U.S. Department of Labor
Administrative Review Board
200 Constitution Avenue, N.W.
Washington, D.C. 20210
ARB Case No. 97-055 ALJ Case No. 95-STA-43 DATE: May 30, 1997
In the Matter of:
GALE COOK,
COMPLAINANT,
v.
GUARDIAN LUBRICANTS, INC.,
RESPONDENT.
BEFORE: THE ADMINISTRATIVE REVIEW BOARD
SECOND DECISION AND ORDER OF REMAND
The Secretary issued a decision in this case, which arises under the
employee protection provision of the Surface Transportation Assistance Act of 1982 (STAA),
49 U.S.C.A. § 31105 (West 1994), on May 1, 1996. In that Decision and Order of
Remand (D.O.R.), the Secretary held that Guardian Lubricants, Inc. (Guardian) had
discriminated against Gale Cook (Cook) in violation of the STAA. Specifically, the Secretary
concluded that Guardian was liable under the STAA both for its termination of Cook and, as a
joint employer, for its knowing participation in retaliatory conduct against Cook by Conex
Freight Systems, a freight company that contracted with Guardian for Cook's trucking services.
The case was therefore remanded to the Administrative Law Judge (ALJ) for a determination
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concerning Complainant's complete remedy in this case.
Following a hearing on the issue of damages, the ALJ issued a
Recommended Decision and Order Awarding Damages (R.D.O.A.D.) on January 27, 1997, in
which he concluded that Guardian was liable for back pay in the amount of $3,174.74 plus pre-judgment interest at the rate provided by 26 U.S.C. § 6621. The ALJ also determined that
Guardian was not liable for compensatory damages claimed by Cook in connection with filing
a petition for bankruptcy. R.D.O.A.D. at 6-7. Further, the ALJ found that Cook was not seeking
reinstatement with Guardian and that Cook had not claimed any costs or attorney's fees in
connection with the adjudication of this complaint. R.D.O.A.D. at 6-8. Following a review of
the record in this case, we conclude that the ALJ's analyses regarding the reinstatement issue and
the extent of Guardian's liability for back pay, R.D.O.A.D. at 4-8, are flawed. We further
conclude that this case must be remanded to the ALJ for further proceedings related to the
reinstatement issue and to the extent of Guardian's liability for back pay.
DISCUSSION
I. Findings of facts and conclusions of law -- standard of review
Pursuant to the regulation implementing the STAA at 29 C.F.R. §
1978.109(c)(3) (1996), if the factual findings rendered by the ALJ are supported by substantial
evidence on the record considered as a whole, we are bound by those findings. Aside from the
exceptions noted herein, the factual findings rendered by the ALJ are in accord with the standard
provided by Section 1978.109(c)(3) and we adopt those findings. Pursuant to the Administrative
Procedure Act, in reviewing the recommended disposition of the ALJ, we act, as the designee
of the Secretary, with "all the powers [the Secretary] would have in making the initial
decision . . . ." 5 U.S.C. § 557(b), quoted in Goldstein v. Ebasco Constructors,
Inc., Case No. 86-ERA-36, Sec. Dec., Apr. 7, 1992 (applying analogous employee
protection provision under the Energy Reorganization Act, 42 U.S.C. § 5851); see
29 C.F.R. § 1978.109(b) (1996); see generally Mattes v. United States
Department of Agriculture, 721 F.2d 1125, 1128-30 (7th Cir. 1983)(relying, inter
alia, on Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 496 (1951) in rejecting
argument that higher level administrative official was bound by ALJ's decision); McCann
v. Califano, 621 F.2d 829 (6th Cir. 1980) and cases cited therein (sustaining rejection of
ALJ's recommended decision by higher level administrative review body). In our review of this
case, we have carefully considered the legal conclusions rendered by the ALJ and we indicate
the basis for our disagreement with certain of those conclusions in the analysis that follows.
See Simon v. Simmons Foods, Inc., 49 F.3d 386, 389-90 (8th Cir. 1995); cf.
McCann, 621 F.2d at 831-32 (examining rationale provided by administrative review body
for its rejection of ALJ's decision).
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II. Period of liability for back pay
A. Absence of reinstatement offer
Initially, we address the issue of whether Cook has validly waived
reinstatement to his former position with Guardian. In Dutilev. Tighe Trucking,
Inc., Case No. 93-STA-31, Sec. Dec., Oct. 31, 1994, the Secretary addressed the
circumstances in which a complainant's statement that he would not seek reinstatement, in the
absence of an unconditional offer of reinstatement, would be binding. Dutile, slip op.
at 3-5. The Secretary cited previous Secretarial decisions holding that back pay continued to
accrue until the employer had complied with the damages order. Id. The Secretary
noted that the date of such compliance, including the proffering of an unconditional offer of
reinstatement, was the proper point at which accrual of back pay would terminate.
Dutile, slip op. at 3-4; see Francis v. Bogan, Inc., Case No. 86-ERA-8, Sec.
Dec., Apr. 1, 1988, slip op. at 6 (stating that "the NLRB has consistently . . . discounted
statements, prior to a good faith offer of reinstatement, indicating unwillingness to accept
reinstatement.' Hein[rich] Motors, Inc., 166 N.L.R.B. No. 88 (1967), 1967 CCH NLRB
21,654, at 28,297."). As stated in Dutile, whether the employee declines or
accepts the reinstatement offer, the period of back pay ends at the time the offer is made.
Id. To this end, the Secretary discouraged reliance on waivers by complainants that
were made in the absence of a bona fide reinstatement offer. Id.; see Ass't Sec'y
and Polewsky v. B & L Lines, Inc., Case No. 90-STA-0021, Sec. Dec., May 29,
1991, slip op. at 2-4.
1 The Board understands that in
seeking this information from Cook the ALJ was merely attempting to facilitate the calculation of
damages, but in so doing, the ALJ failed to appreciate that he was wrongfully relieving Guardian of
its obligation to make a bona fide offer of reinstatement.
2 The following abbreviations are
used herein for references to the record: Transcript of December 9, 1996 hearing, T.; ALJ Exhibit,
ALJX.
3 We note that Guardian did not
avail itself of the opportunity to offer Cook reinstatement between the time the Secretary's order
mandating reinstatement was issued on May 1, 1996 and the ALJ's order requiring a response from
Cook was issued on May 10, 1996. See ALJX 4 at 1. There is also no suggestion that
Guardian took the opportunity to discuss Cook's possible interest in reinstatement, despite the
parties' communications regarding Cook's estimate of his damages prior to the hearing on damages.
See T. at 283-85, 322-23; ALJX 4; cf. Dutile, slip op. at 1, 5 (employer held liable
on a continuing basis following invalid waiver of reinstatement, Secretary noted that employer had
tendered a check for back pay damages plus interest, which had been declined by the complainant);
see generally Spinner v. Yellow Freight System, Inc., Case No. 90-STA-17, Sec. Dec., May
6, 1992, slip op. at 21-25 (discussing immediate effect of Secretary's reinstatement order),
aff'd, Yellow Freight System, Inc. v. Martin, 983 F.2d 1195 (2d Cir. 1993).
4 In addition to the back pay period
following Guardian's termination of Cook, Guardian is liable for losses to Cook's income that Cook
suffered during the October 14 - November 14, 1994 period, when Guardian knowingly participated
with joint employers Seattle Freight and Conex in the assignment of less lucrative freight
assignments for Cook. D.O.R. at 35; see R.D.O.A.D. at 5-6. The back pay due for this four
week period is included in the back pay calculation provided at n.13, infra.
5 The Brady court
declined to follow the National Labor Relations Board's rule that, when an employee is terminated
from interim employment for misconduct, only misconduct that demonstrates moral turpitude will
constitute a breach of the employee's duty to mitigate damages. Brady, 753 F.2d at 1279
(addressing NLRB decision in Mid-America Machinery Co., 258 NLRB 316, 319 (1981)).
We find the Brady court's rule to be the more appropriate test for determining the
reasonableness of an employee's mitigation efforts.
6 The ALJ cited no legal authority
in support of this proposition. R.D.O.A.D. at 6. We note that the principle stated by the ALJ is
contrary to the common law principle that a tortfeasor who injures a plaintiff is not relieved of
liability by the subsequent independent and similarly tortious and injurious act of another tortfeasor,
see Restatement (Second) of Torts § 879 (1979).
7 A review of Cook's testimony
regarding the circumstances of his termination from May Trucking Company as a whole, see
20 C.F.R. § 1978.109(c)(3) (1995), indicates various factors that may have contributed
to his termination there. T. at 233-41; see T. at 259-61. Specifically, Cook stated that, on
the occasion when he was unable to complete a lengthy run -- the round trip from a terminal in
Oregon to Los Angeles -- without driving a number of hours that would violate the Department of
Transportation "fatigue rule," he dropped off his freight at a May Trucking terminal,
from which another driver hauled the freight the remainder of the assigned run. T. at 237-39. After
that incident, Cook discussed the "fatigue rule" with the safety director and operations
supervisors at May Trucking, who asked that Cook drive thereafter as a member of a team, in which
he would share driving responsibilities for long distance assignments with another driver. T. at 237-40. In summing up the basis for his termination by May Trucking, Cook repeatedly referred to the
company's decision that he work as a team driver as "the problem" that lead to the
termination. T. at 236, 237; see also T. at 238, 240. Cook also testified, "After that
load was split off, they wanted me to go onto a team. Plus at that time I wanted -- I requested some
time off. I believe it was a day or - we're supposed to be allowed seventy-two hours to turn down
a load or a dispatch." T. at 240.
8 ALJX 6 refers to the transcript
of the October 16, 1995 hearing in the STAA complaint that was filed by Cook against Kidimula,
Cook v. Kidimula International, Inc., Case No. 95-STA-44, which was admitted into
evidence at the damages hearing in the instant complaint. T. at 214-15.
9 The Kidimula transcript shows
that Cook had been working at Kidimula for less than three weeks when he delivered a load that
turned out to be overweight. ALJX 6 at 27, 33-34. Cook did not inform anyone that the shipment
was overweight. Id. at 41, 48. When the dispatcher assigned him another shipment Cook
refused the shipment, id. at 42, handed the keys to Kidimula's owner, id. at 75, 98,
and walked out. Id. at 92-93. Kidimula's owner delivered the rest of Cook's shipments that
day and Cook never returned to work at Kidimula. ALJX 6 at 75.
10 Kidimula did not provide
a W-2 form or other documentation regarding Cook's earnings while employed there. See
ALJX 4 at 3; R.D.O.A.D. at 3. Although Cook's pay agreement with Kidimula was for a flat
40% of proceeds, ALJX 6 at 24, 85, which was more than his overall pay scale at Guardian, RX 2,
Cook estimated that he had made a total of $600.00, or $200.00 per week, for his work at Kidimula.
ALJX 6 at 63. We note that Cook's three weeks of employment at Kidimula occurred during the
seasonal decline in shipping activity around the Seattle port. See p. 10, infra.
Guardian offered no evidence to dispute Cook's estimate.
11 Cook, who has not been
represented by counsel in the adjudication of this case, indicated in his testimony at the damages
hearing that he was unaware of the legal standard applicable to the calculation of back pay owed a
wrongfully discharged complainant and did not realize that his back pay award would be diminished
by the employment he was engaged in during the interim period. T. at 217-18, 281-83; see
R.D.O.A.D. at 4.
12 In addition to the period
following Cook's November 15, 1994 termination, Guardian is also liable for losses to Cook's
income that were suffered as the result of discriminatory freight assignments during the approximate
four week period of October 14 through November 14, 1994. See n.4 supra. Back
pay calculations must be reasonable and supported by the evidence of record, but need not be
rendered with "unrealistic exactitude." Pettway, 494 F.2d at 260. Particularly
in view of the irregular work schedules involved in most of Cook's truck driving employment during
the back pay period, we conclude that the use of calendar weeks, rounded to the closest full week,
as the basic computation unit is reasonable.
13 During 53 weeks of the
back pay period following Cook's termination at Kidimula on April 24, 1995, Cook was
unemployed or was earning less that $200.00 per week. ALJX 3,4; T. at 257. For those 53 weeks,
the projected weekly Guardian earnings of $349.06 are thus reduced by $200.00 per week under the
Knickerbocker Plastic rule, yielding a weekly net back pay amount of $149.06 due. That figure
calculates to a total of $7,900.18 for the 53 week period. The remaining 59 weeks of the back pay
period are weeks which either precede the April 24, 1995 termination from Kidimula International
or in which Cook made in excess of $200.00 per week. The earnings for those weeks total
$16,803.84 ($629.30 --Guardian/Seattle Freight, 10/14/94-11/14/94; $831.00 -- May Trucking;
$600.00 -- Kidimula International; $6,843.54 -- Long Haul, Inc.; $7,900.00 -- Navaho Trucking).
ALJX 3,4; T. at 250; R.D.O.A.D. at 2-4; see Marcus v. United States Environmental Protection
Agency, Case No. 92-TSC-5, Sec. Ord., Sept. 27, 1994, slip op. at 2-3. Calculated at $349.06
per week, the projected earnings from Guardian for this 59 week period total $20,594.54, which,
when reduced by $16,803.84 in interim earnings, yields a net back pay amount for those 59 weeks
of $3,790.70. The total net back pay for the period of October 14, 1994 through December 9, 1996
is thus $11,690.88 ($7,900.18 + 3,790.70). The unemployment benefits and lottery winnings Cook
received in 1995, ALJX 4, are not properly deductible from the back pay award. See Marcus,
slip op. at 2-3; Ass't Sec'y and Phillips v. MJB Contractors, Case No. 92-STA-22, Sec.
Dec., Oct. 6, 1992, slip op. at 2-4.