respondent has not engaged in unfair labor practices
within the meaning of Section 8(a)(1) and (4) of the Act.
Upon the basis of the foregoing findings of fact, conclu-
sions of law, and the entire record in this proceeding, and
pursuant to the provisions of Section 10(c) of the Act, I
hereby issue the following recommended:
ORDER4
The complaint is hereby dismissed in its entirety.
In the event no exceptions are filed as provided by Sec 10246 of the
Rules and Regulations of the National Labor Relations Board, the findings,
conclusions, and recommended Order herein shall, as provided in Sec
102 48 of the Rules and Regulations, be adopted by the Board and become
its findings, conclusions, and Order, and all objections thereto shall be
deemed waived for all purposes