Laborers Funds of Northern California

National Labor Relations Board - Board Decisions

May 17, 1991

302 N.L.R.B. 1031 (N.L.R.B. 1991)

1031
302 NLRB No. 168
LABORERS FUNDS OF NORTHERN CALIFORNIA
1 The General Counsel also excepts to the judge’s findings that the Appli-
cant met eligibility standards with respect to net worth, that precomplaint fees
and costs, compensation for law clerks’ services and postcomplaint fees and
costs related to the preparation of its August 16, 1988 letter and to issues on
which it did not prevail should be awarded, and that one-half the fees paid
by Applicant to its attorneys for legal services should be awarded. The Appli-
cant excepts to the judge’s calculation of attorney’s fees at the hourly rate of
$75 rather than the higher hourly rate charged by its attorneys. In view of our
finding that the General Counsel was substantially justified in prosecuting the
case, we find it unnecessary to reach these issues.
2 Jim’s Big M, 266 NLRB 665 (1983).
3 Craig & Hamilton Meat Co., 276 NLRB 974 (1985).
4 The Court found that a sentence in the 1985 House Committee Report,
H.R. Conf. Rep. No. 99–120 (1985), which defined substantial justification as
‘‘more than mere reasonableness’’ was not an authoritative interpretation of
what the 1980 statute meant or of what the 1985 Congress intended.
5 Case 20–CA–14543.
6 Contempt adjudication orders were issued on February 16 and November
25, 1983, May 8, 1984 (order denying rehearing), and December 9, 1986.
Only the latter order was published, No. 81–7401, December 9, 1986. 124
LRRM 2078.
Laborers Funds Administrative Office of Northern
California, Inc. and Office and Professional
Employees International Union, Local 3. Case
20–CA–21333(E)
May 17, 1991
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
CRACRAFT AND DEVANEY
On May 9, 1990, Administrative Law Judge Jerrold
H. Shapiro issued the attached supplemental decision.
The General Counsel filed exceptions and a supporting
brief. The Applicant filed cross-exceptions and an an-
swering brief, and the General Counsel filed an an-
swering brief.
The National Labor Relations Board has delegated
its authority in this proceeding to a three-member
panel.
The Board has considered the decision and the
record in light of the exceptions and briefs and has de-
cided to affirm the judge’s rulings, findings, and con-
clusions only to the extent consistent with this Deci-
sion and Order.
In his supplemental decision, the judge granted the
Applicant’s application for attorney’s fees and ex-
penses under the Equal Access to Justice Act (EAJA)
and the Board’s Rules and Regulations, Section
102.143 et seq. The General Counsel excepts to the
award, challenging virtually all aspects of it, including
the judge’s findings that the General Counsel’s posi-
tion in the underlying unfair labor practice case (Case
20–CA–21333, unreported in the Board volumes) was
not substantially justified. For the reasons stated
below, we reverse the judge’s finding that the General
Counsel’s position was not substantially justified and
deny the application.1
EAJA provides that an administrative agency may
award certain expenses incurred in connection with an
adversary adjudication to a prevailing party, unless the
agency finds that the Government’s position was sub-
stantially justified. Substantial justification is not to be
equated with a substantial probability of prevailing on
the merits.2 Nor is the standard intended to deter the
Government in good faith from advancing close ques-
tions of fact and law or to preclude it from exploring
novel questions of law.3 Rather, as the Supreme Court
stated in Pierce v. Underwood, 487 U.S. 552, 565
(1988), the phrase ‘‘substantial justification’’ means
‘‘justified to a degree that could satisfy a reasonable
person’’ or having a ‘‘reasonable basis both in law and
fact.’’4
Unfair Labor Practice History
As the record in the underlying unfair labor practice
proceeding and the instant supplemental proceeding es-
tablishes, the parties’ last collective-bargaining agree-
ment was effective from November 1, 1976, through
October 31, 1979. Prior to the agreement’s expiration,
the Applicant and the Union began negotiating a suc-
cessor agreement. When the 1976–1979 agreement ex-
pired, the Applicant unilaterally changed, among other
things, the employees’ contractual workweek from 32
hours, 4 days a week to 35 hours, 5 days a week. On
January 9, 1981, in an earlier proceeding,5 an adminis-
trative law judge found that the unilateral change vio-
lated Section 8(a)(5) and (1) of the Act, and ordered
that the Respondent restore the status quo ante and
make the employees whole for any losses of earnings
resulting from the change. On February 26, 1981, the
Board adopted the judge’s Order in an unpublished de-
cision.
For 6 years following the Board’s decision, the Ap-
plicant steadfastly refused to remedy these unilateral
change violations, notwithstanding that, on August 14,
1981, the United States Court of Appeals for the Ninth
Circuit issued a judgment granting enforcement of the
Board’s Order and in the 5 years following, four addi-
tional orders to compel the Applicant’s compliance
with the enforced Board Order.6 During that period the
Applicant repeatedly maintained that its unilateral
changes had been instituted following an impasse in
negotiations. The Applicant also refused to post notices
to employees, to notify the Regional Director for Re-
gion 20 about its compliance efforts, and to make its
records available to the Regional Office. On January
27, 1986, following a special master’s report to the
court on January 3, 1986, that recommended among
other things that a writ of body attachment for civil
contempt be issued for David Johnson, the Applicant’s
administrator and secretary, the Applicant partially re-
instituted the 4-day, 32-hour workweek. Six months
later, however, the Applicant reneged and notified em-
ployees:
1032 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
7 The admission of impasse referred to is not explained nor substantiated by
the record. The record does indicate that the Applicant raised an impasse argu-
ment during contempt proceedings, but that the court rejected the argument as
waived.
8 At all times material to the events in Cases 20–CA–14543 and 20–CA–
21333, Johnson was primarily responsible for the formulation of personnel and
labor relations policies.
Since our voluntary compliance with the [special
master’s] recommendation on January 27, 1986,
there has been no request for bargaining by the
Union and no new proposals; since the govern-
ment has admitted that an impasse has long been
in place and there has been virtually no change in
any circumstance, we will return to the work-
week, holiday and sick leave conditions which ex-
isted on January 26, 1986. This restoration of the
workweek, holiday and sick leave conditions will
take effect on July 7, 1986.7
On April 17, 1987, the Applicant once more restored
the 4-day, 32-hour workweek in accordance with the
Board’s 1981 Order. Official compliance was not
achieved, however, until December 1987, following the
settlement of disputed amounts owed pursuant to the
make whole provisions of the Board’s 1981 Order.
Despite the Applicant’s conduct, on November 19,
1986, the Union and the Applicant resumed bargaining
for an agreement to succeed the 1976–1979 agreement.
At their introductory bargaining session the Applicant
and the Union agreed that holidays and the workweek
were major issues. On several occasions between the
commencement of negotiations and July 20, 1987,
when the Respondent unilaterally implemented its final
offer thereby giving rise to the charges in Case 20–
CA–21333, Union Negotiator George Davis informed
the Applicant’s negotiator, Robert Russell, that compli-
ance with the Board’s outstanding Order was very im-
portant to employees and would facilitate reaching an
agreement. Although Russell stated that compliance
matters were not within the scope of his negotiating
authority, he said he would pass along the Union’s
compliance concerns to the Applicant’s administrator,
Johnson.8
The Union and the Applicant held 12 additional bar-
gaining sessions, and at least two ‘‘informal’’ meetings
which only the chief negotiators attended before nego-
tiations broke off in late July 1987. Although they
reached agreement on numerous subjects, they were
still far apart as of April 13, 1987, on the ‘‘major’’
issues described above. Nor was their disagreement on
the workweek surmounted when, on April 17, 1987,
the Applicant restored the 4-day, 32-hour workweek in
compliance with the Board’s 1981 Order. From start to
finish of the negotiations, the Applicant insisted on a
5-day workweek and the Union insisted on a 4-day
workweek. At the April 21 session, the Applicant pro-
posed a 5-day, 37-1/2-hour workweek for the first year
of the contract and a 5-day, 40-hour workweek for the
remaining 2 years. At their next session on May 4, the
Applicant proposed a 5-day, 35-hour workweek for the
first year of a 2- or 3-year contract and a 37-1/2-hour,
5-day workweek for the remainder of the contract. The
Union adhered to its proposal for a 4-day, 32-hour
workweek but proposed that the contract be reopened
after the first year to renegotiate the workweek. Pre-
viously, the Union had proposed ‘‘splitting’’ the work-
week by scheduling employees to work 32 hours Mon-
day through Thursday and Tuesday through Friday.
The Union stated that the shorter workweek made lay-
offs less likely. The Applicant stated that the longer
workweek made for greater efficiency. On June 3,
Davis and Russell met alone to discuss outstanding
proposals and at this meeting the Union proposed a
‘‘favored nations’’ clause that would allow the Appli-
cant to adopt a more favorable workweek should one
be reached between the Union and any other employer.
Davis indicated that all the collective-bargaining agree-
ments the Union had with other employers provided
for 4-day workweeks, and the Union wanted to keep
those contracts standard because it believed if it gave
in on one it would have to give in to other employers.
On July 2, the Applicant presented its final offer to
the Union in the presence of a Federal mediator. The
offer included the proposed 5-day, 35-hour workweek,
as well as provisions for a wage increase and the ob-
servance of holidays falling on a Saturday that were
previously proposed or deemed acceptable by the
Union. At the same meeting, the Applicant rejected the
Union’s workweek proposals. On July 16, the employ-
ees rejected the Applicant’s final offer, as a result of
which Russell informed a union business representative
that the Applicant would implement its last offer on
July 20. Thereafter, as stated, the Applicant returned to
the 35-hour workweek on July 20, and the Union filed
an 8(a)(5) charge (Case 20–CA–21333).
The Regional Director initially dismissed the charge,
finding no nexus between the Applicant’s unlawful
conduct in Case 20–CA–14543 and its July 20 imple-
mentation of the 35-hour workweek. The Union ap-
pealed the dismissal, and on April 18, 1988, the Gen-
eral Counsel’s Office of Appeals issued a letter stating
that the case raised issues warranting a hearing and di-
recting the Regional Director to issue a complaint. On
May 24, 1988, a complaint issued. At the hearing,
counsel for the General Counsel declined to acknowl-
edge that an impasse occurred, asserting that any dead-
lock in negotiations that occurred was tainted by the
Respondent’s 6-year failure to comply with the
Board’s Order in Case 20–CA–14543, and therefore
was not a legally cognizable impasse.
The judge found that an impasse did occur and that
there was insufficient evidence of a nexus between the
Respondent’s prior unfair labor practices and the im-
passe. He found that although the Union requested dis-
1033LABORERS FUNDS OF NORTHERN CALIFORNIA
9 The judge also rejected the Union’s contention that the Applicant engaged
in bad-faith bargaining by negotiating with a preconceived intent to bring
about an impasse so as to enable it to reinstitute the conditions over which
it had so long delayed compliance.
10 M & C Vending Co., 278 NLRB 320 (1986); Wayne’s Dairy, 223 NLRB
260 (1976); and Bethlehem Steel Co., 147 NLRB 977 (1964).
11 This was the language used in the letter from the Office of Appeals re-
versing the Regional Director on his initial refusal to issue complaint.
12 See Bethlehem Steel Co., supra.
13 Advance Development Corp., 277 NLRB 1086 (1985).
cussion about the Respondent’s obligation to comply
with the outstanding orders at the outset of negotia-
tions, it never included compliance among its bar-
gaining proposals, and that while the Union repeatedly
stated that compliance would make it easier to reach
an agreement, its negotiators did not testify that the de-
layed compliance influenced the Union’s bargaining
position or the employees’ rejection of the Respond-
ent’s workweek proposal–-even though that was the
only issue separating the parties at the time of the Re-
spondent’s unilateral implementation of its final con-
tract proposal. He noted that the Applicant restored the
status quo ante 3 months prior to impasse, and found
further that each party engaged in hard bargaining on
the workweek issue, and that the Union’s inability to
compromise was due to its fear of adverse economic
consequences and desire to avoid a dangerous prece-
dent for upcoming negotiations with other employers.9
Based on the foregoing, he dismissed the complaint in
the underlying case.10
EAJA Analysis
In the instant proceeding, the judge found that the
General Counsel’s theory of the underlying case was
not supported in fact or law. In so finding, he first
noted that the General Counsel did not challenge the
Applicant’s claim of impasse. He also drew an adverse
inference from the General Counsel’s failure to inter-
view the Applicant’s agents prior to issuing the com-
plaint, and imputed knowledge of the tenor of negotia-
tions and positions of the parties during negotiations to
the General Counsel based on submissions made to the
Regional Office by the Applicant’s attorney prior to
the hearing. Regarding legal sufficiency, the judge
found that none of the cases cited by the General
Counsel for the proposition that the Applicant’s prior
unfair labor practices precluded unilateral implementa-
tion of its proposals are factually comparable to the
underlying case. M & C Vending Co., 278 NLRB 320
(1986); Wayne’s Dairy, 223 NLRB 260 (1976); and
Bethlehem Steel Co., 147 NLRB 977 (1964).
Contrary to the judge, we find that, although not
armed with the strongest facts for prevailing in the un-
fair labor practice case, the General Counsel possessed
sufficient evidence on which to prosecute the case. The
General Counsel was aware of the prior unfair labor
practices and the Applicant’s refusal until midway
through negotiations to take even partial steps to rem-
edy them. The General Counsel was also aware of the
Applicant’s continued insistence in the most recent ne-
gotiations on formalizing agreement on the workweek
and attendant overtime provisions that were unlawfully
implemented, its continuing failure to provide the
backpay due employees and union funds that would
have fully restored the status quo ante, and the Union’s
repeated requests throughout negotiations that the Ap-
plicant remedy the unfair labor practices in order to
raise employee morale and facilitate reaching an agree-
ment. Even considering the General Counsel’s posses-
sion of the information submitted by the Applicant’s
attorney, i.e., that the Union never insisted that an
agreement was contingent on compliance with the
Board’s Order and that the Union in fact asserted unre-
lated grounds for its position on the workweek, we
find, that the General Counsel was correct in con-
cluding that Applicant’s claim of impasse ‘‘raise[d]
Section 8(a)(5) and (1) issues warranting Board deter-
mination based upon record testimony developed at a
hearing.’’11 We note particularly that for the General
Counsel to prevail in the underlying proceeding it was
necessary only for him to prove the claimed impasse
was based in part on the Applicant’s unremedied unfair
labor practices.12 Accordingly, we do not view the evi-
dence as necessarily inconsistent with, or as precluding
a theory that an impasse, if reached, was not legally
cognizable.
It is also significant that the judge had to make
credibility findings between the testimony of Union
Negotiator Davis and Applicant Negotiator Russell
concerning the references to the Applicant’s out-
standing backpay liability during negotiations. The fact
that the credibility resolutions did not affect the
judge’s ultimate decision does not compel a finding
that substantial justification was lacking. Obviously,
the General Counsel was not required to believe all the
assertions made in the Applicant’s prehearing submis-
sions to the Regional Office, particularly in view of
the discrepancy between the Union’s and the Appli-
cant’s version of the incidents.13 In this connection, we
do not view Iowa Parcel Service, 266 NLRB 392
(1983), enfd. 739 F.2d 1035 (8th Cir. 1984), cert. de-
nied 105 S.Ct. 595 (1984), as being as readily distin-
guishable from the instant case as the judge does.
The fact that counsel for the General Counsel ex-
tended an invitation to the Applicant to participate in
an investigation after issuance of the complaint does
not of itself give rise to a finding of insufficient jus-
tification especially given the sequence of events here.
The Regional Office had completed its investigation
before the Regional Director initially decided not to
issue complaint. The General Counsel reversed that de-
cision on appeal because, in disagreement with the Re-
gional Director, he concluded that the evidence gath-
1034 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
14 This is not to suggest that the Board will uphold all decisions of the Of-
fice of Appeals to sustain appeals as substantially justified. Rather, in consid-
ering the adequacy of an investigation or the lack thereof, we will examine
the circumstances surrounding the processing of the charge. We will not deem
a post-appeal investigation or offer to investigate to be inadequate simply be-
cause it follows the issuance of the complaint.
1 Not reported in the Board volumes.
ered in that investigation could be construed, if cred-
ited by a judge, as making out an unfair labor prac-
tice.14 The Regional Director then issued complaint on
the direction of the General Counsel, but, out of an
abundance of caution, invited a submission by the Ap-
plicant.
In sum, it is irrelevant whether, in a further inves-
tigation after the General Counsel had directed
issuance of complaint, the Applicant’s witnesses would
have supported assertions made in the Applicant’s Sep-
tember 9, 1987 position statement. Reasonable minds
could differ as to the legal significance of those factual
assertions. The General Counsel did not act unreason-
ably in concluding that there was at least a triable case
as to whether the Applicant’s year-long delay in rem-
edying its unfair labor practice that was related to the
unit employees’ workweek tainted the impasse on that
same subject.
Finally, we note that although the cases relied on by
counsel for the General Counsel are not on all fours
with the underlying case, they all indicate that a back-
ground of unlawful unilateral changes may be such as
to taint an otherwise legally cognizable impasse. Given
that the Board has no per se test for determining the
length of time that must elapse or the number of ses-
sions that must take place before impasse occurs, and
that an impasse determination is made on a case-by-
case basis, and in view of the Applicant’s renewed in-
sistence on terms it had unlawfully imposed for 6
years, we find that the General Counsel possessed a
reasonable basis in law, as well as fact, to prosecute
a case alleging that the Respondent’s conduct violated
the Act.
ORDER
The National Labor Relations Board reverses the
recommended Order of the administrative law judge
and orders that the application of the Applicant, Labor-
ers Funds Administrative Office of Northern Cali-
fornia, Inc., San Francisco, California, for attorney’s
fees and expenses under the Equal Access to Justice
Act is denied.
SUPPLEMENTAL DECISION
STATEMENT OF THE CASE
JERROLD H. SHAPIRO, Administrative Law Judge. This
supplemental proceeding is before the National Labor Rela-
tions Board (Board), for consideration of the verified applica-
tion for attorneys fees and costs (Application), submitted on
June 8, 1989, by Respondent Laborers Funds Administrative
Office of Northern California, Inc. (Applicant), pursuant to
the Equal Access to Justice Act, Pub. L. 96–481, 94 Stat.
2325, 5 U.S.C. § 504 (1980), as amended in Pub. L. 99-80,
99 Stat. 183 (August 5, 1985) (EAJA), and Section 102.143,
et seq., of the Board’s Rules and Regulations.
On May 9, 1989, the Board issued an Order1 in the above-
entitled case adopting my findings and conclusions that the
Applicant herein, had not engaged in unfair labor practices
in violation of the National Labor Relations Act (Act) and
dismissing the complaint in its entirety.
In its June 8, 1989 Application, the Applicant argues that
as the prevailing party in the underlying adversary adjudica-
tion it is entitled to an award of fees and expenses under the
EAJA. On June 9, 1989, pursuant to Section 102.148(b) of
the Board’s Rules, the Board ordered that the matter be re-
ferred to me for appropriate action. Thereafter, on July 13,
1989, the General Counsel filed a motion to dismiss the Ap-
plication and the Applicant on August 11, 1989, filed a time-
ly response.
On August 17, 1989, having considered the General Coun-
sel’s motion to dismiss and the Applicant’s response, I issued
an order denying the motion to dismiss, without prejudice,
and directed the Applicant to resubmit a schedule of fees re-
computed at the hourly rate of $75 and to file certain addi-
tional information pertaining to its eligibility for an award
and to the propriety and reasonableness of certain of the fees
and expenses requested. On October 2, 1989, in response to
my order of August 17, 1989, the Applicant filed a schedule
of fees recomputed at $75 an hour and submitted the addi-
tional requested information.
On November 14, 1989, the General Counsel filed an an-
swer to the Applicant’s Application and a supporting memo-
randum. Thereafter, on December 5, 1989, the Applicant
filed a reply to the General Counsel’s answer.
On December 7, 1989, having considered the General
Counsel’s answer and the Applicant’s reply, I issued an order
directing the Applicant to submit certain additional informa-
tion pertaining to its eligibility for an award. On January 5,
1990, in response to my order of December 7, 1989, the Ap-
plicant submitted the additional requested information. There-
after, on February 5, 1990, the General Counsel filed a re-
sponse.
Subsequent to filing the Application, the Applicant sub-
mitted further fee statements concerning fees and expenses
incurred in the preparation and prosecution of the Applica-
tion. These statements were a part of the supplemental dec-
larations filed by the Applicant’s attorney on these dates:
July 7, 1989; October 2, 1989; November 10, 1989; Decem-
ber 5, 1989; December 18, 1989; January 29, 1990; and Feb-
ruary 16, 1990.
Based upon the record in this supplemental proceeding,
described supra, and the record in the underlying unfair labor
practice proceeding, and having considered the parties’ argu-
ments, I make the following findings and conclusions.
The Issues
The EAJA, as applied to this case, provides for an award
of attorney’s fees and expenses to the Applicant, the ‘‘pre-
vailing party’’ in the underlying unfair labor practice pro-
1035LABORERS FUNDS OF NORTHERN CALIFORNIA
2 Although the ‘‘owners’’ of the Applicant are its ‘‘members,’’ the Appli-
cant’s accountant, and presumably the Applicant itelf, are under the impression
that the Applicant is owned by the Laborers Pension-Health & Welfare-Vaca-
tion Trust Funds. In this regard, the accountant’s notes to the Applicant’s an-
nual final statements for the years 1987 and 1988 state that, ‘‘the [Applicant]
is a corporation owned by Laborers Pension-Health & Welfare-Vacation Trust
Funds] through issuance of membership certificates to each of the trustees of
the Trust Funds.’’ The financial statements of the Laborers Pension-Health &
Welfare-Vacation Trust Funds reveal that it is the funds, rather than their indi-
vidual trustees, who pay the Applicant for the membership certificates.
ceeding, provided the Applicant meets the EAJA’s eligibility
requirements and provided further that the General Counsel
fails to show that the General Counsel’s position in the un-
derlying unfair labor practice proceeding was ‘‘substantially
justified.’’ Other than their agreement that the Applicant is
a prevailing party, the parties dispute virtually everything
else of significance. General Counsel contends that the Ap-
plicant does not meet the EAJA’s eligibility requirements
and, in any event, that the General Counsel’s position in the
unfair labor practice proceeding was substantially justified.
The General Counsel also contends that even if the Applicant
is entitled to an award of fees and expenses, that the Appli-
cant’s fees and expenses incurred before the issuance of the
complaint in the underlying unfair labor practice proceeding
are not compensable, and that I am without authority to
award the Applicant more than $75 an hour for attorney’s
fees, and that in certain other enumerated respects the Appli-
cant’s claims for fees and expenses are either excessive or
not recoverable. I shall address each of these issues in turn.
The Applicant’s Eligibility
1. The Evidence
The Applicant, a nonprofit corporation, is in the business
of administering Section 302(c)(5)(6) Labor Management Re-
lations Act (LMRA) trust funds, which it does by contracting
with the funds to provide administrative services at cost. The
Applicant has two offices in San Francisco, California, which
it leases from the Laborers Pension Trust Fund. It employs
a work force of approximately 60 employees, including man-
agers, accountants, claims processors, collectors, and book-
keepers. Its nonsupervisory employees are represented for the
purpose of collective bargaining by Office and Professional
Employees International Union, Local 3, the Charging Party
in the underlying unfair labor practice proceeding.
The trust funds administered by the Applicant are irrev-
ocable trust funds, as required by Section 302(c) of the
LMRA, and are established pursuant to employer-union col-
lective-bargaining contracts to provide health, retirement,
holiday, vacation, and employment training program benefits
to the covered employees and their dependents. They are ad-
ministered, in accord with Section 302(c) of the LMRA, by
an equal number of employer and union appointed trustees
and a neutral trustee selected by the union and employer ap-
pointed trustees. The trustees owe a strict fiduciary duty to
the beneficiaries of the trust funds, and therefore cannot seek
to operate the funds to advance the interests of themselves
personally or the interests of the union or employer which
appoints them as trustees. See generally NLRB v. Amax Coal
Co., 453 U.S. 322 (1981).
Three of the trust funds administered by the Applicant are
the Laborers Pension Trust Fund for Northern California (La-
borers Pension Trust Fund); the Laborers Health and Welfare
Trust Fund for Northern California (Laborers Health & Wel-
fare Trust Fund); the Laborers Holiday-Vacation Trust Fund
for Northern California (Laborers Vacation Trust Fund); and
(Laborers Pension-Health & Welfare-Vacation Trust Funds).
Laborers Pension-Health & Welfare-Vacation Trust Funds
have the same trustees.
In 1963 their trustees, on behalf of the Laborers Pension-
Health & Welfare-Vacation Trust Funds, incorporated the
Applicant for the primary purpose of administering the La-
borers Pension-Health & Welfare-Vacation Trust Funds and
other trust funds formulated pursuant to collective-bargaining
contracts between employers and labor organizations affili-
ated with the International Hod Carriers, Building and Com-
mon Laborers’ Union of America.
I reject the Applicant’s apparent contention that the trust-
ees incorporated the Applicant on behalf of themselves as in-
dividuals, rather than on behalf of the Laborers Pension-
Health & Welfare-Vacation Trust Funds, for whom they
acted as trustees. Any doubt that the trustees acted on behalf
of these three trust funds when they created the Applicant is
removed by the fact that article 10 of the Applicant’s articles
of incorporation provides, in substance, that if the Applicant
is dissolved or otherwise goes out of business, that any assets
remaining after its debits have been satisfied shall be distrib-
uted among the Laborers Pension-Health & Welfare-Vacation
Trust Funds, rather than among the individual trustees.
The Laborers Pension Trust Fund and the Laborers Vaca-
tion Trust Fund have no places of business and employ no
employees. The Laborers Health & Welfare Trust Fund has
an office in Oakland, California, where it employs a work
force of approximately 46 employees, including clerical and
administrative employees, claims adjustors, and a supervisor,
all of whom are represented by Teamsters Local No. 856.
The Applicant, as a nonprofit corporation, is ‘‘owned,’’ in
a sense, by ‘‘members’’ rather than by shareholders.2 The
Applicant is not owned by its members in the usual sense
of ownership, because unlike the shareholders of a for-profit
corporation, the Applicant’s members do not receive a share
of the Applicant’s profits inasmuch as nonprofit corporations,
like the Applicant, have no profits. Nor are the Applicant’s
members eligible to receive any of the Applicant’s assets, if
the Applicant is dissolved. As noted previously, upon dis-
solution, the Applicant’s assets will be distributed to the La-
borers Pension-Health & Welfare-Vacation Trust Funds.
Since its incorporation, the Applicant’s members have
been the 10 trustees of the Laborers Penion-Health & Wel-
fare-Vacation Trust Funds. These trustees are also the Appli-
cant’s board of directors. In this regard, the Applicant’s by-
laws state the, ‘‘the business and affairs of the [Applicant]
shall be conducted by a board of 10 directors elected by and
from the members.’’ Consistent with the bylaw, the Appli-
cant’s 10 members, the trustees of the Laborers Pension-
Health & Welfare-Vacation Trust Funds, voted themselves to
be the Applicant’s board of directors. It is undisputed that
the trustees, in their capacity as the Applicant’s board of di-
rectors, are the governing body of the Applicant and conduct
the business and affairs of the Applicant. An example of this
is contained in the record of the underlying unfair labor prac-
tice proceeding. There, it was established, the Applicant
hired the management consultant firm of Scarth-Lyons to ne-
gotiate on its behalf with Local 3, only after Scarth-Lyons
was interviewed and approved by the Applicant’s Board of
1036 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
3 The trustees of the Laborer Pension-Health & Welfare-Vacation Trust
Funds, each of whom are members-directors of the Applicant, are also the
trustees of the Laborers Training and Retraining Trust Fund for Northern Cali-
fornia (Laborers Training Trust Fund).
4 The Annuity Pension Fund is a part of the Laborers Pension Trust Fund.
5 The above net worth computations for the Laborers Vacation Trust Fund
and Laborers Training Trust Fund are based on their net assets available for
benefits, as set forth in the financial statements in evidence, inasmuch as the
Applicant presented no evidence that either of these trust funds had present
value of accrued benefits, also known as present value of accumulated bene-
fits, as of the fiscal year ending May 31, 1988.
6 Bhardwaj is employed by the ‘‘big 8’’ accounting firm of Arthur Anderson
& Co. as a certified public accountant and manager. He supervised the audit-
ing of the financial records of the Laborers Pension-Health & Welfare-Vaca-
tion Trust Funds for the fiscal year ending May 31, 1988.
Directors, and during the subsequent contract negotiations
with Local 3, the essential contract proposal advanced by
Scarth-Lyons, on the Applicant’s behalf, were made only
after having been approved by the Applicant’s board of di-
rectors.
During the fiscal year ending May 31, 1988, the Appli-
cant’s revenues totaled $5,170,870, all of which consisted of
administrative fees paid to the Applicant by the following
trust funds: Laborers Health & Welfare Trust Fund,
$1,462,292; Laborers Pension Trust Fund, $1,107,318; La-
borers Vacation Trust Fund, $889,406; Laborers Training and
Retraining Trust Fund for Northern California, $784,168;3
Northern California Cement Masons Administration, Inc.,
$778,603; Laborers Contract Administration Trust Fund for
Northern California, $3,100; Annuity Pension Fund, $3,034;4
and, Aggregates and Concrete Association of Northern Cali-
fornia, Inc. Employees’ Security Fund, $139,934. In other
words, during the fiscal year ending May 31, 1988, approxi-
mately 67 percent of the Applicant’s revenue was in the form
of administrative fees paid to the Applicant by the Laborers
Pension-Health & Welfare-Vacation Trust Funds. Also for
the previous fiscal year ending May 31, 1987, the record re-
veals that approximately 64 percent of the Applicant’s rev-
enue was in the form of administrative fees paid to the Ap-
plicant by the Laborers Pension-Health & Welfare-Vacation
Trust Funds.
In addition to providing the majority of the Applicant’s
revenue, the Laborers Pension-Health & Welfare-Vacation
Trust Funds loaned the Applicant $480,000, which loan is
still outstanding, and guaranteed the Applicant’s monthly
payments for leased business equipment. In this regard, the
record reveals that each of the Laborers Pension-Health &
Welfare-Vacation Trust Funds holds a promissory note val-
ued at $160,000 for moneys they have loaned to the Appli-
cant, and that in 1983 the Applicant entered into a 7-year
lease for electronic data processing equipment at a monthly
rental of $11,200 and that the Laborers Pension-Health &
Welfare-Vacation Trust Funds jointly guaranteed these
monthly lease payments.
It is undisputed that the net worth of the Applicant for the
fiscal year ending May 31, 1988, was $30. It is also undis-
puted that the net worth of the Laborer Vacation Trust Fund
was $2,529,980 and the net worth of the Laborers Training
Trust Fund was $4,992,809 for the fiscal years ending May
31, 1988.5
The financial statements of the Laborers Pension Trust
Fund show that for the fiscal year ending May 31, 1988, its
net assets available for benefits totaled $495,191,290 and that
its present value of accumulated plan benefits, also known as
the present value of accrued benefits, totaled $650,569,700.
It is undisputed that the annual financial statements of the
trust funds involved in this case, do not specifically identify
their net worth, but to compute their net worth it is necessary
to subtract the present value of accumulated plan benefits,
also known as the present value of accrued benefits, from the
trust fund’s net assets available for benefits. In this regard,
Sunil Bhardwaj states in his declaration:6
The financial statements [of the Laborers Pension-
Health & Welfare-Vacation Trust Funds] contained in
Exhibits B, C and D are those which are required to
be prepared for defined benefit plans pursuant to the
standards established by the Financial Accounting
Standards Board (‘‘FASB’’). FASB Statement—35 (Ac-
counting and Reporting for Defined Benefit Plans) re-
quires (l) a Statement of Net Assets Available for Bene-
fits . . . . The Statement of Net Assets Available for
Benefits is not a statement of ‘‘net worth.’’ ‘‘Net
Worth’’ is a term in general business use that reflects
the difference between an entity’ total assets and its
total (current and long-term) liabilities. The Statement
of Net Assets Available for Benefits is exclusive of the
value of accumulated plan benefits, which is a long-
term liability. The accounting profession does not cal-
culate a defined benefit plan’s ‘‘net worth,’’ because of
the uncertainty of relying on actuarial information,
which is necessary for stating the present value of accu-
mulated plan benefits. Although financial statements for
defined benefit plans do not state ‘‘net worth,’’ an ap-
proximation of the concept can be derived by sub-
tracting the present value of accumulated plan benefits
from net assets available for benefits.
Accordingly, subtracting the present value of accumulated
plan benefits for the Laborers Pension Trust Fund as of May
31, 1988 ($650,569,700) from its net assets available for
benefits as of May 31, 1988 ($495,191,290), establishes that
the net worth of the Laborers Pension Trust Fund as of May
31, 1988, was a minus $155,378,410.
I reject counsel for the General Counsel’s contention that
the net worth of the Laborers Penion Trust Fund and the La-
borers Health & Welfare Trust Fund, infra, is limited to their
total assets minus their current liabilities. In support of this
contention counsel states that since the funds have no current
obligation to pay the benefit claims which will be made in
the future, that these future claims on benefits do not affect
the funds’ net worth. Counsel for the General Counsel offers
no authority for the proposition that it is only the current li-
abilities of the trust funds that can be used to compute their
net worth, and has not otherwise contradicted the declaration
of the Applicant’s expert, Sunil Bhardwaj, that ‘‘‘[net]
worth’ is a term in general business use that reflects the dif-
ference between an entity’s total assets and its total (current
and long-term) liabilities,’’ and that [a]lthough financial
statements for defined benefit plans [referring to the trust
funds involved herein] do not state ‘net worth,’ an approxi-
mation of the concept can be derived by subtracting the
present value of accumulated plan benefits from net assets
available for benefits.’’
1037LABORERS FUNDS OF NORTHERN CALIFORNIA
7 The complaint issued in the underlying unfair labor practice proceeding on
May 24, 1988.
The financial statements of the Laborers Health & Welfare
Trust Fund show that for the fiscal year ending May 31,
1988, it had net assets available for benefits of $5,519,758.
As I have noted previously, the financial statements of the
Laborers Health & Welfare Trust Fund do not specifically
identify its net worth. Rather the Fund’s net worth is com-
puted by subtracting the present value of accumulated plan
benefits, also known as accrued benefits, from the net assets
available for benefits. However, in the case of the Laborers
Health & Welfare Trust Fund, unlike the Laborers Pension
Trust Fund, the auditors who audited its books of account for
the fiscal year ending May 31, 1988, did not prepare a docu-
ment showing the Fund’s accrued benefits. In order to estab-
lish the Funds’ total accrued benefits, as of May 31, 1988,
the Applicant submitted a declaration from Jordon Smith, a
group manager for the Martin E. Segal Company, the com-
pany that is the actuary for the Laborers Pension-Health &
Welfare-Vacation Trust Funds.
In his declaration, Smith stated that the annual statistical
reports prepared by Martin E. Segal for the Laborers Health
& Welfare Trust Fund are prepared under his direction and
supervision and further stated that he was familiar with the
financial statements prepared by the auditors of Arthur An-
derson & Co. for the Laborers Health & Welfare Trust Fund,
because in preparing those financial reports the auditors and
the actuaries employed by Martin E. Segal worked together
in fulfilling their respective responsibilities. Smith also de-
clared:
Participants in the Laborers Health & Welfare Trust
Fund for Northern California earn future eligibility for
benefits as they work. For example, work performed in
the period from February through July earns eligibility
for benefits in the following period of September
through February. Thereafter, as of the end of the Trust
Fund’s fiscal year, May 31, participants have earned fu-
ture eligibility. The potential liability for that future eli-
gibility as [of] May 31, 1988, was in excess of $8 mil-
lion and is not shown on the Trust Fund’s audited fi-
nancial statements.
Financial statements for employee benefit funds do
not identify ‘‘net worth.’’ If one were to calculate the
theoretical net worth of the Laborers Health & Welfare
Trust Fund as of May 31, 1988, the potential liability
for future earned eligibility, in the amount of in excess
of $8 million, would need to be taken into account.
Accordingly, based on Smith’s declaration, subtracting the
present value of the Laborers Health & Welfare Trust Fund’s
accumulated plan benefits as of the fiscal year ending May
31, 1988 ($8 million), from the Trust Fund’s net assets avail-
able for benefits as of May 31, 1988 ($5,519,758), establish
that the net worth of the Laborers Health & Welfare Trust
Fund, as of May 31, 1988, was a minus $2,480,242.
I reject counsel for General Counsel’s contention that
Smith was not shown to be competent to submit a declara-
tion about the present value of the accumulated benefits for
the Laborer Health & Welfare Trust Fund, and for this rea-
son I should find the Applicant has failed to present any evi-
dence of the present value of the accumulated benefits for
the Laborers Health & Welfare Trust Fund. As an actuary
who worked in conjunction with the Trust Fund’s auditors in
auditing the fund’s business records for the period ending
May 31, 1988, Smith was competent to submit a declaration
about the Fund’s accumulated benefits as of the fiscal year
ending May 31, 1988. I note that counsel for the General
Counsel did not request that I afford him an opportunity to
cross-examine Smith about the matters contained in his dec-
laration, but simply requested that I reject his declaration in
its entirety because he was an incompetent declarant.
2. Analysis
Section 102.143(c) of the Board’s Rules and Regulations,
in pertinent part, defines a party eligible for an award under
the EAJA as a corporation with a net worth of not more than
$7 million and not more than 500 employees as of the date
of the complaint in an unfair labor practice proceeding.7 In
addition, Section 102.143(g) of the Board’s Rules and Regu-
lations states:
The net worth and number of employees of the appli-
cant and all of its affiliates shall be aggregated to deter-
mine eligibility. Any individual, corporation, or other
entity that directly or indirectly controls or owns a ma-
jority of the voting shares or other interest of the appli-
cant . . . will be considered an affiliate for purpose of
this part, unless such treatment would be unjust and
contrary to the purpose of the EAJA . . . in light of
the actual relationship between the affiliated entities. In
addition, financial relationships of the applicant other
than those described in this paragraph may constitute
special circumstances that would make an award unjust.
In Noel Produce, Inc., 273 NLRB 769 (1984), where the
Board rejected an applicant’s contention that the Board had
exceeded its administrative authority in adopting Section
102.143(g), the Board stated:
Section 102.143(g) is merely an adoption of the rule
recommended by the Administrative Conference of the
United States which received and considered comments
on the validity of the rule. Although EAJA is silent on
the matter, the requirement [that the net worth of an ap-
plicant be consolidated with that of its affiliates in de-
termining eligibility] implements the purpose of the
Act, which sought to establish ‘‘financial criteria which
limit the bill’s application to those persons and small
businesses for whom costs may be a deterrent to vindi-
cating their rights (citation omitted).’’ Parties that meet
the eligibility standard only because of technicalities of
legal or corporate form, while having access to a large
pool of resources from affiliated companies, do not fall
within this group of intended beneficiaries. Moreover,
in our attempt to ensure that the rule does not eliminate
deserving applicants, Section 102.143(g) provides that
in limited circumstances net worth will not be consoli-
dated where ‘‘such treatment would be unjust and con-
trary to the purposes of the EAJA . . . in light of the
actual relationship between the affiliated entities.’’
The Applicant contends it is eligible for an award of fees
and expenses under the EAJA because its net worth did not
exceed $7 million and it employed not more than 500 em-
ployees during the time material. The General Counsel con-
1038 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tends that the Laborers Pension-Health & Welfare-Vacation
Trust Funds and the Laborers Training Trust Fund are affili-
ates of the Applicant within the meaning of Section
102.143(g) of the Board’s Rules and Regulations, which re-
quires that the net worth of the these five entities be aggre-
gated to determine the Applicant’s eligibility for an award
under the EAJA. The Applicant’s response is that the Labor-
ers Pension-Health & Welfare-Vacation Trust Funds and the
Laborers Training Trust Fund are not affiliates of the Appli-
cant within the meaning of Section 102.143(g) and, in any
event, even if they are affiliates of the Applicant, the Appli-
cant is still eligible for an award under the EAJA.
I am of the opinion that the Laborers Pension-Health &
Welfare-Vacation Trust Funds are affiliates of the Applicant
within the meaning of Section 102.143(g), because the record
reveals that these three trust funds created the Applicant, ex-
ercise financial and administrative control over the Applicant,
provide the Applicant with the vast majority of its operating
revenues, and otherwise make their financial resources avail-
able to the Applicant. The several considerations set forth
below, in their totality, have led me to this conclusion.
As described in detail supra, the Applicant is a creature of
the Laborers Pension-Health & Welfare-Vacation Trust
Funds; the Applicant was incorporated by the trustees of
those trust funds, on behalf of those trust funds, for the pur-
pose of administering them. Besides forming the Applicant,
the trustees of the Laborers Pension-Health & Welfare-Vaca-
tion Trust Funds, as described in detail supra, are the Appli-
cant’s Board of Directors and, as such, they exercise finan-
cial and administrative control over the Applicant’s affairs.
The Applicant’s contention that the Laborers Pension-
Health & Welfare-Vacation Trust Funds ‘‘have no control of
any nature over the Applicant’’ and that the funds’ ten trust-
ees ‘‘have simultaneous control of the Applicant and the
three trust funds,’’ lacks merit. I recognize that in general,
‘‘[a] trustee is not an agent. An agent represents and acts for
his principal . . . [a trustee] has no principal.’’ Taylor v.
Davis, 110 U.S. 330, 334–335 (1884); 1 A. Scott, Law of
Trust, Sec. 8, 74–79 (3d Ed. 1967) (distinguishing trustees
from agents). However, I am persuaded that the record estab-
lishes that at the very least the Laborers Pension-Health &
Welfare-Vacation Trust Funds exercise indirect control over
the Applicant because, as I have found supra, it was the
funds’ trustees who created the Applicant and did so on be-
half of the trust funds and for the benefit of the trust funds
and their beneficiaries; and it is the funds’ trustees who, on
behalf of the trust funds and for the benefit of the funds and
their beneficiaries, exercise control over the financial and
business affairs of the funds.
Since the trustees of the Laborers Pension-Health & Wel-
fare-Vacation Trust Funds did not form the Applicant for
their own personal benefit as individuals, but formed it in
their capacity as trustees of the Laborers Pension Health &
Welfare-Vacation Trust Funds for the benefit of those trust
funds, and in view of the trustees’ fiduciary responsibilities
toward the beneficiaries of those funds, it is a fair inference
that in exercising their financial and administrative control
over the Applicant, the trustees do so with an eye toward the
welfare of the Laborers Pension-Health & Welfare-Vacation
Trust Funds. Plainly, the welfare of those trust funds includes
the financial solvency of the Applicant, inasmuch as the Ap-
plicant was created by these trust funds to administer their
funds. Indeed, the Laborers Pension-Health & Welfare-Vaca-
tion Trust Funds have in fact placed their financial resources
behind the Applicant by guaranteeing the Applicant’s month-
ly lease payments for electronic data processing equipment
and by loaning the Applicant almost $500,000.
The vast majority of the Applicant’s revenue is the form
of fees paid to the Applicant by the Laborers Pension-Health
& Welfare-Vacation Trust Funds; during the fiscal year end-
ing May 31, 1988, approximately 67 percent of the Appli-
cant’s income was from the fees paid to it by the Laborers
Pension-Health & Welfare-Vacation Trust Funds. In addition
to providing the vast majority of the Applicant’s revenue in
the form of administrative fees, the Laborers Pension-Health
& Welfare-Vacation Trust Funds have made their financial
resources available to the Applicant by means of substantial
loans and by guaranteeing to a third party that the Applicant
will fulfill a contractual obligation. In this regard, as de-
scribed previously, the Laborers Pension-Health & Welfare-
Vacation Trust Funds have made loans totaling $480,000 to
the Applicant, which are still outstanding, and for the past
several years have guaranteed the Applicant’s monthly rental
payments of $11,200 for electronic data processing equip-
ment used by the Applicant in the operation of its business.
It is for all of the above-stated reasons that I am persuaded
the Laborers Pension Trust Fund, the Laborers Health &
Welfare Trust Fund, and the Laborers Vacation Trust Fund
are affiliates of the Applicant within the meaning of Section
102.143(g) of the Board’s Rules and Regulations. See gen-
erally Pacific Coast Metal Trades District Council (Foss
Shipyard), 271 NLRB 1165 (1984), and 295 NLRB 156
(1989).
Counsel for the General Counsel’ further contention that
the Laborers Training Trust Fund is an affiliate of the Appli-
cant within the meaning of Section 102.143(g) lacks merit.
The Laborers Training Trust Fund was not a party to the cre-
ation of the Applicant inasmuch as the Applicant’s articles
of incorporation provide that, ‘‘[t]he members of the Appli-
cant] shall be the duly appointed trustees of the [Pension La-
borers-Health & Welfare-Vacation Trust Funds].’’ Also, un-
like the Laborers Pension-Health & Welfare-Vacation Trust
Funds, the Laborers Training Trust Fund has not loaned the
Applicant money or guaranteed its payments for leased busi-
ness equipment or otherwise made its financial resources
available to the Applicant. The Laborers Training Trust Fund
is merely one of the Applicant’s customers which may at any
time chose to do business with someone else. In contrast, the
Laborers Pension-Health & Welfare-Vacation Trust Funds
are realistically obligated to do business with the Applicant
because: it was the trustees of those trust funds, acting on
behalf of those trust funds, who incorporated the Applicant
for the purpose of administering the Laborers Pension-Health
& Welfare-Vacation Trust Funds: it is the trustees of the La-
borers Pension-Health & Welfare-Vacation Trust Funds,
who, as members of the Applicant, are in the loose sense of
the word, the ‘‘owners’’ of the Applicant; it is the Laborers
Pension-Health & Welfare-Vacation Trust Funds who have
loaned the Applicant $480,000 and guaranteed the Appli-
cant’s monthly payments for leased office equipment; and, it
is the Laborers Pension Trust Fund which has entered into
a long-term lease with the Applicant for the Applicant’s use
of office space in property owned by that fund. In view of
these circumstances, the fact that the persons who were the
1039LABORERS FUNDS OF NORTHERN CALIFORNIA
trustees of the Laborers Training Trust Fund on May 24,
1988, coincidentally, on that date, were the same persons as
the trustees of the Laborers Pension-Health & Welfare-Vaca-
tion Trust Funds as of that date, is insufficient to establish
that the Laborers Training Trust Fund is an affiliate of the
Applicant within the meaning of Section 102.143(g). I am
also persuaded there has been no showing that the ‘‘financial
relationship’’ between the Applicant and the Laborers Train-
ing Trust Fund is such that it would constitute ‘‘special cir-
cumstances’’ so as to make it appropriate, under Section
102.143(g), to aggregate the Laborers Training Trust Fund’s
net worth with that of the Applicant’s and its affiliates.
Having found that the Laborers Pension-Health & Wel-
fare-Vacation Trust Funds are affiliates of the Applicant
within the meaning of Section 102.143(g) of the Board’s
Rules and Regulations, the remaining question concerning
the Applicant’s eligibility for an award of fees and expenses
under the EAJA, is whether the combined net worth of the
Applicant and its affiliates totals not more than $7 million.
As I have found supra, the net worth of the Applicant and
its affiliate as of the fiscal year ending May 31, 1988, was
as follows: Applicant, $30; Laborers Vacation Trust Fund,
$2,529,980; Laborers Pension Trust Fund, minus
$155,378,410; and Laborers Health & Welfare Trust Fund,
minus $2,480,242. Obviously, their combined net worth is
not more than $7 million. Accordingly, having concededly
met the other eligibility requirements, the Applicant is eligi-
ble for an award of fees and expenses under the EAJA.
Assuming I have erred in computing the net worth of the
Laborers Health & Welfare Trust Fund, and its net worth is
$5,519,758, as contended by the General Counsel, and as-
suming I have also erred in concluding that the Laborers
Training Trust Fund is not an affiliate of the Applicant and
it would otherwise be inappropriate to combine its net worth
with the Applicant’s, the combined net worth of the Appli-
cant and its affiliates would still not exceed $7 million be-
cause of the Laborers Pension Trust Fund’s $155,378,410
negative net worth. In go concluding, I considered and re-
jected the counsel for the General Counsel’s contention that
when combining the net worth of an applicant and its affili-
ates, it is unnecessary to include the net worth of those affili-
ates who have a negative net worth. The contention that the
net worth of the affiliates herein may be viewed separately,
is contrary to the plain language of Section 102.143(g) of the
Board’s Rules and Regulations: ‘‘The net worth . . . of the
applicant and all of its affiliates shall be aggregated to deter-
mine eligibility.’’ While there may be good reasons for not
following the plain language of the Board’s Rules and Regu-
lations in certain situations, I am not at liberty to depart from
the straightforward and unambiguous language of the
Board’s Rules and Regulations requiring the aggregation of
the net worth of all of an applicant’s affiliates, where, as
here, the General Counsel has cited no authority or even of-
fered a rationale for deviating from the Rule’s plain lan-
guage, and there is no obvious reason for concluding that the
Rule does not mean what it says.
The General Counsel’s Justification for Issuing
the Complaint
On November 1, 1979, when its current collective-bar-
gaining contract with Local 3 expired, the Applicant, which
was at the time engaged in negotiating the terms of a suc-
cessor contract with Local 3, unilaterally instituted its final
contract proposal, even though the negotiations had not
reached an impasse. One of these unilateral changes was the
substitution of a 5-day 7-hour workweek for the employees’
4-day 8-hour workweek. The other unilateral changes insti-
tuted at that time were the elimination of premium pay, the
elimination of four paid holidays, changes in employee eligi-
bility requirements for paid holidays and sick leave, and a
change in policy regarding a laid-off employee’s eligibility
for recall. On February 26, 1981, in Case 20–CA–14543, the
Board, in an unpublished Order, adopted the findings and
conclusions of an administrative law judge that the Appli-
cant’s above-described unilateral conduct violated Section
8(a)(5) and (1) of the Act. To remedy the Applicant’s unilat-
eral changes in the employees’ terms and conditions of em-
ployment, the Board ordered the Applicant, among other
things, to restore the status quo ante, until such time as the
parties bargained in good faith for a reasonable time and
reached a new agreement or, in the alternative, reached an
impasse, and also ordered the Applicant to make the employ-
ees whole for any loss of earnings they may have suffered
by reason of the Applicant’s November 1, 1979 unilateral
changes in their terms and conditions of employment.
On August 14, 1981, the Court of Appeals for the Ninth
Circuit entered a judgment enforcing the Board’s order. That
judgment summarily adopted the Board’s order of February
26, 1981. Thereafter, for several years, the Applicant refused
to comply with the court’s judgment of August 14, 1981, and
its subsequent orders.
It was not until April 17, 1987, that the Applicant fully
restored the status quo ante, as required by the court’s judg-
ment and contempt orders, and it was not until December
1987 that, in compliance with the court’s judgment and con-
tempt orders, that the Applicant made the employees whole
for the losses they incurred as the result of its unfair labor
practices.
In the meantime, in November 1986, after a lengthy hia-
tus, the Applicant and Local 3 resumed their negotiations for
a successor collective-bargaining contract. As described in
detail in my decision in the underlying unfair labor practice
proceeding, there is no dispute that after extensive negotia-
tions with Local 3, which resulted in an impasse, that on July
20, 1987, the Applicant implemented the terms of its final
contract offer which included its proposed 5-day 7-hour
workweek, thereby unilaterally changing its employees’
workweek from 4- to 8-hour days to 5- to 7-hour days.
On July 22, 1987, Local 3 filed its unfair labor practice
charge with the Board’s Regional Director in this case, alleg-
ing that the Applicant had violated Section 8(a)(5) and (1)
of the Act by unilaterally implementing terms and conditions
of employment without bargaining to an impasse with Local
3. The Regional Director, after conducting an investigation,
notified all parties, by letter dated September 23, 1987, that
there was insufficient evidence to establish a violation of the
Act, as alleged, because ‘‘there does not appear to be an
nexus between [the Applicant’s earlier violations of the Act]
and the current failure to reach agreement.’’ Local 3 filed a
timely appeal with the Office of Appeals of the Board’s Gen-
eral Counsel. The Office of Appeals by letter dated April 18,
1988, informed the parties that Local 3’s appeal had been
‘‘sustained’’ because ‘‘it was concluded that the employer’s
declaration of a bargaining impasse and unilateral implemen-
1040 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tation of changes in terms and conditions of employment
raised Section 8(a)(5) and (1) issues warranting Board deter-
mination based upon record testimony developed at a hearing
before an Administrative Law Judge.’’
The complaint in the underlying unfair labor practice pro-
ceeding was issued by the General Counsel on May 24,
1988, and it alleged, in substance, that on July 20, 1987, the
Applicant changed the workweek of its employees rep-
resented by Local 3 from a 32-hour workweek, comprised of
4-8 hour days, to a 35-hour workweek, comprised of 5-7
hour days, and further alleged that by engaging in this con-
duct the Applicant violated Section 8(a)(5) and (1) of the Na-
tional Labor Relations Act, because this change in the em-
ployees’ terms and conditions of employment was made uni-
laterally and in the absence of ‘‘a valid impasse.’’ In support
of this allegation, the General Counsel did not contend that
the contract negotiations between the Applicant and Local 3
had not reached impasse by July 20, 1987, when the Appli-
cant unilaterally imposed the terms of its last contract offer,
including the 40-hour workweek of 5- to 8-hour days. Rath-
er, it was the General Counsel’s position that the bargaining
impasse which existed on that date was not a valid impasse
because the Applicant’s prior unremedied unlawful unilateral
changes found by the Board in Case 20–CA–14543 tainted
the impasse, thus, the General Counsel contended that the
Applicant was not privileged to unilaterally implement the
workweek provision of its last contract offer. More specifi-
cally, it was the position of the General Counsel that the bar-
gaining negotiations had not reached impasse by July 20,
1987, because of these factors: The Applicant previously vio-
lated Section 8(a)(5) of the Act in 1979 by unilaterally
changing the employees’ terms and conditions of employ-
ment in several different respects, including their workweek
from 4-8 hour days to 5-7 hour days, and subsequently for
several years refused to comply with the judgment and or-
ders of the court requiring it to remedy those unfair labor
practices by restoring the status quo ante; the Applicant fully
restored the status quo ante, as required by the court’s judg-
ment and contempt orders, only a little more than 3 months
before July 20, 1987; and, it was not until approximately 5
months after July 20, 1987, that the Applicant, in compliance
with the court’s judgment and contempt orders, made the
employees whole for the losses they incurred as the result of
the Applicant’s unfair labor practices.
I rejected the General Counsel’s position because I found
that the record failed to establish that a cause of the parties’
bargaining impasse was the Applicant’s previous unlawful
unilateral changes in the employees’ terms and conditions of
employment and, in defiance of the court’s judgment and
contempt orders, its delay in remedying those changes. Nei-
ther the General Counsel nor the Charging Party excepted to
my decision. Subsequently, the Board, in an unpublished
order, adopted my findings and conclusions that the Appli-
cant had not engaged in unfair labor practices in violation of
the Act and dismissed the complaint in its entirety.
The EAJA provides that a prevailing party may receive an
award for fees and expenses incurred in connection with an
adversary adjudication involving an administrative agency of
the Federal Government, unless it is shown that the position
of the agency was ‘‘substantially justified’’ or that ‘‘special
circumstances’’ make an award unjust. Here, the General
Counsel contends that the agency’s position in the underlying
unfair labor practice proceeding was substantially justified,
even though it was judged to be without merit. The law is
settled that substantially justified means ‘‘justified to a de-
gree that could satisfy a reasonable person,’’ or having a
‘‘reasonable basis both in law and fact.’’ Pierce v. Under-
wood, 109 S.Ct. 2541, 2550 (1988). I am of the opinion that
the General Counsel was not substantially justified in issuing
the complaint in this proceeding.
Regarding the General Counsel’s contention that the par-
ties’ bargaining impasse as of July 20, 1987, was tainted by
the Applicant’s failure to rescind its prior illegal unilateral
changes of the employees’ terms and conditions of employ-
ment, the law is settled that when an employer implements
unlawful unilateral changes in employees’ terms and condi-
tions of employment, the employer ‘‘violates the Act even if
it then enters into bargaining on that subject, so long as it
has failed in the interim to reinstate the condition it has un-
lawfully discontinued.’’ American Commercial Lines, 291
NLRB 1066, 1075 (1988), citing, NLRB v. Allied Products
Corp., 548 F.2d 644, 652 (6th Cir. 1977). If, however, after
implementing the illegal unilateral changes the employer
continues to bargain with the union which represents its em-
ployees and an impasse in bargaining occurs, the impasse is
considered valid even though the employer in the interim
failed to rescind the unilateral changes and reinstate the con-
ditions it had previously unlawfully discontinued. Depend-
able Building Maintenance Co., 274 NLRB 216, 219 (1985),
supp. dec., 276 NLRB 27 (1985); Eagle Express Co., 273
NLRB 501 (1984); J.D. Lunsford Plumbing, 254 NLRB 1360
(1981). See also NLRB v. Cauthorne, 691 F.2d 1023, 1026
(D.C. Cir. 1982) (‘‘where an employer and a union have bar-
gained in good faith, despite the employer’s prior unilateral
changes in wages and conditions of employment, the em-
ployer’s liability for the unlawful unilateral changes termi-
nates on the date when the parties execute a new agreement
or reach a lawful impasse.’’). But, if there is a showing that
the prior unremedied unlawful unilateral conduct was a factor
(not necessarily the sole one) that caused the bargaining im-
passe, it taints the impasse and precludes the employer from
relying on the impasse as a defense to its unilateral change
in the employees’ terms and conditions of employment. See
Shipbuilders (Bethlehem Steel) v. NLRB, 320 F.2d 615 (D.C.
Cir. 1973), on remand sub nom. Bethlehem Steel Co., 147
NLRB 977 (1964). In the instant case, however, the record
fails to establish that when the General Counsel issued the
complaint herein that she had a reasonable factual basis for
believing that the Applicant’s failure to rescind its prior ille-
gal unilateral changes in the employees’ terms and conditions
of employment and restore the status quo ante, despite the
several court orders that it do so, was a cause of the parties’
July 20 bargaining impasse.
The only evidence in the possession of the General Coun-
sel which colorably suggested that the Applicant’s failure to
rescind those unilateral changes, despite the several court or-
ders that it do so, contributed to the eventual impasse in the
Applicant’s contract negotiations with Local 3, was the fol-
lowing: Local 3’s request and the Applicant’s refusal in Jan-
uary 1987, at the outset of the contract negotiations, to dis-
cuss the Applicant’s legal obligation to rescind the illegal
unilateral changes it had made in the employees’ working
condition; and, Local 3’s statements made to the Applicant
at several subsequent negotiation meetings that it would be
1041LABORERS FUNDS OF NORTHERN CALIFORNIA
easier for Local 3 to reach agreement on the terms of a new
contract with the Applicant if the parties sit down and ‘‘re-
solve’’ the issues concerning the Applicant’s legal obligation
to rescind the illegal unilateral changes it had made in the
employees’ condition of employment. However, the other
evidence submitted to the General Counsel during the inves-
tigation of Local 3’s unfair labor practice charge, and the
failure of Local 3 to supply certain evidence in support of
that charge, should have demonstrated convincingly to the
General Counsel that the Applicant’s lengthy delay in re-
scinding the illegal unilateral changes it had made in the em-
ployees’ working condition, in derogation of several court or-
ders to rescind those changes and restore the status quo ante,
played no part in the bargaining impasse. In this regard, the
record shows that at the time of the issuance of the com-
plaint in this proceeding and its prosecution, the General
Counsel knew the following.
Three months prior to July 20, 1987, the date on which
the Applicant implemented its contract proposal providing
for a 5-day 35-hour workweek, the Applicant on April 17,
1987, rescinded all of the illegal unilateral changes it had
made in the employees’ working conditions and, in compli-
ance with its legal obligation, restored the status quo ante in-
cluding the restoration of the employees’ 4-day 32-hour
workweek.
During the several bargaining sessions which predated
April 17, 1987, Local 3 and the Applicant were far apart
concerning their respective workweek proposals; Local 3
continually proposed that the employees work a 4-day 32-
hour workweek, as provided in the parties’ last collective-
bargaining agreement, and the Applicant continually pro-
posed that they work a 5-day 40-hour workweek.
Between April 17, 1987, when the Applicant rescinded the
illegal unilateral changes it had made in the employees’
working conditions and restored the status quo ante, and July
20, 1987, when the Applicant implemented its 5-day 35-hour
workweek proposal, the parties’ negotiators held four bar-
gaining sessions, during which they discussed their respective
bargaining proposals and positions at length and reached
agreement on a substantial number of issues which had pre-
viously divided them. However, they remained as far apart
as ever on the major issue of the employees’ workweek. The
Applicant, as described supra, previously had been demand-
ing a 5-day 40-hour workweek, but now proposed a 5-day
35-hour workweek for the first year of the parties’ contract,
and a 5-day 37-1/2-hour workweek for the remainder of the
contract’s term. Local 3, however, refused to budge from the
position it had held since the start of the negotiations in De-
cember 1986; a 4-day 32-hour workweek, as provided in the
parties’ most recent collective-bargaining agreement and in
Local 3’s current collective-bargaining agreements with other
employers in the industry. During one of the bargaining ses-
sions held between April 17 and July 20, 1987, Local 3’s ne-
gotiator explained to the Applicant’s negotiator that one of
the reasons for Local 3’s insistence on a 4-day 32-hour
workweek was that since Local 3’s collective-bargaining
contracts with other employers in the industry contained this
provision, Local 3 felt it would be adversely affected if it
agreed to a more favorable provision in its negotiations with
the Applicant.
In support of its unfair labor practice charge, Local 3 did
not supply the General Counsel with evidence that during the
period which postdated April 17, 1987, that Local 3’s con-
duct at the bargaining table and its conduct in rejecting the
Applicant’s final contract proposal was influenced by the
Applicant’s delay in rescinding the illegal unilateral changes
it had made in the employees’ working conditions and restor-
ing the status quo ante. I have presumed that if Local 3 had
presented such evidence to the General Counsel in the form
of statements by officials of Local 3 or employees or of
Local 3’s literature addressed to the employees or third par-
ties, that counsel for the General Counsel would have pre-
sented this evidence in the underlying unfair labor practice
proceeding.
The above-described considerations, in their totality, have
persuaded me that when the General Counsel issued the com-
plaint in the underlying unfair labor practice proceeding, the
General Counsel did not have a basis for reasonably believ-
ing that the impasse in bargaining between Local 3 and the
Applicant, which existed on July 20, had been caused in
whole or in part by the Applicant’s delay in complying with
its legal obligation to rescind the illegal unilateral changes it
had made in the employees’ working conditions and to re-
store the status quo ante. Rather, the evidence which the
General Counsel possessed, particularly the evidence describ-
ing how Local 3 had conducted itself at the bargaining table
during the 3-month period after the Applicant had rescinded
its illegal unilateral changes and restored the status quo ante,
clearly warranted the inference that the Applicant’s delay in
rescinding the unilateral changes and restoring the status quo
ante had absolutely nothing whatever to do with the parties’
bargaining impasse. The reasonableness of this inference
should have been even more readily apparent to the General
Counsel because of Local 3’s failure to furnish evidence that
Local 3’s conduct at the bargaining table subsequent to April
17 and its July 16, 1987 rejection of the Applicant’s final
contract proposal, was conduct influenced by the Applicant’s
delay in complying with its legal obligation to rescind the il-
legal unilateral changes it had made in the employees’ work-
ing conditions, or that Local 3 believed this to have been the
case.
The General Counsel’s contention that the parties’ bargain-
ing impasse herein was tainted by the Applicant’s failure to
make the employees whole for the loss of earnings they had
suffered because of the Applicant’s illegal unilateral changes
lacks a reasonable basis in law. Counsel for the General
Counsel cites no authority and there is none which, expressly
or by implication, holds that a bargaining impasse cannot
justify unilateral changes in employees’ working conditions,
if one of the reasons for the impasse was the employer’s fail-
ure to comply with that part of a Board order, in an unfair
labor practice case, which requires the employer to make the
employees whole for their loss of earnings. One of the rea-
sons for the lack of authority is that an employer, who has
been found to have violated the Act by unilaterally changing
his employees’ working conditions and because of this has
been ordered by the Board to, among other things, make the
employees whole for the loss of earnings they may have suf-
fered, has the right under the Board’s Rules and Regulations
to litigate, in a Board-conducted backpay hearing, the
amount of backpay claimed. This is exactly what the Appli-
1042 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
8 On approximately April 17, 1987, the date on which the Applicant com-
plied with the Board order by rescinding all of the unilateral changes and re-
storing the status quo ante, the Board’s Regional Office commenced its inves-
tigation to determine the amount of backpay owed under the terms of the
Board’s make-whole order. Thereafter, when the Regional Office personnel de-
termined the amount of backpay owed and submitted this figure to the Appli-
cant, the Applicant disputed that amount and, as a result, the Board’s Regional
Director on August 11, 1987, issued a backpay specification and notice of
hearing, which afforded the Applicant an opportunity to legally dispute the Re-
gional Director’s claims. Subsequently, between August 11, 1987, and Decem-
ber 1987, the Applicant reached an agreement with the Regional Director on
the amount of the backpay owed by the Applicant under the terms of the
Board’s order, and pursuant to that agreement, in December 1987 the Appli-
cant paid these moneys to the employees, thus satisfying the make whole pro-
visions of the Board’s order. There is no record evidence which shows that
in disputing the amount of backpay, which the Board’s Regional Director
claimed was required to satisfy its backpay obligation, that the Applicant acted
frivolously or in bad faith, or that the General Counsel had reason to believe
that this was the case.
9 In January 1987, at the start of the contract negotiations, the Applicant’s
negotiator refused the request of Local 3’s negotiator to discuss the Appli-
cant’s legal obligation to make whole the employees for the loss of earnings
they incurred as a result of the Applicant’s illegal unilateral changes in their
working conditions. Subsequently, on several occasions during contract negoti-
ating sessions, Local 3’s negotiator informed the Applicant’s negotiator that
it would be easier for Local 3 to reach agreement on the terms of the new
contract, if the Applicant would sit down and ‘‘resolve’’ the issues concerning
the Applicant’s legal obligation to make whole the employees for their loss
of earnings incurred because of the Applicant’s illegal unilateral changes in
their working conditions.
cant did in the present case.8 Under these circumstances, the
Applicant was not obligated to negotiate with Local 3 about
the amount of backpay it owed under the terms of the
Board’s make-whole order,9 instead of exercising its right
under the Board’s Rules and Regulations to litigate this issue
in a Board-conducted backpay proceeding. Accordingly, even
if a contributing cause of the eventual impasse in the parties’
bargaining negotiations was the Applicant’s refusal to discuss
with Local 3, as a part of their contract negotiations, its legal
obligation to make whole the employees for the earnings
they lost because of the Applicant’s unfair labor practices,
the General Counsel had no reasonable basis in law for tak-
ing the position that it tainted the impasse.
In any event, the General Counsel failed to establish that
when the complaint issued, the General Counsel had a rea-
sonable factual basis for believing that the Applicant’s fail-
ure to make the employees whole for their loss of earnings
was one of the factors which contributed to the bargaining
impasse. As I have found supra, the evidence in the posses-
sion of the General Counsel overwhelmingly indicated that
the sole cause of the parties’ impasse in bargaining was their
irreconcilable and intransigent bargaining positions con-
cerning the employees’ workweek, which because of this
warranted the inference that even absent the Applicant’s fail-
ure to make the employees whole by July 20, the parties
would still have been at an impasse on that date. This is viv-
idly demonstrated by the fact that even after the Applicant
in December 1987 made the employees whole for their loss
of earnings, in compliance with the orders of the Board and
court, the contract negotiations still remained hopelessly
deadlocked for the same reasons—the parties’ irreconcilable
differences over the employees’ workweek.
Lastly, I considered counsel for the General Counsel’s ar-
gument that, ‘‘[i]n view of the [Applicants] prior commission
of unfair labor practices of the same kind as alleged in the
charge herein and its deliberate refusal to comply with the
Board and court orders over a period of several years, it was
reasonable [for the General Counsel] to conclude that such
conduct normally has an impact on the bargaining process
and is likely to affect the conduct of the parties at the bar-
gaining table.’’ I recognize, as counsel for the General Coun-
sel suggests, that there are circumstances where the nature of
an employer’s unfair labor practices will so undermine a
union’s bargaining position so as to warrant the reasonable
inference that a good-faith bargaining impasse could not
thereafter take place, unless the employer first remedied its
illegal conduct. Here, however, it is undisputed that the Gen-
eral Counsel knew that 3 months prior to the disputed im-
passe in bargaining, the Applicant had remedied the most
significant aspects of its unfair labor practices by rescinding
the illegal unilateral changes it had made in its employees’
working conditions and by restoring the status quo ante. In
any event, there is no per se rule or conclusive presumption
that an employer’s unfair labor practices automatically pre-
cludes the possibility of meaningful negotiations and pre-
vents the parties from reaching a good-faith impasse. NLRB
v. Cauthorne, 691 F.2d 1023, 1025 (D.C. Cir. 1982). In the
instant case, for the sake of argument, assuming that on its
face the employer’s unfair labor practices and its deliberate
refusal to comply with the orders of the Board and court for
a period of several years, was the type of misconduct reason-
ably calculated to have led the General Counsel to believe
that unless fully remedied such conduct would preclude
good-faith bargaining from occurring, it did not mean that
the General Counsel was privileged to shut her eyes to what
had in fact occurred during the parties’ contract negotiations.
It was only by ignoring what in fact had taken place during
the parties’ contract negotiations that the General Counsel
could have reasonably believed that the Applicant’s prior un-
fair labor practices and its contemptuous refusal to comply
with the court’s orders to remedy that conduct, contributed
to the parties’ bargaining impasse. For, as I have found
supra, the evidence which the General Counsel possessed or,
as described infra, would have possessed in greater detail, if
she had not failed to accept the Applicant’s offer to submit
it during the investigatory stage of this case, demonstrated
overwhelmingly to the General Counsel that the sole cause
of the parties’ impasse was the irreconcilable and intransigent
bargaining positions taken by the parties concerning the em-
ployees’ workweek, and that because of this, even absent the
Applicant’s unfair labor practices and its contemptuous re-
fusal to remedy those practices, the parties’ contract negotia-
tions would still have been at impasse during the time mate-
rial.
In finding, as described supra, that the General Counsel
had knowledge of what occurred during the collective-bar-
gaining negotiations between the Applicant and Local 3, I re-
lied upon the September 9, 1987 position letter to the
Board’s Regional Director from the Applicant’s attorney,
Robert W. Tollen, and the uncontradicted testimony of Rob-
ert Russell, the Applicant’s negotiator, which was given by
Russell when he testified on behalf of the Applicant during
the unfair labor practice proceeding. My reason for attrib-
uting to the General Counsel the knowledge of Russell’s tes-
timony concerning the parties’ contract negotiations, follows.
Shortly after Local 3 on July 22, 1987, filed its unfair
labor practice charge, Attorney Tollen notified the Board’s
Regional Office that the Applicant was prepared to allow the
Board agent assigned to investigate the charge to take state-
1043LABORERS FUNDS OF NORTHERN CALIFORNIA
10 A copy of this letter was sent to the Director of the General Counsel’s
Office of Appeals.
11 On August 19, 1988, the Regional Director issued an order rescheduling
the hearing to October 18, 1988, at the request of the Charging Party’s attor-
ney.
ments from the Applicant’s negotiators about the contract ne-
gotiations between the Applicant and Local 3. In response
Attorney Tollen was informed that the Regional Office per-
sonnel did not desire to interview the Applicant’s negotiators
because the General Counsel did not dispute the Applicant’s
assertion that the contract negotiations had reached an im-
passe during the time material to the charge. Thereafter, after
considering the evidence submitted by Local 3 in support of
its charge and the information set forth in Attorney Tollen’s
September 9, 1987 position letter, the Board’s Regional Di-
rector notified all parties, by letter dated September 23, 1987,
that there was insufficient evidence to establish a violation
of the Act, as alleged, because ‘‘there does not appear to be
a nexus between [the Applicant’s earlier violations of the
Act] and the current failure to reach agreement.’’ Local 3 ap-
pealed the Regional Director’s dismissal to the General
Counsel’s Office of Appeals, which during the latter part of
April 1988 notified the Applicant that Local 3’s appeal had
been sustained and that the case had been remanded to the
Board’s Regional Director with instructions to issue a com-
plaint, absent a settlement. On May 2, 1988, Attorney Tollen,
on behalf of the Applicant, wrote the Regional Director, in
pertinent part, as follows:10
We are in receipt of the letter of April 18, 1988 from
the General Counsel’s Office of Appeals directing you
to issue a complaint in the above matter. The General
Counsel is in error. She does not have substantial jus-
tification for the issuance of a complaint. We ask that
no complaint issue. In the event that a complaint does
issue, and we are ultimately successful, we will geek
attorney’s fees, pursuant to the Equal Access to Justice
Act, 5 U.S.C. § 504 et seq.
Your office has provided us with the cages that were
cited by the Office of Appeals. They are Olive Knoll
Farms, Inc., 223 NLRB 260, 265 (1976); Bethlehem
Steel, Inc., 147 NLRB 977 (1964); and M & C Vending
Co., 278 NLRB 47 (1986). Those cages stand for the
obvious legal principle that ‘‘there can be no legally re-
organizable impasse . . . if a cause of the deadlock is
the failure of one of the parties to bargain in good
faith.’’ Industrial Union v. NLRB, 320 F.2d 615, 621
(3rd Cir. 1963). As the Administrative Law Judge
wrote in Wayne’s Olive Knoll Farms: ‘‘A party cannot
parlay an impasse resulting from it’s own misconduct
into a license to make unilateral changes.’’ 223 NLRB
at 265. We acknowledged that principle in our letter to
you of September 9, 1987, at page 5.
The General Counsel does not have substantial jus-
tification for concluding that the Laborers Fund admin-
istrative office’s prior failures to bargain in good faith
were the cause of the impasse reached in July, 1987.
The Office of Appeals’ letter recites that issues have
been raised ‘‘warranting Board determination based
upon record testimony developed at a hearing before an
Administrative Law Judge.’’ That statement is wrong.
The General Counsel does not know whether such
issues have been raised. Region 20 did not interview
the Administrative Office’s witnesses. Please see page
4 of my letter of September 9, 1987, noting that the
Administrative Office was prepared to give statements,
but that Region 20 did not want them. Section 10056.4
of the Casehandling Manuel [sic] recites that the
charged party should be contacted if the investigation
of the charging parties evidence points to a prima facie
case. We do not believe that the evidence submitted by
Local 3 pointed to a prima facie case that the prior fail-
ures to bargain in good faith caused the July, 1987 im-
passe. Even if that evidence had pointed to a prima
facie case, that case might have been dispelled if Re-
gion 20 had interviewed the Administrative Office’s
witnesses.
The General Counsel’s wish to develop record testi-
mony does not satisfy the substantial justification stand-
ard. By directing the issuance of a complaint without
interviewing the charged party’s witnesses, the General
Counsel has denied herself the opportunity to determine
that there is substantial justification for the issuance of
a complaint.
The Regional Director did not respond to this letter and,
prior to the issuance of the complaint on May 24, 1988, did
not afford the Applicant with an opportunity to present its
evidence concerning the parties’ contract negotiations, by ei-
ther interviewing the Applicant’s witnesses concerning those
negotiations or by having Attorney Tollen submit the wit-
nesses’ statements. The May 24, 1988 complaint notified the
parties that the hearing in the matter would be held before
an administrative law judge on August 2, 1988, but due to
conflicts in their schedules the attorneys for the Applicant
and Local 3 asked that the matter be rescheduled to another
date and these requests were granted, and the hearing was
eventually rescheduled to be held August 30, 1988.11 Prior
to that date, on August 12, 1988, the Attorney assigned to
prosecute the case for the General Counsel wrote Attorney
Tollen, as follows:
I have been assigned to represent the General Coun-
sel of the National Labor Relations Board at the hearing
in the above-captioned case. It has come to my atten-
tion that on May 2, 1988 you sent a letter to Robert
H. Miller, Regional Director, Region 20 asserting that
your client had not been afforded the opportunity to
make evidence available to the Regional Office during
the investigation in the above-captioned case.
It is the policy of this agency to afford the Charged
Party an opportunity to make available to the Regional
Office evidence concerning the factual issues raised
during the investigation of an unfair labor practice
charge. Accordingly, the Regional Office now desires
to afford Respondent an opportunity to make available
evidence in the above-captioned case. Such evidence
will be carefully considered by the Regional Office.
Moreover, the Regional Office will inform the office of
Appeals of any evidence which Respondent may
present. As you know, the Office of Appeals made the
decision to issue the Complaint in the above-captioned
case.
It is requested that you please advise the Regional
Office in writing by the close of business on August
1044 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
18, 1988, whether Respondent desires to make available
evidence in the above-captioned case. In the event that
I do not hear from you by that date, it will be assumed
that your client does not desire to present evidence. If
your client requires additional time to make a decision,
you may request an extension of the due date prior to
August 18, 1988.
On August 16, 1988, Attorney Tollen, by letter, responded
to counsel for the General Counsel’s letter, as follows:
I am in receipt of your letter of August 12, 1988,
which strikes me as insincere. If I am wrong, then I
apologize in advance, but the fact is that the Regional
Office first issued a complaint and then waited more
than three months to react to my letter of May 2, leav-
ing only 2 weeks remaining before the hearing. Further,
the reason a Respondent presents his evidence to the
Regional Office is to convince the Regional Office that
no complaint should issue. Otherwise, one would not
present his evidence to his adversary. The April 18,
1988 letter from the Office of Appeals remanded the
case to the Regional Director with ‘‘instructions to
issue [a] complaint.’’ I find nothing in the letter that
left the Regional Director with discretion to take evi-
dence from the Respondent and then to decide not to
issue a complaint. Nor does your letter of August 12
tell me that the Office of Appeals has joined in your
request for additional evidence or authorized the Re-
gional Director to reconsider the issuance of a com-
plaint. Indeed, your statement that any evidence Re-
spondent offers ‘‘will be carefully considered by the
Regional Office’’ appears to be carefully crafted go as
not to speak on behalf of the Office of Appeals. So
does your statement that ‘‘the Regional Office will in-
form the Office of Appeals of any evidence which Re-
spondent may present.’’
The proper way to have gone about this matter ini-
tially would have been for the Office of Appeals to
have reversed the Regional Director’s decision not to
issue a complaint and to have directed the Regional Di-
rector to resume his investigation. You have not ad-
vised me that the Office of Appeals will now allow the
Regional Director to withdraw the complaint and to re-
evaluate whether or not a complaint should issue, based
on a completed investigation.
Neither counsel for the General Counsel nor the Regional Di-
rector responded to this letter.
During the subsequent unfair labor practice hearing coun-
sel for the General Counsel, as had been represented to the
Applicant’s attorney during the investigation of the case, did
not contest the Applicant’s contention that the collective-bar-
gaining contract negotiations between the Applicant and
Local 3 had reached a state of impasse during the time mate-
rial. Rather, counsel for the General Counsel took the posi-
tion that the impasse was not a valid one because it was
tainted by the Applicant’s prior unfair labor practices. As a
result, the testimony of Robert Russell, the Applicant’s nego-
tiator, which described the parties’ contract negotiations, was
not contradicted by the General Counsel, except in one re-
spect; Russell’s testimony about the discussion between him-
self and Local 3’s negotiator concerning the Applicant’s prior
unfair labor practices.
In view of the Applicant’s request that the General Coun-
sel interview its negotiator concerning the contract negotia-
tions between Local 3 and the Applicant, for the specific
purpose of affording the Applicant an opportunity to dem-
onstrate to the General Counsel that there was no ‘‘substan-
tial justification’’ for the General Counsel to believe that the
Applicant’s prior unfair labor practices contributed to the
parties’ bargaining impasse, and in view of the General
Counsel’s failure to interview the Applicant’s negotiator or
to otherwise, in lieu of that, request that the Applicant’s at-
torney submit detailed evidence of those negotiations, and in
view of the fact that this conduct was contrary to Section
101.4 of the Board’s Statement of Procedure and contrary to
customary operating procedure, and considering that the Gen-
eral Counsel has offered no good reason for deviating from
the General Counsel’s usual policies, I find it is appropriate
to attribute to the General Counsel the knowledge of what
occurred during the contract negotiations between the Appli-
cant and Local 3, as described by the Applicant’s negotiator
Russell when he testified during the unfair labor practice
hearing. Presumably if the General Counsel had followed the
General Counsel’s usual practices and procedures during the
investigation of Local 3’s charge and had interviewed Rus-
sell at that time, as requested by the Applicant, or in lieu of
that, instructed the Applicant’s attorney to submit a detailed
statement describing the parties’ contract negotiations, Rus-
sell or the Applicant’s attorney would have submitted to the
General Counsel the same detailed description of the parties’
contract negotiations as contained in Russell’s unfair labor
practice hearing testimony. As noted supra, his testimony in
all but one respect was not disputed by Local 3’s negotiator.
To sum up, as described supra, Attorney Tollen’s letters
to the Board’s Regional Office of September 7, 1987, and
May 2, 1988, placed the General Counsel on notice that the
Applicant was prepared to and desired to present detailed
evidence concerning the collective-bargaining negotiations
between the Applicant and Local 3, for the specific purpose
of showing the General Counsel that there was no substantial
justification for the General Counsel to believe that the Ap-
plicant’s prior unfair labor practices contributed to the im-
passe in those negotiations. However, because apparently the
General Counsel, as evidence by the April 18, 1988 Office
of Appeals’ letter, had ‘‘concluded that the [Applicant’s]
declaration of a bargaining impasse and unilateral implemen-
tation of changes in the terms and conditions of employment,
raised Section 8(a)(5) and (1) issues warranting Board deter-
mination based upon record testimony developed at a hearing
before an Administrative Law Judge,’’ the General Counsel
chose to shut her eyes to what had in fact occurred during
the parties’ contract negotiations, and in disregard of the
General Counsel’s usual investigatory practices and proce-
dures issued the complaint without affording the Applicant
an opportunity to present its detailed evidence of the parties’
contract negotiations, which would have shown the General
Counsel that the General Counsel was without substantial
justification in issuing the complaint.
In my opinion where, as in the instant case, the charged
party specifically notified the General Counsel of the specific
evidence it desired to submit, specifically informed the Gen-
eral Counsel that after considering that evidence it would be
1045LABORERS FUNDS OF NORTHERN CALIFORNIA
12 266 NLRB 392, 393 (1983), enfd. 739 F.2d 1305, 1311–1312 (8th Cir.
1984).
13 Although not relevant, I note in passing that after considering all of the
evidence submitted by Local 3, in support of its charge, and Attorney Tollen’s
September 7, 1987 position letter, the Board’s Regional Director dismissed
Local 3’s charge in this case because he was of the view that the Applicant’s
prior unfair labor practices did not contribute to the parties’ bargaining im-
passe.
readily apparent to the General Counsel that there was no
‘‘substantial justification’’ for the issuance of the complaint,
and the General Counsel without good reason and in viola-
tion of the Board’s usual practices and procedures went
ahead and issued the complaint without affording the Appli-
cant an opportunity to submit that evidence, and where, as
here, the record further reveals that if the General Counsel
had followed the usual practices and procedures and consid-
ered the Applicant’s evidence, that the evidence would have
demonstrated to the General Counsel that there was no sub-
stantial justification for the issuance of the complaint, I am
persuaded that knowledge of such evidence should be attrib-
uted to the General Counsel and that, under such cir-
cumstances, it would be contrary to the policies underlying
the EAJA to find that the General Counsel had substantial
justification in issuing the complaint.
I have considered that in Iowa Parcel Service12 the Gen-
eral Counsel’s investigation of an unfair labor practice
charge was inadequate and violated the Board’s procedures
because of the General Counsel’s failure to ascertain the
charged employer’s evidence or position, yet the Board, with
court approval, in the subsequent EAJA proceeding rejected
the employer-applicant’s contention that had there been an
adequate investigation, the General Counsel would not have
had sufficient information in his possession to justify the
issuance of the complaint, where the record revealed that the
General Counsel had sufficient information in his possession
to justify the issuance of the complaint. The instant case,
however, differs significantly from Iowa Parcel Service be-
cause unlike that case the Applicant in the instant case spe-
cifically notified the General Counsel of the specific type of
evidence it desired to present and notified the General Coun-
sel that this evidence would demonstrate to the General
Counsel that there was no ‘‘substantial justification’’ for the
issuance of a complaint, and the record further shows that in
the instant case, if the General Counsel had afforded the Ap-
plicant the opportunity to submit the evidence it desired to
submit, that the evidence would have demonstrated to the
General Counsel that there was no substantial justification
for the issuance of the complaint.
I agree with the Applicant that the General Counsel’s be-
lated invitation to the Applicant to submit its detailed evi-
dence of the negotiations, issued approximately 2-1/2 months
after the issuance of the complaint and virtually on the eve
of the scheduled unfair labor practice hearing, came too late
because the conduct of the General Counsel was reasonably
calculated to lead the Applicant’s attorney to believe that to
submit his evidence at that late date would have been an ex-
ercise in futility. Moreover, when the Applicant’s attorney
responded to counsel for the General Counsel’s invitation by
inquiring whether, after considering the evidence, the
Board’s Regional Director, under whose name the complaint
had issued, would have the authority to withdraw the com-
plaint, the Applicant’s attorney received no answer from ei-
ther counsel for the General Counsel or any other other rep-
resentative of the General Counsel. Absent such an assurance
or, at the very least, some assurance that the complaint
would be withdrawn if the evidence submitted warranted its
withdrawal, it is not surprising that the Applicant’s attorney
failed to submit his evidence to counsel for the General
Counsel on the eve of the scheduled unfair labor practice
hearing.
If I have erred in imputing to the General Counsel the
knowledge of Russell’s unfair labor practice testimony con-
cerning the contract negotiations, I would still conclude that
Attorney Tollen’s September 7, 1987 position letter to the
Regional Director, by itself, contained sufficient factual in-
formation about the parties’ negotiations so as to have placed
the General Counsel on notice that the Applicant’s prior un-
fair labor practices played no part in the parties’ current bar-
gaining impasse and that the sole cause of the impasse was
the parties’ intransigent bargaining position over the subject
of the employee workweek.13 Attorney Tollen’s position let-
ter informed the Regional Director of the following pertinent
facts: 3 months before the July 20, 1987 bargaining impasse,
the Applicant had rescinded all of its illegal changes in the
employees’ working conditions and had completely restored
the status quo ante; during this 3-month period Local 3 and
the Applicant had held several lengthy bargaining sessions
and, as a result of those sessions, the parties had reached
agreement on virtually all of the issues which had kept them
from reaching agreement, except for the issue of the employ-
ees’ workweek; the parties were hopelessly deadlocked over
the issue of the employees’ workweek and had refused to
compromise on that subject both prior to July 20, 1987, and
during the negotiations held after July 20, 1987; and, Local
3 had explained to the Applicant that it was not possible for
Local 3 to compromise its bargaining position concerning the
employees’ workweek because it was afraid that its collec-
tive-bargaining contracts with other employers in the indus-
try, which included the workweek provision it was pro-
posing, would be adversely affected if it comprised on that
issue during its negotiations with the Applicant. These rep-
resentations, contained in Attorney Tollen’s position letter,
were not contradicted by counsel for the General Counsel
when they were presented during the unfair labor practice
hearing. In my opinion, they establish the General Counsel
had no reasonable factual basis for believing that the Appli-
cant’s prior unfair labor practices contributed to the impasse
in bargaining which had occurred during the time material to
this case.
In support of the contention that the General Counsel had
a reasonable factual basis when she issued the complaint for
believing that the Applicant’s illegal unilateral changes in the
employees’ working conditions contributed to the parties’
bargaining impasse, the General Counsel relies on the
Board’s decisions in M & C Vending Co., 278 NLRB 320,
325 (1986); Wayne’s Dairy, 223 NLRB 260, 265 (1976), and
Bethlehem Steel Co., 147 NLRB 977 (1964). Counsels for
the General Counsel in this proceeding and in the unfair
labor practice proceeding merely cited these cases and made
no attempt to compare them factually with the instant case
to persuade me that it was reasonable for the General Coun-
sel to rely on them. This is not surprising since M & C
Vending and Wayne’s Dairy do not remotely resemble the in-
stant case factually; they differ materially from the instant
1046 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
case in so many significant respects that I will not burden
this already over-long decision by summarizing their perti-
nent facts. Bethlehem Steel, although factually closer to the
instant case, is, as I noted in my decision in the unfair labor
practice proceeding, factually distinguishable in significant
respects, including the fact that there the employer had not
rescinded its prior illegal changes in its employees’ working
conditions and restored the status quo ante, by the date it
was claiming that a bargaining impasse justified its subse-
quent unilateral changes. Here, as described in detail supra,
the General Counsel when she issued the complaint knew the
following: the Applicant’s unfair labor practices had been re-
scinded and the status quo ante fully restored, as long as 3
months prior to the disputed impasse; knew that the parties
had held lengthy contract negotiations during that interim
and continuing thereafter; knew that during those negotia-
tions Local 3 remained unyielding in its position concerning
the employees’ workweek; and, knew that Local 3 refused to
compromise its position on that subject, which position it had
continually maintained since the start of the negotiations sev-
eral months earlier. I recognize, as noted by counsel for the
General Counsel, that ‘‘no two cases are alike; no single
precedent can fix the answer to the next,’’ but I am per-
suaded that the General Counsel was unreasonable in relying
on Bethlehem Steel and the other cited cases as authority for
the issuance of the complaint in this case.
It is for all of the reasons set forth above that I find the
General Counsel was not substantially justified in initiating
and pursuing the unfair labor practice proceeding herein
against the Applicant.
The Applicable Hourly Rate for Attorney’s Fees
The EAJA, Section 5 U.S.C. § 504(b)(1)(A), provides that
‘‘attorney or agent fees shall not be awarded in excess of
$75 per hour, unless the Agency determines by regulation
that an increase in the cost of living or a special factor, such
as the limited availability of qualified attorneys or agents for
the proceeding involved, justifies a higher fee.’’ Section
102.145 of the Board’s Rules limits recoverable fees to $75
per hour and Section 102.146 provides that in order to in-
crease the maximum fee, that any person may file a petition
with the Board for rulemaking to increase the maximum fee
and that the petition should state why higher fees are war-
ranted by an increase in the cost of living or a special factor
such as the limited availability of qualified attorneys or
agents for the proceedings involved.
The hourly rates charged the Applicant for the services of
the partner of the law firm, who represented the Applicant
throughout this case, ranged from $185 to $210. The hourly
rate of the attorneys who assisted him, ranged from $95 to
$140. The Applicant contends that ‘‘the $75 rate is totally
out of touch with reality’’ and urges that it be compensated
at the actual rates charged by its attorneys or, at the very
least, the rate of $75 an hour be adjusted to take into account
the increase in the cost of living. However, the Applicant has
not made a request to the Board, by application for rule-
making or otherwise, for an increase in the allowable hourly
rate of $75. Absent such a request and a favorable ruling by
the Board, I am without authority to consider the Applicant’s
request for attorney’s fees higher than the maximum pro-
vided by the EAJA and the Board’s Rules. Accordingly, I
shall compute the Applicant’s attorney’s fees herein at the
hourly rate of $75.
The Applicant’s Claim for Fees and Expenses Incurred
Prior to the Issuance of the Complaint
As described supra, the unfair labor practice charge in the
underlying unfair labor practice proceeding was filed by
Local 3 on July 22, 1987, and on May 24, 1988, the General
Counsel issued the complaint.
Counsel for the General Counsel contends that all of the
Applicant’s fees and expenses incurred prior to the issuance
of the complaint are not compensable under the EAJA be-
cause they were not incurred in connection with the General
Counsel’s prosecution of the complaint, but were incurred as
a part of the Regional Director’s investigation of Local 3’s
charge.
Counsel for the Applicant contends that although generally
fees and expenses incurred before the issuance of a com-
plaint issued in an unfair labor practice proceeding are not
compensable under the EAJA, that those incurred in the in-
stant case from September 2 through September 22, 1987, in
connection with the Applicant’s September 9, 1987 position
letter to the Board’s Regional Director, are compensable be-
cause the investigation of the facts and the legal research
which went into the preparation of that position letter were
both useful and of the type ordinarily necessary for the Ap-
plicant to advance its case during the subsequent adversary
adjudication. The facts pertinent to this issue are as follows.
Early in September 1987, Attorney Tollen, the Applicant’s
lawyer, was notified by Regional Office personnel that it ap-
peared to the Board’s Regional Office that Local 3’s charge
was meritorious. Attorney Tollen was also given the factual
and legal basis for this belief, and invited to submit a state-
ment of position. The theory of the alleged violation, as ex-
plained to Attorney Tollen, was the same theory as was ulti-
mately relied on by the General Counsel in the issuance of
and the prosecution of the complaint. Thereafter, during Sep-
tember 1987, in response to the invitation of the Board’s
agent to submit a statement of position to the Board’s Re-
gional Director, the Applicant’s lawyer did the following:
Analyze the cases relied on by the Board’s Regional Office,
which were essentially the same cases relied on by the Coun-
sel for the General Counsel during the prosecution of the
complaint; researched the circumstances under which a prior
unfair labor practice, including one still unremedied, might
taint an otherwise valid bargaining impasse: interviewed the
employees of the management consultant firm who, on be-
half of the Applicant, were negotiating with Local 3, so as
to learn more about the precise facts as they related to this
legal research; and had further discussions with the personnel
of the Board’s Regional Office about the legal theories in-
volved.
Based upon the aforesaid investigation of the facts and
law, Attorney Tollen prepared an 8-page position letter
which, on September 9, 1987, he submitted to the Board’s
Regional Director. This letter sets forth the Applicant’s posi-
tion as to the facts and the law, and was a response to the
contention of the Board’s Regional Office personnel that the
bargaining impasse between Local 3 and the Applicant was
not a valid one because it had been tainted by the Appli-
1047LABORERS FUNDS OF NORTHERN CALIFORNIA
14 Although the letter also dealt with the Regional Office’s personnel’s con-
tention that the Applicant was in contempt of the court’s order, this constituted
only a de minimis part of the letter. I also note that the fee statement sub-
mitted by the Applicant for the period (Sept. 2 through 22, 1987) reveals none
of the legal research and analysis performed by the Applicant’s lawyers in
connection with the preparation of the letter, dealt with the contention that the
Applicant’s prior unremedied unfair labor practices had tainted the parties’
bargaining impasse.
cant’s prior unremedied unfair labor practices.14 The letter
was written for several reasons: To persuade the Board’s Re-
gional Director not to issue a complaint; and to collect to-
gether, organize and preserve the analysis of the Applicant’s
defenses for use in the event a complaint issued. Ultimately,
the investigation of the facts, the legal research, and the anal-
ysis of that research as applied to the facts, all of which went
into the September 9, 1987 position letter, formed the basis
for the Apllicant’s successful defense against the General
Counsel’s prosecution of the complaint; the record shows
that in trying its case before me during the unfair labor prac-
tice hearing, the Applicant used virtually all of this informa-
tion—factual and legal—in presenting its case-in-chief. In
view of the above-described factors, I agree with the Appli-
cant that the time spent by the Applicant’s lawyer in pre-
paring the September 9, 1987 position letter submitted to the
Board’s Regional Director, concerned work which was both
useful and of a type ordinarily necessary to advance the Ap-
plicant’s position during the later adversary adjudication.
The statutory provision on which the Applicant’s fee ap-
plication is based (5 U.S.C. § 504(a)(1)) applies only to fees
and expenses incurred ‘‘in connection with’’ an ‘‘adversary
adjudication’’ before an administrative agency, and 5 U.S.C.
§ 504(b)(1)(C) defines ‘‘adversary adjudication’’ as ‘‘an ad-
judication under Section 554 of this title in which the posi-
tion of the United States is represented by counsel or other-
wise.’’ Sections 102.143 and 102.144 of the Board’s Rules
and Regulations, which implement those provisions of the
EAJA, state in pertinent part, ‘‘[a]n eligible applicant may
receive an award for fees and expenses incurred in connec-
tion with an adversary adjudication,’’ and defines the term
‘‘adversary adjudication’’ to mean ‘‘unfair labor practice
proceedings pending before the Board on complaint, and
backpay proceedings . . . pending before the Board on no-
tice of hearing.’’
Counsel for the General Counsel takes the position that
even if the investigation of the facts and the legal research
work that went into the preparation of the Applicant’s Sep-
tember 9, 1987 position letter to the Regional Director were
both useful and of a type ordinarily necessary for the Appli-
cant to advance its case during the subsequent adversary ad-
judication, that as a matter of law those fees and expenses
are not compensable under the EAJA, because they were in-
curred prior to the issuance of the complaint. Counsel cites
no Board authority for this position. In this regard, I note
that in the handful of cases where the Board has issued
EAJA awards and where the successful applicants have asked
to be compensated for precomplaint legal fees and expenses,
that the administrative law judges have ruled against the ap-
plicants on this issue and the applicants did not file excep-
tions to the judges’ decisions. DeBolt Transfer, 271 NLRB
299 (1984), and Evergreen Lumber Co., 278 NLRB 656
(1986). Thus, the Board has not ruled on this question. The
Applicant relying on Webb v. Dyer County Board of Edu-
cation, 471 U.S. 234 (1985), contends that if the legal serv-
ices performed by its lawyers in connection with the submis-
sion of its September 9, 1987 position letter to the Regional
Director were both useful and ordinarily necessary to the Ap-
plicant to advance its side of the litigation during the General
Counsel’s prosecution of the complaint, that the expense of
those legal services is compensable under the EAJA, even
though they were performed prior to the issuance of the com-
plaint. I agree.
In Webb a school teacher, after being terminated by the
Board of Education, retained counsel to represent him in an
administrative proceeding before the Board of Education,
where the teacher contested his termination on the grounds
that it was racially motivated and that his constitutional
rights had been violated. Four years later the Board of Edu-
cation decided to adhere to its decision. Subsequently, the
teacher instituted an action in federal district court, seeking
relief under various civil rights statutes, including 42 U.S.C.
§ 1983. The case was subsequently settled by entry of a con-
sent order awarding the teacher damages and other relief.
Thereafter, the teacher filed a motion for an award of fees
under the Civil Rights Attorney’s Fees Awards Act of 1976,
42 U.S.C. § 1988, which provides that, ‘‘[i]n any action or
proceeding to enforce’’ certain civil rights statutes, including
Section 1983, ‘‘the court, in its discretion, may allow the
prevailing party . . . a reasonable attorney’s fee as part of
the costs.’’ The district court, with the approval of the Court
of Appeals, awarded a fee, but rejected the teacher’s conten-
tion that it should cover services performed by counsel in the
administrative proceeding before the Board of Education.
In Webb the Supreme Court held that a ‘‘prevailing party’’
within the meaning of Section 1988 was not entitled to a fee
award for services rendered during a school board hearing
not required for pursuit of a Section 1983 claim, and in this
regard reasoned (Webb v. Dyer County Board of Education,
471 U.S. at 241):
Congress only authorized the district courts to allow the
prevailing party a reasonable attorney’s fee in an ‘‘ac-
tion or proceeding to enforce [§ 1983].’’ Administrative
proceedings established to enforce tenure rights created
by state law simply are not any part of the proceedings
to enforce Sec. 1983, and even though the petitioner
obtained relief from his dismissal in the later civil
rights action, he is not automatically entitled to claim
attorney’s fees for time spent in the administrative
process.
The Court then went on to consider the teacher’s second
theory—that under the Court’s reasoning in Hensley v.
Eckerhart, 461 U.S. 424 (1983), even if there was no auto-
matic entitlement for the time spent on the administrative
proceeding, that such time would be compensable if it was
shown to have been reasonably expended in the preparation
for the later litigation. Webb v. Dyer Board of Education,
461 U.S. 234, 241–244 (1985). The Supreme Court, in con-
sidering this argument, emphasized that each case must be
decided on its own facts, and that although some legal serv-
ices performed before formally filing a lawsuit are compen-
sable under Section 1988, it was not error for the district
court to exclude the 5 years of easily separable administra-
tive time in computing a ‘‘reasonable attorney’s fee’’ for the
teacher’s counsel, where ‘‘[t]he [teacher] made no suggestion
1048 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
15 Although Webb and Hensley v. Eckerhart, 461 U.S. 424 (1983), on which
the Court’s opinion in Webb was based in substantial part, involved fee appli-
cations under the Civil Rights Attorney’s Fees Awards Act, 42 U.S.C. § 1988,
the standards set forth in those opinions appear to be ‘‘generally applicable’’
to all cases in which Congress has authorized an award of fees to a ‘‘pre-
vailing party.’’ 461 U.S. at 433 fn. 7.
16 The situation of an attorney for a charged party who has been notified
by the General Counsel that the General Counsel intends to issue a complaint
against his client in the immediate future, is analogous to the situation of an
attorney who represents a party that is in the process of preparing to initiate
litigation against another party by filing a complaint. In those situations, if the
plaintiff prevails in his lawsuit, he can recover attorney’s fees for the legal
services performed prior to the filing of the complaint insofar as those services
are reasonably related to the litigation which the complaint generates. See
Webb v. Dyer County Board of Education, 471 U.S. 234, 250–251 (1985)
(Brennan, J., concurring in part and dissenting in part).
below that any discrete portion of the work product from the
administrative proceedings was work that was both useful
and of a type ordinarily necessary to advance the civil rights
litigation to the state it reached before settlement.’’ Webb v.
Dyer County Board of Education, 471 U.S. at 243. In other
words, as the Court of Appeals for the Third Circuit stated
in Delaware Valley Citizens’ Council for Clean Air v. Penn-
sylvania, 762 F.2d 272, 277 fn. 7 (1985), ‘‘the Supreme
Court recently held in Webb that fees may be recovered
under 42 U.S.C. § 1988 for time spent by counsel pursuing
‘optional administrative proceedings,’ so long as counsel’s
work ‘was both useful and of a type ordinarily necessary to
advance the [civil rights] litigation’ to the point where the
party prevailed.’’ See also Webb v. Dyer County Board of
Education, 471 U.S. at 244–245 (Brennan, J., concurring in
part and dissenting in part) (Court’s conclusion authorizes
limited awards of fees under Sec. 1988 for work performed
in optional state administrative proceedings if such work was
‘‘useful and of a type ordinarily necessary to the successful
outcome of the subsequent litigation.’’).
In view of the Supreme Court’s opinion in Webb, and hav-
ing found, supra, that the time spent by the Applicant’s law-
yers in preparing the September 9, 1987 position letter in-
volved legal work which was both useful and of a type ordi-
narily necessary to advance the Applicant’s position during
the later adversary adjudication, I further find that the Appli-
cant’s legal fees and expenses incurred from September 2
through September 22, 1987, in connection with that position
letter, are compensable under the EAJA.15
The Applicant’s Claim for Fees and Expenses Incurred
Before the Complaint Issued, but Subsequent to the
Applicant’s Notice from the General Counsel that the
General Counsel Intended to Issue the Complaint
On May 24, 1988, the complaint in the underlying unfair
labor practice case issued. However, as described supra, on
April 18, 1988, the General Counsel notified all of the par-
ties to the proceeding that the General Counsel’s Office of
Appeals was remanding the case to the Board’s Regional Di-
rector with instructions to issue a complaint, absent settle-
ment. The Applicant contends it is entitled to the legal fees
and expenses it incurred between April 18, 1988, and May
24, 1988, in connection with the anticipated issuance of the
complaint, because the General Counsel’s April 18, 1988 an-
nouncement that a complaint would be issued should be
equated with the issuance of a complaint for the purposes of
the EAJA. Counsel for the General Counsel takes the posi-
tion that as a matter of law no fees and expenses incurred
prior to the actual issuance of a complaint are compensable
under the EAJA. Counsel for the General Counsel’s position
places form over substance.
I am of the opinion that when the General Counsel notifies
the parties involved in an unfair labor practice investigation,
including the charged party, that the General Counsel has de-
cided that absent settlement a complaint will issue, that this
announcement realistically is the equivalent of the actual
issuance of a complaint for purposes of the EAJA, and that
it is reasonable to expect that the charged party’s lawyer or
agent at that point in time will act in anticipation of the
issuance of the complaint.16 However, as provided in the
EAJA the legal fees and expenses incurred during this pe-
riod, as during the period which postdates the issuance of the
complaint, must be incurred in connection with the ‘‘adver-
sary adjudication’’ to be compensable.
In the instant case, between April 18, 1988, when the Ap-
plicant was notified by the General Counsel that a complaint
would issue, and May 24, 1988, when the complaint issued,
the Applicant’s attorneys performed the following legal serv-
ices for which the Applicant is seeking reimbursement: con-
sidered the General Counsel’s decision to issue the complaint
and the theory of the complaint; met with the Applicant’s
business manager and its collective-bargaining negotiators,
for the purpose of discussing with them the General Coun-
sel’s decision to issue the complaint; considered and re-
searched the cases which the General Counsel indicated she
intended to rely on in support of the complaint; considered
asking the General Counsel to reconsider her decision to
issue the complaint; considered the possibility of filing a mo-
tion for summary judgment in response to the issuance of the
complaint; considered and researched possible defenses to
the complaint; considered and researched the Board’s Rules
and Regulations concerning the EAJA and cases arising
under the EAJA, with the object of determining whether the
Applicant would qualify as a ‘‘prevailing party’’ under the
EAJA and whether the General Counsel had ‘‘substantial jus-
tification’’ to issue the complaint; and, on May 2, 1988 At-
torney Tollen, wrote a letter to the Board’s Regional Direc-
tor, with a copy to the General Counsel’s Office of Appeals.
This letter which has been set forth in detail supra, can be
briefly summarized as follows: It began by stating that the
General Counsel had no ‘‘substantial justification’’ for
issuing the complaint, asked that the complaint not issue, and
warned that if the complaint did issue and the Applicant ulti-
mately prevailed, that the Applicant intended to seek attor-
ney’s fees under the EAJA; analyzed the legal authority
which the General Counsel had relied on in concluding that
the issuance of a complaint was warranted because there was
not a valid bargaining impasse; stated that the evidence sub-
mitted by Local 3 did not establish a prima facie case and
that even if the evidence submitted by Local 3 indicated that
the parties’ bargaining impasse had been tainted by the Ap-
plicant’s prior unfair labor practices, this prima facie show-
ing would have rebutted by the Applicant’s evidence, if the
Board’s Regional Director had complied with the Applicant’s
request and interviewed the Applicant’s witnesses; and, the
letter ended by complaining that by failing to interview the
Applicant’s witnesses, the General Counsel had denied her-
self of the opportunity to determine that there was no ‘‘sub-
stantial justification’’ for the issuance of the complaint.
1049LABORERS FUNDS OF NORTHERN CALIFORNIA
I am of the opinion that all of the above-described legal
services were reasonably connected with the anticipated
issuance of the complaint and are of the type of services nor-
mally associated with the issuance of a complaint in a Board
unfair labor practice proceeding. I am also of the opinion
that the Applicant’s counsel did not act prematurely when,
after being notified that the General Counsel had decided to
issue a complaint, he promptly researched and considered the
applicability of the EAJA and thereafter notified the General
Counsel that the Applicant believed it qualified as an eligible
party under the EAJA and that if it prevailed in the upcom-
ing litigation it intended to seek attorney’s fees under the
EAJA because the General Counsel lacked ‘‘substantial jus-
tification’’ in issuing the complaint. The Applicant’s counsel
would have been remiss in his responsibility toward his cli-
ent, if knowing that a complaint would be issued, he had not
researched and considered the applicability of the EAJA and
had not notified the General Counsel of the fact that his cli-
ent was eligible for an award and that the General Counsel
had no substantial justification to issue the complaint because
of, among other things, the Regional Director’s failure to
interview the Applicant’s witnesses. In any event, even if the
Applicant’s attorney acted prematurely at this point in time
in considering the applicability of the EAJA, the Applicant’s
fees and expenses for those services are still compensable
under the EAJA, because the time spent in April and May
1988 researching and considering the EAJA’s applicability
was useful and of a type ordinarily necessary to the success-
ful outcome of the subsequent litigation involving the Appli-
cant’s claims under the EAJA. Webb v. Dyer County Board
of Education, 471 U.S. 234 (1985); cf. Reliable Tile Co., 280
NLRB 408, 408 at fn. 7 (1986).
It is for the foregoing reasons, that I find the legal fees
and expenses incurred between April 18 and May 24, 1988,
which have been claimed by the Applicant, are recoverable
under the EAJA.
The Applicant’s Claim for Fees and Expenses Incurred
in Connection with the Applicant’s Attorney’s August
16, 1988 Letter to the Board’s Regional Director
Counsel for the General Counsel contends that the Appli-
cant’s legal fees and expenses incurred in connection with
the preparation of the Applicant’s Attorney’s August 16,
1988 letter to counsel for the General Counsel are not com-
pensable under the EAJA, even though they were incurred
after the complaint issued, because they were not incurred in
connection with the General Counsel’s prosecution of the
complaint, but were incurred as a part of the Regional Direc-
tor’s precomplaint investigation.
This contention lacks merit. The letter was written several
months after the complaint and notice of hearing had issued
and shortly before the scheduled unfair labor practice hearing
and, as described in detail supra, inquired whether the
Board’s Regional Director, in whose name the complaint and
notice of hearing had been issued, had been given the author-
ity by the Board’s General Counsel to withdraw the com-
plaint, if the evidence submitted to counsel for the General
Counsel by the Applicant should persuade the Regional Di-
rector that this was the appropriate course of action. Clearly,
this letter, whose primary purpose was to determine whether
the Regional Director had authority to withdraw the out-
standing complaint and notice of hearing, was written by the
Applicant’s attorney in connection with the General Coun-
sel’s prosecution of the complaint. The fact that it was writ-
ten in response to counsel for the General Counsel’s belated
invitation to the Applicant, on behalf of the Board’s Regional
Director, to make available the Applicant’s detailed evidence
of the negotiation, so as to allow the Regional Director to
consider that evidence, does not detract from the fact that the
letter’s principal purpose was to determine whether the Re-
gional Director, after considering the evidence, had authority
to withdraw the complaint. Obviously if the Regional Direc-
tor lacked such authority or was unable to otherwise assure
the Applicant that if the Applicant’s evidence warranted it,
that the complaint would be withdrawn, it would have been
foolish, under the circumstances, for the Applicant to submit
its evidence to counsel for the General Counsel.
The Applicant’s Claim for Legal Fees and Expenses
for Services Relating to Defenses upon Which It
Did Not Prevail
The complaint in the underlying unfair labor practice pro-
ceeding consists of a single claim; the allegation that the Ap-
plicant violated Section 8(a)(5) and (l) of the National Labor
Relations Act by unilaterally changing its employees’ work-
week. The Applicant was the ‘‘prevailing party’’ in that pro-
ceeding for purposes of the EAJA because that claim was
dismissed in its entirety.
The Applicant’s lawyer, in preparing the Applicant’s de-
fense to the alleged unfair labor practice, spent time deter-
mining whether the Applicant was subject to the Board’s ju-
risdiction inasmuch as it seemed to counsel that, since the
Applicant had no direct inflow or outflow of goods and serv-
ices across state lines, it was questionable whether an organi-
zation such as the Applicant, which was paid to administer
employee benefit plans for trust funds and which operated
entirely within the State of California, would be subject to
the Board’s jurisdiction. Ultimately, however, counsel de-
cided that the trust funds’ purchases of insurance policies
from out of the state satisfied the Board’s indirect outflow
jurisdictional standard, at which point the Applicant dropped
its jurisdictional defense and during the outset of the unfair
labor practice hearing conceded that it met one of the
Board’s applicable jurisdictional standards and was an em-
ployer engaged in commerce.
Also, in defending itself against the General Counsel’s
complaint, the Applicant argued it was not obligated to nego-
tiate with Local 3 about the restoration of the status quo
ante, as required by the Board’s and court’s orders, because
the subject of compliance with those orders constituted a
nonmandatory subject of bargaining, thus, the Applicant ar-
gued its refusal to negotiate with Local 3 about that matter
could not have tainted the parties’ otherwise valid bargaining
impasse. However, in dismissing the complaint in its entirety,
I did not need to reach that defense.
Counsel for the General Counsel takes the position that
since the Applicant’s above-described jurisdictional and non-
mandatory subject of bargaining defenses did not prevail,
that with respect to those defenses the Applicant was not a
prevailing party under the EAJA and because of this should
not be compensated for the legal fees and expenses it paid
for the time its lawyer spent researching and considering
those defenses. The Applicant, on the other hand, contends
this issue is governed by the Supreme Court’s decision in
1050 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
17 Although Hensley involved a fee application under the Civil Rights Attor-
ney’s Fees Awards Act, 42 U.S.C. § 1988, the standards set forth in that opin-
ion are ‘‘generally applicable’’ in all cases in which Congress has authorized
an award of fees to a ‘‘prevailing party.’’ 462 U.S. at 433 fn. 7.
18 The fee statements relied on by the Applicant are dated as follows: Octo-
ber 16, 1987: May 24, 1988; June 22, 1988; July 26, 1988; August 24, 1988;
September 15, 1988; October 19, 1988; November 28, 1988; December 20,
1988; January 17, 1989; February 21, 1989; March 16, 1989; April 24, 1989;
May 16, 1989; June 2, 1989; June 15, 1989; July 10, 1989; August 21, 1989:
September 19, 1989; October 23, 1989; November 17, 1989; December 8,
1989; January 19, 1990; and, February 16, 1990. As noted previously, the Ap-
plicant does not rely on a September 22, 1989 fee statement because it con-
cedes that the legal services and expenses encompassed by that statement were
not connected with the underlying adversary adjudication or the instant supple-
mental proceeding.
19 These Declarations were filed on the following dates: June 6, 1989; July
7, 1989; October 2, 1989; November 10, 1989; December 5, 1989; December
18, 1989; January 29, 1990; and February 16, 1990. I note that the last Dec-
laration erroneously states it was executed on January 29, 1990. The contents
of the Declaration, the date it was served on the other parties, and the date
of receipt for filing, establish it was executed on or about February 16, 1989,
and filed immediately thereafter.
Hensley v. Eckerhart, 461 U.S. 424 (1983), and that based
on the Court’s reasoning in that decision, it is entitled to re-
cover legal fees and expenses incurred in connection with its
jurisdictional and nonmandatory subject of bargaining de-
fenses, even though it did not prevail on those defenses. I
agree.
In Hensley the Supreme Court held that in assessing attor-
ney’s fees under ‘‘prevailing plaintiff’’ statutes in cases
where the plaintiff has raised multiple claims in a single ac-
tion and only succeeded on some of them, the district court
must award fees in accordance with the plaintiff’s degree of
success. More specifically, the Court stated that where the
plaintiff’s action represents ‘‘distinctly different claims for
relief that are based on different facts and legal theories,’’
the court must deny fees for services rendered on the unsuc-
cessful claims. 461 U.S. at 434–435. However, in cases
where a plaintiff is a prevailing party which involve but a
single claim or multiple claims which involve a cooon core
of facts and/or related legal theories, the Court noted that in
those situations (461 U.S. at 424):
Where a plaintiff has obtained excellent results, his at-
torney should recover a fully compensated fee. Nor-
mally this will encompass all hours reasonably ex-
pended on the litigation . . . . In these circumstances
the fee award should not be reduced simply because the
plaintiff failed to prevail on every contention raised in
the lawsuit [Citation omitted]. Litigants in good faith
may raise alternative legal grounds for a desired out-
come, and the court’s rejection of or failure to reach
certain grounds is not a sufficient reason for reducing
a fee. The result is what matters.
The unfair labor practice proceeding involved, in which
the Applicant was the prevailing party, consisted of only a
single claim against the Applicant. The Applicant’s jurisdic-
tional and nonmandatory subject of bargaining defenses were
a part of the Applicant’s efforts to defend itself against that
single claim and there is no showing that those defenses
were considered and/or raised frivolously or in bad faith.
Quite the opposite, the record reveals that the Applicant
acted reasonably in considering and researching those de-
fenses. It is for these reasons, and based on the Supreme
Court’s decision in Hensley, that I find the legal fees and ex-
penses incurred by the Applicant in connection with its juris-
dictional and nonmandatory subject of bargaining defenses
are compensable under the EAJA, even though the Applicant
did not prevail on those defenses.17
The Applicant’s Claim for Fees Paid for Services
Performed by a Lay Clerk
The Applicant’s claim for legal fees submitted herein in-
cludes a claim for 12-3/4 hours of work performed by a law
clerk.
The record establishes that it is the current practice in the
applicable geographic area for attorneys to bill their clients
for work performed by law clerks and that the market rates
charged for the past several years ranged from $65 to $75
an hour, with the current rate being $75 an hour. Consistent
with the current rates in the community, the Applicant was
billed at $75 an hour for the services performed by the law
clerk. This is what the Applicant is claiming in this pro-
ceeding.
Counsel for the General Counsel contends that under the
EAJA, a law clerk’s services must be treated as part of a law
firm’s overheard and, as such, included in the attorney’s
hourly rate. Alternatively, counsel for the General Counsel
contends that, assuming the services of a law clerk are com-
pensable under the EAJA, that those services should be cal-
culated at actual cost—what the law clerk is actually paid per
hour.
The Applicant takes the position that the question of how
a ‘‘prevailing party’’ under the EAJA should be compensated
for legal fees paid for services performed by a law clerk was
settled by the Supreme Court in Missouri v. Jenkins, 57
U.S.L.W. 4735 (June 19, 1989), where the Supreme Court
held that under the Civil Rights Attorney’s Fees Awards Act
of 1976 (U.S.C. § 1988), that a ‘‘prevailing party’’ should be
compensated for the legal work of paralegal and law clerks
at the market rate for their services, rather than at their cost
to the attorneys. I agree. The Court’s rationale in Missouri
v. Jenkins, in my opinion, is equally applicable to the manner
in which a prevailing party must be reimbursed under the
EAJA for the money it paid for the legal services performed
by law clerks. In the instant case, as I have found supra,
there is no dispute that the requested rate of $75 an hour for
the legal services performed for the Applicant by the law
clerk was in line with the current community rate. Accord-
ingly, the Applicant’s request that it be reimbursed in that
amount is meritorious.
The Amount of the Applicant’s Recovery
In order to substantiate the amount of the legal fees and
expenses it incurred in connection with the underlying adver-
sary adjudication and in connection with the preparation and
prosecution of its Application in the instant supplemental
proceeding, the Applicant submitted fee statements which
show the dates and hours spent by its lawyers and law clerks
in performing those services, with a description of the spe-
cific services performed and expenses incurred.18 These fee
statements were submitted as a part of the several Declara-
tions filed in this proceeding by the Applicant’s attorney.19
These Declarations, among other things, explain and clarify
the fee statements in certain respects. I note that the updated
1051LABORERS FUNDS OF NORTHERN CALIFORNIA
20 In the section of the Applicant’s fee statements, as is the case with most
fee statements submitted to clients by law firms, the particular ‘‘expense’’ for
which the Applicant was billed is briefly described in terms of ‘‘copying
charge,’’ ‘‘delivery service,’’ ‘‘telephone call,’’ ‘‘Lexis Research Service,’’
‘‘On-Line Research Service,’’ and ‘‘travel.’’ I agree with the Applicant that
further documentation for the purpose of identifying line items would require
the production of voluminous records and involve an inordinate amount of
time. As indicated supra, rather than have the Applicant supply further docu-
mentation, I have reviewed the Applicant’s fee statements and analyzed them
in the light most favorable to the General Counsel.
21 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 objec-
tions to them shall be deemed waived for all purposes.
22 If the parties are unable to agree within a reasonable period of time con-
cerning the amount of any fees and expenses, incurred after the date of the
Applicant’s most recent submission, to which the Applicant is entitled in con-
nection with the prosecution of the apllication, the Applicant should submit
to the Judge a revised application for fees and expenses consistent with this
Supplemental Decision and Order.
revised schedule of fees computed at the $75 an hour rate
which is attached as an ‘‘Exhibit B’’ to several of the Dec-
larations is incorrect in these respects: The June 22 fee state-
ment shows 4.25 hours of legal services, not 4.50 hours as
set forth in revised schedule; the May 16, 1989 fee statement
shows 25.55 hours of legal services, not 25.05 as set forth
in the revised schedule; and, the revised schedule incorrectly
refers to a July 15, 1989 fee statement which it states shows
17.20 hours of legal services, whereas the record shows there
is no such fee statement, but that there is a July 10, 1989
fee statement which shows 20.65 hours of legal service.
I have reviewed and considered each of the aforesaid fee
statements and declarations and conclude that the Applicant
was billed by its attorney for 387.38 hours of legal services.
In view of the findings of fact and conclusions of law set
out in previous sections of this decision, I further find that
all of these legal services were performed in connection with
the underlying adversary adjudication or in connection with
the preparation and prosecution of the Application in this
supplemental proceeding. Since the Applicant is entitled to
an award of $75 an hour for the fees it paid for those legal
services, I further find that the Applicant is entitled to an
award of $29,053.50 in legal fees under the EAJA, plus any
additional compensable legal fees it may incur in connection
with its further prosecution of the Application.
Regarding the Applicant’s claim for the expenses it in-
curred in connection with the aforesaid legal services, I re-
viewed and considered each of the aforesaid fee statements
and declarations, and concluded that the Applicant has been
billed $5,160.53 for legal expenses. In view of the findings
of fact and conclusions of law set forth in previous sections
of this decision, I concluded that these expenses were in-
curred by its lawyer in connection with the underlying adver-
sary adjudication or in connection with the preparation and
prosecution of the Application in this supplemental pro-
ceeding, as well as in connection with other unrelated legal
matters. In this last regard, my analysis of the fee statements
has led me to conclude that in a number of cases it is not
possible to determine whether a particular expense, or what
part of a particular expense, was incurred in connection with
those legal services compensable under the EAJA, rather
than in connection with some nonrelated legal work which
the attorney was performing at that time for the Applicant.
However, my review and analysis of the fee statements sub-
mitted by the Applicant revealed that significantly more than
a majority of the claimed expenses were connected with the
legal services performed by the Applicant’s lawyer which, as
I have found supra, are compensable under the EAJA. But,
in view of the impossibility in a number of instances of de-
termining whether a particular expense, or what part of that
expense, was incurred in connection with those legal serv-
ices, rather than with other noncompensable legal services, I
shall compensate the Applicant for only 50 percent of the
$5,160.53 it paid in legal expenses. Accordingly, I find that
the Applicant is entitled to an award of $2,580.27 in legal
expenses under the EAJA, plus any additional compensable
legal expenses it may incur in connection with the further
prosecution of its application.
In recommending this award of fees and expenses, I con-
sidered the General Counsel’s contention that certain speci-
fied expense claims should be denied because of inadequate
documentation, and the General Counsel’s further contention
that the fee award should be reduced because: an unreason-
able number of hours were spent researching the Applicant’s
jurisdictional and non-mandatory subject of bargaining de-
fenses; the total of research hours spent in connection with
defending the Applicant in the underlying unfair labor prac-
tice proceeding ‘‘seems somewhat excessive’’; and, ‘‘the
overall time spent on research and preparation of [the] EAJA
application . . . is excessive and unreasonable.’’ I reject
these contentions because I am persuaded that the Appli-
cant’s expenses were adequately documented.20 And, consid-
ering the complexity of the issues involved and the high-
quality of the legal services provided, I am persuaded that
the time for which reimbursement is claimed was reasonably
expended.
CONCLUSIONS OF LAW
1. The Applicant is a prevailing party within the meaning
of the EAJA and meets the eligibility requirements of the
EAJA.
2. The position of the General Counsel in issuing and in
prosecuting the complaint in this case was not substantially
justified nor were there special circumstances which would
make an award of attorney’s fees and expenses unjust.
3. The Applicant is entitled to an award of attorney’s fees
and expenses under the EAJA totaling $31.633.77, plus addi-
tional compensable fees and expenses it may have incurred
or may incur in connection with the further prosecution of
its application since the period covered by the Applicant’s
last submission.
On these findings of fact and conclusions of law and on
the entire record, I issue the following recommended21
ORDER
It is ordered that the Applicant, the Laborers Funds Ad-
ministrative Office of Northern California, Inc., San Fran-
cisco, California, be awarded the sum of $31,633.77, pursu-
ant to its application for an award under the Equal Access
to Justice Act, plus the additional fees and expenses incurred
in connection with compensable portions of its EAJA appli-
cation since the period covered by the Applicant’s last sub-
mission.22