Shell Ray Mining, Inc.

National Labor Relations Board - Board Decisions

Oct 18, 1989

297 N.L.R.B. 53 (N.L.R.B. 1989)

SHELL RAY MINING 53
Shell Ray Mining, Inc. and United Mine Workers of
America District 17, Subdistrict II, Cases 9—
CA-23075(E) and 9-CA-23553(E)
, October 18, 1989
DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND HIGGINS
On December 28, 1987, Administrative Law
Judge Robert T Wallace issued the attached sup-
plemental decision On July 5, 1988, the Board re-
manded the proceeding to the judge On January
23, 1989, the judge issued the attached second sup-
plemental decision The General Counsel filed ex-
ceptions and a supporting brief, and the Applicant
filed an answering bnef The Applicant filed a
third motion to amend and supplement its applica-
tion for award of fees and expenses under the
Equal Access to Justice Act, and the General
Counsel filed a memorandum in opposition to the
Applicant's motion
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel
The Board has considered the decisions and the
record in light of the exceptions and briefs and has
decided to affirm the judge's rulings, findings,' and
conclusions and to adopt the recommended Order
The judge found in the second supplemental de-
cision that the General Counsel lacked substantial
justification in issuing and processing the complaint
and awarded $13,145 88 in fees and expenses to the
1 In the second supplemental decision the judge reaffirmed his finding,
for the reasons stated in the prior supplemental decision, that the General
Counsel had not shown substantial justification for issuing and pursuing
the complaint In the prior supplemental decision the judge rejected the
General Counsel's argument that there was substantial justification for al-
leging that the Respondent engaged in direct dealing with the employees
based on the General Counsel's assertions that "the buy-out agreement
was in reality nothing more than a plan to allow employees to purchase
the company at sometime in the future and was 'specifically contingent
upon their retaining employee status during the term of the plan' The
judge concluded that the General Counsel s assertions concerning direct
dealing were "lacking in evidentiary support and contrary to consistent
and credited testimony of participants as well as the plain meaning of lan-
guage used in the written [buyout] agreement" We affirm the judge's
finding that the General Counsel was not substantially justified in alleging
that the Respondent engaged in direct dealing, but do not rely on the
credited testimony of the participants The plain meaning of the language
used in the written agreement and the affidavits obtained by the General
Counsel fall to support the General Counsel s assertions concerning direct
dealing
In the second supplemental decision, the judge declined to award an
additional reimbursement of $476 25 as requested in the Applicant's
second supplemental motion to amend its application for fees The Appli-
cant asserted that although Coal Labor had charged the Applicant d dis-
count rate of $50 per hour for Its services, It should be reimbursed at its
customary fee rate of $65 per hour In the absence of exceptions to the
judge's rulings, we adopt pro forma the judge's ruling in this matter
The judge's second supplemental decision contains an inadvertent
error The balance sheet submitted by the Applicant with Its EAJA appli-
cation was dated April 30,1987, not April 30,1957
Applicant Thereafter, the Applicant filed a third
motion to amend the application for fees seeking
additional compensation of $1818 75 in fees and
$87 58 in expenses, for a total amount of $1906 33
We find that the Applicant is entitled to the addi-
tional reimbursement, which, however, we reduce
by $637 50 because the third motion to amend re-
quests reimbursement for fees and expenses includ-
ed in Applicant's second motion to amend the ap-
plication for fees Accordingly, the Applicant is en-
titled to reimbursement in the amount of $1268 83
pursuant to its third motion to amend its applica-
tion for fees
ORDER
The National Labor Relations Board adopts the
recommended Order of the administrative law
judge and orders that the Applicant, Shell Ray
Mining, Inc, Iaeger, West Virginia, be awarded
the sum of $14,414 71 pursuant to its application
for an award under the Equal Access to Justice
Act and amendments to such application
Garey E Lindsay, Esq , for the General Counsel
Donald R Johnson, Esq (Shott ci Johnson), of Bluefield,
West Virginia, for the Respondent
Thomas H Zerbe, Esg and David J Hardy, Esq , for the
Charging Union
SUPPLEMENTAL DECISION
Equal Access to Justice Act
ROBERT T WALLACE, Administrative Law Judge On
30 September 1987, the Board affirmed my decision that
Respondent Shell Ray was not shown to have violated
the Act subsequent to entering into a settlement agree-
ment on 30 May 1986, and it reinstated that agreement
and dismissed the complaint in 286 NLRB 466
On 29 October 1987, Shell Ray filed an application for
fees and expenses under the Equal Access to Justice Act
(EAJA), 1 and it filed a reply to the General Counsel's
motion to dismiss the application
As previously found, Shell Ray during the month of
April 1986, and contrary to its obligations under a col-
lective-bargaining agreement, unilaterally reduced wages
and benefits of its employees because, otherwise, it could
not afford to mine coal at the drastically reduced per-ton
price offered by its lessor-proprietor And when its presi-
dent (Ray Bailey) was informed on I May that an unfair
labor practice charge had been filed, he promptly closed
the mine, and in a letter dated 16 May he advised the
Regional Director that he had done so for economic rea-
sons and indicated a willingness to rectify the situation
by paying the miners what they should have received
under the contract for the month they worked On 30
'5 USC § 504 (1982), amended by Pub L 99-80, 99 Stat 183
(1958)
297 NLRB No 6
54 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
May, the matter apparently was resolved by means of an
all party settlement agreement
However, on 5 June operations resumed at the mine
under an arrangement whereby ostensibly the miners
were owners and Bailey and his brother were employees
On 7 October the settlement agreement was set aside and
the complaint issued in this proceeding
The basic question under EAJA is whether there was
substantial basis for issuing and processing the corn
plaint 2 I conclude there was not
At the heanng the General Counsel sought and was
granted permission to amend the complamt to allege that
the mine closing on 1 May was in retailiation for the
filing of a charge and violative of Section 8(a)(4) of the
Act As seen, the Region by virtue of Bailey s letter
dated 16 May, had early notice that the closing was trig
gered by the filing of the charge That knowledge how
ever, apparently had no effect on the settlement agree
ment entered into on 30 May 3 and at the trial counsel
for the General Counsel did not dispute the data under
lying Shell Ray s claim of economic justification Instead
reliance was placed solely on an inference of unlawful
motive arising from Shell Ray s decision to shut down
after learning that a charge had been filed In light of the
compelling nature of the economic data and the absence
of any indication that it was not available prior to trial I
find the eleventh hour allegation not shown to be sub
stantially justified 4
Another allegation is that the new owners received
less than the wages called for in the collective bargaining
agreement for work performed by them on and after 5
June At the outset of the trial counsel for the General
Counsel asked (and was allowed) to drop this charge He
made the request following an 1 1/2 hour recess during
which he examined company records There is no mdica
tion that those records would not have been made avail
able on request, to Board agents prior to trial Accord
ingly I find inclusion of the charge in the complaint and
its retention up to the time of hearing not shown to be
substantially justified
One of the two remaining contested allegations is that
the buyout agreement was in reality nothing more than a
plan to allow employees to purchase the Company at
sometime in the future and was specifically contingent
on their retaining employee status during the term of the
plan and based on those assertions counsel argued that
Bailey s discussion of the plan on 4 June constituted
direct dealing with employees in contravention of its
duty to bargain with union representatives The asser
tions however were found lacking in evidentiary sup
port and contrary to consistent and credited testimony of
participants as well as the plain meaning of language
used in the written agreement and that finding was af
firmed by the Board without modification I conclude
2 Union Carbide Building Co 276 NLRB 1410 (1985)
3 The notice required to be posted pursuant to that agreement did not
mention any retaliatory closing nor did it require reopening of the mine
4 Compare Supershade Corp 280 NLRB 1213 (1968) in which the
Board affirmed Judge Steven B Fish s finding that the General Counsel
may not avoid EAJA claims simply by citing testimony which if be
heved would warrant a finding of violation in circumstances where the
testimony is patently incredible and could have been evaluated as such
dunng the investigative stage of the case
that here too there is no showing of substantial justifica
tion
The last allegation is that employee Collins was dis
charged for engaging in a protected activity i e for re
tneving his settlement check and declining to participate
in the buyout There was no direct evidence that those
matters motivated the termination, and the General
Counsel relied on an inference of animus arising from
falseness of the reasons given for the discharge But by
his own testimony Collins (including his affidavit given
on 10 September) is shown to have been justifiable
dropped from the rolls as a result of his extended unan
noucned absence from work and failure to provide any
explanation therefor Again there simply was no justifi
cation for the allegation
CONCLUSIONS AND REMEDY
I find a lack of substantial justification for setting aside
the settlement agreement and for issuing and pursing the
complaint and that the motion to dismiss the application
for fees and expenses under the EAJA should be denied
The General Counsel does not dispute the claimed re
imbursable amounts, and upon careful review I find them
to be accurate reasonable, and in accord with Section
102 143 et seq of the Board s Rules and Regulations
Accordingly I find applicant Shell Ray entitled to reim
bursement of $8675 in attorney and consultant fees and
$1,005 16 in expenses for a total amount of $9,680 16 5 in
cludmg $754 64 incurred in pursuing this application
5 Although in some instances legal fees of $8 per hour were paid by
Shell Ray only the maximum allowable amount ($75) under the Board s
Rules and Regulations (Sec 102 145(b) was used in calculating the total
amount due
Garey E Lindsay Esq for the General Counsel _
Donald R Johnson Esq (Shott & Johnson), of Bluefield
West Virginia for the Respondent
Thomas H Zerbe and David J Hardy Esqs for the
Charging Union
SECOND SUPPLEMENTAL DECISION
Equal Access to Justice Act
ROBERT T WALLACE Administrative Law Judge
Pursuant to the Board s remand Order on July 5 1988
the General Counsel opted to file an answer to the in
volved application for fees and expenses under the Equal
Access to Justice Act
Previously the General Counsel filed a motion to dis
miss based on an argument that there was indeed sub
stantial justification for issuing and pursuing the corn
plaint I denied the motion and awarded reimbursement
of fees and expenses in the amount of $9 680 16
Substantive Issue
That issue is again addressed in the answer and upon
careful review of that document as well as the record as
a whole I reaffirm, for the reasons stated in the prior
supplemental decision my finding that the General
SHELL RAY MINING 55
Counsel has not shown substantial justification Compare
Lion Uniform, 285 NLRB 249 (1987)
The only new matters presented are affidavits taken by
a Board investigator on September 10, 1986, in which
three employees state that an employee (Steele) who de-
cided not to participate in the buyout was paid union
scale on and after June 5, 1986, and the General Counsel
argues she was entitled to Infer therefrom that employee
participants were paid less than scale in violation of the
settlement agreement At best, however, the inference is
tenuous, and the investigator could have obviated any
problem simply by asking them what they were paid
Failure to do so and need to rely on the Inference illus-
trates the paucity of the file on which the complaint
Issued Indeed, there is no indication that Applicant
would not voluntarily have made available its payroll
and other financial records during the investigatory stage
had it been asked to do so 1
Amount Due
By order dated October 17, 1988, I reopened the
record to permit submission of additional data Applicant
availed itself of the opportunity on November 16 and the
General Counsel responded on December 5
As a threshold matter, the General Counsel argues
that Applicant is not entitled to any reimbursement for
three reasons First, because it failed to comply with Sec-
tion 102 143(d) of the Board's Regulations by not pre-
senting a statement of financial condition "as of the date
of the complaint," i e, October 7, 1986 But that section
simply provides that an applicant present data sufficient
to support a determination of its net worth on that date
It does not require financial statements as of a particular
day See Evergreen Lumber Go, 278 NLRB 656, 658 fn 2
(1986) Here, the balance sheet submitted with the appli-
cation shows a net worth of $60,553 85 as of April 30,
1957, and that statement is consistent with credited testi-
mony as well as financial data received at the trial on
November 20 and 21, 1986 Taken together the evidence
establishes that Applicant was well within the eligibility
standard of $7 million as of October 7 Second, the Gen-
eral Counsel contends that the financial data in the appli-
cation cannot be used to establish eligibility for an award
because the verification by Applicant's financial officer
(Ray Bailey) is fatally defective Citing Section
102 147(e) and Industrial Security Services Corp, 289
NLRB 459 (1988), she argues that a verification must
state that the data is accurate not simply "representative"
and that affiant has personal knowledge of the assets and
liabilities not just "familiarity" with them The cited Sec-
tion and case, however, do not prescribe any set form
'Apparently the only pretrial request for records is contained in a sub-
poena issued over a month after the complaint was served and which re-
quired that data be made available on the date of trial The fact that Ap
plicant may not have responded to a suggestion in the subpoena that It
might provide documents prior to hearing so that only those items se-
lected [by the General Counsel] need be produced at the hearing"
does not amount to a refusal to provide records as claimed in the Gen-
eral Counsel's answer Similarly, her statement that Applicant destroyed
certain subpoenaed records (citing fn 4 of my decision in the basic case)
is unwarranted if meant to suggest a deliberate suppression of evidence
The superintendent testified to a practice that antedated both the subpoe-
na and the complaint
for a verification, and in this case, where Bailey also
swears that since the date of sale (June 13, 1986) he
"provided and supervised all accounting services
[for the company] and has been and remains person-
ally familiar with the assets, liabilities" and that the fi-
nancial statements were prepared under his direct con-
trol and supervision, I find the data sufficiently authenti-
cated Third, the General Counsel urges that it be reject-
ed in any event because it is not accompanied by a state-
ment of Ray Bailey's personal net worth Her position
reflects a view that the "sale" on June 13 was a sham
and that ownership and control of the Company re-
mained with Bailey That view, however, is contrary to
the finding in the basic case that the sale was not shown
to be other than bona fide
Alternatively, the General Counsel contends that por-
tions of the claim for reimbursement are unjustified and
should be disallowed
The claim is for moneys ($13,145 88 in total) paid by
applicant (1) to a labor consultant (Coal Labor, Inc ) for
advice and assistance given between November 3 and 21,
1986 (including attendance at the trial) in the amount of
$1,587 50, 2 (2) to a law firm (Shott & Johnson) for legal
services ($4,837 503) and expenses ($696 13) provided be-
tween November 13 and May 27, 1987, and (3) to
Donald R Johnson, Esq (who severed a partnership re-
lation with that firm in favor of individual practice on
June 1, 1987) for legal services ($5,381 254) and expenses
($643 50) rendered from June 15 and continuing, includ-
ing $2250 for services and $85 54 for expenses in reply-
ing to the General Counsel's exceptions to the (first) sup-
plemental decision and $881 25 5 for services and $248 93
for expenses incurred subsequent to filing of the answer
Initially, the General Counsel asks that compensation
paid for services rendered by Coal Labor after Novem-
ber 13, 1986, be disallowed to the extent they duplicate
work performed by Shott & Johnson In particular, she
notes that Coal Labor seeks compensation for time spent
by its president and sole stockholder (Tom Woolwme)
interviewing witnesses and appearing at trial The record
in the basic case shows Woolwme to be an advisor to
Applicant's principals well before this proceeding began,
and in light of the serious allegations in the complaint, I
will not assume his services were duplicative of rather
than complementary to those of Shott & Johnson
Next the General Counsel observes that the hourly
fees paid for the services of Coal Labor ($50) and the at-
torneys ($75) are unsubstantiated by supporting docu-
2 In its second supplemental request for an award, Applicant seeks ad-
ditional reimbursement of $476 25 because It belatedly learned that Coal
Labor normally charged $65 per hour for its services whereas Applicant
was charged a discount rate of $50 If allowed, the $476 25 presumably
would be paid to Coal Labor No reason being given for why the higher
rate was not charged, I decline to award It now
3 Applicant actually paid an additional $1,047 50 to Shott & Johnson
and to Donald R Johnson because their hourly rate on and after billing
date of February 5, 1987, was $85 But under the pertinent Board Regula-
tion (Sec 102 145(b)), $75 continues to be the maximum allowable hourly
rate
4 1d at fn 3
5 The second supplementally request asks compensation of $2,062 50
However, I have reduced that amount by $1,181 25 because the latter is
for fees and expenses Included in Applicant s first supplement request
56 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
mentation The fees do not exceed the maximum allowed
under Board regulations, and having considered the rela-
tive complexity of the issues presented and my awareness
of fees generally charged for professional services, I
accept statements in affidavits by Woolwme and Johnson
that the respective fees were customary in their practice
and in line with prevailing rates for similar services in
their communities
Turning to fees and expenses paid by Applicant in re-
sponding to exceptions taken to the first supplemental
decision, the General Counsel takes the position that
none of these should be reimbursed because she pre-
vailed and the Board remanded the case to permit filing
of an answer The argument is without merit The fact
that the General Counsel prevailed on a procedural
aspect of the case has nothing to do with its burden to
establish that it had substantial justification for issuing
and proceeding with the complaint, i e, the merits of the
case The General Counsel having failed to meet that
burden, Applicant may recover all amounts reasonally
incurred in vindicating its rights regardless of whether it
experienced procedural setbacks along the way
Lastly, the General Counsel faults Applicant (1) for of-
fering in support of its claim for legal fees paid only the
"self-serving unsupported" affidavit of its attorney that
his expenditure of time was reasonable in the circum-
stances, and (2) for failing adequately to substantiate all
expense items for which it claims reimbursement For ex-
ample, she points out that no odometer readings were
provided to verify attorney mileage charges, that those
charges were billed at 25 cents per mile rather than the
22 5 cents which the Government allows its employees,
and that no receipts were supplied covering parking, toll
fees, and mailing expenses
I have carefully reviewed Applicant's submissions con-
cerning services paid for These are broken down by spe-
cific tasks performed during each billed hour In my
judgment the fees are clearly justified As to expenses,
Applicant has offered an adequate number of receipts to
warrant my conclusion that the expenditures were rea-
sonable and incurred in connection with the instant
case 6 Regarding mileage, there is no requirement for
odometer readings or that the mileage rate not exceed
22 5 cents Instead, the general standard of whether an
expense was incurred and is reasonable applies
CONCLUSIONS AND REMEDY
I find a lack of substantial justification for setting aside
the settlement agreement and for issuing and pursuing
the complaint, and that Applicant is entitled to reim-
bursement of $13,145 88
6 I also note that Applicant offered to make other receipts available to
the General Counsel on request