Nickey Chevrolet Sales, Inc.

National Labor Relations Board - Board Decisions

Feb 15, 1972

195 N.L.R.B. 395 (N.L.R.B. 1972)

NICKEY CHEVROLET SALES, INC. 395
Nickey Chevrolet Sales, Inc. and American Federation
of Professional Salesmen . Case 13-CA-6401
February 15, 1972
SECOND SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN MILLER AND MEMBERS FANNING
AND JENKINS
On May 4, 1965, the United States Circuit Court of
Appeals for the Seventh Circuit entered its decree en-
forcing the National Labor Relations Board's Order' of
March 2, 1965, in which the Board found that Re-
spondent had discriminatorily discharged two em-
ployees in violation of Section 8(a)(3) and (1) of the
National Labor Relations Act, as amended. On
November 10, 1965, the court adjudged Respondent in
civil contempt for refusing to reinstate the two em-
ployees. On September 23, 1966, the Board issued its
Supplemental Decision and Order' directing Respond-
ent to pay the two employees backpay in specified
amounts. On March 11, 1971, the court again adjudged
Respondent in contempt finding, inter alia, that Re-
spondent violated the court decree by discharging Har-
old Sergott, a salesman employed by Respondent, be-
cause of his union activities. The court ordered
Respondent to offer Sergott full and bona fide reinstate-
ment and to make him whole for all pay and benefits
lost due to the discrimination against him.'
On August 6, 1971, pursuant to the court order the
Regional Director for Region 13 issued and served on
the parties a backpay specification detailing the sum of
money due Sergott for the period from October 5, 1969,
to March 24, 1971.On September 2, 1971, Respondent
filed an answer thereto. Upon appropriate notice issued
by the Regional Director, a hearing was held on Sep-
tember 28, 1971, before Trial Examiner Henry L. Ja-
lette.
On October 29, 1971, the Trial Examiner issued the
attached Decision in this proceeding, Thereafter, the
General Counsel filed exceptions and a supporting
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 Trial
Examiner's Decision in light of the exceptions and
briefs and has decided to affirm the Trial Examiner's
rulings, findings, and conclusions and to adopt his
Unpublished
160 NLRB 1279
N.L.R B v Nickey Chevrolet Sales, Inc., 65 LC & 11,650
recommended Order, only to the extent consistent
herewith.
1. The Trial Examiner found, and we agree, that
during the backpay period Sergott would have had the
use of a demonstrator automobile, and that the value
of such use during the backpay period was $125 per
month, or $375 per quarter.4
2. The Trial Examiner further found that, because of
the discrimination against him, Sergott suffered a loss
in prizes he would have received in sales contests spon-
sored by General Motors, Inc., in the total amount of
$82.88. The Trial Examiner reasoned that since Sergott
earned a total of $675 in prizes during the year preced-
ing his discharge, this amount must be prorated over a
period of 19 quarters because that was the representa-
tive period agreed to for determining loss of earnings
other than prizes. By this method, the Trial Examiner
concluded that Sergott's average quarterly prize money
would have amounted to $35.52 and that amount
should be added to his quarterly backpay. Thus, the
Trial Examiner prorated the value of prizes received
during a 4-quarter period over a 19-quarter period in
estimating the value of prizes lost. We do not agree
with the Trial Examiner's computation of the average
quarterly prize money.
The specification alleged that Sergott should be reim-
bursed for the prizes he would have received, absent the
discrimination against him, at the rate of $675 per year.
Respondent denied this allegation, but presented no
formula of its own.' The General Counsel selected the
formula in the specification because Sergott had a
record of the prizes he had received during the year
before his discharge. In the absence of any evidence to
the contrary, we find that the selection of this formula
was reasonable. Although we do not necessarily agree
with the Trial Examiner that the General Counsel
could not, without justification, use a formula for prizes
which was different from that used for sales commis-
sions, we find, based on the foregoing, that there was
justification in this case. Moreover, it is clear that the
formula devised by the Trial Examiner was unfair to
the discriminatee because it assumed he would have
earned the same amount over a 19-quarter period as he
in fact earned in only 1 year.
' In making this determination , which is concededly less than the full
scheduled $200 monthly rental for an automobile, we have taken into con-
sideration the restrictions on the use of demonstrator automobiles by sales-
men at Nickey Chevrolet The record shows that the salesman is expected
to have the vehicle at the agency when he is on duty, he uses it for demon-
strator purposes and makes it available to other salesmen for such purpose,
it is used for lending to deserving customers, and demonstrators are subject
to sale at any time.
' In view of our determination that Respondent's contentions as to this
issue are without merit , we find it unnecessary to decide whether the answer
was insufficient under Sec 102 54 (b) and (c) of the National Labor Rela-
tions Board Rules and Regulations and Statements of Procedure , Series 8,
as amended , to entitle Respondent to litigate the issue as the General Coun-
sel contends
195 NLRB No. 76
396 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
In all the circumstances, therefore, we find that the
formula set forth in the specification is fair and reasona-
ble, and that Sergott is entitled to prize money at the
rate of $675 per year or $168.75 per quarter during the
backpay period.6
3. The Trial Examiner found that there was insuffi-
cient basis to deny Sergott backpay during the period
from October 5, 1969, to April 30, 1970. We agree. The
Trial Examiner concluded, however, that after the ex-
piration of his unemployment benefits on April 30,
1970, Sergott did not make reasonable efforts to find
equivalent employment and therefore was not entitled
to backpay for the period after April 30, 1970. We find
merit in the General Counsel's exceptions to this
finding.
The record shows that during the backpay period
Sergott called in person on 24 different automobile
dealers, and contacted them, either in person or by
telephone, a total of approximately 113 times. Of these,
72 contacts were made after April 30, 1970. Respond-
ent admittedly made an independent check to ascertain
whether Sergott sought employment during the period
October 5, 1969, through March 24, 1971, and learned
that Sergott had visited various automobile agencies.
There is no evidence that Sergott at any time during
this period received or refused any job offers.' There
also is no showing that any jobs were available at any
of the automobile dealers to which Sergott applied or
at any of the other Chicago automobile dealers. When
the Trial Examiner asked Sergott why he did not apply
to some of the other dealers, Sergott replied, "I applied
to the dealers that gave me hope as [sic] getting a job
there." He explained that he had worked exclusively
for Chevrolet and Cadillac dealers during the 18 years
he had sold automobiles. Between April 30, 1970, and
March 17, 1971, Sergott sought employment 11 or 12
times at Stamer Cadillac and the same number of times
at Brigance Chevrolet where he had been previously
employed. Thus, we find that Sergott continued to
make a reasonable search for employment during the
entire backpay period.
In these circumstances, we find that Respondent has
failed to sustain the burden of establishing that Sergott
willfully incurred a loss of interim earnings at any time
during the backpay period.'
We shall therefore reverse the Trial Examiner's
Decision insofar as it related to his finding that Sergott
is not entitled to backpay for the period from April 30,
1970, to March 24, 1971.
We conclude therefore that Respondent's obligation
to make Sergott whole shall be fulfilled by payment to
him of the total net backpay set forth and computed
below:
Quarterly Period
4 -- 69 1 -- 70 2 -- 70 3 -- 70 4 -- 70 1 -- 71
Gross
backpay $3 , 158,41 $2,065 . 81 $3,040 . 14 $3,168.51 $3,179 . 92 $2,730.80
Value of
demon-
strator
at $125
per
month 375.00 375.00 375.00 375.00 375.00 375.00
Value of
prizes 168.75 168.75 168.75 168.75 168.75 168.75
Total
Quarterly $3,702.16 $2,065 . 81 $3,583.89 $3,712.26 $3,723 .67 $3,274.55
Gross
Backpay
Total Net
Backpay $20,606.09
NLRB v Charley Toppino and Sons, Inc, 358 F.2d 94 (C A 5) ' Marlene Industries Corporation, 183 NLRB No 3, enfd. 440 F 2d 673,
Nickey Chevrolet Sales, Inc, 160 NLRB 1279, 1280 (C A 6), Golay & Co., Inc v. NLR B, 447 F 2d 290 (C A 7)
NICKEY CHEVROLET SALES , INC 397
ORDER
On the basis of the foregoing Supplemental Decision
and Order and the entire record in this case , the Na-
tional Labor Relations Board hereby orders that the
Respondent , Nickey Chevrolet Sales , Inc., Chicago, Il-
linois , its officers , agents , successors , and assigns, shall
pay to Harold Sergott as net backpay $20,606 .09, less
any tax withholding required by the laws of the United
States and the State of Illinois , plus interest thereon at
the rate of 6 percent per annum in accordance with the
formula prescribed in Isis Plumbing & Heating Co., 138
NLRB 716.
tion was $202 a month or $606 per quarter . The Respondent
admits that Sergott would have had the use of a demonstrator
automobile during the backpay period, but it contends that
the value of the use of such a demonstrator was $125 per
month.
The specification alleges that during the backpay period
Sergott would have received prizes from the Respondent or
the Chevrolet Division of General Motors , Inc., in the value
of $675 per year . Respondent denies this allegation.
The specification admits to no interim earnings for the
entire backpay period and Respondent contends that Sergott
did not make reasonable effort to find substantially equivalent
employment and that he should therefore be awarded no
backpay , or that he be denied backpay for a substantial por-
tion of the backpay period.
II THE VALUE OF THE USE OF A DEMONSTRATOR
AUTOMOBILE
TRIAL EXAMINER 'S DECISION
STATEMENT OF THE CASE
HENRY L. JALETTE , Trial Examiner : On March 11, 1971,
the United States Court of Appeals for the Seventh Circuit
issued its opinion and order on a petition filed by the National
Labor Relations Board to adjudge Respondent in civil con-
tempt for disobeying and failing and refusing to comply with
a decree of the Court entered May 4 , 1965, in which the Court
concluded , inter alta, that Harold Sergott , a salesman em-
ployed by Respondent , had been discharged because of his
union activities , and in which the Court ordered Respondent
to purge itself of contempt by offering Sergott full and bona
fide reinstatement and to make him whole for all pay and
benefits lost due to the discrimination against him .' Pursuant
to such order , the Regional Director for Region 13 issued a
backpay specification on August 11, 1971, detailing the sum
of money due the said Sergott. On September 28, 1971, a
hearing was held in Chicago, Illinois.
Upon the entire record , including my observation of the
witnesses , and after due consideration of the briefs by General
Counsel and the Respondent , I make the following:
FINDINGS OF FACT
I PRELIMINARY STATEMENT
The specification alleges, the answer admits , and I find that
the backpay period is from October 5, 1969, to March 24,
1971.
The specification alleges, the answer admits, and I find that
Sergott would have earned 89.67 percent of the average gross
earnings of three representative salesmen earned in the period
from January 1, 1965, through September 30, 1969, as set
forth in Appendix C of the specification.
The specification also alleges that during the backpay
period Sergott would have had the use of a new demonstrator
automobile and that the value of the use of such a demonstra-
' NL R B v Nickey Chevrolet Sales, Inc., F 2d
As previously noted , it is undisputed that as a salesman
Sergott would have had the use of a demonstrator automo-
bile. According to Edward J. Stephani , president of Respond-
ent, the use of a demonstrator by a salesman is figured to be
the equivalent in compensation of $125 per month . Accord-
ing to the specification , the value of the use of a demonstrator
automobile is $202 per month . The only evidence submitted
in support of the specification was the rate schedule used by
Nickey Rent-A-Car, a corporation also owned by Stephani,
and a $200 per month quotation given to Sergott by the
former manager of the Rent -A-Car operation for the rental
of a four-door Impala for a period of 12 months.
I accept the testimony of Stephani and conclude that the
value of the use of a demonstrator automobile is $125 per
month . The rate schedule submitted into evidence sets forth
rates for rentals for varying periods of time, not including
periods longer than 1 month , and it does not take into ac-
count the use which will be made of the automobile, including
such limitations as are imposed by having to use the car as
a demonstrator . The $200 quotation on the back of the rate
schedule was not explained by the individual who made it and
is hearsay evidence. This is insufficient basis to overcome the
testimony of Stephani who testified that the cost of rentals is
a negotiable matter . I find , therefore , that the value of the use
of a demonstrator during the backpay period was $125 per
month , or $375 per quarter.
III THE VALUE OF THE PRIZES SERGOTT WOULD HAVE
RECEIVED
General Motors sponsors sales contests pursuant to which
salesmen employed by dealers such as Respondent obtain
points based on sales which can be converted into merchan-
dise prizes . Sergott testified that in the year preceding his
discharge he received prizes with a total value of $675. Gen-
eral Counsel contends that Sergott would have earned prizes
of equal value annually during the backpay period and that
he is therefore entitled to an additional amount of $ 168.75 per
quarter for the value of the prizes he was prevented from
earning by reason of his discriminatory discharge.
As previously indicated insofar as gross earnings were con-
cerned , the specification alleged that the appropriate measure
of Sergott 's gross backpay was 89 . 67 percent of the gross
398 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
earnings of three representative salesmen earned in the period
from January 1, 1965, through September 30, 1969. For some
unexplained reason, where prizes were concerned, General
Counsel not only abandoned the 89.67 percent formula and
the representative employees, but also he abandoned the
January 1, 1965, through September 30, 1969, representative
period. Respondent contends that General Counsel was not
warranted in carving out the year 1969 as a period representa-
tive of the prizes Sergott would have earned annually during
the backpay period, nor was he warranted in relying on Ser-
gott's prizes rather than those of the representative em-
ployees. I agree. Having selected a representative period and
representative employees for earnings other than prizes, Gen-
eral Counsel could not select a different period and Sergott's
prizes without justifying the variance. No justification was
offered. I therefore reject the backpay claim for prizes as
alleged in the specification.
Despite the deficiency of the allegation , General Counsel
has established that Sergott did suffer a loss in prizes by
reason of the discrimination against him and Sergott is enti-
tled to be made whole to the extent of the proof. As I view
the record, for the period conceded by the specification to be
an appropriate period to measure Sergott 's earnings , namely
January 1, 1965, to September 30, 1969, Sergott earned prizes
for a total of $675.2 Since that period consists of 19 quarters,
Sergott's average quarterly prize money amounted to $35.52
and that amount shall be added to his quarterly backpay for
the backpay period.
IV SERGOTT'S WILLFUL LOSS OF EARNINGS
A. Sergott's Search for Employment
During the backpay period of October 5, 1969, to March
24, 1971, Sergott had no interim earnings . He registered with
the United States Employment Service on October 10, 1969,
1 week after his discharge, and he continued to report to the
claims office every week until April 30, 1970, when he had
exhausted his benefits. Beginning November 13, 1969, he
sought employment as a automobile salesman (the occupa-
tion in which he had been engaged for 18 years) either by
personal visits to automobile dealers or by telephone calls.
Between that date and March 18, 1971, Sergott sought em-
ployment in this fashion from 25 dealers and made 114 con-
tacts.
B. Analysis and Conclusions
Despite the impressive evidence of attempts by Sergott to
obtain interim employment, Respondent contends that on the
facts of this case he did not make a diligent search for employ-
ment. Before analyzing Respondent's contentions, it should
be noted that there is no dispute about the controlling legal
considerations. A discriminatorily discharged employee must
make reasonable efforts to find new employment which is
substantially equivalent to the position from which he was
discharged. N.L.R.B. v. Miami-Coca Cola Bottling Co., 360
F.2d 569 (C.A. 5). However, failure to make a reasonable
search for interim employment in an affirmative defense to
backpay liability and the burden of proof is on the employer.
N.L.R.B. v. Mooney Aircraft, Inc., 366 F.2d 809 (C.A. 5);
N.L.R.B. v. Brown & Root, Inc., 311 F.2d 447 (C.A. 8).
Respondent's contention that Sergott's testimony is imcompetent or
insufficient to establish the value of the prizes he received is without merit
It is settled law that an individual's testimony about the value of his personal
property is admissible, and the only issue is the weight to be accorded the
testimony In this instance , Sergott's testimony is uncontradicted and was
based on proper observations 3 Wigmore, Evidence 716, 719 (Chadbourn
Rev 1970)
It is with these principles in mind , and with special empha-
sis on what is almost a truism, namely, that whether an
employee acted reasonably or not in seeking employment is
a question of fact,' that I turn to the factors enumerated by
Respondent in support of its contentions. These are as fol-
lows:
(1) Sergott did not apply to any employer until November
14, 1969, 40 days after his termination.
(2) During the backpay period of nearly 18 months, Sergott
contacted only 24 different automobile dealers.
(3) He did not contact his previous employer , Brigance
Chevrolet, until nearly 4 months after his discharge.
(4) Sergott ignored the rest of some 500 Chicago area
dealers through the entire backpay period , including a num-
ber of sizable dealers in the immediate area of his residence.
(5) As soon as his unemployment compensation benefits
expired, he stopped reporting to the State employment office.
(6) After April 30, 1970, he called on only four different
dealers in a period of 11 months, and from May I to Novem-
ber 15, 1970, he applied to none.
As to item (1) I deem it insufficent to warrant a denial of
backpay for the first period of Sergott's unemployment. There
is no requirement that an employee wrongfully terminated
must instantly seek new work, and Sergott's failure to apply
to any employer until November 13, 1969, must be weighed
with the evidence that he registered with the United States
Employment Service within a week of his termination and
was reporting to the claims office every week. Sergott may
well have hoped that the agency would be able to refer him
to employment and his waiting to make personal applications
for a period of about 40 days cannot in the circumstances be
deemed unreasonable.
As to item (3), Sergott's failure to contact his previous
employer for a period of nearly 4 months, I see no basis to
disqualify Sergott. During that 4-month period, he was re-
porting to the state employment office and he had received no
referrals to any employer. When he did apply to his previous
employer he was unsuccessful.
Items (2), (4), (5), and (6) are complementary. In agree-
ment with Respondent, I deem it significant that during a
backpay period of nearly 18 months during which he had no
interim employment, Sergott contacted only 25 out of some
500 automobile dealers in the Chicago metropolitan area.
Sergott offered no explanation for his failure to apply to more
than 25 dealers. Nevertheless, I do not agree with Respond-
ent that by reason of the limited search Sergott made to find
employment he is not entitled to any backpay. During the
period from October 10, 1969, to April 30, 1970, Sergott was
registered with and reporting to the state employment office.
While there is no evidence that he received a single referral
during the entire period he was registered, it was not unrea-
sonable for him to place some reliance on that office to refer
him to employment, particularly when he was contemporane-
ously seeking employment through his own efforts from at
least some of the Chicago area's automobile dealers. Under
these circumstances , and because I do not believe that a
discharged employee must exhaust all possibilities in seeking
interim employment, I conclude that Sergott's failure to
broaden his search for employment between the date of his
discharge and April 30, 1971, is insufficient basis to deny him
backpay for that period.
A different conclusion is warranted, however, with regard
to Sergott's efforts to find employment after the expiration of
his employment benefits on April 30, 1970. Those efforts
cannot be deemed reasonable on the facts presented herein.
After April 30, 1970, he kept applying to the same employers
' Florence Printing Company v. N.L.R.B., 376 F 2d 216 (C A. 4)
NICKEY CHEVROLET SALES, INC 399
repeatedly although there is no indication he was receiving
any encouragement. For example, between April 30, 1970,
and March 17, 1971, he applied at (or telephoned) Starner
Cadillac, 11 times; Moell Cadillac, 11 times; Gateway Chev-
rolet, 11 times; Brigance Chevrolet, 11 times. These were all
dealers to whom he had applied before April 30. Not until
November 18, after a period of 6-% months, did he apply to
a new dealer. Thereafter, he contacted another new dealer on
January 4, 1971; another one on January 8, 1971; and yet
another on March 12, 1971, There is no explanation why,
having limited his search to 21 dealers over a period of 13
months, Sergott decided to expand his search, and yet to do
so in such a limited fashion, In my judgment, many of the
contacts made by Sergott were window dressing. An undeter-
mined number were merely telephone calls, and as previously
noted they were repeat calls. Given the size of the employ-
ment market and the fact that he was no longer registered
with the state employment office, it cannot be said that such
efforts to find equivalent employment were reasonable. Ser-
gott is 44 years old with 18 years of experience. It is incon-
ceivable to me that he would have been unemployed for 18
months had he made reasonable efforts to find equivalent
employment. On the facts of this case, I conclude that Sergott
is not entitled to backpay for the period after April 30, 1970.
V SUMMARY
Summarizing the foregoing, I conclude that Respondent's
obligation to make Sergott whole shall be fulfilled by payment
to him of the total net backpay set forth and computed below:
Quarterly Period
4-69 1-70 2-70 4/
Gross Backpay $3 ,158.41 $2,065.81 $1,013.38 5/
Value of Demonstrator
at $125 a month 375.00 375.00 125.00
Value of Prizes 35.52 35.52 11.84
Total Quarterly $3,568.93 $2,476.33 $1,150.22
Gross Backpay
Total Net Backpay $7,195.48
RECOMMENDED ORDER
Upon the basis of the foregoing findings and conclusions,
I recommend that the Board issue the following:
SUPPLEMENTAL ORDER
Respondent, Nickey Chevrolet Sales, Inc., its officers,
agents, successors, and assigns , shall pay to Harold Sergott
as net backpay $7,195.48, less any tax withholding required
by the laws of the United States and the State of Illinois, plus
interest thereon at the rate of 6 percent per annum in accord-
ance with the formula prescribed in Isis Plumbing & Heating
Co., 138 NLRB 716.
To April 30, 1970
' One-third of the gross backpay set forth in Appendix C to the backpay
specification