Frontier Foundries

National Labor Relations Board - Board Decisions

Sep 13, 1993

312 N.L.R.B. 73 (N.L.R.B. 1993)

73
312 NLRB No. 33
FRONTIER FOUNDRIES, INC.
1 By an unpublished Board Order dated May 28, 1993, the Board,
Member Devaney dissenting, granted the General Counsel’s request
for special permission to appeal, reversed the judge’s order, rein-
stated the complaint, and remanded the proceeding to Judge Miller
for appropriate action without prejudice to further settlement negotia-
tions. The parties were advised that a fully articulated decision
would follow.
2 Independent Stave, supra at 74.
Frontier Foundries, Inc. and William Resinger and
Ronald J. Grazier, Jr. Cases 6–CA–24355 and
6–CA–24499
September 13, 1993
ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY AND RAUDABAUGH
On June 23, 1992, the Regional Director for Region
6 issued a consolidated complaint and notice of hear-
ing alleging, inter alia, that the Respondent violated
Section 8(a)(1) and (3) of the Act by selecting Charg-
ing Parties William Resinger and Ronald J. Grazier, Jr.
for layoff based on their activities on behalf of United
Steelworkers of America. A hearing was held before
Administrative Law Judge Michael O. Miller on Sep-
tember 23 and 24, 1992, and, after adjournment, was
scheduled to resume on November 2, 1992. At the re-
quest of the Respondent the hearing was continued
until December 12, 1992. On December 11, 1992, the
hearing was postponed indefinitely pending settlement.
On March 12, 1992, the Respondent submitted an
executed non-Board settlement to the judge, the terms
of which provided as follows:
Charging Party Resinger received $2000 ($468
treated as regular backpay subject to the standard
payroll deductions; the remainder, $1532, was
treated as ‘‘liquidated damages’’ not subject to
taxation).
Charging Party Grazier received $1000 ($476
treated as backpay subject to payroll deductions;
$524 treated as ‘‘liquidated damages’’ not subject
to taxation).
In both cases the liquidated damage were purport-
edly for ‘‘personal injury . . . suffered’’ because of
the layoff and in consideration of a general release.
The settlement agreement specifically provided that the
sums denominated as ‘‘liquidated damages shall have
no deductions taken from them and that any tax con-
sequences are the responsibility of the alleged
discriminatees. The General Counsel filed an ‘‘Opposi-
tion to Approval of Withdrawal Requests and Dismis-
sal of Complaint’’ and objected to the proposed non-
Board settlement.
On April 12, 1993, Judge Miller issued an ‘‘Order
Approving Settlement and Request to Withdraw
Charges and Dismissing Complaint.’’ In his order
Judge Miller noted that the settlement provided that
the discriminatee ‘‘would be solely responsible for de-
termining the tax consequences, if any, stemming from
the receipt’’ of the liquidated damages, that the Charg-
ing Parties withdrew their charges with prejudice, and
that since the hearing adjourned, the Respondent and
the Union had engaged in negotiations, and the Union
had not objected to the settlement.
On April 26, 1993, the General Counsel filed a Re-
quest for Special Permission to Appeal From Ruling of
Administrative Law Judge and Appeal.1 The General
Counsel opposes the settlement. The primary basis for
his doing so is his contention that the parties have im-
properly characterized, as liquidated damages, a sub-
stantial portion of the settlement amount. According to
the General Counsel, the parties did so in order to
‘‘avoid the payment of taxes on backpay.’’ The Gen-
eral Counsel also argues that if the parties have cor-
rectly characterized the amount of liquidated damages,
then the amount attributable to backpay is ‘‘uncon-
scionably small’’ and thus can not pass muster under
Independent Stave, 287 NLRB 740 (1987).
We agree with the General Counsel’s second conten-
tion, and we do not pass on the primary contention.
That is, we accept arguendo the private parties’ rep-
resentation that Resinger is to receive $468 as backpay
and $1532 as liquidated damages; Grazier is to receive
$476 as backpay and $524 as liquidated damages. Be-
cause the Board awards only backpay and does not
award ‘‘liquidated damages,’’ it follows that only $944
is being awarded to remedy the alleged unfair labor
practices directed toward these two employees. Ac-
cording to the General Counsel, 100 percent of back-
pay for these two employees would be more than
$15,000.
In deciding whether to accept a settlement agree-
ment, the Board considers the following factors:2
(1) whether the charging party[ies], the respond-
ent[s], and any of the individual discriminatee[s]
have agreed to be bound, and the position taken
by the General Counsel regarding the settlement;
(2) whether the settlement is reasonable in light of
the nature of the violations alleged, the risks in-
herent in litigation, and the stage of the litigation;
(3) whether there has been any fraud, coercion or
duress by any of the parties in reaching the settle-
ment; and (4) whether the respondent has engaged
in a history of violations of the Act or has
breached previous settlement agreements resolving
unfair labor practice disputes.
74 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 See NLRB v. Electrical Workers Local 112 (Fischbach Lord
Electric), 143 LRRM 2256, 2257–2258 (9th Cir. 1993).
With respect to the first factor, we note that, al-
though the charging parties and Respondent have
agreed to the settlement, the General Counsel vigor-
ously opposes it. With respect to the second factor, we
note the serious nature of an 8(a)(3) violation, and we
note that the usual remedy for that kind of violation
includes full backpay. Significantly, the backpay award
in this case is about 6 percent of full backpay. In addi-
tion, the settlement does not provide for any notices
and does not contain assurances against future mis-
conduct.
Of course, we recognize that there are risks (for
both sides) in any litigation. However, particularly in
light of the very small percentage of backpay awarded
in the settlement, we are not persuaded that the Gen-
eral Counsel’s chances of success are so abysmally
low that it would be reasonable to accept a 6 percent
settlement
Concededly, the other two factors to be considered
under Independent Stave have not been shown to mili-
tate against acceptance. However, particularly because
the settlement amount is so clearly unreasonable, and
in light of the General Counsel’s oposition, we shall
not accept the settlement.3
MEMBER DEVANEY, dissenting.
I would affirm the administrative law judge’s ac-
ceptance of the settlement agreement which was agreed
to by the Respondent and the alleged discriminatees.