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Clay v. Castle Coal & Oil Company, Inc., 90-STA-37 (ALJ Feb. 28, 1994)



Date:  February 28, 1994

Case No. 90-STA-00037

IN THE MATTER OF

     RALPH B. CLAY
               Complainant

          v.

     CASTLE COAL & OIL COMPANY, INC.

Wendy Sloan, Esq.
          For Complainant

Peter D. Conrad, Esq.
          For Respondent

BEFORE: FRANK D. MARDEN
        Administrative Law Judge


                   RECOMMENDED DECISION AND ORDER 
              UPON REMAND FROM THE SECRETARY OF LABOR

     This proceeding arises under the Surface Transportation
Assistance Act of 1982 (the Act), 49 U.S.C. § 2301,
et seq., based upon a complaint filed with the
Secretary of Labor alleging Respondent discharged Complainant in
violation of the Act.

I.   PROCEDURAL HISTORY

     After an administrative investigation, the results of
which are more fully set forth in my Decision and Order of July
18, 1991, a formal hearing was held before me on
February 15 and 21, 1991 in Cranford, New Jersey.  Thereafter, on
July 18, 1991, I issued a Decision and Order which found, inter
alia, that the Complainant had not been improperly discharged by
his employer for complaining about allegedly unsafe working
conditions in his employment as a fuel oil truck driver.  (ALJX
31).[1] 

     Complainant appealed my decision to the Secretary of Labor
who issued a Decision and Order dated November 12, 1991, in which


[PAGE 2] she[2] ordered the Complainant immediately reinstated and remanded the case to me to determine the appropriate back wages and costs and expenses, including attorney's fees, to be awarded under the Act. (ALJX 34). However, the Secretary found it necessary to seek injunctive relief in the United States District Court of the Southern District of New York to enforce her order. On April 21, 1992, the District Court issued an injunction enforcing her order. (CX 20). Shortly thereafter, on May 18, 1992 Complainant was restored to his former employment. In accordance with the Secretary's order, on June 24 and 25, 1992, I held an additional hearing to further determine the issues specifically remanded to me by the Secretary. After this hearing the Complainant filed its post-hearing brief on September 28, 1992 while Respondent filed its brief on December 14, 1992. Complainant's reply to Respondent's motion was then filed on March 5, 1993. Subsequently, on March 12, 1993, Complainant filed a motion to correct certain portions of the transcript, to which Respondent filed a response. Certain portions of the transcript were sealed by an order of this Court dated October 30, 1992. The Complainant's counsel has conceded the material impact of Complainant's testimony currently under seal. Based on this concession, I find that no need exists to disclose the substance of this testimony in this recommended decision and order. Accordingly, the order sealing portions of the transcript remains in effect. II. ISSUES Currently before this Court for adjudication are the Complainant's motion to correct the transcript of the June 24 and 25, 1992 hearing, and the Secretary's order of remand for a determination of back wages and costs and expenses, including attorney's fees. 1. Complainant's Motion to Correct the Transcript Since my ruling on the merits of Complainant's Motion to Correct the Transcript will impact the final contents of the record presented for adjudication, it necessarily must be disposed of first. By way of motion dated March 12, 1993, the Complainant seeks to correct the hearing transcript compiled on June 24 and 25, 1992 during the hearing upon remand held in this case. A copy of the hearing transcript was received by this Court on July 22,
[PAGE 3] 1992. Sometime thereafter, omitted pages were discovered and exchanged by the parties by a letter dated September 24, 1992 from attorney Sloan. Respondent opposes the Complainant's motion on two grounds. First, it not was filed within the prescribed time. Second, the corrections sought are not permissible under the rule because they do not relate to substantive matters. 29 C.F.R. § 18.52(b), governs corrections to the official transcript. Section 18.52(b) reads as follows: Corrections to the official transcript will be permitted upon motion. Motions for correction must be submitted within ten (10) days of the receipt of the transcript unless additional time is permitted by the administrative law judge. Corrections of the official transcript will be permitted only when errors of substance are involved and only upon approval of the administrative law judge. Since the official transcript was complete on or about September 24, 1992, with the exchange of the missing pages of the transcript, all motions for correction must have been filed by no later than October 3, 1992. See 29 C.F.R. § 18.52(b). This deadline passed more than five months prior to the filing of Complainant's current motion. In its motion, Complainant argues that the errors were initially noted in Complainant's Post-Hearing Brief as to Damages submitted on September 28, 1992; thereby, satisfying the rule. This is not the case. I take note that the September 28, 1992 brief was titled "Complainant's Post-Hearing Brief as to Damages." No indication was specifically addressed in the caption to any errors in the transcript. However, I do note alleged errors in the transcript were noted in two footnotes. (n.1, p.7 & n.2, p.12). Merely burying a footnote or two in a lengthy brief relating to damages is not considered as a motion as to allege errors in the hearing transcript. The purpose of a motion is to put the Court and opposing counsel on notice that an issue that impacts the substantive rights of the parties exists and needs to be adjudicated. The two footnotes in the brief cited by Complainant do not meet this test. Therefore, Complainant's argument that portions of its brief satisfied the rule is without merit. Section 18.52(b), grants me discretion in extending the time
[PAGE 4] to file the motion beyond the ten day limit of the rule. Since no application for additional time was made before the expiration of the ten days and no good cause has been subsequently demonstrated, no additional time will be granted for the filing of the motion. Furthermore, I am reluctant to retroactively grant leave to file the motion out-of-time. Having determined that Complainant's motion is untimely, there is no need to determine the substantive merits of the motion. However, I note that these changes are not of substance and therefore would not satisfy the requirements of the rule. Since Complainant's motion was filed grossly outside the time prescribed by 29 C.F.R. § 18.52(b), it is hereby DENIED. 2. Determination of Complainant's Back Pay The Act allows for the award of back pay to the Complainant for wages lost between the time he was unlawfully discharged by the Respondent, February 13, 1990, and the date that he was reinstated by orders of the Secretary and, the United States District Court - May 11, 1992.[3] See 49 U.S.C. § 2305(c)(2)(B). To determine the proper amount of back pay to be awarded, I must determine how much the Complainant would have earned had he continued to be employed by the Respondent for the period between his wrongful termination and reinstatement.[4] A. Potential Earnings The first step in determining Mr. Clay's total back pay award is to determine the total amount of lost earnings for the back pay period. During the back pay period, Mr. Clay's pay and benefits were governed by two labor contracts. The first was the 1988-1990 Master Contract of Teamsters Local Union No. 553. (CX 16). The second was the 1990-1992 contract. (CX 17). i. Regular earnings Under Section 2 of the contract (CX 16; 17), Mr. Clay was entitled to regular pay at the following rates: February 13, 1990 through December 15, 1990: $138.04 per 8 hour day x 5 days a week = $690.20 per week
[PAGE 5] $690.20 x 44 weeks = $30,368.00 December 16, 1990 through December 15, 1991: $142.04 per 8 hour day x 5 days a week = $720.20 per week $710.20 x 52 weeks = $36,930.40 December 16, 1991 to May 11, 1992: $146.04 per 8 hour day x 5 days a week = $730.20 per week $730.20 x 21 weeks = $15,334.20 Total lost regular earnings: $82,632.60 ii. Overtime earnings In addition to compensation for his lost regular earnings, Mr. Clay is also entitled to compensation for lost overtime earnings. Frank Jusas, as Respondent's dispatch manager for the last six years, is responsible for assigning all work to drivers working out of the terminals where Mr. Clay was based. (TR 374). Mr. Jusas testified that the amount of work a driver will get on a particular day depends on, inter alia, the truck he drives. Id. Mr. Jusas also related the other factors that affect the length of the work day including, traffic, the geographic area assigned, distance driven, and customer demand. (TR 375- 77). Mr. Jusas also testified that the availability of weekday overtime work to any particular driver was a matter of luck, while the distribution of weekend overtime was governed by the collective bargaining agreement. (TR 377, 393). Mr. Clay claimed, for the first time at the hearing on damages, that he was discriminated against in the distribution of overtime pay. I hereby reiterate my ruling during the hearing that his testimony along these lines is beyond my jurisdiction and I will not consider his claims of diminished overtime due to retaliatory motives not related to this adjudication. Therefore, in order to calculate Mr. Clay's lost overtime earnings, I will examine the last two quarters of employment with the Respondent. In the last quarter of 1989, Mr. Clay worked 85 hours of overtime. In the first quarter of 1990, in which Mr. Clay was terminated at the mid-way point, he had earned 68 hours.
[PAGE 6] This number, when extrapolated for the entire quarter, equals 136 hours of overtime. On average, Mr. Clay was earning 110.5 hours of overtime a quarter, multiplied by four quarters in a year equals approximately 442 hours a year or 8.5 hours of overtime a week. Therefore, I find that 8.5 hours of overtime a week to be a reasonable approximation of his overtime earnings when he was terminated. Again Section 2 of the contract set forth the rate at which overtime was to be paid. (CX 16, 17). Therefore, Mr. Clay is entitled to overtime payments at the following rate: February 13, 1990 through December 15, 1990: 44 weeks x 8.5 hrs a week x $25.8825 per hr = $ 9,680.06 December 16, 1990 through December 15, 1991: 52 weeks x 8.5 hrs a week x $26.6325 per hr = $11,711.56 December 16, 1991 to May 11, 1992: 21 weeks x 8.5 hrs a week x $27.3825 per hr = $ 4,887.78 Total lost overtime earnings: $26,279.40 iii. Sick pay earnings Mr. Clay is also entitled to reimbursement for the five sick days he would have earned, but did not have the opportunity to use in 1991 had he remained at Castle. The cash value of these days total $730.20. Mr. Clay is not entitled to payment for the 1990 days because there is adequate evidence to support Respondent's contention that Mr. Clay was paid for these days shortly after his discharge. Concerning 1992, no cash value is awarded since Complainant has (had) the opportunity to utilize these sick days after his reinstatement. Total lost sick pay earnings: $730.20 iv. Total gross wage loss The Complainant's total gross wage loss is calculated as follows: Total lost regular earnings: $ 82,632.60 + Total lost overtime earnings: $ 26,279.40
[PAGE 7] + Total lost sick pay earnings: $ 730.30 = Total gross wage loss: $109,642.20 B. Interim Earnings The Respondent is entitled to offset against the total gross wage loss, any amounts earned by Mr. Clay as interim earnings. Mr. Clay's interim earnings are set forth as follows: Year Employer Earnings 1990 - P. Chimento $ 7,581.06 JRS Pickup & Delivery Service 238.00 Edra Transportation 1,302.50 Corona Ready Mix 840.00 PT Petro Corp. 758.87 Richard Acerra, Inc. 14,027.91 Ameropan 1,450.00 Misc. 322.18 Total: $26,520.52 1991 - Ameropan $22,717.54 Scaccia Concrete Corp. 2,668.70 Total: $25,386.24 1992 - Ameropan $11,474.86 Total interim earnings: $63,381.62 Respondent has argued that Mr. Clay's interim earnings would have been significantly higher had he pursued a different course of action with respect to securing interim employment. However, I am unpersuaded by Respondent's arguments. The extensive cross-examination of Mr. Clay, along with his supporting documents showing the extent of his job search adequately supports the extent of his efforts to continue to secure employment after his wrongful discharge from Castle. Respondent is entitled to no further offset against Mr. Clay's lost earnings. C. Total Award of Net Lost Earnings and Sick Pay Therefore, Mr. Clay's total award for net lost earnings and sick pay may be calculated as follows: Total gross wage loss $109,642.20 and lost sick pay - Total interim earnings 63,381.62 = Award for net lost earnings
[PAGE 8] and sick pay
$ 46,260.58 D. Medical Expenses While in the Respondent's employ, Complainant had medical insurance coverage through Local 553's health and welfare fund. After his termination, some of Mr. Clay's interim employers offered medical insurance coverage. Thereafter, he availed himself of a "COBRA" continuation of the Acerra plan. (TR 175- 176). Complainant offered sufficient evidence to demonstrate that is total expenses for health insurance was $2,612.50 during the back pay period. (ALJX 51; PX 30). I find that these expenses were reasonably incurred by the Complainant to insure continued medical coverage during the back pay period. Therefore, I award $2,612.50 in medical expenses reasonably incurred. E. Employee Benefits i. Pension plan Had Complainant continued to work for Respondent, he would have made contributions to the Local 553 Pension fund. Accordingly, Respondent is directed to notify the Local 553 pension fund administrator that Complainant is entitled to full pension credit for the back pay period of February 13, 1990 through May 11, 1992, plus and interest and/or penalties due for contributions that should have been made during the back pay period. The plan administrator shall determine, consistent with his fiduciary duty under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001, et. seq., the exact amount to be contributed to the fund by the Respondent. ii. Deferred compensation plan Complainant also participated in the Local 553 Deferred Compensation Fund. Section 56(b) of the contract sets forth the contributions to be made to the Fund by the employer. (CX 16; 17). The contributions were to be paid on the following schedule: 12/16/89 - 12/15/90 .60/hr. per 40 hr. week 12/16/91 - 12/15/92 .80/hr. per 40 hr. week 12/16/91 - 12/15/92 $2.00/hr. per 40 hr. week Therefore, Mr. Clay's contributions are set forth as follows:
[PAGE 9] 1990: 44 weeks x .60/hr. per 40 hr. week = $2,816.00 1991: 52 weeks x .80/hr. per 40 hr. week = $3,744.00 1992: 21 weeks x $2.00/hr. per 40 hr. week = ,680.00 Total: $8,240.00 Respondent is entitled to offset against this amount the $565.50 paid to Mr. Clay's 401(k) plan in 1991 and early 1992 by Richard Acerra, Inc. (CX 27). Accordingly, Respondent is directed to deposit the sum of $7,674.40 into the Deferred Compensation Fund. The Fund is directed to determine the appropriate interest the contributions would have earned had they been timely filed and/or any late fees and penalties due. All calculations are to be made based on a full contribution of $8,240.00. The payment of these additional funds are the responsibility of the Respondent. Therefore, the Respondent is so ordered to make such payment. F. Prejudgment Interest Complainant claims that he is entitled to prejudgment interest on his back pay award. I am inclined to reject this argument for several reasons. First, there is no specific authorization in the Act or its implementing regulations for an award of prejudgment interest. Second, between the time this action was first commenced until the time of the order of the Secretary, the Respondent was continually in the position of being the prevailing party; therefore, it had no incentive, nor should it be penalized for not correcting its unlawful actions. Third, given the relatively short duration of this litigation, the back pay award has not been delayed so long as to make an assessment of interest compelling. See Cooper v. Cobe Labs, 743 F. Supp. 1422 (D. Colo. 1990). Finally, the Secretary has not determined that the current decision is a "final" one for the purposes of the Administrative Procedure Act; therefore, the ultimate disposition of this case remains uncertain. Therefore, Complainant's claim for prejudgment interest is rejected. 3. Costs and Attorney's fees The Act allows for the award of costs and expenses, including attorney's fees, to the Complainant for wages lost between the time he was unlawfully discharged by the Respondent and the date of this decision. See 49 U.S.C. § 2305(c)(2)(B). A. Costs The only costs and expenses sought by the Complainant are
[PAGE 10] for obtaining copies of the various transcripts developed during the course of this litigation. In support of its application, Complainant submitted copies of invoices from the court reporter. These invoices total ,093.00. I find that these costs are directly related to the litigation and are fair and reasonable. Therefore, costs and expenses in the amount of ,093.00 are awarded. B. Attorney's Fees The basic framework for an award of attorney's fees has been set forth by the Supreme Court in Hensley v. Eckerhart, 461 U.S. 424 (1983), where the Court stated that the fee is derived by taking "the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate." Id. at 433. In this case, both hours expended and the rate must be determined. In Blum v. Stenson, 465 U.S. 866, 895 (1984), the Supreme Court stated that "'reasonable fees' . . . are to be calculated according to the prevailing market rates in the relevant community." The Court went on to further state that the "burden is on the fee applicant to produce satisfactory evidence . . . that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience, and reputation." Id. at 896 n.11. In this case the relevant community is the greater New York area. In its fee application, Complainant offered some general market data related to very large firms in New York and some unpublished court decisions where her firm was given fee awards. After reviewing this information, as well as counsel's own affidavits, I conclude that a reasonable hourly rate for both Mr. Hall and Ms. Sloan is $175.00 per hour. While it is true that both Mr. Hall and Ms. Sloan have generally practiced in the area of employee rights, they have not demonstrated any particular skill related to the issues presented in this case or in the area of administrative law in general; therefore, no departure from a general prevailing rate is necessary. See Cruz v. International Brotherhood of Electrical Workers, 1993 U.S. Dist. LEXIS 9570 (E.D.N.Y. July 12, 1993). Moreover, while this case is a relatively straightforward one, Mr. Hall and Ms. Sloan's actions complicated matters beyond reasonable bounds and cannot now claim that this is a "complex" litigation requiring a higher fee. Therefore, these hourly rate of $175.00 will be applied to the number of reasonable hours allowed under the application.
[PAGE 11] In Complainant's fee application dated September 28, 1992, and supplemented on March 5, 1993, Complainant's counsel submitted time records that purport to demonstrate a total of 210 hours of time directly spent on this litigation plus 24.5 hours spent on preparing the fee application. Rather than providing any type of detailed records, Complainant's counsel merely submitted photocopied appointment calendars showing large blocks of time dedicated to Mr. Clay's case. Often these entries are vague and illegible. Of the 210 hours claimed in connection with the litigation, I have been able to determine that 4.75 of the hours requested by Complainant are for travel between New York and Cranford, New Jersey for the June 24 and 25, 1992 hearing. While necessary to Complainant's case, these hours cannot be billed at the full hourly rate; therefore, these hours are hereby reduced by fifty percent. See In re Agent Orange Prod. Liability Litigation, 611 F. Supp. 1296, 1320, 1349 (E.D.N.Y. 1985) (50% reduction in rate for travel time). A total of 2.375 hours will be allowed for travel time. 12.5 of the hours requested by Complainant are for reviewing the 345 page transcript of the first hearing on this matter. This task, even if performed at the relatively slow rate of one page a minute should have taken no more than six hours. Therefore a total of 6 hours will be allowed for this task. Similarly, only 20.75 hours will be allowed for the preparation of the post-hearing brief because the submitted figure taken in conjunction with the length of time spent reviewing the transcript is excessive. Sixteen hours are sought by Mr. Hall and the one hour is sought by Ms. Sloan for preparing a sur-reply letter dated May 22, 1991. (ALJX 28). This letter went well beyond what was contemplated by the Court when leave was granted for it to be filed and the majority of its contents are nothing more than a personal attack on Respondent's counsel that do nothing to advance the best interests of the Complainant. This task, as originally contemplated by the Court, could well have been completed in one hour. See (ALJX 27). Therefore, sixteen of the seventeen hours requested are disallowed. The net result of these calculations has reduced 65 of the requested hours by 34.875 hours to 30.125 hours. Therefore, of the original 210 hours requested, 145 hours remain to be considered. However, this task is hampered by the failure of
[PAGE 12] Complainant's counsel to maintain adequate contemporaneous time records. Since this case was initiated after 1983, the Complainant should have been well aware of the requirement in this Circuit that contemporaneous time records must be kept to support a fee application. See New York Ass's for Retarded Child. v. Carey, 711 F.2d 1136, 1147 (2nd Cir. 1983). The Supreme Court in Hensley v. Eckerhart, 461 U.S. 424, also noted that "Where the documentation of hours is inadequate, the district court may reduce them accordingly." Id. at 433. Since the time records submitted by Ms. Sloan are inadequate, a proper reduction will be made as authorized in Hensley. Id. Before this reduction is made, an appropriate reduction must be determined. One of the most persuasive cases setting forth the proper amount of reduction for inadequate time records is Rosario v. Amalgamated Ladies' Garment Cutters' Union, 749 F.2d 1000 (2d Cir. 1984). In Rosario, the United States Court of Appeals for the Second Circuit allowed a 30% reduction of Mr. Hall's hours because he failed to keep contemporaneous records relating to the hours he spent on the case. Id. at 1007. In that case, the total hours expended were derived from "a reconstruction by his partner [Ms. Sloan] and a law school student . . . based upon their examination of his annual appointment calendars and extensive files." Id. at 1004. Similarly, the Court disallowed 148 hours spent on the fee application because those hours directly resulted from "Hall's failure to keep any contemporaneous time records." Id. at 1008. Unlike the case in Rosario, in the case sub judiciae, Ms. Sloan has shifted the reconstruction task to this Court; thereby, increasing the need for an appropriate sanction. The Rosario case does not exist in a vacuum. In one of the cases attached to Complainant's own fee application, Petramale v. Laborers' International Union of North America, 81 Civ. 4817 (S.D.N.Y. Aug. 25, 1992), the Court reduced Mr. Hall and Ms. Sloan's hours due to "disorderly" time keeping. Finally, as recently as July 1993, the firm of Hall & Sloan has been sanctioned for its shoddy bookkeeping with respect to attorney's time records. See Cruz v. International Brotherhood of Electrical Workers, 1993 U.S. Dist. LEXIS 9570 (E.D.N.Y. July 12, 1993). In Cruz, the district court reduced Hall & Sloan's fee application by twenty-five percent because the submitted time records contained "vague and often cryptic descriptions of work
[PAGE 13] performed by counsel." Id. at *17. In keeping with the Supreme Court's authorization set forth in Hensley, and noting Hall & Sloan's demonstrated persistent reluctance to keep adequate time records, I will reduce the total hours allowed by forty percent. Thirty percent as a general sanction under Hensley and ten percent as an additional sanction for continued contempt for the fee award process by failing to keep adequate records. I have determined that 145 of the hours claimed will be subject to reduction as contemplated under Hensley; therefore, an additional 58 hours are disallowed and 87 hours are awarded. Complainant's counsel seeks an award of 24.5 hours for the preparation of its fee application. None of the hours requested will be allowed. The act does not provide specifically for the reimbursement for the preparation of an attorney fee statement. See 49 U.S.C. §2305(c)(2)(B). Therefore, no award will be made for the preparation of the fee application. Adding the sum of the 30.125 hours allowed through specific scrutiny plus the 87 hours remaining after a general reduction under Hensley, I hereby award Complainant attorney's fees for 117.125 hours. Taking counsel's hourly rate of $175.00 per hour, multiplied by 117.125 hours of work equals a total fee award of $20,496.88. ORDER Based upon the forgoing, the Respondent, CASTLE COAL & OIL COMPANY, INC., is ordered to pay the Respondent, Ralph Clay, the following: 1. Net Lost earnings and sick pay in the amount of $46,260.58. 2. Out-of-pocket medical expenses in the form of health insurance premiums of $2,612.50. 3. $7,674.40 to the Local 553 deferred compensation fund and other such sums as required by the Local 553 pension and deferred compensation funds as set forth in the foregoing recommended decision. 4. ,093.00 in costs and expenses reasonably incurred in pursuing his claim.
[PAGE 14] 5. $20,496.88 in attorney's fees reasonably incurred in pursuing his claim. FRANK D. MARDEN Administrative Law Judge Camden, New Jersey NOTICE: This Recommended Decision and Order and the administrative file in this matter will be forwarded for review by the Secretary of Labor to the Office of Administrative Appeals, U.S. Department of Labor, Room S-4309, Frances Perkins Building, 200 Constitution Ave., NW, Washington, DC 20210. The Office of Administrative Appeals has the responsibility to advise and assist the Secretary in the preparation and issuance of final decisions in employee protection cases adjudicated under the regulations at 29 C.F.R. Parts 24 and 1978. See 55 Fed. Reg. 13250 (1990). [ENDNOTES] [1] The following references will be used herein: TR for transcript, CX for Complainant's exhibit, EX for Employer's exhibit and ALJX for Administrative Law Judge's exhibit. [2] At the time of the Decision, the Secretary of Labor was the Honorable Lynn Martin, the current Secretary of Labor is the Honorable Robert B. Reich. [3] While the Complainant may not have actually returned to work until on or about May 18, 1992, the Complainant has conceded that May 11, 1992 is the appropriate end of the back pay period. I find that this date is reasonably supported by Complainant's own testimony in the sealed portion of the hearing transcript, the subject matter of which has no further impact on this decision. [4] Although the Respondent is also entitled to an offset of any amounts obtained by the Complainant from other collateral sources, I will not consider the amounts collected as unemployment compensation from New York State. It is the responsibility of the Complainant to prevent a double-recovery and reimburse the State of New York for any amounts paid to him as unemployment compensation for which he is now being awarded back pay.



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