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Palmer v. Western Truck Manpower, Inc., 85-STA-16 (Sec'y June 26, 1990)


U.S. DEPARTMENT OF LABOR

SECRETARY OF LABOR
WASHINGTON, D.C.

DATE: June 26, 1990
CASE NO. 85-STA-16

IN THE MATTER OF

HUBERT L. PALMER,
    COMPLAINANT,

    v.

WESTERN TRUCK MANPOWER, INC.,
    RESPONDENT.

BEFORE: THE SECRETARY OF LABOR

FINAL DECISION AND ORDER ON
DAMAGES AND ATTORNEY FEES

    Before me for review is the Recommended Decision and Order (R.D. and O.) issued on February 26, 1990, by Administrative Law Judge (ALJ) James J. Butler in the above-captioned case which arises under the Surface Transportation Assistance Act of 1982, 49 U.S.C. app. § 2305 (1982). The ALJ's R.D. and O. was issued in response to the Secretary's Decision and Order of Remand of January 16, 1987, which directed the ALJ to determine the date on which Respondent Western Truck Management (WTM) refused to reemploy Complainant and to determine the amount of compensation due to Complainant. In his R.D. and O., the ALJ recommended the sums of money which Respondent should pay for back wages, health and medical benefits, pension fund contributions, early IRA withdrawal, vacation pay and interest. The ALJ also found that reinstatement was not an appropriate remedy since WTM had dissolved its affairs on December 31, 1986. Finally, the ALJ approved fees for two of Complainant's attorneys and directed a third attorney to file a fee petition.

    On review before me, WTM objects to the ALJ's determinationof overtime pay due Complainant, to the award of any vacation pay, and to the assessment of any prejudgment interest. Brief of Respondent Western Truck Manpower, Inc. in opposition to Recommended Decision and Order of Administrative Law Judge James J. Butler (WTM Brief),


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March 30, 1990. Complainant has filed no brief on review. The case record, however, contains a letter from Complainant's counsel to the ALJ stating that the ALJ's order contains an error in the total dollar amount of back wages. Letter of March 14, 1990, from Patricia D. Barrett to the ALJ. inasmuch as the record does not reflect any action by the ALJ in response to this letter, I treat this letter as Complainant's brief on review.

    In determining whether to accept the ALJ's recommendations, the record has been reviewed to determine whether there is substantial evidence to support the ALJ's findings and whether the ALJ's decision is in accordance with law. Where the ALJ's "findings of fact are supported by substantial evidence on the record considered as a whole, [they are] considered conclusive." 29 C.F.R. § 1978.109(c)(3) (1989). Based on this review, I accept the findings and conclusions of the ALJ, except as corrected and clarified below.

DATE OF REFUSAL OF REEMPLOYMENT

    I adopt the ALJ's finding that Complainant was refused reemployment on October 15, 1984. R.D. and 0. at 4. The record reveals that, at the hearing on remand, the parties stimulated that Complainant, who had been disabled since his discharge, was released to work on October 15, 1984, and that notice of this re-lease was given to WTM no later than October 18, 1984. Complainant's uncontradicted testimony was that his doctor gave oral notice of Complainant's medical release to WTM prior to October 15th, and that the oral notice was followed by written notice. Complainant also testified that he reported for work at WTM on October 15th, and that Respondent did not return him to work. Transcript of Hearing, January 10, 1989 (T.), at 85-87.

BACK PAY

Period of Liability

    I also adopt the ALJ's finding that Respondent is liable for back wages to Complainant for the period of October 15, 1984, through December 31, 1986, when WTM was dissolved. The record contains no basis for assessing back pay beyond this date.1

Overtime

    I reject Respondent's contention that the ALJ erred in compensating Complainant for 1,570.75 overtime hours, which is the number of overtime hours earned by Terence Hart, the next most senior employee of WTM, during the period of October 15, 1984, through December 31., 1986. WTM argues that Complainant should not be awarded any overtime because the amount of overtime due is "of necessity highly speculative." WTM Brief at 3. If any overtime is awarded, it is -further argued by WTM, it should be limited to 66% of Hart's overtime since in 1983, when Complainant and Hart were both employed by WTM, Complainant had worked 266 overtime hours while Hart had worked 405.5 overtime


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hours.

    That the amount of overtime hours Complainant would have worked, but for the discrimination, cannot be determined with certitude does not deprive Complainant of all compensation for overtime hours lost. See Pettway v. American Cast Iron Pipe Co., 494 F.2d 211 (5th Cir. 1974), where the court noted that "in computing a back pay award two principles are lucid: (1) unrealistic exactitude is not required, (2) uncertainties in determining what an employee would have earned but for the discrimination, should be resolved against the discriminating employer." 494 F.2d at 260.

    Federal courts consistently have held under a variety of discrimination statutes that a purpose of the back pay remedy is to:-make "whole" the employee who has suffered economic loss as a result of the employers' illegal discrimination. See Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 900 (1984) (National Labor Relations Act); Ford Motor Co. v. E.E.O.C., 458 U.S. 219, 230 (1982) (Title VII, Civil Rights Act of 1964); Gibson v. Mohawk Rubber Co., 695 F.2d. 1093, 1097 (8th Cir. 1982) (Age Discrimination in Employment Act). The failure to compensate Complainant for any overtime, as Respondent suggests, would leave Complainant less than "whole."

    Neither would awarding Complainant back pay for 66% of the overtime hours worked by Hart during the 1984-1986 period fully compensate Complainant for his economic loss. While it is true that Complainant worked a third fewer overtime hours in 1983 than Hart worked, the record reflects that there were reasons 'for this difference. Complainant testified that he had two work related injuries in 1983 as a result of which he did not work. T. at So. Although Complainant did not recall how long he was absent after his first injury, T. at 81, a report on his medical history for workers' compensation purposes indicates that he missed 4 or 5 days in March of 1983. Remand Respondent's I, Exhibit B at 2. According to Complainant, the second injury resulted in a six week absence from work in October-November of 1983. T. at 81. While these periods do not account fully for the difference in the 1983 overtime hours worked by Complainant and by Hart, they do support the ALJ's finding that the 266 hours of overtime worked by Complainant in 1983 are not representative of the overtime to which he was entitled.

    In finding that 1983 was not a representative period for determining Complainant's overtime entitlement, the ALJ relied on Complainant's testimony that, between November of 1983 and February of 1984, he had filed many grievances on behalf of himself and other drivers because Hart had been given preference in the assignment of overtime work. T. at 82-84. See R.D. and 0. at 3, n.1. WTM argues that, inasmuch as Complainant testified that only some of the grievances succeeded but that others had been dropped, allowed to expire or had not been resolved as of the date of the hearing, it is inappropriate to assume that Hart had been given overtime hours at Complainant's expense. WTM Brief at 2. Complainant's testimony, however, was uncontroverted. WTM presented no evidence to the effect that none of these grievances resulted in Complainant being paid for overtime hours worked by Hart. Complainant's testimony, therefore, is a further basis for finding that the 1983 overtime hours worked by Complainant are not representative of his entitlement to back wages for lost overtime.


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    The ALJ recommended that Complainant be compensated for the same number of overtime hours that Hart had worked during the back pay period. R.D. and 0. at 4. Since Hart was the next senior driver to Complainant, it is reasonable to assume, in the absence of any showing otherwise, that Complainant would have worked at least the same number of overtime hours during that period had he not been discriminatorily refused reemployment. Where an award of back pay "can' be only a close approximation, it has been held that "the use of a seniority formula to compute the earnings of a 'representative employee' gives a reasonable approximation of what (a Complainant) would have made but for the discrimination." NLRB v. Superior Roofing Co., 460 F.2d 1240, 1241 (9th Cir. 1972), cited with approval in Sure-Tan, 467 U.S. at 901, n.11. See also Pettway, 491 F.2d at 262. Accordingly, I adopt the ALJ's recommendation that Complainant receive back pay for 1,570.75 overtime hours.

Vacation Pay

    Respondent objects to the ALJ's recommendation that Complainant be awarded payment for three (3) weeks of vacation pay, arguing that, since Complainant is to receive back wages for these weeks, he will be compensated twice for the same period. WTM's Brief at 3.

It has been held that "the ingredients of back pay include more than 'straight salary' . . . .

[F]ringe benefits such as vacation . . . pay are among the items which should be included in back pay." Pettway, 494 F.2d at 263. Thus, in order to be made "whole", a complainant is entitled to be paid for accrued vacation time he has lost as a result of the employer's discrimination. That does not mean, however, that a complainant is automatically entitled to receive both straight wages and vacation time for the same period. Where it is the practice of the employer to pay an employee for vacation time not taken, it is equitable that a complainant receive both straight wages and vacation pay for the same period. Where, however, an employee must take his vacation or lose it, the addition of vacation pay to a back pay award of straight salary for the same period would compensate the complainant for more than he lost as a result of the employer's illegal discrimination.

    The ALJ gave no explanation as to the basis for his finding that Complainant is entitled to 3/52 of his gross pay ($3,554.80) as vacation pay. R.D. and 0. at 3 and 7. In Complainant's brief before the ALJ, Complainant's counsel states that Complainant

testified that he was entitled to 3/52nds of his gross wages for vacation. (TR 93:13-15) This entitlement is in addition to his regular wages and employees had the option of either taking the time or taking the money. Thus, payment for this time is appropriate in the calculation of damages due complainant. He would have been entitled to vacation for 1985, 1986, 1987, 1988 and prorated for 1989 in the amount of $7,413.60 (13 1/2 weeks).


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Complainant's Brief at 11. The only evidence in the record to support counsel's statement, however, is the following testimony given by Complainant in response to a question as to what other expenses he had incurred as a result of his discriminatory discharge: "And also 3/52nds of my gross wages, or whatever wages its determined on, for vacation pay." T. at 93.

    Complainant's testimony does not clarify the period for which he is claiming vacation pay nor what amount of vacation time he accrued each year. Accordingly, I find that there is no evidence in the record to support the ALJ's recommendation that Complainant be awarded vacation pay in addition to back wages of straight earnings.

Back Wages Due

    I agree with Complainant that, in his Recommended Order, the ALJ listed an incorrect amount for the back pay due to Complainant. R.D. and 0. at 1. Complainant correctly notes that the ALJ has deducted twice from the amount due for wages and overtime the sum of the monies-earned by the Complainant and those received as unemployment compensation during the back pay period.

    In his Recommended Findings, Conclusions and Remedies, the ALJ found that "WTM is liable to Palmer for the payment of $61,616.66 in wages", and that "WTM is liable to Palmer for the payment of $31,492.40 in overtime wages." R.D. and 0. at 4. These amounts total $93,109.06. The ALJ further found that the total of Complainant's straight time and overtime wages should be reduced by the amount the parties stipulated Complainant had earned during the back pay period. The parties stipulated that those earnings totaled $4,353.99. See R.D. and 0. at 3. Thus, the total amount due Complainant for all back wages less actual earnings (and without any deduction for unemployment compensation received by Complainant) is $88,755.07.

Unemployment Compensation

    The ALJ further erred in deducting from Complainant's compensation the amount Complainant received during the back pay period as unemployment compensation. Under the STAA, unemployment compensation is not deductible from the amount due for back pay. See Hufstetler v. Roadway Express, Inc., Case No. 85-STA-8, Aug. 21, 1986, slip op. at 59, aff'd sub nom Roadway Express, Inc. v. Brock, 830 F.2d 179 (11th Cir. 1987). Accordingly, the unemployment compensation sum of $4,316.00 ($166 per week for 26 weeks) will not be deducted from Complainant's back pay award. Complainant thus is entitled to back pay in the amount of $88,755-07.


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INTEREST

    Respondent points out that the ALJ's recommended order assesses "interest on all sums due, in accordance with 28 U.S.C. § 1961," R.D. and 0. at 7, #8, but does not set a date for the commencement of interest. Since section 1961 provides for postjudgment interest, Respondent "presumes" that it is not liable for prejudgment interest. WTM's Brief at 4.

    Prejudgment interest on back pay awards has customarily been assessed in cases arising under the STAA. See Nelson v. Walker Freight Lines, Inc., Case No. 87-STA-21, Sec. Dec. and Order, July 26, 1988, slip op. at 6-7; Stone V. Nu-Car Carriers, Case No. 86-STA-16, Sec. Is Dec. and order on Liability; Remand Order on Damages, July 29, 1987, slip op. at 6; Hufstetler v. Roadway Express, Inc., slip op. at 58. The assessment of prejudgment interest is necessary to comport with the policy of making Complainant whole. See Hansard v. Pepsi-Cola Metropolitan Bottling Co., 865 F.2d 1461 (5th Cir. 1989) ; Hufstetler v. Roadway Express, Inc., slip op. at 58. Calculation of the dollar amount of prejudgment interest in STAA cases has been in accordance with 29 U.S.C. 1961. See Hufstetler v. Roadway Express, Inc., slip op. at 58-59; Long v. Roadway Express, Case No. 88-STA-31, Case No. 88-STA-13, Sec. Final Dec. and Order, March 9, 1990, slip op. at 6; Nelson, slip op. at 6-7; Stone, slip op. at 6. The use of 29 U.S.C. § 1961 for the assessment of prejudgment interest is consistent with Federal court rulings to the effect that, although section 1961 is silent regarding prejudgment interest, it does not bar the awarding of interest prior to judgment in accordance with its provisions. See Western Pacific Fisheries, Inc. v. SS President Grant, 730 F.2d 1280, 1289 (9th Cir. 1984) ; Accord, Bricklayers' Pension Trust Fund v. Taiariol, 671 F.2d 988, 989 (6th Cir. 1982), and cases cited therein. I, therefore, find that Complainant is entitled to prejudgment interest determined at the rate provided in 28 U.S.C. § 1961.

    Respondent argues, additionally, that "no interest can properly be assessed against WTM" for periods of "extensive delay, from 1986 until 1990 caused by various requests for continuance by Mr. Palmer of the hearing on remand and, on at least one occasion, of the failure of his then counsel Mr. Herndon, to appear at a previously scheduled hearing because of automotive difficulties." WTM's Brief at 4. The record reveals that there were some delays due to the necessity of Complainant to seek new counsel. (Complainant had at least three attorneys during this case.) The record also reveals that there were additional reasons why the remand proceedings did not continue uninterruptedly, e.g., settlement discussions, time to agree on stipulations, attempts to join Ryerson as a party, the return of the case on February 29, 1988, to the master calendar for regular rescheduling,and the fact that three different ALis were assigned the case. In view of this, I do not find that the delay was so inordinate as to relieve Respondent of liability for interest during any part of the back pay period. See NLRB v. Rutter-Rex Manufacturing Co., 396 U.S. 258, 262-265, and Berkshire Knitting Mills v. NLRB, 139 F.2d 134, 141-142 (3rd Cir. 1943), holding that delays in litigation are not grounds,for denying back pay. Since Respondent has had the use of these monies throughout this time, Respondent is not prejudiced unfairly by this ruling.


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    Accordingly, Complainant is entitled to interest on his back pay, calculated in accordance with 28 U.S.C. § 1961, from October 15, 1984, until such payment is made.

ATTORNEY FEES

    The ALJ awarded Complainant "the amount of $3,205.10 for his first two attorneys . . . ." R.D. and 0. at 7, #6. This award was based on Complainant's testimony as to the amounts he paid to Attorneys Appling and Holiday. T. at 92. Respondent does not challenge these awards and I accept the ALJ's recommendation. See Suggested Findings and Conclusions and Brief of Respondent Western Truck Manpower to the Administrative Law Judge on Remand From the Secretary of Labor at 8-9; WTM's Brief generally.

    In the case of Attorney Barrett, who was Complainant's final attorney on this case, the ALJ's order specifically provides for the filing of a petition for approval of attorney fees and costs and provides for a time period for objections by the Respondent. R. D. and 0. at 7, #6. The record submitted to me by the ALJ contains a Petition For Approval of Attorney Fees filed with the ALJ on March 19, 1990. The ALJ failed to act on this petition and Respondent has not, in any respect, challenged Barrett's request for fees. In view of these circumstances and in the interest of judicial economy and avoiding further delay which would be occasioned were I to remand this issue to the ALJ, I have considered Barrett's fee request. I find that the fee requested was "reasonably incurred . . . ." 49 U.S.C. app. § 2305 (c) (2) (B) . Accordingly, WTM shall pay Complainant the additional sum of $3,000 in attorney fees for Attorney Barrett.

CONCLUSION AND ORDER

    Regarding the ALJ's findings on reinstatement, health/ medical benefits, pension contributions, reimbursement for costs, and wages for hours worked and unpaid, I conclude that they are supported by substantial evidence in the record, and I adopt those findings. Accordingly it is ORDERED that:

    1. Respondent pay to Complainant the sum of $88,755.07 for back pay (including overtime) from October 15, 1984 through December 31, 1986, with interest thereon calculated from October 15, 1984, until date of payment in accordance with 28 U.S.C. § 1961.

    2. Respondent pay to Complainant the sum of $77.04 as compensation for hours worked on February 14, 1984, with interest calculated in accordance with 28 U.S.C. § 1961 from February 14, 1984, until date of payment

    3. Respondent pay to Complainant the sum of ,769.87 for health benefit costs.


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    4. Respondent pay to Complainant the sum of $402.50 as reimbursement for IRA early withdrawal penalties cost payment.

    5. Respondent pay to the appropriate Teamster's pension fund on behalf of Complainant the sum of $5,686.36.

    6. Respondent pay to Complainant the sum of $3,205.10 for attorney fees paid to Attorneys Walter C. Appling and Susan K. Holiday, plus the sum of $3,000 for attorney fees for Patricia D. Barrett.

    SO ORDERED.

       ELIZABETH DOLE
       Secretary of Labor

Washington, D.C.

[ENDNOTES]

1During the hearing, counsel for Complainant argued that Complainant was entitled to back pay past this date because, allegedly, there was a successor to WTM. The, ALJ ruled that the scope of the Secretary's remand was limited to determining WTM's liability and questioning on the successor issue was abandoned. T. at 96. In his R.D. and O. at 4, the ALJ appears to rule that there is no successor to WTM because WTM "discharged all of its employees upon dissolution and did not assist them in finding other employment." I do not adopt this finding since the issue of whether there was a successor corporation was not litigated.

In its post-hearing brief to the ALJ, Complainant argues that WTM, under California law on corporate dissolutions, is liable for back pay past the date of its dissolution. Brief of Complainant Hubert L. Palmer in Support of Proposed Findings of Fact and Conclusions of Law (Complainant's Brief) at 6-7. The possibility that under state law Complainant may recover monies due to him is not, however, a factor in assessing remedial back pay under the STAA.



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