Lion Uniform

National Labor Relations Board - Board Decisions

Aug 7, 1987

285 N.L.R.B. 249 (N.L.R.B. 1987)

LION UNIFORM 249
Lion Uniform, Janesville Apparel Division and Oil,
Chemical and Atomic Workers International
Union, AFL-CIO. Cases 10-CA-12938(E), 10-
CA-13089(E), and 10-CA-13284-2(E)
7 August 1987
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
JOHANSEN, BABSON, AND STEPHENS
On 13 September 1983 Administrative Law
Judge J. Pargen Robertson issued the attached de-
cision. The General Counsel filed exceptions and a
supporting brief. The Applicant filed cross-excep-
tions, a supporting brief, and a brief in response to
the General Counsel's exceptions. The General
Counsel filed a brief in opposition to the cross-ex-
ceptions. The Applicant further filed a motion to
dismiss the General Counsel's exceptions for lack
of jurisdiction, and the General Counsel filed a
memorandum in opposition to the, Applicant's
motion to dismiss.' Thereafter, the General Coun-
sel filed a supplemental brief and a request for
leave to file that brief in opposition to the Appli-
cant's motion, and the Applicant filed a brief in op-
position thereto.2 The Applicant also filed a
motion for issuance of decision.
The ' Board has considered the decision and the
record in light of the exceptions, motions, and
briefs and has decided to affirm the judge's rulings,
findings, and conclusions only to the extent consist-
ent with this Supplemental Decision and Order.
On 21 January 1982 the Board issued a Decision
and Order in the underlying unfair labor practice
case.3 Thereafter, the Applicant applied for an
award of attorney's fees and expenses pursuant to
the Equal Access to Justice Act (EAJA), 5 U.S.G.
§, 504 (1982).4 In the attached decision, the judge
found that the' Applicant is an eligible party and
that the position of the General Counsel in the un-
derlying case was not "substantially justified"
within the meaning of EAJA. Accordingly, he rec-
olmmended that the Applicant be reimbursed for
certain specified fees and expenses incurred in the
underlying unfair labor practice proceeding and in
the instant EAJA proceeding. The General Coun-
sel has excepted; the Applicant has cross-excepted;
and, as noted, has also filed a motion to dismiss the
General Counsel's exceptions for lack of jurisdic-
tion.
Initially, we must rule on the Applicant's motion
to dismiss the General Counsel's exceptions for
lack of jurisdiction. The Applicant contends that
the Board does not have jurisdiction to review the
judge's EAJA decision. This contention is premised
on the original language of EAJA, which subse-
quently was amended.5 The amendments to EAJA,
which apply to "cases pending on . . . the date of
the enactment of this Act,"s include the addition of
the following language to Section 504(a)(3): "The
decision of the agency on the application for fees
and other expenses shall be the final administrative
decision under this section." The report of the
House of Representatives' Committee on the Judi-
ciary that accompanied the bill which subsequently
was enacted as the amendments to EAJA states, re-
garding this language, "This provision explicitly
adopts the view that the agency makes the final de-
cision in the award of fees in administrative pro-
ceedings under section 504. This ... recognizes
the fact that decisions in administrative proceedings
are generally not final until they have been adopted
by the agency."7 Accordingly, we find that the
Board has jurisdiction to review the judge's EAJA
decision, and we deny the Applicant's motion to
dismiss. We now consider the judge's award of fees
to the Applicant.
The first issues to consider are the Applicant's
eligibility for reimbursement and the date for deter-
mining that eligibility. The original language of
EAJA defined a "party" eligible for reimbursement
of legal fees and expenses as "[a] corporation .. .
but exclude[d] (i) any . . . corporation . . . whose
net worth exceeded $5,000,000 at the time the ad-
versary adjudication was initiated . . . and (ii) any
... corporation ... having more than 500 em-
ployees at the time the adversary adjudication was
initiated."8 The judge concluded that EAJA may
be read to include as eligible those corporations
with either 500 or fewer employees, or a net worth
of $5,000,000 or less. He also determined that the
Applicant's eligibility should be judged as of 17
1 The Applicant also requested oral argument . This request is denied as
the record, the exceptions, the cross -exceptions, and the briefs , adequately
present the issues and the positions of the parties.
2 The General Counsel's request is denied as the positions of the par-
ties had been presented adequately prior to the filing of the request, i.e.,
in the Applicant's motion to dismiss, the General Counsel's exceptions
and the General Counsel's memorandum in opposition to the Applicant's
motion.
$ Lion Uniform, 259 NLRB 1141.
4 Subsequently, EAJA was amended. See Pub. L. 99-80,'99 Stat 183-
187 (1985). '
5 See the original versions of 5 U.S.C. § 504(a)(1) (applications "shall"
be granted "unless the adjudicative officer of the agency finds that the
position of the agency as a party to the proceeding was substantially jus-
tified or that special circumstances make an award unjust"), § 504(c)(2)
N al party dissatisfied with the fee determination . . may petition for
leave to appeal to the court . . . having jurisdiction to review the merits
of the underlying decision of the agency adversary adjudication"); and
§ 504(6)(1)(6) which, in defining "party." does not include any agency of
the United States.
6 Pub . L 99-80 § 7(a), 99 Stat . '183, 186 (1985).
7 H.R. Rep. No. 99-120 at 14 (1985).
S 5 U.S.C. § 504(b)(1)(B) (1982).
285 NLRB No. 29
250 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
November 1977, the date on which the first com-
plaint in the underlying unfair labor practice case
was issued. We find merit in the General Counsel's
exceptions to both of these points.
Contrary to the judge's conclusion, the plain lan-
guage of Section 504(b)(1)(B) prior to the 1985
amendments clearly showed that a corporation
must have had both a net worth of not more than
$5 million and not more than 500 employees to be
eligible for an award from the Board under
EAJA.9 More important, however, is the 1985
amendment of the definition of an eligible party.
As noted above, the 1985 amendments to EAJA
apply to cases such as the instant case that were
pending on the date of the enactment of those
amendments . Section 504(b)(1)(B) was amended in
pertinent part to define as an eligible party "(ii) any
. .. corporation . . . the net worth of which did
not exceed $7,000,000 at the time the adversary ad-
judication was initiated, and which had not more
than 500 employees at the time the adversary adju-
dication was initiated."10 Thus, the currently appli-
cable language of EAJA makes it clear that both
the net worth requirement and the employee com-
plement requirement must be met as of the relevant
date if a corporation is to be found eligible for an
award of attorney's fees and expenses . We next
must determine the relevant date in this proceed-
ing.
The judge concluded that the relevant date to
consider eligibility was 17 November 1977, the
date on which the first complaint in the underlying
unfair labor practice proceeding was issued. As
noted above, EAJA defines the relevant date for
the determination of eligibility as "the time the ad-
versary adjudication was initiated,"" and the
Board's Rules and Regulations state that eligibility
shall be determined "as of the date of the com-
plaint in an unfair labor practice proceeding
...." 12 Neither definition explicitly addresses the
problem with which we are confronted in this case,
where two complaints were issued on two different
dates and the Applicant prevailed on the allega-
tions contained in the second complaint but did not
prevail on the allegations contained in the first
See also the original language of the Board's Rules and Regulations,
Sec. 102 143(c)(5), which defined as eligible those corporations "with a
net worth of not more than $5 million and not more than 500 employ-
10 See also Sec 102 143(c)(5) of the Board' s Rules and Regulations, as
amended . 51 Fed Reg 17732, 17733 (1986), which defines an eligible
corporation as one "with a net worth of not more than $7 million and not
more than 500 employees ." Sec 102 143(d), which was not revised,
states, "[Tjhe net worth and number of employees of an applicant shall
be determined as of the date of the complaint in an unfair labor practice
proceeding "
11 5 U S C. § 504(b)( 1)(B)
12 Board 's Rules and Regulations , Sec 102.143(d)
complaint as it issued on 17 November 1977.19 For
the following reasons, we agree with the General
Counsel and will find the Applicant eligible for an
award under EAJA only if it met the requirements
for eligibility on 9 February 1978, the date of the
second complaint and the date on which the Gen-
eral Counsel first made allegations on which the
Applicant prevailed.
A party may be eligible for an award of attor-
ney's fees and expenses pursuant to EAJA if it pre-
vails in the underlying adjudication14 or in a signif-
icant and discrete substantive portion of that pro-
ceeding.15 As described below, the Applicant
herein did not prevail on the allegations made for-
mally by the General Counsel in the complaint as it
issued on 17 November 1977. That earlier com-
plaint alleged, for the most part, that the Applicant
unlawfully threatened its employees in various re-
spects during a union organizing campaign at its
Lake City, Tennessee plant. The second complaint
primarily alleged that the Applicant unlawfully re-
moved certain work from the Lake City plant in
violation of Section 8(a)(3). Although, as the Ap-
plicant points out, the General Counsel relied heav-
ily on the organizing campaign threats in the at-
tempt to prove that the removal of the work was
motivated by unlawful considerations, the basic ele-
ments of the alleged violations are significantly dif-
ferent from each other and the allegedly unlawful
events were separated by a period of time-the
8(a)(1) allegations occurring 3-5 months before the
removal of the work from the Lake City plant
which was the subject of the 8(a)(3) allegation. Ob-
viously, an adverse ruling on the work removal al-
legations of the second complaint would have had
a much greater impact on the Applicant's business
than the cease-and-desist order that ultimately
issued on the first complaint's contentions. Under
these circumstances, we find that the date of the
second complaint, 9 February 1978, is the date on
which the Applicant's eligibility should be deter-
mined because the allegations on which the Appli-
cant prevailed were first alleged in that complaint
and because those allegations formed a significant
and discrete substantive portion of the underlying
proceeding.16
The next considerations involve the Applicant's
net worth and number of employees on the rele-
vant date of 9 February 1978. The General Coun-
sel admits that the Applicant had a net worth of
13 The complaint which issued on 17 November 1977 was later amend-
ed, in September 1980, to include certain 8(a)(5) allegations on which the
Applicant did prevail
14 5 U S C § 504(a)(1) and (2).
15 Board 's Rules and Regulations, Sec. 102 143(b)
11 See Board's Rules and Regulations , Sec 102 143(b)
LION UNIFORM
less than $5 million on the date.17 At issue is
whether the Applicant on that date employed 500
or fewer employees.1 ' The parties appear to agree
that the Applicant employed at least 436.6 employ-
ees for EAJA purposes on 9 February 1978. The
General Counsel and the Applicant each excepted
to certain findings of the judge that otherwise af-
fected the employee count. For example, the Ap-
plicant contends that the judge erred in including
certain "extra" or temporary employees who
worked at its Jellico, Tennessee plant between the
fall of 1977 and the summer of 1978, and that the
judge erred in including certain employees at its
Williamsburg, Kentucky plant who did not work
during the week that included 9 February 1978.
For the reasons stated by the judge, we agree with
his inclusion of these employees. The inclusion of
these individuals brings the employee count as of 9
February 1978 to 455.6. Accordingly, we next con-
sider the General Counsel's contention that the
judge erred in not counting 54 individuals who
were on strike at the Applicant's Lake City, Ten-
nessee plant from 12 October 1977 until 16 May
1978.
As found in the underlying unfair labor practice
case , the Applicant transferred production of its
product line of clothing from Lake City to Beatty-
ville, Kentucky, on 24 October 1977 because of the
strike at Lake City. The judge concluded that the
Lake City strikers should not be included in the
employee count because they were not regularly
performing services for the Applicant on the rele-
vant date and because, in view of the transfer of
the product line and the hiring of new employees
at Beattyville, inclusion of the strikers, who would
have been producing the Beattyville product line
had they not struck, would not give an accurate
picture of the Applicant's size for EAJA purposes.
We agree with the judge' s exclusion of the 54
strikers from the employee count. The Applicant
employed 74 individuals at the Beattyville plant on
9 February 1978 in classifications held by the Lake
City strikers prior to the strike. Those individuals
produced the same product produced in Lake City
before the strike. Under these circumstances, inclu-
17 As noted above, the net worth standard was raised to $7 million
when EAJA was amended in 1985
18 EAJA does not define the term "employees " However, it seems
clear that the definition is far less restrictive than that found in the Na-
tional Labor Relations Act, as amended, and in Board and court cases
interpreting Sec 2(3) of that Act The Board's Rules and Regulations
define "employees ," for EAJA purposes, as "all persons who regularly
perform services for remuneration for the applicant under the applicant's
direction and control Part-time employees shall be included on a propor-
tional basis " Sec 102 143(t)
251
Sion of the strikers would cause the Applicant to
appear to be a larger business than it is.19
Accordingly, we find that the Applicant had not
more than 500 employees and not more than $7
million in net worth on 9 February 1978, the date
on which the General Counsel initiated proceed-
ings on which the Applicant prevailed, and that
therefore the Applicant is an eligible party within
the meaning of EAJA.
Having found that the Applicant is a party eligi-
ble for an award of EAJA fees, we must next
decide whether the General Counsel was substan-
tially justified in initiating and pursuing the unfair
labor practice proceeding. The Board's Rules and
Regulations provide that an applicant may receive
an award for fees and expenses incurred in connec-
tion with an adversary adjudication if it prevailed
in that proceeding or in a significant and discrete
substantive portion of that proceeding unless the
General Counsel proves that the position in the
unfair labor practice case, over which the applicant
has prevailed, was substantially justified.20 Further,
in order to defeat a claim for fees and expenses
under EAJA, the General Counsel must meet that
burden with respect to each readily identifiable
stage of the proceeding.21 For example, the Gener-
al Counsel may be able to prove substantial justifi-
cation for issuing a complaint but not in proceeding
to a hearing or in filing exceptions to a judge's de-
cision. In this case, the judge concluded that the
General Counsel was not substantially justified in
issuing the complaint on which the Applicant pre-
vailed or in taking certain other actions during the
underlying proceeding. In this connection, he
found that there was "no evidence" showing that
the October 1977 relocation of the Applicant's
product line was unlawfully motivated and that the
General Counsel had offered no evidence showing
that the Applicant violated Section 8(a)(5) of the
19 We find it unnecessary to decide whether strikers will be excluded
from the total number of an applicant 's employees in all cases Further
arguments advanced by the General Counsel with regard to the inclusion
of other individuals need not be addressed because they would not affect
the result reached herein
20 Board 's Rules and Regulations , Secs 102 143(b), 102.144(a) The
judge 's decision in this case issued 13 September 1983, prior to the 1985
amendments to EAJA Subsequent to those amendments, effective 15
May 1986, the Board revised Sec. 102 144(a) of its Rules and Regulations
regarding substantial justification That section now states (51 Fed. Reg.
17732 ( 1986))
An eligible applicant may receive an award for fees and expenses in-
curred in connection with an adversary adjudication or in connec-
tion with a significant and discrete substantive portion of that pro-
ceeding , unless the position of the General Counsel over which the
applicant has prevailed was substantially justified. The burden of
proof that an award should not be made to an eligible applicant is on
the General Counsel, who may avoid an award by showing that the
General Counsel 's position in the proceeding was substantially justi-
fied
21 See Tyler Business Services v. NLRB, 695 F.2d 73 (4th Cir 1982).
252 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Act by its October 1977 relocation. For the follow-
ing reasons, we disagree with these conclusions and
find that the General Counsel was substantially jus-
tified in pursuing this case throughout the unfair
labor practice proceeding.
Briefly stated, the facts of the underlying unfair
labor practice case, which are described in greater
detail in two earlier Board decisions,22 are as fol-
lows: The Union began an organizing campaign at
the Applicant's Lake City, Tennessee plant in the
spring of 1977. In its decision at 259 NLRB 1141,
the Board affirmed the judge's conclusion that
during the campaign, the Applicant violated Sec-
tion 8(a)(1) of the Act by, inter alia, interrogating
its employees concerning their union activities,
threatening that it would not negotiate with the
Union, threatening to discharge employees if they
joined or engaged in activities on behalf of the
Union, threatening to close the plant if employees
selected the Union as their collective-bargaining
representative, and threatening to cancel its plans
to expand and improve the Lake City plant be-
cause of the employees' union activities. These vio-
lations were found to have been committed by the
Applicant's owner, and by high level and low level
supervisors, and, indeed, were admitted by the Ap-
plicant, Despite these unfair labor practices, the
Union won the Board-conducted election held 14
July 1977. Over the Applicant's exceptions, the
Board also found that in August 1977 the Appli-
cant unlawfully made unilateral changes in work
rules. The Board further found that when the
Union commenced a strike on 12 October 1977, the
plant manager unlawfully told an employee that
the striking employees were fired.
Thereafter, on 24 October 1977 while the strike
was still in progress, the Applicant moved the
Lake City plant's only product line, firemen's
clothing, referred to as fire coats, to its Beattyville,
Kentucky location. By telegram dated 23 October,
the Applicant informed the Union that the removal
of the product line was temporary and that it was
caused by the strike. However, on 24 October the
Applicant's attorney sent another telegram to the
Union stating that the move was needed because
there was insufficient room to expand at Lake City.
Negotiations between the Applicant and the Union
began the next day, during which the Applicant
told the Union that the move was temporary. The
Applicant also told the Union that the move was
temporary during bargaining sessions on 1, 2, and
28 November 1977.
22 See 259 NLRB 1141 (1982), noted above, see also Lion Uniform, 247
NLRB 992 (1980) None of the present Board members participated in
either decision
The complaint in Cases 10-CA-12938 and 10-
CA-13089, which alleged the 8(a)(1) violations and
the 8(a)(5) violation described above, was issued on
17 November 1977. During telephone conversa-
tions in December 1977, the Board agent, investi-
gating yet another charge (Case 10-CA-13284-2),
which alleged that the October 1977 move was in
violation of Section 8(a)(3), asked the Applicant's
attorney what its position was with respect to the
charge allegation that removal of the fire coat line
was unlawful. The attorney responded by asking
the Board agent whether he had a copy of the Ap-
plicant's 23 October telegram to the Union, which
stated that the move was temporary, and by stating
that he did not know what else he could offer by
way of proof other than the Applicant's repeated
assurance to the Union that the move was tempo-
rary. Thereafter, the General Counsel requested no
further evidence on this charge and the Applicant
offered none.
On 5 January 1978 the Applicant informed the
Union by letter that it had tentatively decided to
make the transfer of fire coat production from
Lake City to Beattyville permanent. The letter also
stated that the Applicant was prepared to discuss
the matter and that the Applicant intended to
produce other products at Lake City when the
strike ended.23 The complaint in Case 10-CA-
13284-2 was issued on 9 February 1978, alleging,
inter alia, that the October 1977 removal of the fire
coat line violated Section 8(a)(3) and (1) of the
Act. That allegation was consolidated for hearing
with the earlier complaint's allegations, though the
two complaints were not formally consolidated.
The Applicant made several settlement offers
after the issuance of the second complaint. At the
hearing held before Administrative Law Judge Mi-
chael O. Miller in May 1978, the Applicant offered
to admit all allegations in the two complaints if the
Board's order would permit it to reopen the Lake
City facility with a different product line. The
judge then limited the hearing to the issues of
whether the new product line was substantially
equivalent to the work previously performed at
Lake City and whether the Applicant had suffi-
cient justification for refusing to return the previ-
ous product line to Lake City. In his 8 June 1978
decision, the judge answered both questions affirm-
atively, approved the unilateral settlement agree-
ment, and found, pursuant to the Applicant's ad-
missions, that the Applicant had violated Section
23 The strike ended on 16 May 1978 and the Union made an uncondi-
tional offer to return on behalf of the strikers on that date Between 31
May and 20 June 1978, the Applicant offered the employees employment
on work other than fire coats Some accepted and some rejected the
offer
LION UNIFORM
8(a)(1), (3), and (5) of the Act. The Board reversed
Judge Miller's decision on 11 February 1980,24
fording that reinstatement of the fire coat product
line- would be an appropriate remedy if the unfair
labor practices were found. The Board concluded
that the new product line was not substantially
equivalent to the work performed before the strike
and that the record did not support the judge's
finding that reinstatement of the old product line at
Lake City would not be feasible.25 Accordingly,
the Board remanded the case for further hearing on
the merits of the complaints' allegations.26
The Applicant continued to offer settlement pro-
posals, which the General Counsel rejected, at least
through the commencement of the September 1980
hearing before Judge Robertson.27 In his 5 Febru-
ary 1981 decision, the judge found that the Appli-
cant had not violated Section 8(a)(3) when it
moved the fire coat line from Lake City and that it
had not violated Section 8(a)(5) in any of its deal-
ings concerning the move. However, as outlined
above, the judge found several violations of Sec-
tion 8(a)(1), most of which were admitted by the
Applicant, and a violation of Section 8(a)(5) in its
unilaterally changing terms and conditions of em-
ployment in August 1977. Exceptions to the judge's
decision were filed by the General Counsel and the
Charging Party, and the Applicant filed cross-ex-
ceptions. Thereafter, the Board adopted the judge's
decision.? 8
With these facts as background, we will examine
the General Counsel's exceptions to the judge's
finding that the General Counsel acted without
substantial justification throughout the unfair labor
practice proceeding.
The issue of whether the General Counsel was
substantially justified in pursuing any particular
case must be determined on a case-by-case basis.29
Although usually we will find that the General
Counsel was substantially justified if the General
Counsel introduced evidence during the underlying
24 See 247 NLRB 992 (1980), noted above.
25 247 NLRB at 992, 994.
26 Our dissenting colleague elaborates at great length on the Appli-
cant's settlement offer, which Judge Miller accepted , and strongly inti-
mates that the Board should likewise have accepted it But the earlier
Board did not do so, and the record does not show that the Applicant
appealed the Board's Order. It therefore stood as the law of this case and
was an element that the General Counsel could consider in the later re-
sponses to various other settlement offers which the Applicant made.
27 At the September 1980 hearing, the General Counsel also included
two further unfair labor practice allegations, i.e., that the Applicant had
violated Sec. 8(aX5) by refusing to bargain about its October 1977 move
and its alleged decision to remain in Beattyville in January 1978. These
allegations were added to the first, not the second, complaint in this pro-
ceeding, though it was the second complaint which alleged that the move
itself violated Sec. 8(a)(3) of the Act.
28 259 NLRB 1141 (1981).
29 Enerhaul, Inc., 263 NLRB 890 (1982), reversed on other grounds
710 F.2d 749 (11th Or 1983).
253
unfair labor practice proceeding which, if credited,
would establish a prima facie case, such a showing
is not always necessary to a finding of substantial
justification3O or always sufficient to prevent a
finding that the General Counsel was not substan-
tially justified.31 However, if, as the judge found in
the instant case, the General Counsel possesses no
evidence in support of the allegations, we cannot
find substantial justification.
Applying these considerations, we find the Gen-
eral Counsel was substantially justified in issuing
the complaint on which the Applicant prevailed.
When the complaint, alleging that fire coat produc-
tion had been transferred in violation of Section
8(a)(3), issued on 9 February 1978, the General
Counsel possessed information tending to show the
following: During the Union's organizing cam-
paign, the Applicant had committed a number of
8(a)(1) violations and had threatened to close the
Lake City plant and cancel expansion plans if the
employees chose the Union as their collective-bar-
gaining agent. On 31 August 1977, after the Union
had won the election, the Applicant changed cer-
tain working conditions without notifying and bar-
gaining with the Union. When the employees went
on strike on 12 October 1977, the plant manager
told one employee that the strikers were fired.
About 2 weeks later, fire coat production was
transferred to another plant and the Union received
conflicting telegrams regarding the reasons for the
transfer. Moreover, after the unfair labor practice
charge concerning the October 1977 move was
filed, the Applicant came forward with ' no evi-
dence in support of its position, other than its 23
October telegram to the Union and its various rep-
resentations to the Union. Further, when the com-
plaint issued in February 1978, it was clear that the
"temporary"' move had blossomed into a perma-
nent relocation of the fire coat work to Beattyville,
and no real evidence had been presented by the
Applicant to counter balance the apparent discrimi-
natory motive for the move.32 Considering these
so See Woodview Rehabilitation Center, 268 NLRB 1239, 1240 fn. 4
(1984), Enerhaul, supra.
31 See DeBolt Transfer, Inc., 271 NLRB 299, 303 fn. 7 (1984).
32 We reject the General Counsel's contentions that the Applicant's
"[failure] to raise material defenses or to proffer supporting evidence"
constituted "special circumstances mak[ing] an award unjust," within the
meaning of sec 504(a)(l) of EAJA. The legislative history of EAJA
shows that the special circumstances defense available to the agencies is a
"safety valve" designed to protect the government from EAJA awards
"where unusual circumstances dictate that the government is advancing
in good faith a credible, though novel, rule of law " H.R. Rep. 96-1418
at 14 (1980). This defense " also gives the court discretion to deny awards
where equitable considerations dictate an award should not be made." Id.
at 11. Since the General Counsel does not allege that the underlying case
involved the advancement of a "credible, though novel, rule of law," and
since we conclude that there are no equitable considerations present in
Continued
254 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
facts, we cannot agree with the Applicant's conten-
tion that the General Counsel should have accept-
ed its unsupported claim of innocence and dis-
missed the charge. See, e.g., Leeward Auto Wreck-
ers, 283 NLRB 574 (1987). Therefore, we find that
the General Counsel was substantially justified in
issuing the complaint on 9 February 1978, which
alleged an 8(a)(3) violation in the October 1977
move.3 3
The General Counsel also excepts to the judge's
findings that the General Counsel was not substan-
tially justified in rejecting the Applicant's various
settlement offers in 1978 and 1980 , and in insisting
that the Applicant return fire coat production to
Lake City even after the Applicant sold its Lake
City facility, in September 1979 to FMK Apparel,
Inc. We find merit to these exceptions of the Gen-
eral Counsel.
As noted, the record in this EAJA proceeding34
shows that the Applicant and the Region engaged
this case that would dictate the denial of an award , we find that the Ap-
plicant's actions during the investigation stage of the unfair labor practice
proceeding cannot support a conclusion that special circumstances,
within the meaning of EAJA, are present here. (Rather, an applicant's re-
sponse to the filing and investigation of unfair labor practice charges is
only relevant to the issue of substantial justification . The General' Counsel
will be found to have acted with substantial justification in issuing a com-
plaint whenever the General Counsel possesses , at the time the complaint
is issued, evidence that could reasonably lead an administrative law judge
to find a violation and does not possess evidence that clearly would
defeat an allegation that the charged party has violated the law. See
DeBolt Transfer, Inc., supra. A charged party has no obligation to pro-
vide evidence to the General Counsel during an investigation See Inter-
national Maintenance Systems Group, 267 NLRB 1136 (1983).)
33 Our dissenting colleague claims that in finding the General Counsel
substantially justified we have only focused on "what the General Coun-
sel actually knew [when the complaint issued], rather than on both what
the General Counsel actually knew and also reasonably should have
known under the circumstances " He then lists two pieces of evidence,
i.e., the 23 October telegram and the various representations to the Union
in negotiations , that he calls "unrebutted evidence" showing that the
move was not discriminatorily motivated Contrary to our colleague's in-
dications , we have considered that evidence, as described above, and we
conclude that based on the countervailing evidence likewise available, the
General Counsel was substantially justified in issuing the complaint. In
light of that countervailing evidence , and unlike our dissenting colleague,
we do not deem the telegram and representations "unrebutted evidence"
that the move was lawful.
94 As it was originally enacted, EAJA did not define the term
"record" or otherwise describe the body of evidence to which an agency
should have looked when considering an EAJA application . The 1985
amendments , however, added the following language to sec 504(a)(1):
"Whether or not the position of the agency was substantially justified
shall be determined on the basis of the administrative record, as a whole,
which is made in the adversary adjudication for which fees and other ex-
penses are sought." The House Judiciary Committee 's report on the
amendments, H.R. Rep. No 99-120 at 13, explained the change as fol-
lows:
When the case is litigated to final decision by a court or adjudica-
tive officer (or even when the case is settled after only some litiga-
tion procedures) the evaluation of the government 's position will be
straightforward , since the parties will have already aired the facts
that led the agency to bring the action No additional discovery of
the government's [sic] position will be necessary , for EAJA petition
purposes . Dougherty v. Lehman, 711 F 2d 555, 561-562 (3d Cir.
1983).
When the case is conceded on the merits, dropped by the agency,
or otherwise settled on terms favorable to the private party before
any of the merits are heard, the court (or adjudicative officer) will
in settlement negotiations beginning in March 1978
and continuing at least until the hearing on the
merits in this underlying unfair labor practice case
in September 1980. However, in these negotiations
the Applicant never offered unconditionally to
return fire coat production to Lake City and to
offer to rehire all of its former Lake City employ-
ees to make fire coats in Lake City, and the Gener-
al Counsel therefore rejected all the Applicant's
offers. As noted above, one of the Applicant's set-
tlement proposals, in which it admitted all com-
plaint allegations and offered to reopen its Lake
City facility for the production of products other
than fire coats was approved by Judge Miller in
1978. Subsequently, however, as noted above, a
three-member panel of the Board reversed the
judge's approval of that unilateral settlement. In
these circumstances, where the General Counsel
was substantially justified in issuing the February
1978 complaint; where the Applicant had reneged
on an earlier settlement agreement; 3 5 and where
the General Counsel was on notice by the Board's
decision reversing Judge Miller that reinstatement
of the fire coat line 'would be an appropriate
remedy if the General Counsel could prove the
case, we find that the General Counsel was sub-
stantially justified in rejecting settlements which of-
fered less than full reinstatement, e.g., the Appli-
cant's June and August 1980 settlements. Though
the case is complicated by the Applicant's sale of
its facility in September 1979, nonetheless, as de-
scribed below, this fact does not ultimately change
our conclusion that the General Counsel did not
again look to the record in the case to determine whether the posi-
tion of the government was substantially justified. The record in this
instance will consist of the pleadings , affidavits, and other supporting
documents filed by the parties in both the fee pro[ceedmg ] and the
case on the merits.
Thus, the "substantial justification determination" will not involve
additional evidentiary proceedings or additional discovery of agency
files, solely for EAJA purposes
Although congressional intent is now clear that evidentiary hearings are
not to be held on the issue of substantial justification, there was no simi-
larly clear directive at the tune of the EAJA proceedings before the
judge in this case . Furthermore, the instant EAJA case was litigated at a
time when very few EAJA cases had been filed, and the case involved
many issues of first impression . Thus, we find that the judge did not err
by holding the hearing in this case, which included the litigation of mat-
ters relating to substantial justification . Furthermore, nothing in the
EAJA amendments or their legislative history suggests that a record
made before those amendments were enacted must be ignored by an
agency reviewing such a record after the amendments became effective.
Accordingly, we hold that the record in this case includes the evidence
regarding the substantial justification issue adduced at the hearing on the
Applicant's application for fees and expenses pursuant to EAJA.
as In August 1977 the Regional Director had approved a settlement
agreement covering the various 8(a)(1) allegations which the Applicant
has admitted throughout this proceeding. In November 1977 the Region-
al Director withdrew approval of that settlement based on the later alle-
gation thaf the Applicant had violated Sec 8(a)(5) by its August 1977
unilateral change, referred to above
LION UNIFORM
have to accept the Applicant's 1980 settlement
offers. 3 6
The judge in the instant proceeding, however,
concluded that the General Counsel acted without
substantial justification with regard to the settle-
ment negotiations in three respects. First, having
found that the General Counsel was not substan-
tially justified in issuing the complaint alleging that
the removal of fire coat production from Lake City
was unlawful, he concluded that the General-
Counsel was not justified in settlement negotiations
in requiring the relocation of such production to
Lake City. Second, the judge concluded that the
General Counsel acted unreasonably in refusing to
investigate the Applicant's claims in June and
August 1980 that a return' of fire coat production
to Lake City would cause financial hardship. Final-
ly, the judge concluded that the General Counsel
acted without substantial justification by continuing
to insist, after the Applicant's September 1979 sale
of the Lake City facility, that fire coat production
be returned to Lake City. For the following rea-
sons, we disagree with each of these conclusions.
Inasmuch as we have concluded, contrary to the
judge, that the General Counsel was substantially
justified in issuing the complaint, we cannot find
that the General Counsel's actions regarding settle-
ment efforts were unjustified because of the com-
plaint's purported lack of merit. Also, as noted, in
view of the Board's February 1980 rejection of the
Applicant's proposal that was approved by Judge
Miller in 1978, we cannot now find that the Gener-
al Counsel should have accepted that proposal. As
for the judge's second conclusion, we disagree with
his characterization of the General Counsel's ac-
tions as a refusal to investigate the Applicant's
claims of financial hardship. Contrary to the judge,
we note that the Applicant did not argue there
would be a financial hardship in restoring the fire
coat line in June-August 1980 but rather a hardship
in restoring it if fewer than a certain number of
employees currently working at FMK accepted its
offer. The Applicant had not at that time come for-
36 Our dissenting colleague has set out much of the breadth of various
of the Applicant's June and August 1980 settlement offers. We note,
however, inter alia , that the June offer- did not cover all former unit em-
ployees but only those then working for FMK , the company that had
bought the Applicant's Lake City facility. The settlement also included
no backpay offer. Contrary to our dissenting colleague, this clearly was
not an offer of "what the General Counsel had been insisting upon all
along ...." The Applicant's 12 August offer (which was an alternative
to the June offer) did extend to all former unit employees but it was only
an offer 1o pay moving expenses for those who would accept employ-
ment at the Applicant's Beattyville facility. Lastly, we note the Appli-
cant's 18 August proposal did extend to all former unit employees but it
had as a condition precedent, the same condition set out in the June offer,
i.e., if fewer than 15 former unit employees then working at FMK de-
sired to quit the new company and accept work at Lake City with the
Applicant then there would be no fire coat work at Lake City for the
unit employees who had not been working for FMK.
255
ward with additional evidence which it later pro-
duced at the unfair labor practice hearing that a
return of fire coat production to Lake City would
have caused financial hardship. The absence of
such evidence formed a large part of the Board's
earlier decision to reverse Judge Miller's approval
of the earlier 1978 settlement proposal and of our
finding that the General Counsel was substantially
justified in issuing the complaint in 1978. When fi-
nally that evidence was introduced at the Septem-
ber-October 1980 hearing on the merits of the
unfair labor practice case, Judge Robertson, and
later ithe Board, concluded that the removal of fire
coat production did not constitute a violation of
the Act. But it , does not appear that the General
Counsel was apprised of that evidence in June and
August 1980 and we will not, at this date, and with
respect only to the settlement negotiations, find
fault in actions taken by the General Counsel at a
time when the Applicant's production of evidence
of financial hardship might have altered the Gener-
al Counsel's course of conduct.
Finally, we disagree with the judge's conclusion
that the General Counsel acted without substantial
justification in continuing to insist on the return of
fire coat production to Lake City after the Appli-
cant sold its Lake City facility in 1979. Although
the sale of the facility complicates the issue of
whether the General Counsel was substantially jus-
tified in rejecting the Applicant's later settlement
offers, we note that the Applicant itself,had indi-
cated in its 1980 offers that it would reopen a fire
coat facility at Lake City. The Applicant, however,
would do so only with certain stipulations. In the
circumstances of this offer, and the Board's Febru-
ary 1980 decision, and not then having evidence
going to the economic hardship of reopening at
Lake City, the General Counsel was substantially
justified in rejecting the Applicant's 1980 settle-
ment offers.37
A conclusion that the General Counsel was sub-
stantially justified in prosecuting the complaint
through the hearing stage flows logically from our
findings that there was substantial justification for
issuing the complaint and for rejecting the Appli-
cant's settlement offers. Contrary to our dissenting
colleague's assertion, much of the evidence relied
on by the judge and the Board in dismissing the
complaint was not known to the General Counsel
prior to the commencement of the hearing. Our
conclusion in this regard is supported by certain
findings made by the judge in his decision in the
underlying unfair labor practice case which con-
37 See generally Temp Tech Industries v. NLRB, 756 F 2d 586, 590-591
fn. 5 (7th Cir. 1985).
256 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
flicts with certain findings he made in the instant
EAJA proceeding. For example, the Applicant
presented at the hearing, for the first time, the fol-
lowing evidence: the 24 October 1977 transfer was
not planned until 21 October; the Applicant ob-
tained studies prior to the onset of the organizing
campaign showing that expansion at Lake City
would have been unduly expensive; the Applicant
began looking for a larger facility in the early
1970's; after the strike began on 12 October, the
Applicant fell behind on its production schedule
and received complaints from customers about
delays in filling orders; and the Applicant had
planned to transfer fire coat production to the
Beattyville facility, which was purchased shortly
before the 14 July 1977 election, at some point in
the future without regard to whether its Lake City
employees became organized because Beattyville
was the Applicant's largest facility. The judge
relied heavily on this evidence in the underlying
adjudication. In that decision, the judge stated,
with a citation to Wright Line,38 that "Respondent
proved that the move was temporary and was ne-
cessitated by business reasons brought on by its em-
ployees' strike."39 The judge later in his decision
in the unfair labor practice proceeding explained:
In reaching this conclusion [that Applicant's
October 1977 move did not violate the Act] I
am bothered by evidence which tends to show
that Respondent was motivated by its employ-
ees' union activities. In May 1977, Respond-
ent's owner threatened employees that it
would close the plant and cancel expansion
plans because of the union activities. Those
threats would have been persuasive if Respond-
ent had either closed the plant or cancelled ex-
pansion activity without the intervention of
other motivating events. . . . Moreover, Re-
spondent's alleged illegal activity came at a
time when any other action or inaction could
have endangered its continued viability.40 _
We interpret these findings and the citation to
Wright Line to mean that the judge in the unfair
labor practice proceeding found that the General
Counsel had established a prima facie violation of
the Act in the transfer of fire coat production but
38 251 NLRB 1083 (1980), enfd 662 F 2d 899 (1st Cir 1981) In Wright
Line, the Board established the following test for determining whether a
respondent has engaged in unlawful discrimination
First, we shall require that the General Counsel make a prima facie
showing sufficient to support the inference that protected conduct
was a "motivating factor" in the employer's decision Once this is
established, the burden will shift to the employer to demonstrate that
the same action would have taken place even in the absence of the
protected conduct [Id at 1089 ]
39 259 NLRB 1145
40 259 NLRB at 1145-1146 (emphasis added)
that the Applicant's rebuttal evidence showed the
Applicant did not, in fact, violate the Act.41
Nevertheless, in his decision in this EAJA pro-
ceeding, the judge stated, "[T]here was unrebutted
evidence demonstrating that Applicant relocated its
Lake City operations in October 1977 solely be-
cause of its inability to meet production because of
the strike. I believe the General Counsel acted un-
reasonably by ignoring that evidence. There was
no evidence showing the relocation was illegally
motivated," and the judge here has also stated,
"there was no causal connection [shown between
the Section 8(a)(1) violations and the relocation]
and overwhelming evidence proved the relocation
was caused by Applicant's inability to meet pro-
duction because of the strike." In reaching these
conclusions here, however, the judge failed to take
account of his Wright Line citation in the earlier
case and the voluminous evidence set out above
which the Applicant introduced at the hearing for
the first time; of which the General Counsel was
not aware until the hearing; and on which the
judge relied in dismissing the 8(a)(3) allegation.42
Also, the judge's conclusion that there was "no
causal connection" between the various 8(a)(1) vio-
lations and the relocation allegation appears pre-
mised in part on the Applicant's rebuttal evidence
which was not available to the General Counsel
until the unfair labor practice hearing.
Similarly, the judge's conclusion in the instant
proceeding that the "General Counsel offered no
evidence showing that Applicant violated Section
8(a)(5) by its October 1977 relocation," is inconsist-
ent with his findings in the underlying case. In the
earlier case, he found that "Respondent did not
afford the Union an opportunity to negotiate before
the October 24 move." (259 NLRB at 1144.) He
also noted the conflicting telegrams sent to the
Union at the outset of the strike concerning the
reasons for the strike.43 It is clear that the Appli-
cant did not bargain about the move, an ostensible
mandatory subject of bargaining. Instead, it pre-
sented the Union with a fait accompli and one the
*i We have previously noted (see text accompanying the citation to
DeBolt, fn 31 above) that the presence of a prima facie case does not
always establish that the General Counsel was substantially justified in
bringing a complaint allegation but we do not perceive the facts here to
be similar to those in DeBolt
42 We agree with the judge and the Applicant that the General Coun-
sel must have known that the strike was successful However, this knowl-
edge, standing alone, would not necessarily require the General Counsel
to conclude that the transfer of fire coat production was not unlawfully
motivated or that the Applicant was economically justified in transferring
the work without prior discussion with the certified collective-bargaining
representative
43 Our dissenting colleague is therefore in error when he indicates the
judge made no reference in the underlying case to evidence submitted by
the General Counsel in support of this allegation
LION UNIFORM 257
General Counsel, based on the available facts,
could allege as an 8(a)(5) violation. In his earlier
decision, the judge found that the Applicant had
established that business considerations justified its
failure to bargain with the Union before the tempo-
rary relocation of fire coat production.44 The evi-
dence that supported this defense included evi-
dence presented by the Applicant to rebut the
8(a)(3) allegation, and was, as noted above, unavail-
able to the General Counsel before the hearing.
Therefore, we find that the General Counsel also
was substantially justified in pursuing through the
hearing the allegation that the Applicant had un-
lawfully refused to bargain with the Union before
fire coat production was transferred.45
However, we agree with the judge that the Gen-
eral Counsel was not substantially justified at the
hearing in including an allegation that the Appli-
cant violated Section 8(a)(5) of the Act on 5 Janu-
ary 1978. On that' date, the Applicant notified the
Union that it had "tentatively concluded" not to
return fire coat production to Lake City because
such a move would not be feasible for economic
reasons. The letter announcing the tentative deci-
sion also stated that the Applicant was "prepared
to discuss any aspect of this matter, including the
tentative conclusion itself,' in good faith." Thus, the
letter on its face does not announce any final deci-
sion reached without bargaining and it clearly
offers to bargain about the tentative decision and
its consequences. The General Counsel offered no
evidence that could support a conclusion that the
Applicant violated Section 8(a)(5) on 5 January
1978. Under these circumstances, we find that the
General Counsel was not substantially justified in
pursuing an allegation at the hearing that a viola-
tion of Section 8(a)(5) occurred on that date. None-
theless, we find that the Applicant is not entitled to
an award in connection with this allegation because
this allegation was not a "significant and discrete"
substantive part of the proceeding. The Applicant's
defense to the allegation necessitated no discernible
additional effort on the part of the Applicant in liti-
gating the underlying case. Primarily, this part of
the Applicant's defense was based on the plain lan-
guage of its 5 January 1973 letter, the same lan-
guage the Board relied on in affirming the judge's
dismissal of the allegation and on which we now
rely in finding that the allegation was not substan-
44 The judge cited Empire Terminal Warehouse Co., 151 NLRB 1359
(1965), for this conclusion.
45 As noted above at fn. 13, this allegation was not included in the
second complaint that issued in February 1978 but was added by way of
amendment at the September 1980 hearing to the first complaint A por-
tion of our dissenting colleague's opinion might be construed to indicate
that this allegation was part of a complaint as it originally issued but that
is not correct.
tially justified. To the extent that the Applicant
relied on evidence that the relocation was motivat-
ed solely by economic considerations, that same
evidence was relevant to the 8(a)(3) allegation.
Thus, because the allegation that was made without
substantial justification was so closely related to the
allegations that were made with substantial justifi-
cation, the Applicant suffered no measurable ex-
penditure recoverable under EAJA and no award
will be made therefor.46
Having found that the Applicant is entitled to no
award in connection with the issuance of the com-
plaint on which the Applicant prevailed, we must
decide whether the General Counsel was substan-
tially justified in pursuing the case after the Appli-
cant introduced the evidence on which the judge
and the Board relied in dismissing the unfair labor
practice case. We find that the General Counsel
was substantially justified in continuing the pros-
ecution of the case. Although the Applicant's re-
buttal evidence, on which the judge and the Board
ultimately relied, was introduced during the unfair
labor practice hearing, the General Counsel was
not obligated to move for the dismissal of the work
removal allegations on the introduction of that evi-
dence. The General Counsel could not know,
before the judge's decision issued, whether the
judge would credit the Applicant's witnesses' testi-
mony or its other evidence, or the relative weight
that would be given by the judge to the General
Counsel's evidence and the Applicant's evidence.
Accordingly, we conclude that the General Coun-
sel was substantially justified in continuing, the case
through the close of the hearing and in submitting
the posthearing brief to the judge.
For similar reasons, we find that the General
Counsel was substantially justified in continuing the
unfair labor practice case to the next readily identi-
fiable stage of the proceedings, i.e., the filing of ex-
ceptions with the Board: Although the Board did
not find the exceptions persuasive, the judge's deci-
sion in the unfair labor practice case was suscepti-
ble to reasonable arguments regarding its findings
of fact and conclusions of law. For example, both
the 8(a)(3) and (5) allegations regarding the reloca-
tion of the Applicant's product line were deter-
mined, in large part, by findings regarding the Ap-
plicant's motivations for the relocation. In this
regard, the judge acknowledged that the Applicant
had shown "apparent union animus" and that it
had engaged in an "illegal anti-union campaign"; as
noted above, the judge was "bothered by evidence
which tends to show that Respondent was motivat-
46 See Hensley v, Eckerhart, 461 U.S. 424, 436 (1983), Goidhaber V.
Foley, 698 F.2d 193, 197 (3d Cir. 1983).
258 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ed by the employees' union activities."47 In addi-
tion to these findings of the judge, we note,that the
Applicant made several contradictory statements
regarding its plans for the Lake City facility and its
intentions regarding the Beattyville operations.
Thus, in May 1977 the Applicant admittedly violat-
ed Section 8(a)(1) of the Act by telling employees
that it had canceled plans to expand the Lake City
facility because of the employees' union activities;
on 23 October 1977 the Applicant informed the
Union that the removal of the fire coat product
line to Beattyville was caused by the, strike and
that ' it was temporary; one 24 October the Appli-
cant's attorney informed, the Union that the move
was needed because there was not enough room
for expansion at Lake City; in subsequent negotia-
tions with the Union, the Applicant took the posi-
tion that the move was temporary; and, on 5 Janu-
ary 1978, the Applicant informed the Union of its
tentative decision to make the transfer of fire coat
production from Lake City to Beattyville perma-
nent, In view of the above, the Board' s agreement
with the judge's conclusions that the removal of
,the product line was motivated by business consid-
erations rather than union animus and that the relo-
cation was a reasonable measure necessary to main-
tain operations during the strike does not warrant a
finding that the General Counsel acted without
substantial justification in filing exceptions to the
judge's decision. EAJA does not require the,Gen-
eral Counsel to prevail in the unfair labor practice
proceeding in order to avoid an award of fees and
expenses . Rather, it requires that the General
Counsel establish that the actions during those, pro-
ceedings were substantially justified.48 Although
the General Counsel did not succeed in the attempt
to persuade the Board to reverse the judge's under-
lying decision, we find that the attempt was sub-
stantially justified.
In sum, we conclude that the General Counsel
acted with substantial justification throughout the
underlying unfair labor practice proceeding.49 The
General Counsel possessed significant relevant evi-
dence that warranted the issuance of the complaint.
Thereafter, the General Counsel was substantially
justified in arguing to the judge and the Board that
the Applicant's rebuttal evidence, which was not
made available to the General Counsel until the
hearing, was insufficient to require the dismissal of
47 259 NLRB at 1145.
48 See University of New Haven, 279 NLRB 294 ( 1986), Bennington Iron
Works, 278 NLRB 1087(1986).
49 Accordingly, we find it unnecessary to pass on any of the judge's
findings or conclusions regarding the fees and expenses allegedly incurred
by the Applicant during the unfair labor practice and EAJA proceedings
or regarding the General Counsel 's actions during the EAJA proceeding
before the judge.
the complaint . Accordingly, we will dismiss the ap-
plication.
ORDER
The application of the Applicant, Lion Uniform,
Janesville Apparel Division, Lake City, Tennessee,
for an award under the Equal Access to Justice
Act is dismissed.
CHAIRMAN DOTSON, dissenting.
In agreement with the administrative law judge,
and contrary to my colleagues, I find that the Gen-
eral Counsel was not substantially justified in alleg-
ing (1) that the Applicant violated Section 8(a)(3)
of the Act by discriminatorily relocating its fire
coat production from its Lake City facility in Octo-
ber 1977 and (2) that the Applicant violated Sec-
tion 8(a)(5) by unilaterally, without bargaining with
the Union, relocating its fire coat production in
October 1977.1 Also, again in agreement with the
judge and contrary to my colleagues, I find that
the General Counsel was not substantially justified
in rejecting the Applicant's settlement proposals
and in insisting, as an absolute condition of settle-
ment, that the Applicant relocate its fire coat pro-
duction back to its Lake City facility.2 Additional-
ly, I agree with the judge that there are no "special
circumstances" in this case that would make an
award to the Applicant unjust.
I find the judge's discussion and analysis of the
above issues to be thorough and persuasive. I sub-
scribe to it and have no need to supplement it.
Moreover, my colleagues have failed to counter ef-
fectively the judge's analysis and ' disposition of
these issues.
In finding that the General Counsel was substan-
tially justified in alleging that the Applicant' s relo-
cation of its fire coat production from Lake City
was discriminatorily motivated,, my colleagues
focus -narrowly-and incompletely-merely on
what the General Counsel actually knew, rather
than on both what the General Counsel actually
knew and also reasonably should have known
under the circumstances. The General Counsel had
actual knowledge, of course, of (1) the Applicant's
admitted violations during the summer of 1977
(more than 3- months prior to the allegedly dis-
criminatory relocation of fire coat production); (2}
' My colleagues agree with the judge, and I join them in this regard,
that the General Counsel was not substantially justified in alleging that
the Applicant violated Sec 8(a)(5) by unilaterally, deciding in January
1978 not to return its fire coat production to its Lake City facility.
8 As my colleagues have noted, the Board has revised Sec. 102 144(a)
of its Rules and Regulations, regarding substantial justification. In this
regard, I find that the position taken by the General Counsel in this case
does not fall within even a broad scope of the standard of substantial jus-
tification.
LION UNIFORM 259
the Applicant's independent tightening of work
rules and discontinuance of its practice of making
coffee for employees and permitting them to use
the company phone to place lunch orders at restau-
rants; and (3) the plant manager's statement to an
employee (2 weeks before the relocation of fire
coat production) that all striking employees were
"fired." But, as found by the judge in the instant
Equal Access to Justice Act (EAJA) case as well
as in the underlying unfair labor practice proceed-
ing, the G eneral Counsel also had reason to know
that (as set forth in the Applicant's 23 October tele-
gram to the Union, and made clear to the Union in
subsequent negotiating sessions) (1) the Applicant
was temporarily relocating its fire coat production
from Lake City simply and solely because the
strike at Lake City made it temporarily impossible
for the Applicant to continue production at that fa-
cility, and (2) that the Applicant expressed its com-
plete willingness at that time to return fire coat
production to Lake City as soon as the Lake City
employees returned to work. Thus, I ,agree with
the judge that the General Counsel acted unreason-
ably in ignoring unrebutted evidence available to
the General Counsel, and of which the General
Counsel had reason to know, that in October 1977
the Applicant temporarily relocated its fire coat
production from Lake City solely because it was
unable to produce fire coats at Lake City during
the strike, and not for discriminatory reasons as un-
reasonably alleged by the General Counsel.3
Similarly, in agreement with the judge and con-
trary to my colleagues , I find that the General
Counsel was not substantially justified in alleging
that the Applicant refused to negotiate with the
Union about the ,temporary relocation of fire coat
production from Lake City. In finding that the
General Counsel was substantially justified in this
regard, my colleagues assert that the - judge's con-
clusion in the instant EAJA proceeding, that the
General Counsel offered no evidence showing that
the Applicant violated Section 8(a)(5) by its Octo-
ber 1977 relocation, is inconsistent with the judge's
findings in the underlying unfair labor practice
8 In this regard , I specifically agree with the judge that although viola-
tions of Sec. 8(a)(1) may indirectly contribute to a determination of ille-
gal motive, there must be some causal connection between the asserted
evidence of animus and the alleged illegal action-a causal connection
not present, or even indicated, in the instant case.
Leeward Auto Wreckers, 283 NLRB 574 (1987), relied on by my col-
leagues in this general context, is fully distinguishable. In Leeward, unlike
in the instant case, there was no objective exculpatory evidence available
to the General Counsel , during the investigatory stage, to counter the in-
criminatory evidence of unlawful activity obtained by or otherwise then
available to the General Counsel . Instead, the Applicant in Leeward
simply contented itself in this regard with the oral expression of belief on
the part of its labor consultant that the Applicant 's unilateral subcontract-
ing of unit work was not unlawful, because the collective-bargaiinng
agreement did not expressly prohibit subcontracting.
case.4 However, I see no inconsistency between
the judge's assessment of the lack of substantial jus-
tification for the General Counsel's allegation in
this regard in the instant EAJA proceeding, and
the judge's similar assessment of lack of evidence
from the General Counsel in support of this allega-
tion in the underlying unfair labor practice case.
Indeed, there is no such inconsistency as asserted
by my colleagues. More specifically, in the under-
lying unfair labor practice case, the judge makes no
reference whatsoever to any evidence presented by
the General Counsel in support of this allegation of
failure or refusal on the part of the Applicant to
bargain with the Union about the temporary relo-
cation of fire coat production from Lake City.
Rather, the judge expressly stated in the, unfair
labor practice proceeding that "The record provid-
ed no basis on which I could find Respondent vio-
lated Section 8(a)(3) or (5) by its October 24
move." (259 NLRB at 1145.) Moreover, in the un-
derlying unfair labor practice case, the judge found
that the Applicant did notify the Union on the
same day as the relocation of fire coat production
that this relocation was only temporary, brought
on by the strike. This evidence of good faith on the
part of the Applicant was of course fully available,
through the Union, to the General Counsel during
the course of a reasonable investigation of the
unfair labor practice charges. Additionally, in the
underlying unfair labor practice case the judge
found unrebutted evidence, in the form of, inter
alia, testimony from the Union's district director as
well as from the Applicant's attorney, that on sev-
eral occasions during the 10-week period following
the relocation of fire coat production the Applicant
advised the Union in meetings that the relocation
was only temporary and that fire coat production
would be returned to Lake City as soon as the
strike was over. This evidence of openness and
direct dealing on the part of the Applicant in this
regard was also fully available, through the Union,
to the General Counsel in the course of a reasona-
ble investigation of this charge. Indeed, in the un-
derlying unfair labor practice case, the judge ex-
pressly found that the record established that the
Applicant "engaged in good-faith negotiations with
the Union beginning in October 1977" (259 NLRB
at 1145, emphasis added)-i.e., immediately on tem-
porarily relocating its fire coat production.
Contrary to my colleagues, there is nothing in
the judge's treatment of this issue in the instant
EAJA case that is inconsistent with his treatment
of it in the underlying unfair labor practice case, as
summarized above. On the contrary, his treatment
4 Lion Uniform, 259 NLRB 1141 (1982)
260 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
of this matter in both forums is entirely consistent.
Thus, the judge's assessment in the instant EAJA
case that "the General Counsel offered no evidence
showing that the Applicant violated Section 8(a)(5)
by its October 1977 relocation" is entirely consist-
ent with his assessments in the underlying unfair
labor practice case that "[t]he record provided no
basis on which I could find Respondent violated
Section 8(a)(3) or (5)" and "[t]here was no evi-
dence offered demonstrating that Respondent's
move to Beattyville transcended the `reasonable
measures necessary in order to maintain operations
in such circumstances."'5 The judge rejected the
General Counsel's assertion that the Union was
presented with a fait accompli by the Applicant's
23 October 1977 telegram advising the Union of
the temporary relocation of fire coat production
from Lake City. Instead, the judge found that facts
available to the General Counsel and the Union
prior to the issuance of the complaint in the under-
lying unfair labor practice indicated no such fait
accompli. More specifically, the judge found that
the General Counsel had available, through the
Union, prior to the issuance of the complaint alleg-
ing a violation of Section 8(a)(5) in this regard, (1)
the Applicant's telegram to the Union advising it
that the relocation of fire coat production from
Lake City was only temporary, brought on by the
strike; and (2) evidence that the Applicant met and
in fact negotiated with the Union on six separate
occasions during the 10 weeks following the relo-
cation-including on 25 October, the day immedi-
ately following the relocation itself. Charged-and
correctly so-with the knowledge of these exculpa-
tory matters prior to the issuance of the complaint,
the General Counsel has failed to establish substan-
tial justification in alleging that the Applicant failed
and refused to'bargain about the temporary reloca-
tion of fire coat production from Lake City. In ar-
guing to the contrary, my colleagues ultimately-
and simply-rely on their same flawed argument
that the General Counsel was substantially justified
in alleging that the Applicant's relocation of its fire
coat production from Lake City was discriminator-
ily motivated-an argument which the judge also
correctly rejected, as summarized above.
Having found that the General Counsel acted
unreasonably, i.e., without substantial justification,
in alleging that the Applicant acted unlawfully in
relocating its fire coat production from Lake City,
logic alone would compel me to find also that the
General Counsel acted unreasonably, i.e., without
5 Id. at 1145, citing, Empire Terminal Warehouse Co, 151 NLRB 1359
(1965) (dismissing an allegation of unlawful refusal to bargain about tem-
porary subcontracting of work, under circumstances remarkably similar
to those in the underlying unfair labor practice case).
substantial justification, in rejecting all the Appli-
cant's numerous offers to settle these unreasonably
alleged matters without recourse to an unfair labor
practice hearing. However, although such an anal-
ysis based on logic alone would be sufficient, it
would not tell the story of the General Counsel's
particular unreasonableness in rejecting the Appli-
cant's numerous settlement offers.
The history of the settlement negotiations in this
case is extensive. As seen, the Applicant temporari-
ly relocated its fire coat production from Lake
City on 24 October 1977. In a 9 February 1978
complaint, the General Counsel alleged that this re-
location was discriminatorily motivated, in viola-
tion of Section 8(a)(3) of the Act. This complaint
was consolidated with others involving the Appli-
cant. At the outset of the first unfair labor practice
hearing into these consolidated matters (on 15 May
1978 before Administrative Law Judge Michael O.
Miller), 6 the Applicant offered, by way of settle-
ment, to withdraw its answers to all unfair labor
practice allegations and to submit itself to the issu-
ance of a formal remedial order, provided only that
the Applicant be permitted to reopen the Lake
City facility with a product line different from the
fire coat line which it had been producing for 4 or
5 years at the time of the strike and subsequent re-
location of fire coat production from Lake City.
By offering to withdraw its answers to all unfair
labor practice allegations, and subject itself to the
issuance of a full remedial order (with the one pro-
viso mentioned, that the Applicant be permitted to
reopen Lake City with a product line different than
fire coats), the Applicant was prepared, for the
purposes of settlement, to admit to the following
allegations: interrogations of employees about their
union sympathies and activities; threats of dis-
charge, loss of wage increases, cancellation of plant
improvement and expansion, and plant closure, if
the employees selected the union as their collec-
tive-bargaining representative; and unilateral
changes in several terms and conditions of employ-
ment. The Applicant was also willing to admit that
the 12 October 1977 strike which precipitated the
relocation of fire coat production from Lake City
was either caused or prolonged by the above-listed
unfair labor practices to which the Applicant was
willing to admit, and that the relocation of fire coat
production to Lake City was discriminatorily moti-
vated, in response to the union or other protected
activities of the employees.
The General Counsel and the Union nevertheless
opposed the Applicant's settlement offer, on the
grounds that only the return to Lake City of fire
6 Lion Uniform, 247 NLRB 992 (1980)
I
LION UNIFORM
coat production itself could properly remedy the
alleged discriminatory relocation of fire coat pro-
duction from Lake City. Thereafter, the judge lim-
ited the hearing to the issue of whether the Appli-
cant's offer to reopen Lake City for production of
articles other than fire coats would satisfactorily
remedy the Applicant's admitted (for settlement
purposes) unlawful relocation of fire coat produc-
tion from Lake City.
Instead of the fire coats, which it had been pro-
ducing at Lake City for about 4 or 5 years at the
time it relocated such production, the Applicant of-
fered instead to produce knit shirts at Lake City.
The Applicant also advised that as product lines
changed, it was possible that other products would
be manufactured at Lake City by these employees.
The Applicant further agreed that it would bargain
with the Union regarding the startup of production
and all conditions of employment, including pro=
duction standards, to assure that the employees
would have their former or substantially equivalent
positions. The Applicant contended, in essence,
that the job of the Lake City employees was "cut-
ting and sewing," and that this was so regardless of
whether the cutting and sewing was on fire coats,
shirts, or other garments. The General Counsel and
the Union opposed the proffered settlement, assert-
ing that the work of manufacturing the fire coats
was still available, that no unreasonable burden
prevented the return of the work to Lake City,
that the employees were entitled to reinstatement
on unconditional offer to their former jobs, and
that those former jobs involved the manufacture of
fire coats, not shirts.
The usual reinstatement remedy for employees
who have been unlawfully discharged or otherwise
deprived of their jobs is reinstatement to their
former jobs or, if those jobs no longer exist, to sub-
stantially equivalent positions. In this regard, the
judge found that following the relocation of fire
coat production from the 16,000-square-foot Lake
City plant to the 54,000-square-foot plant in Beatty-
ville, about 100 miles away, production of fire
coats increased from 600-800 per week at Lake
City to 1100-1200 per week at Beattyville, where
fire coat production occupied 30,000 square feet-
almost twice the space available for fire coat pro-
duction at Lake City. Thus, the judge found that
due to the growth of fire coat production follow-
ing its relocation from Lake City, it had become
physically impossible to return fire coat production
to Lake City. The judge also noted that the Appli-
cant's vice president for manufacturing had testi-
fied without contradiction that multishift oper-
ations are neither practical nor acceptable in the
garment industry, and that because of the delivery
261
requirements and the duplication of machines and
supervision that would be required, producing fire
coats at both Beattyville and Lake City would not
be feasible. Accordingly, the judge found that the
Applicant would suffer an undue hardship if re-
quired to restore the status quo ante by reinstitut-
ing the production of fire coats at Lake City.
Under these circumstances, the judge found that, as
a practical matter, the particular former work of
fire coat production at Lake City was no longer
available, for purposes of remedying the admitted
(for settlement purposes) unlawful relocation of fire
coat production from Lake City, and that the Ap-
plicant would instead be required to offer to Lake
City employees work that was substantially equiva-
lent to fire coat production.
The judge next considered the question of
whether the production of knit shirts and other
garments was substantially equivalent to the pro-
duction of fire coats for purposes of effectively
remedying the relocation of fire coat production
from Lake City. Based on an analysis that is com-
mendable for its implicit, yet clear, understanding
and appreciation of what is truly important in these
remedial areas, the judge found that the production
of knit shirts and other garments at Lake City was
at least substantially equivalent to the production of
fire coats, and was therefore a satisfactory remedy
for the relocation of fire coat production from
Lake City, inasmuch as the production of fire coats
at Lake City was no longer available. The judge
stated:
That there are distinct differences between
firecoats and knit shirts is obvious ... .
Nonetheless, the manufacture of both requires
that fabric be spread and cut, the edges of the
fabric be serged (stitched to prevent unravel-
ing), pieces such as collars, cuffs, and pockets
be sewn together, and the various components
of the garment assembled and sewn. The ma-
chines used to manufacture both garments are
at least similar and, in many cases, are identi-
cal....
Moreover, as Respondent pointed out, the
Lake City plant has not always made firecoats.
Until 4 or 5 years ago, various garments in-
cluding jeans, zip suits (coveralls), and jackets
were made in that plant . . . . Indeed, at Re-
spondent's other plants various types of gar-
ments, from pants to caps, are made, with the
same employees being retrained as necessary
to go from one to the other.
The work on the firecoats was steady and
reliable. There were few layoffs and employ-
ees were able to stay with one machine for
262 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
long periods of time. They knew the garments,
their machines, and the work which was ex-
pected of them. The General Counsel has as-
serted that the work on knit shirts (or other
garments) will not be the same or substantially
equivalent because some employees will have
to learn to operate different machines, become
familar with new production standards, and
may be more subject to layoffs because the
new product lines might not be as steady as
the old. However, even prior to the advent of
the Union, these employees had no assurance
that they would not be required to work on a
product other than the firecoats and that such
a change might not require them to learn new
machines, standards, and tasks. Moreover, in
regard to the fears of layoffs or reduced earn-
ings because of different production standards,
I am satisfied that so long as Respondent com-
plies with the requirements of, this Order and
its obligation to bargain with the Union, the
employees will suffer no diminution in these
aspects of their employment.?
Thus, the judge concluded that the Applicant's
offer of settlement would provide a remedy "virtu-
ally identical" to that which might have been
achieved after complete litigation of this matter,
and that it would effectuate the purposes of the
Act to accept the Applicant's settlement offer.
Nevertheless, the General Counsel (and the
Union) filed exceptions with the Board to Judge
Miller's June 1978 approval of the Applicant's set-
tlement offer. During the pendency of those excep-
tions before the Board, the Applicant continued to
attempt to settle these matters. Throughout 1978,
the General Counsel continued to insist, as a condi-
tion of settlement, that the Applicant return fire
coat production to Lake City. The Applicant was
agreeable to the settlement terms proposed by the
General Counsel, except that the Applicant sought
to substitute production of other garments for fire
coats at Lake City. Ultimately, the Applicant sold
its Lake City facility in September 1979. The pur-
chaser, FMK Apparel, Inc., was required, as a con-
dition of purchase, to employ the Applicant's Lake
City employees at the time and also assume the
Applicant's obligation to recognize and bargain
with the Union.
On 11 February 1980 the Board rejected Judge
Miller's approval, of the Applicant's settlement
offer, and remanded the case for a further hearing
on the merits of the unfair labor practice allega-
tions. The Board rejected the judge's determination
that, under the particular facts of this case, the Ap-
7 247 NLRB at 997.
plicant would suffer an undue hardship if it were
required to reinstitute the production of fire coats
at Lake City, and the judge 's conclusion that as a
practical matter, the particular work of fire coat
production was no longer available for purposes of
precisely remedying an unlawful relocation of fire
coat production from Lake City. In rejecting the
judge's determination that it was not feasible under
the circumstances for the Applicant to transfer fire
coat production back to Lake City, the Board
noted that prior to the advent of the Union and the
subsequent relocation of fire coat production, the
Applicant had announced plans to expand the Lake
City facility. The Board saw no evidence that the
Applicant could not now follow through on those
earlier announced plans for expansion of the Lake
City facility, without endangering the Applicant's
economic viability, or at least rent additional pro-
duction facilities at Lake City, so as to be physical-
ly able to accommodate in Lake City a production
operation that was by then almost twice as big as
the operation that had been relocated from Lake
City less than 7 months before."
Nevertheless , the Applicant continued its settle-
ment efforts following the Board 's February 1980
rejection of Judge Miller's approval of the Appli-
cant 's settlement offer . On 12 June 1980, about 8
months after the Applicant 's sale of its Lake City
facility to FMK , the Applicant made a major con-
cession. It proposed to the General Counsel that
the Applicant offer the following alternatives to
the approximately 27 former employees of the Ap-
plicant then working for FMK:
1. If 15 or more of these 27 employees
wanted to quit FMK and work for the Appli-
cant making fire coats at Lake City, then the
Applicant would establish a new fire coat pro-
duction facility in Lake City, at which the Appli-
cant would duplicate the terms and conditions of
employment that would have applied if fire coat
production had never left Lake City. The em-
ployees would be paid the same wages being
paid to the Applicant 's employees then work-
ing at the Applicant's fire coat production fa-
cility in Beattyville; or,
8 Regardless of whether a strict insistence by the Board on a return to
a precise status quo ante might be desirable under other circumstances, it
seems to me (in retrospect, to be sure) that such an insistence was per-
haps questionable under the instant circumstances , where the Applicant
sought only one demonstrably reasonable, factually supported economic
concession-substitution of knit shirts and other products for fire coats as
the products to be manufactured at Lake City . Part of the basis for the
Board's rejection of the Applicant's settlement offer was the Board's find-
ing that the production of knit shirts and other products did not guaran-
tee absolutely full and uninterrupted employment to the Lake City em-
ployees-guarantees which the Board implied had been provided by the
production of fire coats, but which Judge Miller, in the excerpted passage
above, had found were not so certain
LION UNIFORM
2. If fewer than 15 of the 27 former Appli-
cant employees then working for FMK
wanted to quit FMK and go to work for the
Applicant under the conditions described
above,9 then in lieu of establishing a new fire
coat production facility in Lake City, the Ap-
plicant would offer the 27 former employees
the choice of either (a) a job at the Applicant's
Beattyville fire coat facility, with moving ex-
penses paid by the Applicant; or (2) a payment
of $1000, for those employees who no longer
wished to work for the Applicant.
Thus, the Applicant was now offering what the
General Counsel had been insisting on all along-
return of fire coat production to Lake City, condi-
tioned only on the willingness of a small but essen-
tial number of former employees to rejoin the Ap-
plicant for that purpose. But the General Counsel
rejected even this settlement proposal. He counter-
proposed that (1) the former strikers receive back-
pay; (2) "relief" be provided for former strikers
that were not then employed at FMK; and (3) fire
coat production be relocated to Lake City even if
less than 15 former Applicant employees working
at FMK wanted to go back to work for the Appli-
cant. Also, the General Counsel requested assur-
ance from the Applicant that production of fire
coats at Lake City would resume no later than De-
cember 1980-6 months away. The Applicant
pointed out that such a" time schedule would be im-
possible inasmuch as, inter alia, the ,Applicant no
longer owned any real estate or buildings in Lake
City and its former facility was now owned and
used by FMK.
On 12 August 1980 the Applicant made yet an-
other offer, as an alternative to its 12 June settle-
ment offer. Under the alternative, the Applicant
would offer jobs and pay moving expenses to
Beattyville for all employees employed by the Ap-
plicant at the time of the October 1977 strike.
Again, the General Counsel rejected this offer also,
still insisting that any settlement would have to in-
clude return of fire coat production to Lake City.
Settlement efforts were ultimately fruitless, and
the unfair labor practice hearing in this matter
began on 8 September 1980 before Administrative
Law Judge J. Pargen Robertson.' ° On the second
day of the hearing, the judge questioned the coun-
sel for the General Counsel as to how he could
insist that the Applicant reopen a fire coat produc-
tion facility in Lake City if FMK, an acknowl-
9 The Applicant advised the General Counsel that it was "absolutely
unwilling to assume the extreme financial hardship" that would result
from operating with less than 15 employees.
in 259 NLRB 1141 (1982).
263
edged successor to the Applicant, was already op-
erating the Lake 'City facility with some of the Ap-
plicant's former employees. The General Counsel's
position remained fixed: The Applicant must return
fire coat production to Lake City as an absolute
condition to settlement.
As to the merits of the unfair labor practice alle-
gations that the Applicant violated Section 8(a)(3)
and (5) by discriminatorily and unilaterally relocat-
ing fire coat production from Lake City,'' and
Section 8(a)(5) by subsequently unilaterally decid-
ing not to return fire coat ,production to Lake City,
Judge Robertson found that the Applicant did not
act unlawfully in any way in transferring fire coat
production from Lake City.' 2 The Board fully af-
firmed the judge in these regards.' 3
Like Judge Robertson, and contrary to my col-
leagues, I am convinced by the foregoing that the
General Counsel acted unreasonably, without sub-
stantial justification, in insisting on a return of fire
coat production, and nothing other than fire coat
production, to Lake City as an absolute condition
to accepting a settlement in this case. Nor do I find
the General Counsel's lack of substantial justifica-
tion in this regard excused by the Board's February
1980 rejection of Judge Miller's approval of the
Applicant's settlement offer. As seen above, within
4 months of the Board's decision in that regard, the'
Applicant had offered, what the General Counsel
had been insisting on-return of fire coat produc-
tion to Lake City, provided only that at least 15
former employees would be willing to join the Ap-
plicant in the venture.
A finding that the General Counsel lacked sub-
stantial justification in rejecting the Applicant's set-
tlement proposals is first of all, of course, a logical
consequence of my finding that the General Coun-
sel lacked substantial justification in the underlying
allegations of unlawful activity. But, in addition to
that basis for finding a lack of substantial justifica-
tion on the part of the General Counsel in rejecting
the Applicant's settlement proposals, I particularly
agree with Judge Robertson's assessment in foot-
note 10 and the final two paragraphs of section 2
of his decision, that the General Counsel was not
substantially justified in failing to investigate the
Applicant's claim of financial hardship regarding
the General Counsel's unwavering insistence on the
return of fire coat production to Lake City as an
11 As the majority notes, the allegation of unlawful unilateral reloca-
tion of fire coat production was not included in the complaint that issued
in February 1978, but was added by way of amendment at the September
1980 hearing.
12 The judge also found that the strike which precipitated the reloca-
tion of fire coat production was not an unfair labor practice strike.
1 s 259 NLRB at 1141.
264 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
absolute condition for settlement, even after the
Applicant's arm's-length sale of its Lake City facili-
ty to FMK.14
The legal principles applicable to this issue are
relatively few, and easy to state and comprehend.
The Board has broad discretion to approve settle-
ments of unfair labor practice charges.' s It has
long had the policy of encouraging settlements
which tend to eliminate industrial strife, encourage
the collective-bargaining process, and protect the
rights established by the Act.16 Within this con-
text, the Board's broad discretion to dismiss unfair
labor practice charges through settlement should
be exercised only when the unfair labor practices
are substantially remedied and when such a dismis-
sal would effectuate the policies of the Act.17
Thus, in determining whether a settlement should
be approved, the Board must weigh the risks in-
volved in protracted litigation which may be lost
in whole or in part, the early restoration of indus-
trial harmony by making concessions, and the con-
servation of the Board's resources.' s Therefore, al-
though it is certainly not the Board's policy to pro-
mote uncritical, blind, or blanket acceptance of set-
tlements,19 the Board must evaluate the legal and
14 My colleagues' reliance on Temp Tech Industries v. NLRB, 756 F 2d
586 (7th Cir. 1985), in support of their contrary position in this regard is
misplaced. In Temp Tech, the court found that the Board did not abuse its
discretion in finding that the General Counsel did not act unreasonably in
deciding to litigate the alleged unlawful discharge of a picketing employ-
ee who was found to have assaulted a nonstriking employee as the latter
attempted to cross the picket line In finding no abuse of discretion by
the Board in its finding of substantial justification on the part of the Gen-
eral Counsel in this regard, the court relied on the fact (1) that the ad-
ministrative law judge in the underlying unfair labor practice proceeding
apparently dismissed the allegation of unlawful discharge on the basis of
a credibility resolution adverse to the General Counsel, and (2) that even
if the General Counsel had known in advance that its principal witness
was going to be discredited , the allegation of unlawful discharge still
might have been substantially justified, on the basis that under either ver-
sion of the incident in question, it nevertheless might have been found to
be picket line misconduct not of such an egregious, violent, or serious
character as to render the employee unfit for further employment, and
thus not sufficiently egregious to justify, under the Act, the discharge of
the employee for engaging in it. Having found the General Counsel's de-
cision to litigate the matter substantially justified, the court rejected the
company's argument that the General Counsel had to further justify his
decision to reject the company's settlement proposal which, by the com-
pany's own admission, could not have provided the full relief that the
General Counsel would have achieved had he prevailed, and which
would have lacked the enforceability of a Board Order. Thus, Temp Tech
is clearly inapposite to the instant case, which involves no determinative
credibility resolutions on the issue in question-relocation of fire coat
production from Lake City; certainly no concession on the part of the
Applicant that its proposed settlement provided anything short of full
relief; and clearly no question that remedial orders incorporating the Ap-
plicant's 1980 settlement offers would have been anything less than fully
enforceable Board orders.
16 Textile Workers Y. NLRB, 294 F.2d 738, 741 (D.C. Cir. 1961); Farm-
ers Co-Operative Gin Assn, 168 NLRB 367 (1967).
16 ESB Inc., 246 NLRB 325 (1979). See also Wallace Corp. v. NLRB,
323 U S 248, 253-254 (1944).
14 Robinson Freight Lines, 117 NLRB 1483, 1485 (1957).
18 Farmers Co-Operative Gin, supra, 168 NLRB at 367.
is Passavent Memorial Hospital, 237 NLRB 138, 139 fn 4 (1978).
factual merits of the unfair labor practice charges,
as disclosed by an administrative investigation, to
determine whether the allegations of violations in
the complaint can be so clearly proved that noth-
ing less than the maximum remedy can be accepted
in the settlement.20
Thus, even though, in my view, the General
Counsel acted unreasonably, without substantial
justification, in alleging that the Applicant acted
unlawfully in relocating its fire coat production
from Lake City, the General Counsel nevertheless
had repeated opportunities, following the issuance
of the complaint, to avoid the consequences of this
unreasonable and costly course of action, by agree-
ing to any one of the Applicant's several settlement
offers. Unfortunately for all concerned-the em-
ployees, the Union, the Applicant, and this
Agency-the General Counsel pressed forward on
its errant and costly course, unreasonably rejecting
the Applicant's repeated offers to settle this case.
In light of my foregoing findings that the Gener-
al Counsel was not substantially justified in alleging
that the Applicant violated Section 8(a)(3) and (5)
of the Act by discriminatorily and unilaterally relo-
cating fire coat production from Lake City, and in
specifically insisting on return of fire coat produc-
tion to Lake City as an absolute condition for set-
tlement of the entire case against the Applicant, I
find, contrary to my colleagues, that the General
Counsel was not substantially justified in prosecut-
ing the complaint through the hearing stage. Con-
trary to my colleagues, and for the reasons dis-
cussed more fully above and in the judge's EAJA
decision,21 I find that the General Counsel knew
or had reason to become aware of, through the
conduct of a thorough investigation of the instant
unfair labor practice charges, the evidence favor-
able to the Applicant which was ultimately relied
on by the judge and the Board in dismissing ' the
unfair labor practice allegations in question.
It follows, then, that I also disagree with my col-
leagues' findings that the General Counsel was sub-
stantially justified in the continued prosecution of
this case after the Applicant actually introduced at
the hearing the -evidence on which the judge and
the Board relied in dismissing the unfair labor prac-
tice allegations in question. As seen, I find that this
exculpatory evidence should already have been
known to the General Counsel through a thorough
prehearing investigation.
Consequently, I find, contrary to my colleagues,
that the General Counsel was not substantially jus-
ao Farmers Co-Operative Gin, supra, 168 NLRB at 367.
z' See the final six paragraphs of sec. (a), of the judge's attached deci-
sion.
LION UNIFORM 265
tified in filing posthearing exceptions to Judge
Robertson's dismissal of the complaint allegations
in question.
My colleagues in the majority have determined
that the Applicant is not entitled to an award of
any fees or expenses incurred in its successful de-
fense against the unfair labor practice allegations in
question and in its ,prosecution of the instant EAJA
proceeding. Although I disagree, I nevertheless
find that no material purpose would be served by a
solitary review and analysis by me of Judge Rob-
ertson's considerations and determinations of the
reasonableness of specific fees and expenses
claimed by the Applicant, and those ultimately
awarded by the judge, in the attached decision.
Thus, I do not pass on this aspect of the judge's de-
cision.
The purpose of the Equal Access to Justice Act
is to correct the situation under which certain par-
ties may be deterred from defending against or
seeking review of unreasonable governmental
action, because of the expense involved in securing
the vindication of their rights in civil actions or in
administrative proceedings, such as those conduct-
ed under the National Labor Relations Act.22 The
EAJA attempts to diminish this effect by provid-
ing, where appropriate, an ,award of fees and ex-
penses incurred by a party who prevails against the
government. More simply stated, the governing
principle of the EAJA is that the United States
should pay those expenses which are incurred
when the government presses a position that is not
substantially justified during litigation_23
In my view, the decision of my colleagues in the
majority in this case does nothing to advance, and
much to undermine, the purpose and governing
principle of the Equal Access to Justice Act. I de-
cline to join them in this matter.
22 See Equal Access to Justice Act (EAJA), sec. 202, Pub. L. 96-481,
94 Stat. 2325 (1980).
23 See DeBolt Transfer, 271 NLRB 299 (1984).
Stuart Weisberg and George Card, Esqs., for the General
Counsel.
Daniel G. Rosenthal and Hope Martin Frye, Esqs., of Cin-
cinnati, Ohio, for the Applicant.
DECISION
STATEMENT O]P THE CASE
J. PARGEN ROBERTSON, Administrative Law Judge.
The Applicant, pursuant to the Equal Access to Justice
Act, 5 U.S.C. § 504 et seq. seeks fees and expenses
through June 29, 1983, for its successful defense of an,
unfair labor practice complaint and for its prosecution of
this claim under the Equal Access to Justice Act
(EAJA).
On February 19, 1982, the Applicant filed with the
National Labor Relations Board an application to recov-
er fees and expenses under the EAJA. The Applicant
based its claim on its defense to an underlying unfair
labor practice proceeding entitiled Lion Uniform, 259
NLRB 1141 (1982). On February 23, 1982, the Board or-
dered that the application be referred to me. By order
dated April 22, 1982, I denied the General Counsel's
March 26, 1982 motion to dismiss the application. This
EAJA proceeding resulted in a hearing in Atlanta, Geor-
gia, on May 16-20, 1983.
On the entire record, including the record of the
EAJA proceedings, and the underlying unfair labor prac-
tice proceedings, and briefs filed by the General Counsel
and the Applicant, I make the following
FINDINGS
Eligibility
The IEAJA provides that certain parties may recover
fees, including reasonable attorney fees, when they pre-
vail in actions brought by the Government. In order to
qualify for those fees, it is initially essential for the Ap-
plicant to qualify as a party as that term is defined in the
EAJA. The portion of the EAJA defining "party" in
certain administrative agency actions reads in material
part:
[W]hich is "a corporation" but excludes (i) any
"corporation" whose net worth exceeded $5,000,000
at the time the adversary adjudication was initiated
... and (ii) any "corporation" having more than
five hundred employees at the time the adversary
adjudication was initiated [5 U.S.C.§ 504 (b)(1)(B)].
The General Counsel argues in accord with the
Board's Rules and Regulations that the above language
requires the Applicant to prove "both that its net worth
was not more than 5 million dollars and that it employed
not more than five hundred employees," The statute ex-
presses that any "cor-poration" qualifies under the EAJA
except those with a net worth in excess of $5 million and
with more than 500 employees.
The manner in which the statute was drafted presents
confusion. As shown in the above quote, Section
504(b)(1)(B), sets for the those corporations that are ex-
cluded from the Act's application. Those excluded, ac-
cording to the wording, include corporations that satisfy
two criteria (i.e., over $5 million in net worth and over
500 employees). The converse, i.e., those covered by the
statute, may include any corporation that satisfies any of
the following conditions:
(1) a net worth that does not exceed five million
dollars and an employee complement that does not
exceed five hundred;
(2) a net worth that does not exceed five million
dollars even though its employee complement ex-
ceeds five hundred; and
(3) an employee complement that does not
exceed five hundred even though its net worth ex-
ceeds five million dollars.
266 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
In the September 30, 1980 Senate House Conference
Report on the Equal Access to Justice Act, the follow-
ing statement is made regarding Section 504 (b)(1)(B) of
Title 5:
16. AGENCY ACTIONS-THOSE ELIGIBLE
TO CLAIM
The Senate bill defines prevailing parties eligible for
such awards as including individuals and certain en-
tities, except: in the case of individuals, those whose
net worth at the initiation of the adversarial pro-
ceeding exceeded $ 1 million ; and, in the case of en-
tities those whose net worth at the initiation of the
adversarial proceeding exceeded $5 million or who
had more than 500 employees. Charitable tax
exempt organizations so designated under 501(c)(3)
of the Internal Revenue Code and Agricultural Co-
ops defined in the Agricultural Marketing Act are
exempt from the monetary ceiling.
That language from the Conference Report is similar
to the Conference Report regarding EAJA eligibility in
judicial proceedings:
28. JUDICIAL PROCEEDINGS-THOSE ELI-
GIBLE TO CLAIM
The Senate bill defines prevailing parties for an
answer eligible for an award to include individuals
and certain entities , except: in the case of individ-
uals, whose net worth at the initiation of the adver-
sarial proceeding exceeded $1 million; and, in the
case of entities, those whose net worth at the initi-
ation of the adversarial proceeding exceeded $5 mil-
lion or who had more than 500 employees. Charita-
ble tax exempt organizations so designated under
501(c)(3) of the Internal Revenue Code and Agri-
cultural co-ops defined in the Agricultural Market-
ing Act are exempt from the monetary ceiling.
The EAJA itself, in the section dealing with eligibility
in certain judicial proceedings , states , in material part:
(B) "party" means (ii) a "corporation" whose net
worth did not exceed five million dollars at the time
the civil action was filed, or (iii) a "corporation"
having not more than five hundred employees at
the time the civil action was filed [28 U.S.C.
§ 2412(d)(2)(B)].
Although drafted in different styles, it would appear
from the Conference Report that 28 U.S.C.
§ 2412(d)(2)(B) is similar in meaning to 5 U.S.C
§ 504(b)(1)(B) Different subject matter coverage, among
other things, dictated a separate drafting for the adminis-
trative and judicial provisions of the EAJA. Perhaps, ad-
ditionally, the various sections were prepared by differ-
ent draftsmen. Nevertheless, a reading of the various sec-
tions along with consideration of the Conference Report,
illustrates that the Act may be read to include corpora-
tions with either (1) 500 or fewer employees; or (2) a net
worth of $5 million or less. i
The General Counsel also argues that Applicant's eli-
gibility should not be determined as of the date the origi-
nal complaint was filed.
The underlying unfair labor practice litigation in-
volved Cases 10-CA-12938, 10-CA-13089, and 10-CA-
13284-2. The original pleading, which was a consolidat-
ed complaint in Cases 10-CA-12938 and 10-CA-13089,
was filed on November 17, 1977. However, that com-
plaint did not include matters in which the Applicant
was the prevailing party. Subsequently, on February 9,
1978, a complaint issued in Case 10-CA-13284-2, along
with an order consolidating the three cases for hearing.
Finally, on September 9, 1980, during the underlying
hearing, the consolidated complaint was amended. Both
the February 2, 1978 complaint in Case 10-CA-13284-2
and the September 9, 1980 amendment include matters in
which the Applicant prevailed.
The argument of the General Counsel is rooted in the
fact that the February 2, 1978, and September 9, 1980
pleadings involve the matters in which the Applicant
prevailed. 'T'hose are the dates, according to the General
Counsel, on which the material adjudication commenced.
However, neither the statute nor the Board' s Rules and
Regulations appear to agree with the General Counsel.
The statute provides that eligibility of the applicants
shall be determined "at the time the adversary adjudica-
tion was initiated." (5 U.S.C. § 504(b)( 1)(B).)
The Board 's Rules and Regulations indicate that eligi-
bility shall be determined "as of the date of the com-
plaint ." (Sec. 102.143(d).)
In view of the above, I find that the Applicant is eligi-
ble under the EAJA if the facts establish its eligibility on
November 17, 1977, the original date of the filing of the
consolidated complaint in these proceedings. However, I
shall also consider whether the Applicant satisfied the
eligibility requirements on February 9, 1978, the date the
second complaint was filed. I find no reason to condsider
whether the applicant satisfied the eligibility require-
ments on September 9, 1980, the date the complaint was
amended . Neither the statute nor the Board's Rules and
Regulations provide for consideration of an amendment
date in determining eligibility.
Net Worth
During the hearing the Applicant offered expert testi-
mony and documentary evidence regarding its net
worth. Net worth was calucated by subtracting total li-
abilities from total assets. The Applicant's fiscal year was
from the first week in August through the last week in
July. Through use of the Applicant's balance sheet and
monthly financial statements, the Applicant offered
expert testimony that its balance sheet net worth was
$3,191,289 on November 17, 1977, and $3,271,757 on
February 9, 1978.
The Applicant also offered evidence as to the net
worth of its principal stockholder, Clarence Lapedes. La-
' Nevertheless, as shown below, the Applicant proved its eligibility
under both standards
LION UNIFORM 267
pedes' net worth was $298,693 on November 17, 1977,
and was $221,011' on February 9, 1978. The General
Counsel argues that Lapedes' net worth should be added
to that of the Applicant in consideration of Section
102.143(g) of the Board's Rules and Regulations.
The General Counsel also offered expert testimony re-
garding the Applicant's net worth. The expert called by
the General Counsel testified that the Applicant's net
worth, as shown on the Applicant's balance sheet, was
prepared through use of generally accepted accounting
principles and had been audited through use of generally
accepted auditing standards . However , the General
Counsel's expert quarreled with the Applicant's deduc-
tion of accumulated depreciation.
The following appears in the legislative history of
EAJA, "in determining value of assets , the cost of acqui-
sition rather than fair market value should be used." The
General Counsel offered expert testimony that was con-
tested through Applicant 's expert witness, that acquisi-
tion cost refers to the purchase price of an asset without
regard to depreciation . The Applicant's expert testified
that the term "acquisition costs" in the above phrase
refers to the first step in accounting for fixed assets.
Basically, the above disagreement referred to the prac-
tice of subtracting accumulated depreciation from net
assets . The General Counsel argues that accumulated de-
preciation should not be subtracted from net assets. The
General Counsel argued in its brief that accumulated de-
preciation, which was subtracted from the Applicant's
assets, totaled $447,994 on November 17, 1977, and
$504,164 on February 9, 1978.
The General Counsel also argued in oppsition to the
Applicant, that the Applicant should not be permitted to
deduct contributions to its employees' option plan, allow-
ances for doubtful accounts to the extent those allow-
ances were not offset by actual bad -debt expenses and
deferred income tax . Those respective amounts totaled
$235,000, $19,000, and $21,000 on November 17, 1977,
and $245,000, $4250, and $14,000) on February 9, 1978.
The General Counsel also contends that Applicant's
balance sheet should include an asset for value for trade-
marks and goodwill. However , no evidence was offered
by the General Counsel to offset Applicant's evidence
that those items are valueless in this particular instance.
In view of the above, it is apparent that I need not re-
solve the issues in the General Counsel 's contentions. If
the General Counsel's contentions are accepted for the
sake of argument, it is apparent that the Applicant's net
worth , measured by inclusion of Clarence Lapedes' net
worth and reinclusion of accumulated depreciation, con-
tributions to employees stock option plan , allowances for
doubtful accounts, and deferred income tax, total less
than the eligibility limit of $5 million . Those figures
would show Applicant's net worth to be $4,242,976 on
November 17, 1977, and $4,258,182 on February 9, 1978.
Therefore, I find that Applicant proved that its net
worth fell within the eligibility limits at all material
times.
Number of Employees
under the EA,A, the term 'employee shall include all
persons who regularly perform services for remuneration
for the applicant, under applicant 's direction and control.
"Part time employees shall be included on a proportional
basis."
Both the General Counsel and the Applicant agree
that the term "employee" as used above is distinct from
the normal use of that term under the NLRA.
The Applicant offered evidence that its employee
count was 432.6 on November 17, 1977, and 436.6 on
February 9, 1978. Those figures do not include 54 em-
ployees on strike at the Applicant's Lake City, Tennessee
facility.
As shown in the underlying unfair labor practice deci-
sion (see 259 NLRB 1141 (1982)), the Applicant's Lake
City employees shuck from October 12, 1977, until May
16, 1978. There is no doubt but that those strikers would
be considered employees under the NLRA. However, it
is equally clear that on the material dates of November
17, 1977, and February 9, 1978, the strikers were not reg-
ularly, performing services for the Applicant under the
Applicant's direction and control. Moreover, because the
Applicant found it necessary on October 24, 1977, ,to re-
locate its Lake City operation and employ others to per-
form work formerly handled by the strikers, a count that
would include both the strikers and the workers at the
relocated facility would not give a true picture of the
size of that operation. Therefore, I find that the Lake
City strikers were not employees of the Applicant on
November 17, 1977, and on February 9,1978. The Ap-
plicant and the General Counsel agree there were 54
strikers on each of those dates.
The General Counsel also contended that the employ-
ee count should include "extra" workers. Evidence indi-
cated that those employees were hired to complete a spe-
cific contract (Navy contract) that ran from the fall of
1977 into the summer of 1978. On November 17, 1977,
six of those employees who were not otherwise included
in Applicant's employee count were employed at the Ap-
plicant's Jellico, Tennessee plant. On February 9, 1977,
the Applicant employed 13 extras at its Jellico plant that
were not included in its employee count.
I agree with the General Counsel . Those extra em-
ployees were regularly performing services under the
Applicant's direction and 'control at material times. By
including those employees, the Applicant's employee
count should be 438.6 on November 17, 1977, and 449.6
on February 9, 1978.
The General Counsel also argues that an additional six
employees should be shown on the Applicant 's employee
count for February 9, 1978, from its Williamsburg, Ken-
tucky plant. The Williamsburg plant was shut down
during the February 9 week. The Applicant elected to
show, as Williamsburg employees , the average number of
employees for the week before and the week after Feb-
ruary 9. The General Counsel points out that that proce-
dure omits six employees that were working when the
plant temporarily shut down. Again I agree with the
General Counsel. There is no indication that those six
Section 102 . 143(f) of the Board's Rules and Regula- employees should not be considered in the employee
tions indicates for purposes of an applicant 's eligibility count for February 9, 1978. By including those employ-
268 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ees, the Applicant's February 9, 1978 count totals 455.6.
The count, for November 17, 1977, remains 438.6.
The General Counsel argues that the employee count
should include four outside members of the Applicant's
board of directors. I disagree. The sole remuneration re-
ceived by each of those individuals totaled $250 for ex-
penses for each board of directors meeting. None of the
four peformed services under the Applicant's direction
and control. Actually, it is the Applicant that operates
under the direction and control of the board of directors.
Therefore, I find that the board of directors, who are
neither officers of the Applicant nor are otherwise em-
ployed by the Applicant, do not qualify as employees
under the Equal Access to Justice Act.
The General Counsel also argues that the Applicant's
method of computing part-time employees is slightly in-
accurate and that the February 9, 1978 numbers should
be 5.29 part-time employees rather than the 5.1 found by
the Applicant. Assuming the General Counsel is correct,
the February 9, 1978 count should be 455.79. The Gener-
al Counsel also argues that employees Faye McGhee and
Louise Hooks shold be included in the Applicant's em-
ployee count. However, the evidence proved that both
McGhee and Hooks ceased working for the Applicant
before November 17, 1977.
In consideration of the entire record, I find that the
Applicant's actual employee count was 438.6 on Novem-
ber 17, 1977, and no more than 455.79 on February 9,
1978. I find that the Applicant's total employee comple-
ment did not exceed 500 at any material time.
In view of the above, I find that Applicant has estab-
lished its eligibility for consideration of the merits of its
claim -for fees under the EAJA.
The Merits of the Applicant's Claim
The underlying litigation revolved around a produc-
tion line relocation issue . The General Counsel alleged in
that underlying proceeding that the Applicant illegally
relocated its Lake City, Tennessee firemen's clothing
production operation to, Beattyville, Kentucky, on Octo-
ber 24, 1977, and that the Applicant engaged in further
illegal acitivity by making that relocation permanent on
January 5, 1978.2
The General Counsel and the Applicant prevailed in
the unfair labor practice proceeding on the relocation
issue . That issue constitutes a significant and discrete
portion of the unfair labor practice allegations. The ques-
tion left is whether the General Counsel was substantial-
ly justified in pursuing the relocation issue to its ultimate
demise before the Board.
Substantial Justification
The issue, under the circumstances here, must be
broken down into three parts, namely:
2 The issue does not involve a contention that an entire paint was per-
manently relocated. After the Union ended its strike at the Applicant's
Lake City, Tennessee facility, the Applicant reopened the Lake City fa-
cility. However, the production of firemen's clothing, which occurred at
Lake City before the strike, was never resumed at that facility.
1. Was the General Counsel substantially justified in
alleging that Respondent illegally relocated it Lake City,
Tennessee firemen's clothing production line?
2. Was the General Counsel substantially justified in
continuing to insist that any settlement must include relo-
cation of Applicant's former Lake City firemen's cloth-
ing operation back to Lake City?
3. Whether special circumstances existed that should
preclude an,award?
A. Was the Relocation Allegation Substantially
Justified?
The legislative history of the Act includes several ref-
erences to the term substantially justified. Efforts to re-
quire a more rigid standard of "arbitrary" or "capri-
cious" were defeated. However, comments demonstrate
that the substantially justified standard must not rest on
whether "the government can show that its case had a
reasonable basis both in law and fact." The General
Counsel has the burden of proving substantial justifica-
tion.
As shown in the underlying unfair labor practice deci-
sion, following certification the Union struck the Appli-
cant's Lake City facility on October 12, 1977. The strike
was successful. The Applicant's Lake City production
was seriously curtailed.' Only supervisors and a few em-
ployees crossed the picket line.
On October 23, 1977, the Applicant wired the Union
that it was relocating the Lake City operation because of
the strike. On October "24, the 'Lake City operation was
moved to Beattyville, Kentucky. Also, on October 24
the Union was sent another wire, this wire coming from
one of the Applicant's attorney, stating the relocation
was needed because of insufficient room to expand at
Lake City. However, in contract negotiations that started
on October 25, 1977, arid' continued on November 1, 2,
and 28, and subsequently, the Applicant assured the
Union that the Lake City relocation came about when it
became apparent that it could not meet production at,the
Lake City due to the strike and that the move was tem-
porary. (See Lion Uniform, 259 NLRB 1141, 1145
(1982).) The above facts were never in dispute. All those
facts were available to the Regional Office through the
Union who was the Charging Party in the relocation
charge.3
During the underlying unfair labor practice proceed-
ing and in the instant hearing, the General Counsel of-
fered no evidence showing that its investigative file con-
tained matters showing that the Applicant's October 24,
1977 relocation was precipitated by anything other than
the Union's October 12, 1977 strike. The evidence before
me demonstrates that the General Counsel and the
Charging Party Union knew long before the complaint
issued on February 9, 1978, that the Lake City operation
was relocated because the Union's strike had curtailed
production.
During the underlying unfair labor practice hearing,
the General Counsel called the Union's district director,
3 Case 10-CA-13284-2 was filed on November 30, 1977. The com-
plaint in that case issued on February 9, 1978.
LION UNIFORM
John Williams. Williams admitted that during negotiating
sessions before January 5 , 1978, the Applicant consistent-
ly told him that they planned to return the firemen's
clothing line to Lake City when the strike ended.
By letter dated January 16 , 1978 , Williams received a
packet from the Applicant's ailtorney that included min-
utes from several negotiating sessions , including the ses-
sion of November 2, 1977 . Those November 2, 1977 min-
utes read in part:
The meeting began at 9 .OO a.m . Williams opened the
meeting with a question - concerning the Company's
transfer of workout of the Lake City plant . He said
there is no sense in our negotiating if the Company
has decided to close the plant. I told Williams that
the Company had some pressing customer require-
ments for fire coats and that the Company first
thought it could handle those requirements by uti-
lizing employees who were not going to honor the
picket line . I explained that it quickly became ap-
parent that that plan would not work. Williams ac-
knowledged that this was so. I stated,that the Com-
pany then determined that the only way it could
satisfy its customers was by having the coats made
at other plants of the Company . I explained that this
was a temporary transfer and that when the strike
ended , the work would be transferred back to Lake
City.4
On January 5, 1978 , Respondent delivered to John
Williams a letter containing the following:
In order, to save its fire coat and other Lake City
business during your strike, the Company moved
the production elsewhere . The move presented
many difficulties and caused a considerable inter-
ruption in - the supply of garments to its customers.
Production of fire coats, etc., is now proceeding,
although demand is making it difficult to meet
schedule.
The Company has tentatively concluded that it
cannot run - the business risks of attempting to relo-
cate the fire coat and other Lake City, production
back in Lake City again . This tentative conclusion
is based on , very serious business problems-the
interruption which would occur if machinery and
materials had to be relocated , the risk of loss in
transit, the risk of higher production , cost in reas-
sembling and possibly retraining a work force in
Lake City, and the further delays in shipment to
customers which would occur if anything went
wrong in starting up again at Lake City.
We are prepared to discuss any aspect of this
matter, including the tentative conclusion itself, in
,good faith.
The Company does plan to resume production,
but of other products , at Lake City , when the strike
is over.
The following appears in the underlying unfair labor
practice decision:
4 "I" refers to the writer of the minutes, Attorney Richard A. DuRose.
269
There was no evidence offered demonstrating
that -'Respondent 's move to Beattyville transcended
the "reasonable measures necessary in order to
maintain operations in such circumstances." Empire
Terminal Warehouse Company, 151 NLRB 1359
(1965). Despite Respondent 's apparent union animus
as evidenced by its illegal antiunion campaign, the
record shows that Respondent engaged in good-
faith negotiations with the Union beginning in Octo-
ber 1977 . Moreover, when the strike ended, Re-
spondent reinstated the striking employees and an-
nounced to its employees that it denounced , action
which did not fully respect the employees ' rights to
associate with the Union . Furthermore, following
its move, Respondent continuously took the posi-
tion in its discussions with the Union that it would
provide work for the employees at Lake City.
I find that this case falls within the scope of the
rule announced in Empire Terminal Warehouse Com-
pany, supra, which held that similar conduct by an
employer does not constitute violative action. [259
NLRB 1141 , 1145.]
It is correct, as stated in the underlying unfair labor
practice decision , that the Applicant engaged in illegal
unfair labor practice activities during the summer and
fall of 1977 . However,'as shown above, there was unre-
butted evidence demonstrating that the Applicant relo-
cated its Lake City operations in October 1977 solely be-
cause of its inability to meet production because of the
strike. I believe the General Counsel acted unreasonably
by ignoring that evidence . There was no evidence show-
ing the relocation was illegally motivated.5
Moreover , it should have been apparent to any reason-
able person that the relocation was caused by nothing
more than the Applicant 's efforts to, produce its product.
Therefore, I find the General Counsel, was not substan-
tially justified in alleging that the Applicant violated- Sec-
tion 8(a)(3) by relocating its Lake City firemen 's clothing
production on,October 24, 1977.
Additionally, the General Counsel alleges, that the, Ap-
plicant violated Section 8 (a)(5) by refusing to negotiate
regarding the October 24, 1977 relocation and the Janu-
ary 5, 1978 decision to make that relocation permapent.
In its brief, the General Counsel argues that the Appli-
cant's October 23, 1977 wire presented the Union with a
fait accompli. The facts that were available to the Gener-
alCounsel and the Charging Party before the complaint
issued indicate otherwise. On October 23, 1977, the
Union was on strike at the Applicant 's Lake City facility.
The Applicant, in its October 23 telegram to the Union
and during subsequent negotiations , assured ' the Union
that work would resume in Lake City when the strike
ended: The Union had ample time to put the Applicant
to the task by ending the strike and demanding resump-
5 Although it is true that s(a)(t) violations may indirectly contribute to
a determination of illegal motive (259 NLRB at 1145) there must be some
causal connection between the evidence of animus and the alleged illegal
action. Here there was no causal connection and overwhelming evidence
proved the relocation was caused by the Applicant's inab ility to meet
production because of the strike.
270 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tion of the Lake City operations. The Union did not do
so until May 1978, at which time the Applicant reopened
the Lake City facility and recalled the strikers.
The facts which were available to the General Counsel
and the Charging Party demonstrate the urgency of Ap-
plicant's relocation. The Applicant advised the Union of
its decision on October 23. Thereafter the Applicant met
and negotiated with the Union on several occasions be-
ginning on October 25. There was no indication that the
Applicant ever refused to negotiate regarding its reloca-
tion at Lake City. In fact, minutes of those meetings that
were possessed by the Union show that the Applicant
continually offered to resume Lake City operations as
soon as the strike ended.
As indicated in the underlying proceeding, the General
Counsel offered no evidence showing that the Applicant
violated Section 8(a)(5) by its October 1977 relocation.
Moreover, as to the Applicant's January 5, 1978 offer
to negotiate over its tentative decision to permanently re-
locate firemen's clothing in Beattyville, the Union re-
fused the Applicant's offer to negotiate (see 259 NLRB
1146). Therefore, the Applicant did not have an opportu-
nity and, of course, it was not necessary for it to demon-
strate the economic basis for its decision.6
I have reached the above findings on the basis of doc-
uments that were admittedly included in the General
Counsel's investigative file before the 10-CA-13284-2
complaint issued on February 9, 1978, and on the basis of
other matters,, which I shall presume were known to the
General Counsel.
Throughout proceedings leading to this EAJA hear-
ing, the General Counsel took the position that it would
not disclose contents of its investigative unfair labor
practice file. Therefore, although stipulations were re-
ceived that the General Counsel received certain docu-
ments from the Applicant' during the unfair labor pratice
investigation and the Applicant did not produce other
documents, the record did not disclose precisely what
the General Counsel's investigative file contained.
Nevertheless, the General Counsel has the burden of
proving substantial justification. With that in mind, based
on my knowledge that it is the policy of the General
Counsel to thoroughly investigate all unfair labor prac-
tice charges, I shall presume that the Regional Office
was aware of material evidence noted above, which was
possessed by the Charging Party.7
In that regard I find on the basis of stipulations that
the General Counsel was aware of the telegrams sent by
the Applicant to the Union on October 23 and 24, 1977.
I find, in part through presumption, that the General
Counsel was aware of events that transpired during ne-
gotiating sessions between the Union and the Applicant
on October 25, November 1, 2, and 28, December 15 and,
16, 1977, and on January 4, 5, 6, 23, and 24, March 21,
May 24, and September 14, 1978. The General Counsel
had available union officials that attended those sessions
6 Nevertheless, according to unrebutted testimony, the Applicant of-
fered its books to the Union in order to demonstrate the economic basis
for its January 5, 1978 action.
7 Reasonable investigation of the 8(a)(3) and (5) charges would include
examination of minutes of negotiation meetings possessed by the Union,
and all correspondence between the Applicant and the Union.
and, in many cases , minutes of the meetings taken by the
Applicant, which were mailed to the Union.8
Additionally, I shall presume that the General Counsel
was aware through interviews with the union officials
and strikers of the successful nature of the October 12,
1977 strike at Lake City.
On the basis of the above and the entire record, I find
that the General Counsel failed to prove that it was sub-
stantially justified in alleging that Respondent violated
the Act by temporarily and permanently relocating its
Lake City firemen 's clothing operations.
B. Was the General Counsel Unreasonable in
Refusing Settlement?
It follows that the General Counsel was unreasonable
in refusing settlement in view of my finding that the ma-
terial complaint allegations had no basis in fact or law.
However, my findings hereafter do not rest exclusively
on the unjustified complaint allegations.
As early as March 22, 1978, through a letter from one
of the Applicant's attorneys, the Applicant made over-
tures to the Regional Office to settle the outstanding
unfair Labor practices through a formal settlement. On
March 24, 1978, the Regional Office responded by mail-
ing Applicant a rough draft of a settlement agreement.
The letter expressed that .the enclosed proposal was not
absolute. Regarding the relocation remedy the Region's
proposed settlement required:
Take the following affirmative actions to effectu-
ate the policies of the National Labor Relations
Act.
(a) Return its firecoat product line work from
Beattyville, Kentucky, to Lake City, Tennessee, and
reestablish its Lake City, Tennessee facility and op-
eration to the condition in which it existed prior to
October 12, 1977. Employees' will be made whole
for loss of backpay except during periods when
they were engaged in or precluded from working
by a strike.
(b) Reinstate employees to their former or sub-
stantially equivalent positions of employment on
their unconditional application to return to work
discharging replacement employees hired on and
after October 12, 1977, if necessary.
Throughout 1978, the Regional Office continued to
insist as a condition of settlement, the return of the fire-
men's clothing operation to Lake City, Tennessee. The
Applicant was agreeable to the terms proposed by the
Region except the Applicant sought to provide reason-
ably equivalent positions at Lake City, rather than the
precise jobs involved in firemen's clothing production.
As shown in the underlying decision (259 NLRB
1141), the Applicant's proposed settlement was approved
in a decision issued by Administrative' Law Judge Miller
on June 8, 1978. The Board reversed Administrative
8 For example, Exh. 2 in the underlying proceeding is a January 16,
1978 letter from the Applicant to the Union, which includes, among
other things, minutes of the October 25 and November 1, 2, and 28 nego-
tiating sessions
LION UNIFORM
Law Judge Miller on February 11, 1980 (247 NLRB
992).
According to the Applicant 's attorney, Dean Den-
linger, he continued settlement efforts after the General
Counsel and the Charging Party appealed Administrative
Law Judge Miller's decision.
After Administrative , Law Judge Miller 's decision, the
Applicant sold its Lake City facility on September 28,
1979. The terms of that sale included a requirement that
FMK (the buyer) employ the Applicant 's existing Lake
City employees, and assume the Applicant's obligation to
recognize the Union and maintain the existing terms and
conditions of employment.
The Applicant was advised by Attorney Denlinger
that it appeared unlikely that the General Counsel would
prevail on the relocation allegations . However,' Den-
linger advised that if the counsel[ for the General Counsel
was able to prove what he claimed , a remedy requiring
relocation to Lake City could be imposed . The Appli-
cant instructed its attorney that. it could not afford the
expense and risk of returning its entire firemen's clothing
production to Lake City . Therefore, Denlinger was in-
structed that he was to use any possible means within
reason to settle the case . Even though the Applicant no
longer owned a facility at Lake City , Tennessee, it ad-
vanced a settlement proposal to the Region on June 12,
1980, which included:
I am writing to suggest a full settlement of the
Lion Uniform case . I would suggest that , in return
for your dismissal of the case , Lion offer the follow-
ing alternatives to those former Lion bargaining
unit employees who continue to work at FMK Ap-
parel, Inc. These employees number approximately
27.
1. If 15 or more of the former Lion bargaining
unit employees who now work for FMK wish to
quit FMK and accept jobs working for Lion Uni-
form making fire coats in Lake City , Lion would
create a fire coat manufacturing facility in Lake
City. Lion would duplicate the terms and condi-
tions of employment that would have applied if the
work had never moved out . These employees will
receive the same wage rate presently in effect at
Lion's fire coat manufacturing facility in Beatty-
ville, Kentucky . Lion is absolutely unwilling to
assume the extreme financial hardship that would
result from operating with any fewer than 15 em-
ployees.
2. If fewer than 15 of those FMK employees are
willing to leave FMK and work for Lion, Lion
would not create a facility in Lake City.
Instead, it would offer those FMK employees the
following alternatives:
(a) The Company would pay the moving ex-
penses for those who wish to accept employment at
Lion 's plant in Beatttyville , Kentucky.
(b) Those who do not wish to work for Lion
would each receive a payment of $1,000.00.
Lion must know as soon as possible whether it
will have to establish an operation in Lake City.
Similarly , FMK must be informed as to whether it
271
will retain its current employees . Therefore, it will
be vital to Lion, and probably to FMK, for those
FMK employees who wish to exercise option
Number 1 to submit the attached resignation to
FMK within five days of execution of the proposed
settlement.
Lion has not finally approved this settlement. I
am submitting it first to you, to see if the Board
would approve of it . If the Baord approves, I will
recommend that Lion settle the case on these terms.
Please let me know if you have any questions or
comments.
Following the above letter , Dean Denlinger requested
a meeting with the ' Region in its Atlanta office. That
meeting was held on June 30. Although Denlinger re-
quested the chance to meet with the Regional hierarchy
including the Regional Director, Regional attorney, and
Assistant Regional Director , none of those people attend-
ed the meeting . The Region objected to the Applicant's
June 12 settlement proposal, and suggested:
1. Strikers should receive backpay;
2. Relief should be provided for former strikers
that were not then employed at FMK;
3. Firemen's clothing should be relcoated to Lake
City even though ' fewer than 15 FMK employees
desire reinstatement by Applicant.
Additionally, the Region requested assurance from the
Applicant that Lake City production would begin no
later than December 1978 . The Applicant pointed out
that such a time schedule would be impossible in view of
the Applicant's status, i.e., among other problems, it
owned no real estate or buildings in Lake City and its
former facility was being used by FMK . The Region also
took the position that Lake City employees should earn
the same rates the employees at Beattyville , that the Ap-
plicant must agree in the settlement to provide fire coat
production at Lake City for as long as fire coats were
manufactured at Beattyville , and the Region strongly in-
timated that they wanted Richard Lapedes to be the
Lake City plant manager.9
On October 12, 1980 , the Applicant's attorney, Dean
Denlinger , expanded his settlement offer to the Region:
This letter is to set forth in writing the settlement
alternative I suggested to Mr . Card in our recent
telephone conversation . As an alternative to the set-
tlement proposal made in my June 12, 1980 letter to
you, I offer the following.
As to all individuals employed at Lion bargaining
unit positions at the time of the 1977 strike, Lion
would pay moving expenses of those who wish to
accept employment at the Lion 's plant in Beatty-
ville, Kentucky . As you know, this is the typical
remedy imposed by the Board in situations like this
case.
9 Richard Lapedes is the son of the principal owner, Clarence La-
pedes-
272 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
On August 18, 1980, the Applicant again wrote the
Regional Office: On that occasion the Applicant's attor-
ney stated in his letter that the proposal was firm (i.e., it
had been approved by the Applicant).
On August 21, 1980, Denlinger and another attrorney
for the Applicant, Bob Brown, met with the Region to
discuss settlement. On that occasion, the meeting includ-
ed "the Regional Director at least briefly."
Denlinger testified that his August 18 proposal was re-
jected in the "extremely brief' August 21 meeting at the
Regional Office. The Region demanded that settlement
must include returning the "fire coat production" from
Beattyville to Lake City.
During the second day of the underlying unfair labor
practice hearing, I met with all the parties to consider
settlement. On learning of the sale to FMK of all the
Lake City properties, I asked the General Counsel if a
successorship now existed (i.e., was FMK the Appli-
cant's successor in Lake City), and if the General Coun-
sel anticipated any allegation of improper conduct re-
garding the Applicant's sale to FMK. The General
Counsel indicated that she had no intent at that time to
contend that the sale to FMK involved illegal activity. I
then questioned the General Counsel how she could
insist that the Applicant reopen a facility in Lake City if
FMK, who was then operating the Lake City facility
with some of the Applicant's former employees, was a
successor. It was suggested that counsel for the General
Counsel check this matter with the Regional Office. Sub-
sequently, I was informed that the Region's position re-
mained fixed, i.e., the Applicant must return the fire-
men's clothing to Lake City as an absolute condition to
settlement.
The above facts convince me the General Counsel
acted unreasonably regarding the Applicant's .settlement
proposal. Obviously, the Region was unjustified in re-
quiring relocation of firemen's clothing to Lake City in
view of the lack of merit of the material complaint alle-
gations.
Moreover, the Region also acted unreasonably in re-
fusing to pursue investigation of Respondent's several
claims of financial hardship regarding return of the fir-
men's clothing (e.g., the Applicant's letters to the Region
dated August 18, 1980, and June 12, 1980, quoted
above). 10
Finally, the General Counsel acted without substantial
justification by continuing to insist, as a condition of set-
tlement, that the Applicant return its fire clothing pro-
duction to Lake City, following the Applicant' s arm's
length sale of its Lake City operation to FMK.
C. The Special Circumstances
In it answer to the application, the General Counsel al-
leged "there are `special circumstances' which make an
award unjust." In her brief, the General Counsel argues
that special circumstances existed in that the Applicant
failed to provide the Region with evidence supporting its
economic basis for the relocation of the Lake City oper-
ation.
During proceedings leading to the instant hearing,
which included phone conferences between me and the
parties, the General Counsel contended that the special
circumstances argument relied on discussion during De-
cember 1977 phone conversations between a Board agent
from Region 10 and an attorney for the Applicant,
Ronald Ingham. The General Counsel contended that
those conversations demonstrate the Applicant's failure
to cooperate with the 10-CA-13284-2 investigation.
The evidence offered in support of the General Coun-
sel's special circumstances contention was received
through stipulation. That stipulation reads:
During the investigation of the charge in Case
Number 10-CA-13284-2, Lion was sent the letters
with the charge and amended charge, received as
General Counsel's Exhibits 1(o) and 1(q) in the
Judge Miller proceeding.
On December 2, 1977, and December 12, 1977,
Board Agent Richard Prowell telephoned Ronald
Ingham and told him that the Union had filed a
Runway Shop charge. Prowell asked Lion's posi-
tion. Ingham asked whether Prowell had a copy of
the telegram received as Respondent's Exhibit 5 in
the Judge Robertson proceeding, sent by Lion's
vice president of manufacturing to the Union, stat-
ing that the move was temporary.
MR. ROSENTHAL: Excuse me. Isn't that Respond-
ent's Exhibit 45 in the Judge Robertson proceeding?
MR. CARD: I thought I said 45. Forty-five, I'm
sorry.
Ingham offered to provide the telegram. Prowell
said that the Union was sending it to him. Ingham
iterated that the move was' temporary and said that
he did not know what else he could offer by way of
proof, other than the telephone calls and repeated
assurances to the Charging Party that the move was
temporary. Lion made no further response to the
letters.
No further request was made by General Counsel
for evidence, information, access to witnesses or
records, nor was any such evidence offered by
Lion.
10 The General Counsel argues that the Applicant unreasonably failed
to offer evidence regarding financial hardship. However, the Applicant
raised the question with the Regional Office on several occasions and the
Region demonstrated no interest in pursuing that issue.
The Regional Director has an obligation to investigate unfair labor pra-
tice charges and that obligation does not terminate on receipt of the
Charging Party's evidence (see, e g., Sec. 102.73 of the Board's Rules and
Regulations). Although a charged party may have an obligation to coop-
erate, the investigative function remains with the Regional Director.
Here, no evidence showed that the Regional Director sought evidence of
financial hardship from the Applicant.
As shown above, the October 23, 1977 telegram (R.
Exh. 45 in the underlying unfair labor practice proceed-
ing) that was delivered to the Union's district director,
John Williams, reads:
NOTICE IS HERE WITH EXTENDED TO YOU THAT BE-
CAUSE OF THE WORK STOPPAGE AND OUR CRITICAL
NEED TO MANUFACTURE FIRECOATS, LION UNIFORM,
JANESVILLE APPAREL DIVISION WILL BEGIN MANU-
FACTURING FIRECOATS ELSEWHERE ON A TEMPO-
LION UNIFORM 273
RARY BASIS . WE ARE HOPEFUL THIS SENSELESS
WORK STOPPAGE WILL END SO THAT LION UNIFORM
CAN RESUME OPERATIONS IN LAKE CITY. FURTHER,
CONTINUED UNLAWFUL CONDUCT IN THE FACE OF A
COURT RESTRAINING ORDER WILL FORCE US TO EX-
AMINE THE POSSIBILITY OF SUIT FOR DAMAGES
AGAINST OCAW.
Applicant, likt. any resonable employer, was trying to
reasonably defend the unfair labor practice charges.
As indicated in stipulation, the Applicant never re-
fused a request from the Region for cooperation in the
unfair labor practice investigation.
I find no justification for a determination that special
circumstances preclude a recovery by the Applicant.
In order to properly assess the General Counsel's ar-
gument, it is essential to consider events as they existed
when Board Agent Prowell called Attorney Ingham in
December 1977. At that point only a charge, not a com-
plaint, was outstanding. The charge alleged that the Ap-
plicant violated Section 8(a)(1), (3), (4), and (5) by relo-
cating its Lake City operation to Beattyville, Kentucky,
on October 24, 1977.
There was not, during December 1977, any question of
remedy. There was no question which would require the
Applicant to show as it did through voluminous docu-
ments at the unfair labor practice trial that it would have
been financially burdensome to relocate the displaced
firemen's clothing production back to Lake City. The
question in December 1977 was a simple one. Why did
the Applicant move the fire clothing production on Oc-
tober 24, 1977?
Ingham 's response to Board Agent Prowell appeared
to be complete. The telegram (quoted above) sets forth a
specific reason for the relocation. Obviously, the General
Counsel had the means to determine whether the strike
had curtailed the Lake City operations. There was no ap-
parent need for Ingham to supply that information. Obvi-
ously, a manufacturing facility looses its ability to fill
orders and make a profit when its production is stopped.
There was no need for Ingham to supply that informa-
tion. Otherwise, the October 23 telegram is a self-explan-
atory document. It contains all that any reasonable labor
attorney would have thought necessary to defend Case
10-CA-13284-2.
Subsequently, after the January 5, 1978 tentative deci-
sion to keep the firemen's clothing production in Beatty-
ville, a question may have arisen as to economic justifica-
tion. However, in that regard, as shown above, the Ap-
plicant offered to permit the Union to examine its books.
The Union refused.
During numerous settlement discussions and in letters,
the Applicant told the Region that return of the fire
clothing production to Lake City would impose a finan-
cial hardship. However, the Region never asked the Ap-
plicant to present evidence of financial hardship.
Of course, the Applicant did not undertake to defend
the 10-CA-13284-2 unfair labor practice charge with the
same vigor that it ultimately defended the complaint alle-
gations. To do so would have involved a ridiculous
waste of money. i i No intelligent employer would permit
the extensive expense inherent in such defense at a time
when no sanctions would result and when the charge
may have been dismissed without further action. The
11 A requirement that an applicant must fully defend all charges at the
investigative stage without regard to cost would effectively circumvent
the objective of the EAJA, which was designed to prevent the Govern-
ment from unfairly enforcing sanctions against small business by subject-
ing those businesses to large litigation and investigative expenses
Fees
A. The Underlying Unfair Labor Practice Proceeding
The EAJA permits a prevailing party to receive fees
and other expenses incurred by it in connection with
agency proceedings. The Act provides that the Appli-
cant's claim may be reduced if the Applicant unduly and
unreasonably protracted the final resolution of the matter
in controversy.
No evidence was offered and I am unaware of any
facts that show the Applicant unduly and unreasonably
protracted final resolution of the unfair labor practice
proceedings. Therefore, I find that the fee award should
not be reduced on that basis.
The Act permits recovery of reasonable fees, expenses,
costs of studies, reports, etc. Recovery of attorney or
agent fees are limited to a rate not to exceed $75 per
hour.
The Board's Rules and Regulations, Section
102.145(c), state:
(c) In determining the reasonableness of the fee
sought for an attorney, agent, or expert witness, the
following matters shall be considered:
(1) if the attorney, agent, or expert witness is in
practice, his or her customary fee or similar serv-
ices, or, if an employee of the applicant, the fully
allocated cost of the services;
(2) the prevailing rate for similar services in the
community in which the attorney, agent or expert
witness ordinarily performs services;
(3) the time actually spent in the representation of
the applicant;
(4) the time resonably spent in light of the diffi-
cutly or complexity of the issues in the adversary
adjudicative proceeding . . . .
With the above in mind, I shall examine the Appli-
cant's claim from the point of reasonableness. 12
In assessing reasonableness, I am aware of two signifi-
cant overriding points:
(1) The Applicant was aware of the sizeable financial
burden and production delay potential that a Board
order requiring removal of the firemen's clothing back to
12 The Applicant limited its claim for attorney fees to $ 75 in instances
where the actual billing reflected an hourly rate of $75 or more Evi-
dence that was undisputed by the General Counsel demonstrated that
those actual billing rates were customary and reasonable No contrary
evidence was offered to the Applicant's proof that actual fees, which
were shown to be at a rate below $75 per hour, were customary and rea-
sonable The Applicant's proof that its actual billing rates were in accord
with the rates in the community was not contested by the General Coun-
sel The General Counsel did not contest the Applicant' s assertion re-
garding time actually spent except as noted below
274 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
Lake City would entail ; and (2) although its attorneys
felt that the Applicant had a solid defense to the unfair
labor practice allegation regarding the relocation issue,
because of the unavailability of discovery in an NLRB
proceeding, the attorneys could not be sure that the
General Counsel's case was as weak as it appeared to
them.
I credit the Applicant's contention that both the above
factors contrbuted to its decision to fully prepare and
defend the unfair labor practice case.
Additionally, I am persuaded that but for the reloca-
tion allegation and the remedy sought by the General
Counsel, the underlying matter would have settled early
in 1978. Therefore, I shall not automatically discount
claims for fees not directly related to the relocation alle-
gations. I do not adopt the General Counsel's contention
that the Applicant is "only entitled to those fees and ex-
penses attributable to the relocation charge." But for the
relocation charge, the underlying matter would have set-
tled and, therefore, all litigation fees after February 1978
would have been avoided.
Nevertheless, I find that the Applicant is not entitled
to any fees and expenses incurred before the complaint
issued on the relocation matter on February 9, 1978. The
General Counsel is obligated to investigate all charges.
The General Counsel should not be bound by the "sub-
stantial justification" standard prior to complaint issuing.
The investigatory stage of an unfair labor practice
charge is not part of the adversary proceeding.
I also agree with the General Counsel's contention
that the Applicant should be denied fees associated with
handling an unemployment compensation claim. Al-
though the Applicant contends those proceedings were
necessary for discovery purposes, the Applicant was
unable to show that, but for the discovery aspect, an at-
torney would not have handled the unemployment com-
pensation hearing. Therefore, I shall deduct $130.75 from
the Applicant's claim . Nevertheless, the work of Attor-
ney Jennifer Cox in digesting the unemployment tran-
scripts did directly relate to the underlying unfair labor
practice proceeding. Therefore, I shall allow that claim
of $1665.
I also agree with the General Counsel that expert wit-
ness fees should be limited to $75 per hour.
Concerning the General Counsel's claim that the Ap-
plicant was excessive in using three attorneys in the
unfair labor practice hearing, I disgree. Unrebutted testi-
mony proved that all three engaged in productive, non-
duplicate work during the trial. Keeping in mind the
devastating effect a loss would have had on an appli-
cant's business and the fact that the Applicant was not
aware of what the General Counsel's case entailed, I am
unable to find that Applicant's use of three attorneys was
excessive.
Moreover, I am unable to approach this case through
use of a "lodestar" approach by concluding what would
be a reasonable number of hours necessary to litigate this
case. This case involved factors other than those found
in normal litigation practice, including extensive settle-
ment efforts 13 plus extensive trial efforts that may have
been unnecessary in courts when discovery is permitted.
Additionally, there was no evidence that demonstrated
the Applicant's use of some 14 attorneys at various times
was unreasonable. The practice of using several attor-
neys in the same law firm has become widely accepted.
The General Counsel offered no evidence to support her
contention that a client should be able to except that its
task can be handled by one attorney.
As mentioned above, I am not persuaded that the use
of three attorneys for preparation and trial was unreason-
able in this instance. However, I do agree with the Gen-
eral Counsel that a certain claim is unreasonable. I find it
uneasonable to use all three attorneys in the August 22,
1980 trial preparation of Sydney Burns. Therefore, I
shall disallow the claims of Rosenthal and Cox for 7 and
10.5 hours respectively. Denlinger, the chief attorney,
claimed 8 hours for that date in preparation of Burns. I
shall allow that 8-hour claim.
Contrary to the General Counsel's arguments, I am
unable to arbitrarily deny claims stemming from intraof-
fice conferences. Those claims appear reasonable in view
of the other factors mentioned above. The same is true
regarding claims associated with preparing documents
for the 1980 unfair labor practice hearing. Those docu-
ments were voluminous and, as shown above, the Appli-
cant could not risk a loss over the relocation issue.
As to travel and mealtime , I find that the Applicant's
practice of charging travel time only when the travel oc-
curred during working hours, thereby depriving the at-
torney of an opportunity to earn other fees, and the
practice of charging for working meals are reasonable.
I do not find the time the Applicant spent on briefs to
the administrative law judge to be unreasonable. Howev-
er, the Applicant's claim of 57 hours to submit a substan-
tially similar brief to the Board does appear excessive. I
find that 10 hours should be reasonable for preparation
of the brief that was submitted to the Board.
The Applicant claims fees and expenses associated
with the underlying unfair labor practice proceeding in
the amount of $104,330.25. In view of my findings, I rec-
ommend that the Applicant be reimbursed fees and ex-
penses for work in the unfair labor practice proceeding
in the amount of $96,904.45, which is itemized as fol-
lows:
Ronald G. Ingham $ 9,347.50
Dean Denlinger 26,831.25
Expenses 5,250.74
Daniel G. Rosenthal 30,006.25
Jennifer Cox 18,967.50
Robert Brown 937.50
Gary Greenburg 937.50
Edward Mitchell 206.25
Richard DuRose 1,231.25
Kathleen Brott 1,237.50
Howard Thiell, Jr. 18.75
Peter Tambroski 26.25
Stephen Butler 81.25
's Those settlement efforts resulted in numerous trips and conferences
and an additional unfair labor practice hearing
LION UNIFORM
Robert Papp 13.75
Barbara James 105
Allan Gradsky
Fees (limited to $75 per hour) 4,575
Expenses (387.46)
Total fees and expenses 4,962.46
Hope Bailey 400
Deductions.
Unemployment compensation hearing 130.75
47 hours at $75 per hour (brief to
Board) 3,525.50
Total deductions $3,656 25
B. The EAJA Proceedings
The Applicant claims fees and expenses incurred
during the prosecution of this EAJA claim through June
29, 1983,14 totaling $97,346.07. I find that the Applicant
should recover fees and expenses incurred during the
EAJA proceeding.
In that regard, I find that the EAJA proceedings were
not unduly and unreasonably protracted by the Appli-
cant.
As noted above, the February 19, 1982 application for
fees and expenses under EAJA was referred to me on
February 23, 1982. On March 26, 1982, the General
Counsel filed a motion to dismiss the application. By
order dated April 22, 1982, the General Counsel's motion
to dismiss was denied.
On May 20, 1982, the General Counsel was granted an
extension of time until June 8 to file an answer to the ap-
plication. The General Counsel's answer was received on
June 8, 1982.
On July 9, 1982, the Applicant's reply to the answer of
the General Counsel was received.
On July 14, 1982, a conference phone call was initiated
by me including counsels for the General Counsel and
the Applicant. During that conference, the General
Counsel requested an additional verified statement from
the Applicant regarding the issue of the Applicant's eligi-
bilty under the EAJA. I suggested that rather than rely-
ing on a statement from the Applicant, the General
Counsel could avoid additional delay by examining the
Applicant's books and records. The Applicant agreed to
permit the General Counsel to examine its books and
records. However, the General Counsel insisted that it
was entitled to an additional verified statement from the
Applicant. The Applicant agreed to supply the requested
statement. The General Counsel was asked by me to dis-
close its basis for the substantial justification claim to the
extent that claim relied on evidence not in the unfair
labor practice proceeding record. The General Counsel
replied that he would not disclose contents of investiga-
tive files. However, after further discussion the General
Counsel agreed to examine the investigative files and
consider possible stipulations of fact. I reminded the par-
ties that it was the Board's practice to seek to avoid a
hearing in EAJA proceedings if possible. I asked the at-
" The Applicant may incur additional fees and expenses as this litiga-
tion continues Therefore, my ruling should be adjusted at the conclusion
of these proceedings
275
torneys to cooperate toward that end and pointed out
that the parties could agree on discovery devices such as
depositions if those devices would assist in resolving
issues wihtout a hearing.
During the September 16, 1982 conference phone call
involving counsel for the General Counsel, the Appli-
cant, and me, the Applicant advised that the additional
financial statement requested by the General Counsel
would be submitted to the General Counsel during the
following week.
By letter dated September 20, 1982, the Applicant sup-
plied additional information pursuant to the General
Counsel's request.
During an October 1, 1982 phone conversation involv-
ing all the parties and me, the Applicant advised the
General Counsel had asked it to reply to questions re-
garding employee count and to supply additional infor-
mation . Additionally, the General Counsel recently re-
quested the underlying records from the Applicant. The
Applicant indicated the General Counsel's request would
be burdensome. However, the Applicant agreed to
comply with the General Counsel's request. The Appli-
cant asked if the General Counsel would cooperate in
discovery of basis for the General Counsel's claim of
"special circumstances."15 I pointed out that the Board
has permitted the use of discovery in certain situations
and that its use here may assist in avoiding a hearing.
The Applicant agreed to discuss the matter with the
General Counsel in the upcoming week.
The parties were advised that in accord with our dis-
cussions and my efforts to resolve the issues without a
hearing, I would issue an order directing the filing of
trial briefs. On that date, October 1, I issued an order di-
recting the parties to file trial briefs outlining all issues of
fact and law.
During an October 16, 1982 conference phone call,
counsel for the General Counsel advised that he had
been authorized to employ a certified public accountant
to examine the Applicant's books regarding the eligiblity
issue. In light of the General Counsel's authority to use a
CPA and the necessity of additional time for the CPA to
conclude his work, the date for receipt of pretrial briefs
was extended to January 17. The Applicant agreed to
cooperate with the CPA employed by the General
Counsel provided the Applicant is given a copy of the
CPA's report to the General Counsel.
By telegram dated October 15, 1982, the Applicant
moved to preclude the General Counsel from introduc-
ing evidence supporting its special circumstances claim.
The Applicant based its motion on an assertion that the
General Counsel had refused to cooperate in providing
information regarding its special circumstances allega-
' 5 The General Counsel contended that the Applicant should be
barred from recovery of fees and expenses due to special circumstances
As shown above in this decision , the General Counsel 's claim was based
on an alleged refusal of the Applicant to cooperate in the investigation of
the charge in Case 10-CA-13284-2 The General Counsel contended that
its special circumstances claim was based on the contents of phone con-
versations during December 1977 between Board Agent Prowell and the
Applicant's attorney, Ingham The Applicant's EAJA attorney asked if
she could examine the Regional Office's telephone logs of those phone
conversations
276 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
tion. By letter to me dated October 19, 1983, counsel for
the General Counsel stated, inter alia , "Although not
technically covered by Section 102.157(f) and (h), we
will provide additional information concerning our 'spe-
cial circumstances' contention."
By the October 20, 1982 order, the Applicant' s motion
to preclude the General Counsel from introducing evi-
dence was denied. The parties were directed to conclude
all discovery before submitting pretrial briefs.
Despite the fact that the only matter sought by the
Applicant involved notes of two alleged December 1977
phone conversations between Board Agent Prowell and
an attorney for the Applicant, the General Counsel filed
with the Board on November 3, 1982, a request for spe-
cial permission to appeal my October 20, 1982 order. In
its request, the General Counsel stated, among other
things:
3. As noted supra Judge Robertsons' original
Order appears to contemplate broad pretrial discov-
ery. Indeed, during the October 1, conference call
with the parties. Judge Robertson indicated a will-
ingness to permit interrogatories and/or desposi-
tions of Board Agents should Applicant so choose.
Concededly, his Order of October 20 may be some-
what narrower. Thus, in that Order he compels pre-
trial discovery of "all materials which would be
subject to production under Section 102.228(b)(1),
during the hearing." However, we note that the
prior broad Order has never been rescinded. Ac-
cordingly, we believe that we are now subject to a
broad pre-trial discovery Order. At the very least,
we are subject to a somewhat narrower pre-trial
discovery Order.
By Board Order dated November 15, 1982, the Gener-
al Counsel's special request was granted and all prehear-
ing discovery was denied.
Pretrial briefs were received from the Applicant and
the General Counsel on January 17, 1983.
During a January 26, 1983 phone conference, the par-
ties were directed to consult and jointly submit an order
directing hearing, which was to specify outstanding fac-
tual and legal issues and the nature of the planned proof.
During a March 1, 1983 conference, the Applicant ad-
vised it had not received the report from the General
Counsel's CPA and that it needed that report before it
could meet and discuss the proposed trial order. A tenta-
tive date for the parties to meet and draft the trial order
was set for March 21, 1983.
On March 17, 1983, the General Counsel initiated a
conference call. The General Counsel orally requested a
continuance of the scheduled March 21 meeting on the
grounds that the report from the General Counsel's CPA
was not ready. A new date was suggested , but the par-
ties were unable to agree. Counsel for the General Coun-
sel then mentioned that he had not cleared with his
people the format of the pretrial order proposed by me
in the January 26, 1983 conference. Counsel for the Gen-
eral Counsel was thereon directed to inform me and the
Applicant no later than March 18, 1983, whether the
General Counsel would agree to meet with the Appli-
cant and draft a hearing order as earlier proposed.
In a March 18, 1983 conference call, counsel for the
General Counsel advised that the General Counsel
would not agree to a hearing order as proposed. Counsel
for the General Counsel also advised that he would not
submit to the Applicant logs of the December phone
conversations between Board Agent Prowell and the
Applicant's attorney, Ingham , before hearing in this
matter and only then preparatory to cross-examination if
Board Agent Prowell was called as a witness. Counsel
for the General Counsel also stated that he will reserve a
decision whether he will submit a copy of the report
from the General Counsel's CPA until after he has had
an opportunity to examine the CPA report. The Appli-
cant reminded counsel for the General Counsel that he
had originally agreed to supply the Applicant with
copies of the CPA report as a condition precedent to the
Applicant permitting the CPA to examine its books and
records.
In an April 5, 1983 phone conference, the Applicant
requested continuance of the hearing on grounds that it
had not received a copy of the CPA report from the
General Counsel. The General Counsel agreed to author-
ize the Regional Office in Cincinnati to release the CPA
report to the Applicant on this date.
During conferences on April 6 and 8, 1983, the Appli-
cant's unopposed request to continue opening the hearing
to May 16, 1983, was granted on the grounds that the
Applicant had insufficient time to prepare following re-
ceipt of the General Counsel's CPA report.
In view of the above and my knowledge of these pro-
ceedings , I am persuaded that the Applicant has cooper-
ated fully in efforts to expedite resolution at a minimum
cost. The General Counsel, on the other hand, appeared
to persist in exaggerated positions, oftentimes on overly
technical points.
Therefore, I find that the Applicant should not be pre-
cluded from recovering fees and expenses associated
with prosecution of this Equal Access to Justice Act
claim.
The General Counsel contends that fees and expenses
associated with the EAJA prosecution should be award-
ed only when the General Counsel has acted unreason-
ably.
During the instant proceedings, the General Counsel
resisted my efforts to have the parties discuss settlement.
As noted above, counsel for the General Counsel filed a
request for special permission to appeal to the Board,
which misstated and exaggerated the substance and back-
ground of my prior orders. Thereafter, despite his Octo-
ber 19, 1982 written assurance that he would provide to
the Applicant additional information regarding its special
circumstances contention, counsel for the General Coun-
sel did not do so until after the hearing in this matter.
Moreover, even though I asked the General Counsel to
consider a stipulation regarding facts behind its special
circumstances contention during our July 14, 1982 phone
conference, counsel for the General Counsel made no
such proposal until the hearing.
LION UNIFORM
The General Counsel's actions in failing to cooperate
through production of the telephone logs of the Decem-
ber 1977 phone calls between Prowell and Ingham or, al-
ternatively, through proposal of stipulations of the sub-
stance of those phone conversations, and its refusal on
March 18, 1983, to agree to meet with the Applicant to
finally draft a trial order that may have illustrated that a
hearing was unnecessary, resulted in the holding of an
EAJA hearing that may have been unnecessary.
The General Counsel's actions were unreasonable and
those actions contributed to protracting these EAJA pro-
ceedings.
As to the General Counsel's contention that the Appli-
cant's claim for fees and expenses during the EAJA pro-
ceeding are excessive, I disagree. The application re-
quired immediate action in view of the requirement that
it must be filed within 30 days after the Board's underly-
ing Order. The application was complete and well pre-
pared. I do not find a claim of 89.5 hours for preparation
of the application to be excessive. Neither do I find the
claims for travel copying, and miscellaneous matters to
be excessive as alleged by the General Counsel.
I recommend that the Applicant be reimbursed fees
and expenses for work in these EAJA proceedings
through June 29, 1983, in the amount of $90,564.6516
which is itemized as follows:
16 The claim submitted regarding Peat , Marwick, Mitchell & Co DR
was not itemized on an hourly basis No allowance is granted on that
basis subject to that claim being resubmitted during final adjustment, at
the conclusion of these proceedings
277
Expenses $8,875.34
Hope M. Frye 42,935.00
Daniel Rosenthal 15,393.75
Dean Denlinger 7,050.00
Richard DuRose 450.00
Howard Thiele 4150.00
Stephan Butler 75.00
Betty Siegfield (paralegal) 17.50
B. L. Smith (investigator) 17.50
Thomas Jackson (investigator) 35.00
Rippe & Kingston (CPA)
Joseph Rippe (claim add to $75/hr) 4,503 75
Laura Brunner 1,360 80
Paraprofessionals 67.50
Secretaries ($92.85 & $40.08) 132.93
Out-of-pocket expenses 418 08
Roger Makley (plus expenses of $125) 2,625 00
Price Waterhouse (claim adj $75/hr.) 60000
John Fischer 96 25
Peter Tamborski 45 00
Ronald Ingham 300.00
Bari Gaston (paralegal) 691 25
Pam Jenning (paralegal) 2,756.25
Debbie Martin (paralegal) 1,242.50
Cynthia Harper (paralegal) 288 75
Todd Cavern (investigator) 17.50
Jim Prichard (investigator) 420 00