JLL Restaurant, Inc. d/b/a The Smokehouse Restaurant; Seth R. Morriss, Chief Executive Officer

National Labor Relations Board - Administrative Judge Opinions

Feb 26, 2013

31-CA-026240 (N.L.R.B. Feb. 26, 2013)

JD(SF)–04–13
Los Angeles, CA
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
SAN FRANCISCO DIVISION OF JUDGES
SMOKE HOUSE RESTAURANT, INC.
and Cases 31–CA–26240
31–CA–26418
31–CA–26285
HOTEL EMPLOYEES AND RESTAURANT
EMPLOYEES UNION, LOCAL 11, AFL–CIO
Nicole Pereira, Esq.,
for the Acting General Counsel.
Leon Jenkins, Vice President,
of the Smokehouse Restaurant,
Burbank, California, for the Respondent.
Ellen Greenstone, Esq. (Rothner, Segall &
Greenstone), of Los Angeles, California,
for the Charging Party.
Kirill Penteshin, Esq., Unite Here, Local 11,
of Los Angeles, California, for the Charging Party.
Henry M. Willis, Esq. (Schwartz, Steinsapir,
Dohrmann & Sommers) of Los Angeles, California,
On Behalf of Unite Here Trusts.
SUPPLEMENTAL DECISION
JOHN J. MCCARRICK, Administrative Law Judge. On May 31, 2006, the Board issued its
Decision and Order1 finding that Smokehouse Restaurant (Respondent) committed unfair labor
practices including unlawfully failing to apply the terms of the collective-bargaining agreement
between its predecessor, JLL Restaurant, Inc. (Predecessor) and Hotel Employees and Restaurant
Employees Union, Local 112 (Union) and unilaterally changing terms and conditions of
employment. The Board directed, inter alia, that Respondent retroactively restore the terms and

1 Smoke House Restaurant, 347 NLRB 192 (2006).
2 Now known as Unite Here! Local 11.
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conditions of employment of the employees in the unit as established by the collective-
bargaining agreement between Respondent and the Union, and make whole unit employees for
losses resulting from Respondent’s unlawful unilateral changes made thereto, contributions and
reimbursements to be computed as prescribed in Ogle Protection Service, 183 NLRB 682
(1970), with interest to be computed as prescribed in New Horizons for the Retarded, Inc., 283
NLRB 1173 (1987). Thereafter on May 12, 2009, the United States Court of Appeals for the
Ninth Circuit issued its Memorandum and Judgment3 enforcing the Board’s Decision and Order.
This case was tried in Los Angeles, California, on September 25 and 26, 2012, upon the
second amended compliance specification and notice of hearing, as amended (specification)
issued on June 29, 2012, by the Regional Director for Region 31.4 The specification alleges that
Respondent owes contributions to the Los Angeles Hotel-Restaurant Employer-Union Welfare
Fund (Trust Fund) pursuant to the terms of the collective-bargaining agreement between
Respondent and the Union for the period set forth in appendix A to the specification. It is further
alleged that Respondent owes medical expenses and insurance premiums to bargaining unit
employees as set forth in appendix B to the specification.
On July 18, 2012, Respondent filed its answer to the compliance specification and in a
rambling and obtuse manner denied that it owed bargaining unit employees reimbursement for
medical expenses or insurance premiums or owed trust fund contributions to the Trust Fund.
Since the Court’s judgment enforcing the Board’s Order, Respondent has failed to
comply with the Board’s Order to reinstate the terms and conditions of employment as set forth
in the collective-bargaining agreement.
The issues here for resolution are the amounts Respondent owes to the Trust Funds and
the amounts owed to bargaining unit employees for medical expenses and health insurance
premiums.
All parties have been afforded full opportunity to appear, to introduce relevant evidence,
to examine and cross-examine witnesses, and to file briefs. Upon the entire record, from my
observation of the demeanor of the witnesses, and having considered the post hearing briefs of
the parties, I make the following:

3 Ninth Circuit No. 07-74755, Unpublished Memorandum filed May 12, 2009.
4 At the trial on September 25, 2012, counsel for the Acting General Counsel moved to amend the compliance
specification by adding updated appendices A and B, reflecting revisions to the backpay contribution and backpay
calculations found in the second amended compliance specification. The amendment was granted. Also on
November 19, 2012, counsel for the Acting General Counsel filed a Motion to Amend Appendix B of the second
amended compliance specification. Amended Appendix B does not change any of the data or the grand totals stated
in AGC Exh. 12, it only provides subtotals for each of the affected employees. There being no opposition, the
Motion is granted.
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FINDINGS AND CONCLUSIONS
A. Facts
1. The trust fund benefits
In its May 31, 2006 Decision and Order in Smoke House Restaurant, supra at 205, the
Board affirmed the administrative law judge’s April 6, 2004 Decision finding that Respondent
was obligated to adopt the terms of its predecessor, JLL’s collective-bargaining agreement as a
consequence of Respondent’s unlawful conduct in telling JLL employees that it would operate
the restaurant without a union. Respondent was required to follow the terms and conditions of
employment established by JLL’s contract with the Union until a new agreement or impasse was
reached. The administrative law judge found:
As a consequence of Respondent’s unlawful conduct in telling JLL employees it would
operate the Restaurant without a union, Respondent lost the privilege of setting initial
terms and conditions of its employees when it assumed control of the Restaurant on
April 30. Instead, Respondent was required to follow the terms and conditions of
employment established by JLL’s contract with the Union until such time as Respondent
negotiated a new contract with the Union or negotiated to impasse.
In Smokehouse, supra at 209, the Board affirmed the administrative law judge, who
required Respondent to make whole employees for losses resulting from its unilateral changes:
(b) On request of the Union, retroactively restore the terms and conditions of
employment of the employees in the unit as established by the collective-bargaining
agreement between JLL and the Union and make employees whole for any losses they
incurred as a result of unilateral changes made thereto.
The term of the collective-bargaining agreement between JLL and the Union was
September 15, 1996, to September 14, 2001, with a clause providing for automatic renewal.
There is no evidence that either party gave notice to terminate the collective-bargaining
agreement. The agreement provided that Respondent was obligated to make health and welfare
contributions to the health and welfare funds.5 It is undisputed that since at least May 1, 2003
until the present, Respondent has made no contributions to the Trust Funds.6
It is undisputed that on December 1, 2003, Respondent implemented their own health
care coverage requiring premium deductions from employee paychecks.7
The parties stipulated that the calendar quarters set forth in appendix A, column 1, of the
second amended compliance specification represent the relevant calendar quarters during the

5 Jt. Exh 1, attachment 8 at pp. 8–10.
6 On April 1, 2012, the Trust Fund merged into UNITE HERE HEALTH.
7 Jt. Exh. 1, attachment 4.
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liability period of May 1, 2003, through August 31, 2012.8 May 1, 2003 is the date the Board
found the unilateral changes took place.
The parties stipulated that the figures set forth in appendix A, column 2, of the second
amended compliance specification accurately represent the hours worked by unit employees for
each calendar quarter based on Respondent’s payroll documents.
However, Respondent does not stipulate to the hours worked by employee Lynne Pearson
(Pearson) on grounds that she was not an employee of Respondent during the relevant time
period. Respondent presented no probative evidence to support this contention. Rather, the
record reflects that Pearson, who worked for Respondent as a server, is listed on Respondent’s
payroll documents, and was paid for hours worked, during May 1, 2003, through January 2007,
with the exception of the pay periods during the third quarter of 2005, the fourth quarter of 2005,
and the first quarter of 2006.9
Board Agent Danielle Pierce (Pierce), who is responsible for all of the compliance cases
in Region 31, testified concerning the methodology she used in formulating and calculating the
backpay liability owed to the Trust Fund. Pierce used May 1, 2003, for the backpay period to
commence since the Board concluded that was when Respondent ceased making payments to the
Trust. She made calculations for the calendar quarters through August 2012 based on payroll
data supplied by Respondent, and determined that liability continues to accrue since Respondent
has failed to date to reinstate the contractually required trust fund contributions. Pierce included
the number of regular, overtime, and other hours worked by all bargaining unit employees that
appear within Respondent’s payroll documents, in each pay period, and added all those values
for each pay period within each quarter. Pierce used the hourly rate per bargaining unit
employee at which Respondent was obligated to make contributions as provided for in the JLL-
Union collective-bargaining agreement, $1.43, for the entire backpay period. Pierce multiplied
the hours worked, column 2 of appendix A, times rate, column 3 of appendix A to arrive at the
gross total for each calendar quarter. The Board agent added all the gross totals, of each calendar
quarter, to arrive at the total contributions, $1,250,118.36, owed to the Trust Fund.
2. The reimbursement of employees’ health premiums
a. Health premiums
The parties stipulated that the employees listed in appendix B, column I of the
compliance specification represent Respondent’s bargaining unit employees who were employed
by the Respondent for part or all of the period from December 1, 2003, through at least August
2012, and who paid health insurance premiums.10 The parties further stipulated that the calendar
quarters listed in appendix B, column 2 of the second amended compliance specification
represent the relevant calendar quarters where employees paid health insurance premiums.11 The

8 Jt. Exh. 1.
9 Id., attachment 4.
10 Jt. Exh. 1.
11 Id.
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backpay period begins on December 1, 2003, and runs through the end of August 2012.12 Pierce
testified that the only gaps in appendix B, column 2, occur where there were no premium
deductions being made from the employee’s pay during a given quarter. The parties stipulated
that the figures set forth in appendix B, column 3, of the second amended compliance
specification accurately represent the premium expenses paid by employees by payroll deduction
for each calendar quarter of the contribution period based on Respondent’s payroll documents.13
In appendix B, column 3, Pierce included payments deducted from each employee’s
paycheck for health insurance premiums during the relevant calendar quarter. These calculations
were based upon Respondent’s payroll documents from December 1, 2003, until July 2011.
After July 2011, the Board agent used the Trust Fund’s summary plan document and its
attachments as well as the Respondent’s payroll documents to determine the premium expenses
listed in column 3. For all premium expenses after July 1, 2011, the Board Agent relied on an
attachment to the Trust Fund summary plan description which reflected required employee
premium contribution amounts and resulted in a monthly deduction to the premium costs.
The computed amount of backpay owed to the listed employees for reimbursement of
health insurance premiums is $213,610.74.
b. Out-of-pocket medical expenses
Employee Lynne Pearson
Only Respondent’s employee Pearson reported medical expenses. Pierce included all
reimbursable medical expenses to her in appendix B, column 4 of the second amended
compliance specification.14 At the hearing, the parties stipulated that Pierce’s calculations were
accurate based on the underlying documents.
Pierce was unable to determine the specific health care plan that Pearson had selected
prior to the Respondent’s unilateral change in health care plans on December 1, 2003. However,
under the Trust Fund plan, there were four medical plans offering different levels of coverage
prior to and at the time of the Respondent’s unilateral change.15 Accordingly, Pierce selected the
Kaiser plan B as the most representative plan as it offered the highest level of coverage to the
employees. Under Kaiser plan B, employees were(?) had prescription drug coverage with a $10
prescription copay, payable by the employee.
Also under the Kaiser plan B option, dependents were covered at no cost to the
employee. Pierce made this determination based on the language in the Trust Fund summary
plan description16 which does not require payment for dependents. Under the summary plan
description dependents are defined as lawful spouses and unmarried children 19 years old or

12 GC Exh. 12.
13 Jt. Exh 1.
14 GC Exh.12.
15 Jt. Exh. 1, attachment 7(a).
16 Id.
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younger. Additionally, children over the age of 19 are covered under the Trust Fund plan if they
are a disabled dependent.
Pierce determined that Pearson’s backpay period ran from March 1, 2003, through
January 2007, during the time she was employed by the Respondent and receiving paychecks
according to Respondent’s payroll documents.17
Pearson testified without contradiction, and I credit her testimony, that she paid for
prescription drugs for herself. These expenses are set forth in a summary of her expenses she
obtained from both CVS and COSTCO pharmacies.18
Pearson’s Dependent Daughter19
During the backpay period, Pearson also paid for prescription drugs for her daughter.
Pearson testified without contradiction, and I credit her testimony, that her daughter was born in
1986, and has been diagnosed by her physicians with epilepsy, fibromyalgia, pain, muscle
spasms, an overactive bladder, and allergies. In addition in about 2006, Pearson’s daughter was
found disabled based upon both epilepsy and fibromyalgia by the Social Security Administration
and receives disability benefits.
Pierce determined that prior to May 1, 2003, Pearson’s daughter was covered by two
health insurance plans, Blue Cross Blue Shield and the Trust Fund plan. It was concluded that
this concurrent insurance provided that any medical expenses incurred would first be covered by
the primary insurance under the particular terms of that policy including deductibles and copays.
The amount left over, rather than just being the patient’s responsibility to pay, is covered by the
secondary insurance policy.
Typically a dependent child would no longer be eligible for coverage over the age of 19
under the Trust Fund plan. However, according to the Trust Fund summary plan document, if a
child is disabled the plan is not age limited. In view of her impairments and the Social Security
Administration’s finding of disability in 2006, Pierce reasonably made her calculations assuming
that Pearson’s daughter was disabled.
Pearson testified without contradiction that her daughter took prescription medications
during the relevant backpay period. In addition, the Blue Cross Blue Shield explanations of
benefits treatment records20 for her daughter reflect that Pearson paid for numerous medical
expenses for her daughter during the liability period. These included medical expenses where
Pearson paid the deductible and copayment amounts. Similarly, Pearson paid the copayment
amounts listed on CVS Pharmacy summary of prescription documents,21 on behalf of her

17 Jt. Exh. 1, attachment 4.
18 GC Exhs. 5 and 7.
19 Because of HIPPA medical information privacy concerns, Pearson’s daughter’s name was redacted from the
exhibits received. However, I reviewed, in camera, unredacted copies of the daughter’s medical records to verify
that they were hers.
20 GC Exh. 6.
21 Id.
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daughter, during the liability period. She also paid the copayment amounts listed on a Costco
pharmacy statement,22 on behalf of her daughter, during the liability period.
The medical expenses calculated for both Pearson and her daughter amount to $9,590.59,
plus interest.
Pierce added the premium expenses, column 3,23 amended appendix B, to the medical
expenses, column 3, amended appendix B, to arrive at the premium & medical expenses owed to
each employee for each calendar quarter. Pierce then added all the premium & medical
expenses, to arrive at the grand total, $223,201.33, owed to bargaining unit employees.
B. Analysis
1. The legal framework
It has been well established where an unfair labor practice has been found, backpay is
presumptively owed by the offending employer in a backpay proceeding. La Favorita, Inc., 313
NLRB 902, 902 (1994), enfd. 48 F.3d 1232 (10th Cir. 1995), citing NLRB v. Maestro Plastics
Corp., 354 F.2d 170, 178 (2d Cir. 1965), cert. denied 384 U.S. 972 (1966).
It is the purpose of the compliance proceedings to restore the status quo ante by restoring
the circumstances that would have existed had there been no unfair labor practices. Hubert
Distributors, Inc., 344 NLRB 339, 341 (2005); Alaska Pulp Corp., 326 NLRB 522, 523 (1998),
citing Phelps-Dodge Corp. v. NLRB, 313 U.S. 177, 194 (1941).
The General Counsel’s burden in a compliance proceeding is to demonstrate the gross
amount of backpay due. In demonstrating gross amounts owed the General Counsel need not
show an exact amount, rather an approximate amount is sufficient. Laborers Local 158 (Worthy
Bros.), 301 NLRB 35, 36 (1991). The General Counsel’s burden of proof is met by employing a
formula designed to produce a reasonable approximation of what is owed. Reliable Electric Co.,
330 NLRB 714, 723 (2000).
While the Act provides the Board broad authority to fashion a make-whole remedy, this
authority does not extend to the imposition of punitive measures. Republic Steel Corp. v. NLRB,
311 U.S. 7, 12 (1940); Aneco, Inc. v. NLRB, 285 F.3d 326, 329 (4th Cir. 2002). Each backpay
remedy must be sufficiently tailored to expunge only the actual, and not merely speculative,
consequences of the unfair labor practices. Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 902–904
(1984).
a. Trust fund payments
The Board has long held that when a respondent unlawfully ceases making required
contributions to benefit funds on behalf of employees, the appropriate remedy is to require that
the fund be made whole for the missed payments. Triple A Fire Protection, Inc., 357 NLRB No.

22 Id.
23GC Exh. 12.
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68, slip op. at 3 (2011). A Respondent must make the trust funds whole on behalf of employees
possessing a nonspeculative future economic interest in those funds. Stone Boat Yard, 264
NLRB 981, 983 (1982), enfd. 715 F.2d 441 (9th Cir. 1983), cert. denied 466 U.S. 937 (1984).
Where employees hold a nonspeculative interest in a pension or health fund, ordering
Respondent to reimburse that fund is remedial because such contributions “insure the fund’s
financial viability necessary to satisfy employees’ future needs.” Sedgwick Realty LLC and R &
S Management A/K/A Arandess Mgt. Co., 337 NLRB 245, 247 (2001). The Board does not
require employees to be certain to benefit from a trust fund before ordering contributions to that
fund on their behalf. Kenmore Contracting Co., 303 NLRB 1, 2 (1991). In Kenmore
Contracting Co., the Board stated, “The Board’s established premise that such employees may
have a future interest in the funds is sufficient linkage to warrant that the trust fund contributions
be paid.” Id.
In Kraft Plumbing & Heating, Inc., 252 NLRB 891, 891 fn. 2 (1980), enfd. 661 F.2d 940
(9th Cir. 1981), the Board set forth the remedy for a Respondent’s unilateral discontinuance of
contributions to benefit funds provided for in a collective-bargaining agreement and for
reimbursement to employees for third party premiums paid to continue medical coverage:
[M]ake whole the employees in the appropriate unit by transmitting the contributions
owed to the Union’s health and welfare, pension, industry and apprenticeship funds
pursuant to the terms of its collective bargaining agreement with the Union, and by
reimbursing unit employees for any medical, dental or any other expenses ensuing from
Respondent’s unlawful failure to make such required contributions. This shall include
reimbursing employees for any contributions they themselves may have made for the
maintenance of the Union’s health and welfare, pension, industry and apprenticeship
funds after Respondent unlawfully discontinued contributions to those funds; for any
premiums they may have paid to third-party insurance companies to continue medical
and dental coverage in the absence of Respondent’s required contributions to such funds.
b. Medical expenses
The Board has held that employees should be made whole for expenses they incurred due
to the loss of medical insurance due to a respondent’s unlawful action. Reimbursement includes
costs employees paid for medical services that would have been reimbursed under terms of
respondent’s medical insurance plan. Goya Foods of Florida, 356 NLRB No. 184, slip op. at 4
(2011).
Additionally, respondents must reimburse employees for premiums paid to maintain
comparable health insurance, to the extent the premiums exceeded those paid when employed
prior to the unlawful conduct. See RMC Constructors, 266 NLRB 1064, 1066 (1982).
In Kraft Plumbing & Heating, Inc., supra, the Board also held that employees were
entitled to reimbursement for, “any medical or dental bills they have paid directly to health care
providers that the contractual policies would have covered. All payments to employees shall be
made with interest.”
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2. Respondent’s defenses
Respondent raised numerous defenses to its backpay liability, none of which have merit.
a. Ninth Circuit law is binding in this proceeding
Respondent contends that this proceeding is bound by the unpublished Memorandum
Decision24 of the Ninth Circuit Court of Appeals in the enforcement action in Smokehouse
Restaurant, supra.
In its Memorandum Decision at page four, the Court noted:
We lack jurisdiction to review Smoke House’s challenges to certain remedies ordered by
the Board. See NLRB v. Sambo’s Restaurant, Inc., 641 F.2d 794, 795–796 (9th Cir.
1981) (applying jurisdictional bar to issues or remedies). As the government points out,
however, we note that following the Board’s decision in this case, it has established a
compliance proceeding action to determine the ultimate amount of Smoke House’s
financial liability under the “make whole” order, and to align “make whole” orders with
Ninth Circuit Law. See Planned Building Services, Inc., 347 NLRB [670, 710] fn. 23
[(2006)] (citing Advanced Stretchforming, 233 F.3d 1176, 1181–1183 (2000); Kallmann
v. NLRB, 640 F.2d 1094, 1102–1103 (9th Cir. 1981). In that proceeding, Smoke House
may present its arguments regarding whether the expired collective bargaining
agreement’s provisions regarding medical benefits had already been changed by JLL,
whether Smoke House would have agreed to the terms of the previous collective
bargaining agreement, and when it would have reached an agreement on new terms with
the union or reached a bargaining impasse.
Notwithstanding the footnote by the Ninth Circuit panel noting that its Memorandum
Decision was of no precedential value, the Court was without jurisdiction in the enforcement
proceeding to consider issues of remedy. Accordingly, the Court’s pronouncement that
Respondent could present evidence concerning the predecessor collective bargaining agreement
as well as the standard for formulating an appropriate remedy in the compliance proceeding were
dicta and not binding in this proceeding.
Moreover, an administrative law judge is required to follow established Board precedent
which neither the Board nor the Supreme Court has reversed, notwithstanding contrary decisions
by courts of appeals. Waco, Inc., 273 NLRB 746, 749 fn. 14 (1984); Los Angeles New Hospital,
244 NLRB 960, 962 fn. 4 (1979), enfd. 640 F.2d 1017 (9th Cir. 1981).
b. The Board’s Decision and Order does not require Respondent
to make the trusts whole
In Respondent’s answer to the second amended compliance specification as well as in its
brief, it contends that the Board’s Order does not require Respondent to pay back premiums to

24 GC Exh. 1(c).
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the Trust Fund. While the Board Order does not explicitly require the Respondent to make the
Trust Funds whole, the Board’s Order implicitly contains such a requirement. As the Board
found in Triple A Fire Protection, Inc., 357 NLRB No. 68, slip op. at 3 (2011), when a
respondent unlawfully ceases making required payments to benefit funds on behalf of
employees, the appropriate remedy is to require that the fund be made whole for the missed
payments.
Here the Board found respondent violated the Act when it failed to apply the
predecessor’s collective-bargaining agreement to bargaining unit employees. The Board
specifically ordered Respondent to make whole employees for losses resulting from its unilateral
changes:
(b) On request of the Union, retroactively restore the terms and conditions of
employment of the employees in the unit as established by the collective-bargaining
agreement between JLL and the Union and make employees whole for any losses they
incurred as a result of unilateral changes made thereto.
The employee losses included lost medical benefits due to Respondent’s failure to make trust
fund payments. In order to restore the status quo, Respondent must make trust fund payments in
order to restore employee benefits under the trusts.
c. Unit employees do not possess a nonspeculative interest in the trust
Respondent contends that the General Counsel has failed to establish that Respondent’s
employees possess a nonspeculative future economic interest in the trust funds.
A Respondent must make the trust funds whole on behalf of employees possessing a non-
speculative future economic interest in those funds. Stone Boat Yard, 264 NLRB 981, 983
(1982), enfd. 715 F.2d 441 (9th Cir. 1983), cert. denied 466 U.S. 937 (1984). Where employees
hold a nonspeculative interest in a pension or health fund, ordering Respondent to reimburse that
fund is remedial because such contributions “insure the fund’s financial viability necessary to
satisfy employees’ future needs.” Sedgwick Realty LLC and R & S Management A/K/A
Arandess Mgt. Co., 337 NLRB 245, 247 (2001). The Board does not require employees to be
certain to benefit from a trust fund before ordering contributions to that fund on their behalf.
Kenmore Contracting Co., 303 NLRB 1, 2 (1991). In Kenmore Contracting Co., the Board
stated, “The Board’s established premise that such employees may have a future interest in the
funds is sufficient linkage to warrant that the trust fund contributions be paid.” Id.
Here Respondent’s own payroll records25 together with the terms and conditions of
employment in its predecessor’s collective-bargaining agreement26 with the Union and the trust
health plan summary27 establish that Respondent’s employees were entitled to health care
coverage under the trust.

25 Jt. Exh. 1, attachment 4.
26 Id. at attachment 8.
27 Id. at attachment 7.
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Respondent’s reliance on Centra, Inc., 314 NLRB 814, 818–820 (1994), and
Lawrenceville Ready-Mix Co., 305 NLRB 1010 (1991), for the proposition that its employees do
not possess a nonspeculative interest in the trust fund is misplaced. Centra, supra at 819, found
that present employees in the bargaining unit, who through a collective-bargaining agreement
were covered by the extant health plans, had a nonspeculative interest in the vitality of the health
trust. Manhattan Eye, Ear & Throat Hospital, 300 NLRB 201 (1990), is also distinguishable
since the employees in that bargaining unit were no longer represented by the union and had
disclaimed interest in the trust funds. Similarly, Lawrenceville Ready-Mix Co., 305 NLRB 1010
(1991), is not persuasive. In that case, the entire purpose of the Board’s remand was to inquire
whether the employer concluded an agreement effective on or before the date it discontinued
payment into the union-negotiated health and welfare plan. Such proof, if any, would limit the
employer’s obligation to benefits paid out by the fund before execution of the alleged agreement.
Likewise Sedgwick Realty LLC and R & S Management A/K/A Arandess Mgt. Co., supra, is of no
avail to Respondent since, unlike here, the Board found the employees in Sedgwick were not
covered by the health care plan and thus had no nonspeculative interest.
I find that Respondent’s employees possess a nonspeculative interest in the trust fund.
d. Failure to calculate accurately employee premium and medical expenses
Respondent’s argument in its brief is not clear. I cannot determine if Respondent is
contending that the calculations for premium expenses employees paid for the Respondent’s
unilaterally imposed health care plan and out-of-pocket medical expenses are inaccurate or if
Respondent is referring to the contribution amounts it was required to pay to the trust. If
Respondent is referring to the premium payments employees were required to make for the
Respondent’s unilaterally imposed health care plan, those amounts were stipulated to in Joint
Exhibit 1, paragraph 17. If Respondent is referring to trust fund contributions it is irrelevant
what health care plan employees may have chosen. Again Respondent stipulated to the hours
worked by unit employees during the relevant backpay period. The collective-bargaining
agreement between JLL and the Union establishes the amount per hour Respondent was required
to contribute, $1.43. Moreover, only one employee, Lynne Pearson claimed out-of-pocket
medical expenses, as discussed below. Respondent is apparently of the impression that the
General Counsel must establish that the trusts actually made payments of medical expenses for
employees during the backpay period or somehow establish that Respondent’s unilaterally
imposed medical plan would have offset employee costs. This is ludicrous. Since no trust
contributions were made by Respondent, its employees were not enrolled in any trust fund
covered plans after May 1, 2003.
Respondent stipulated that appendix B, column 3, of the second amended compliance
specification accurately represent the premium expenses paid by employees for each calendar
quarter of the backpay period. Moreover there was no evidence adduced by Respondent that any
health care premiums paid by unit employees did not occur until after December 1, 2008. Before
May 1, 2003, employees made no payments for health care premiums. The Trust Fund summary
[lan description does not mention any employee contributions only employer payments.
Respondent’s argument that the General Counsel failed to accurately calculate employer
hourly contributions to the trusts, or employee premiums and medical expenses fails. I find that
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back pay is owed to the listed employees for monthly premiums paid are in the amount of
$213,610.74.
e. Respondent’s predecessor JLL and the Union reached impasse or changed the terms
of the predecessor’s collective-bargaining agreement prior to May 1, 2003
Based upon the Ninth Circuit’s Memorandum Decision, Respondent contends that it may
raise as an affirmative defense that the expired collective-bargaining agreement provisions
regarding health care benefits had already been changed by its predecessor JLL in 2002.
Notwithstanding my finding that the Ninth Circuit’s Memorandum Decision, insofar as it
addressed compliance issues, is dicta and therefore not binding, issues litigated and decided in an
unfair labor practice proceeding may not be re-litigated in the ensuing backpay proceeding.
Paolicelli, 335 NLRB 881, 883 (2001). In Smoke House Restaurant, 347 NLRB 192 (2006), the
Board found that in 2003 the Respondent unlawfully failed to apply the terms of the collective-
bargaining agreement between JLL and the Union and unilaterally changed terms and conditions
of employment. Since the Board has already determined that the collective-bargaining
agreement remained in effect as to Respondent, Respondent’s assertion that JLL changed the
collective-bargaining provisions regarding health care or that JLL and the Union reached
impasse prior to May 1, 2003, cannot be re-litigated in this proceeding.
f. An impasse existed between Respondent and the Union after May 1, 2003
Respondent takes the position that Respondent would not have agreed to the economic
terms of the previous collective-bargaining agreement and that it reached impasse with the
Union, citing Planned Building Services, 347 NLRB 670, 676 (2006).
In Planned Building Services, the Board reviewed what the appropriate make-whole
remedy was when a successor employer discriminatorily denied employment to its predecessor’s
employees and violated its duty to bargain by unilaterally setting initial terms and conditions of
employment. In Planned Building Services, the Board modified its traditional make-whole
remedy. The Board, supra at 676, stated its new formula in successorship cases:
Accordingly, we will issue an order consistent with our traditional remedy in cases like
this one. But we will then permit the Respondent, in a compliance proceeding, to present
evidence establishing that it would not have agreed to the monetary provisions of the
predecessor employer’s collective-bargaining agreement, and further establishing either
the date on which it would have bargained to agreement and the terms of the agreement
that would have been negotiated, or the date on which it would have bargained to good-
faith impasse and implemented its own monetary proposals. (Fn. omitted.)
Of course application of this formula presumes that the parties are engaged in good-faith
bargaining. The trier of fact is to speculate if and when impasse would have been reached, or
when a respondent would not have agreed to the economic terms of a predecessor’s collective-
bargaining agreement. The burden is on the Respondent to establish the elements set forth in
Planned Building Services.
However, where there are unremedied unfair labor practices, the Board has held that
there can be no impasse. In Titan Tire Corp., 333 NLRB 1156, 1159 (2001), the Board
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concluded that unremedied unfair labor practices, including refusal to furnish information during
bargaining, precluded a finding that the parties had reached impasse. Thus the Respondent
violated Section 8(a)(5) and (1) by unilaterally implementing its final offer.
In the instant case Respondent has failed and refused for over 6 years to comply with the
Board’s Order that it remedy its unfair labor practices, including restoring the terms and
conditions of employment established in its predecessor’s collective-bargaining agreement with
the Union. Rather, the record reflects that it has engaged in a game of delay. Respondent has
refused to reimburse the trust funds for over 9 years of contributions but has attempted to
condition further bargaining upon the Union compromising the amount of contributions ordered
by the Board.28 Respondent’s refusal to date to remedy the unfair labor practices found by the
Board, particularly reinstating the terms and conditions of employment established under its
predecessor’s collective-bargaining agreement with the Union, goes to the heart of good-faith
bargaining and precludes a finding that Respondent and the Union could have ever reached a
good faith impasse.
However, I allowed Respondent to adduce evidence subsequent to May 1, 2003,29 in
order to meet the requirements in Planned Building Services that it would not have agreed to the
monetary provisions of the predecessor employer’s collective-bargaining agreement or the date
on which it would have bargained to good-faith impasse and implemented its own monetary
proposals.
Respondent’s arguments to the contrary, I find no probative evidence that the parties
reached impasse, entered into a collective-bargaining agreement or that Respondent established it
would not have agreed to the economic terms of the predecessor collective-bargaining
agreement.
The record reflects that between May 1, 2003 and 2007, there were several meetings
between Respondent and union representatives.
At a meeting on May 1, 2003, health care issues were discussed. Respondent’s Chief
Financial Officer Leland Spencer (Spencer) stated that Respondent could not tell the Union what
their position on health care coverage would be until Respondent determined their financial
status in the next 3 to 6 months.
At another meeting in June 2003, the Union requested that Respondent resume making
contributions for health insurance and to negotiate a new contract. Spencer told the Union that
the Respondent could not make such a decision until they knew what the restaurant’s financial
future was going to be. In addition Spencer told the Union that Respondent would not make trust
contributions for health insurance until its financial status was clear.

28 See R. Exhs. T, X, Y, Z, HH, BB-1, CC, EE, FF, GG.
29 While I initially ruled that no evidence of impasse prior to January 2004, the date of the trial before Judge
Parke, would be received (Tr. p. 34, LL. 11–18 and p. 35, LL. 4–8), I later allowed Respondent to offer evidence of
negotiations between it and the Union after May 1, 2003 (Tr. p. 209, LL. 13–19).
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At a meeting in May 2004, Respondent claims they presented the Union with a new
contract proposal. However, no contract was offered into the record.
There is no evidence of any negotiations between the parties from 2004 to 2006. Spencer
claims there was a meeting at an unknown time in 2007. Respondent admitted that no agreement
was ever reached with the Union. This evidence is insufficient to meet Respondent’s burden
under Planned Building Services to establish that an impasse was or would have been reached.
There was considerable correspondence between the Union and Respondent during the
period May 2003 to 2010. See Joint Exhibits 1 and 2 and Respondent’s Exhibits L, R-HH. Most
of the correspondence deals with demands for reinstatement of the terms and conditions of
employment contained in the JLL collective-bargaining agreement and whether there could be
good-faith bargaining until Respondent had fully remedied its unfair labor practices as found by
the Board and Court. There is no dispute that Respondent failed to reinstate health care
contributions to the trust fund. There is no evidence of any meaningful or good-faith bargaining
in the correspondence.
While Respondent contends that they tendered premium payments to the Trust Fund for
coverage of unit employees on July 9, 2007, these premiums were rejected by the Union and the
Trust Fund. The amount tendered did not represent anything approaching the full amount owed
to the Trust Fund for the period May 1, 2003, to July 9. 2007, but represented only 5 months of
contributions. Spencer admitted that the trust fund did not cash checks the Respondent tendered
and coverage was never reinstated to the employees and employees could not individually apply
for benefits under Trust Fund rules and regulations.
Respondent has presented insufficient evidence to meet its burden under Planned
Building Services to demonstrate that it would not have agreed to the monetary provisions of the
predecessor employer’s collective-bargaining agreement. Spencer’s testimony that he could not
tell the Union what their position on health care coverage would be until Respondent determined
their financial status in the next 3 to 6 months nor telling the Union that the Respondent could
not make a decision on reinstating health care coverage until they knew what the restaurant’s
financial future was going to be is too uncertain for me to conclude that Respondent would not
have accepted the economic terms of the collective-bargaining agreement. There is no other
evidence concerning Respondent’s financial condition. I refused to receive into evidence a 2009
profit and loss statement30 of Respondent. There is no evidence that there was any ongoing
bargaining between the Union and Respondent in 2009. Further there is no evidence that
Respondent claimed they were unable to meet any of the Union’s economic demands due to
economic circumstances. Finally the Respondent’s isolated 2009 profit and loss statement,
standing alone, does not establish that Respondent would not have met the economic terms of its
predecessor’s collective bargaining during the period 2003 to the present. There is no evidence
in this record that Respondent at any time told the Union that its financial position precluded it
from meeting the Union’s economic terms.

30 R Exh. MM.
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Furthermore, as noted above, Respondent presented insufficient evidence to establish
when it would have bargained to good-faith impasse and implemented its own monetary
proposals. There is simply no evidence of good-faith bargaining in this case. Likewise,
Respondent presented insufficient evidence to establish that after May 1, 2003, it and the Union
reached an impasse in negotiations on any subject so that it was free to enact its last best offer.
Taft Broadcasting Co., 163 NLRB 475, 478 (1967).
g. It would be punitive to have a make-whole remedy beyond the expiration
of the collective-bargaining agreement
Respondent cites Ninth Circuit cases for the proposition that there can be no make-whole
remedy beyond the term of a collective-bargaining agreement. NLRB v. Advanced
Stretchforming International, Inc., 233 F.3d 1176, 1182 (9th Cir. 2000); Rayner v. NLRB, 665
F.2d 970, 976 (9th Cir. 1982); Kallmann v. NLRB, 640 F.2d 1094 (9th Cir. 1981); NLRB v. Dent,
534 F.2d 844 (9th Cir. 1976).
The Board’s traditional remedy in cases where a successor, because it has committed
unfair labor practices, is not allowed to set initial terms and conditions of employment is to order
restoration of those terms and conditions of employment until a new agreement or impasse has
been reached. State Distributing Co., 282 NLRB 1048, 1048 (1987). In Planned Building
Services, 347 NLRB 670, 676 (2006), the Board modified this remedy, acknowledging that some
courts of appeals, including the Ninth Circuit in the Kallman line of cases have rejected this
remedy as punitive. Thus the Board established a new test for remedies in these cases providing
that respondents may offer evidence to establish, inter alia, when and if a collective-bargaining
agreement or impasse would have been reached.
As noted above, an administrative law judge is required to follow established Board
precedent which neither the Board nor the Supreme Court has reversed, notwithstanding contrary
decisions by courts of appeals. Waco, Inc., 273 NLRB 746, 749 fn. 14 (1984); Los Angeles New
Hospital, 244 NLRB 960, 962 fn. 4 (1979), enfd. 640 F.2d 1017 (9th Cir. 1981).
Since Planned Building Services has not been reversed by the Supreme Court, I am
bound to follow it even though it may be inconsistent with Ninth Circuit law. Therefore,
Respondent’s argument must fail.
h. GC and Union impeded negotiations
Respondent contends that the General Counsel and the Union impeded negotiations and
caused an impasse by contending that there could be no bargaining until Respondent made the
trust fund whole pursuant to the Board’s Order herein.
Respondent’s argument is wholly lacking in merit. It is irrelevant what position the
Union took with respect to compliance. This proceeding does not contemplate the merits of an
unfair labor practice. I have already found that no impasse could have taken place in this case
where Respondent had unremedied unfair labor practices outstanding. Moreover, alleged
misconduct of a charging party is not a defense in an unfair labor practice proceeding.
Greyhound Lines, 319 NLRB 554, 555–557 (1995). Further, there is absolutely no evidence of
any misconduct on the part of the General Counsel, only an insistence that Respondent fully
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remedy unfair labor practices found by both the Board and the Court. Respondent’s own
recalcitrance to abide by the law is the sole cause of trust payments having continued to accrue
for over 9 years.
i. Pearson is not an employee
As noted above, the evidence establishes that Pearson held the position of server at
Respondent’s restaurant both before and during the relevant backpay period. Respondent
provided no probative evidence that Pearson was not its employee. Respondent’s own payroll
records show that she was receiving paychecks from the Respondent from May 1, 2003, through
January 2007, with the exception of the third and fourth quarter of 2005, and first quarter of
2006. Respondent’s argument is without merit.
j. Pearson’s expenses
Respondent contends that the General Counsel failed to establish the out-of-pocket
medical expenses of Pearson. Respondent’s argument that Pearson failed to provide evidence
that an alleged Workers Compensation settlement or an alleged private mold lawsuit
compensated her for her out-of-pocket medical expenses turns the law on its head. First, there is
no evidence of any award in any Worker’s Comp claim for prescription drugs nor, despite
Respondent’s misrepresentation of the record, is there any evidence of a settlement of a private
mold lawsuit providing for prescription drug payments to Pearson or members of her family. It
was Respondent’s burden to establish an offset against Pearson’s claimed out-of-pocket medical
expenses, and Respondent has failed to satisfy that burden.
Contrary to Respondent’s contention, Pearson did provide evidence of her out-of-pocket
medical expenses. While Pearson no longer has original receipts for prescriptions or medical
treatment, she had probative written summaries from both her pharmacies where she purchased
prescription drugs and from her health care provider for treatment. Respondent’s argument that
these documents do not comport with Federal Rules of Evidence are misplaced. First the records
appear to be documents kept by both the pharmacies and health care provider in the regular
course of business. Pearson testified credibly that she herself obtained these records from her
pharmacies and medical provider. Moreover, after 9 years Respondent should not be able to
profit from the absence of Pearson’s original bills and preclude Pearson’s recovery of out-of-
pocket medical costs caused by Respondent’s wrongdoing.
Finally, Respondent fails to understand that it just makes no difference what trust health
plan Pearson was covered by before Respondent ceased making trust contributions. The General
Counsel does not have to show that if Respondent’s employees were still covered by one of the
trust health plans they would have had more or less out-of-pocket expenses. Respondent’s
employees as a result of Respondent’s unfair labor practices were without trust coverage.
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k. Respondent’s inability to pay
In Respondent’s answer to the second amended compliance specification31 they raise an
affirmative defense that to require Respondent to pay approximately $1,663,916.81 in back
payments to the Trust Funds would be unnecessarily harsh, punitive, and unfair to Respondent,
and create an undue hardship forcing the restaurant to close, and declare bankruptcy.
This argument addresses an issue I cannot resolve. In a compliance proceeding, the judge
simply quantifies respondent’s existing burden. The judge has no authority to increase or reduce
a respondent’s liability but simply has the responsibility to measure it. A respondent’s inability
to pay does not constitute a defense to the determination of backpay liability. Star Grocery Co.,
245 NLRB 196, 197 (1979); Coal Rush Mining, Inc., 341 NLRB 32, 33 fn. 2 (2004).
Accordingly, the evidence Respondent offered to support its inability-to-pay argument is
immaterial to any issue properly before me and I reject Respondent’s defense without regard to
that evidence.
Based on the record as a whole, I conclude that the General Counsel has proven the
allegations raised in compliance specification paragraphs I and II, as modified by General
Counsel’s Exhibits 11 and 12.
Calculations
This supplemental decision addresses the periods alleged in the specification, May 1,
2003, through August 2012, for Trust Fund payments and December 1, 2003, through August
2012, for premium and medical expenses. Respondent will satisfy its make-whole obligations
for this period by payment of the following amounts, together with interest:
Employee Premium Expenses Medical Expenses Total
Arevalo, Sebastian $2,672.06
Avila, Luis $2,573.07
Banda-Cervantes, Rafael $1,548.94
Buell, Elizabeth $115.12
Bueno,Jose $5,276.69
Colazzo-Martino, Christine $545.70
Crimo, Yvonne $5,395.06
Cuevas, Jose $21,268.33
De La Cruz, Mary $5,414.74
De La Luevanos, Eleazar $3,397.83
Del Sol, Antonio $1,093.86
Denniss, Judith $3,611.74
Garcia, Alfredo J. $220.75
Garcia, Rodolfo $2,686.73
Hernandez, Jose Luis $975.60
Herrera, Arturo $1,765.88
Herrera, Jose A. $5,572.96
Iuorno, Angela $661.96

31 GC Exh. 1(u).
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Employee Premium Expenses Medical Expenses Total
Lake, Michael $903.54
Lima, David $2,590.50
Lopez, Jason A. $294.42
Lopez,Jose M. $14,845.64
Lopez, Juan J. $2,621.84
Lopez, Manuel $2,522.81
Lowman, Kellie $70.82
Martinez, Francisco $1,367.31
Martinez, Ismael V. $5,866.74
Martinez, Uriel $5,967.90
McMillan, Gary $5,507.16
Medina, Oscar $175.32
Mendoza, Shelley $3,068.47
Mier, Fernando $8,073.33
Mier, Hector $1,280.17
Munoz, Jose Luis $1,832.11
Munoz, Leopoldo $6,625.28
Munoz, Roman $1,143.77
Nava, Sabino $1,296.53
O’Leary Marcus $3,139.77
Orozco, Ismael $7,380.25
Ortiz, Alberto $4,625.07
Oxenham, Alicia $1,066.56
Pearson, Lynne $1,758.64 $9,590.59 $11,349.23
Peinado, Paul $145.35
Perez, Ramiro $226.20
Puente, Jesus $5,874.03
Puente, Rito $8,136.54
Rodriguez, Hector $521.92
SaIdana, Vicente $2,082.74
Salomon, Hector M. $6,470.49
Sanchez, Francisco $2,648.33
Scott, Derrick $694.00
Sheifer, Stephanie $2,814.22
Solis, Alberto $3,781.89
Solis, Elizondo $5,975.71
Solis, Rosa $260.80
Street, Linda $14,723.25
Strutt, Rachel $163.00
Suarez, Jose $5,906.00
Valdez, Faustino $3,397.83
Vasquez, Alfredo M $967.47
Grand Total: $213,610.74 $9,590.59 $223,201.33
Grand total premium expenses: $213,610.74
Grand total medical expenses: $9,590.59
Grand total funds contributions: $1,250,118.36
Grand total premium expenses,
medical expenses and
fund contributions: $1,473,319.69
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Remedy
Respondent shall file a report with the Social Security Administration allocating backpay
to the appropriate calendar quarters. Respondent shall also compensate the discriminatee(s) for
the adverse tax consequences, if any, of receiving one or more lump-sum backpay awards
covering periods longer than 1 year, Latino Express, Inc., 359 NLRB No. 44 (2012).
Respondent will discharge its make-whole obligations, for the periods alleged in the
compliance specification, May 1, 2003, through August 2012, for Trust Fund payments and
December 1, 2003, through August 2012, for the premium and medical expenses, together with
interest as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987), compounded
daily as prescribed in Kentucky River Medical Center, 356 NLRB No. 8 (2010), enf. denied on
other grounds sub.nom. Jackson Hospital Corp. v. NLRB, 647 F.3d 1137 (D.C. Cir. 2011).
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended.32
ORDER
It is hereby ordered that Respondent, Smoke House Restaurant, Inc., its officers, agents,
successors, and assigns, shall pay the individuals named above under the heading “Calculations”
the amounts specified therein, together with interest as prescribed in New Horizons for the
Retarded, above.
Dated: Washington, D.C. February 26, 2013
____________________________
John J. McCarrick
Administrative Law Judge

32 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and
Regulations, the findings, conclusions, and recommended Order shall, as provided in Sec.
102.48 of the Rules, be adopted by the Board and all objections to them shall be deemed
waived for all purposes.