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National Labor Relations Board v. Lehigh Lumber Co.

December 21, 1981


On Petition for Adjudication in Civil Contempt and for other Civil Relief.

Before SEITZ, Chief Judge, GARTH, and SLOVITER, Circuit Judges.

Per Curiam: Lehigh Lumber Company, Inc., was found by the National Labor Relations Board to have committed unfair labor practices in its dealings with Local 773, International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (Union), and was ordered to bargain in good faith with the Union. See Lehigh Lumber Co., 230 NLRB 1122 (1977). The Board's order was enforced by this court, see Lehigh Lumber Co. v. NLRB, 577 F.2d 727 (3d Cir.), cert. denied, 439 U.S. 928 (1978). Lehigh and another employer, Ritter & Smith Company, Inc., thereafter refused to bargain in good faith with the Union, and were both ordered to do so. See Lehigh Lumber Co., 238 NLRB 675 (1978), enf'd, 609 F.2d 502, 503 (3d Cir. 1979). Both companies continued to refuse to bargain in good faith. On September 23, 1980, the Board filed a petition with this court seeking a contempt decree against the two companies.

This court appointed a Master to conduct proceedings and to make a Report and Recommendation to this court. After discovery, five days of evidentiary hearings, and appropriate briefing, the Master issued a Report and Recommendation. He found Lehigh and Ritter in contempt of this court for failing to bargain in good faith, and recommended sanctions. Lehigh and Ritter have filed exceptions to the Report and Recommendation, which we now consider.

There being no exceptions to the Findings of Fact, Conclusions of Law, and Recommendations A, B(1) to B(10), and B(13) and B(14), they are affirmed and adopted in full. The exceptions are limited to Sanctions B(11) and B(12).

Both companies took exceptions to Sanction B(11), which awards to the Board all expenses, including attorneys' salaries, that the Board has spent in this contempt proceeding. However, it is settled that "compensation of the complaint for losses or expenses incurred because of the wrongdoing [is] an appropriate part of the remedy in civil contempt cases." NLRB v. Local 825, International Union of Operating Engineers, 430 F.2d 1225, 1229 (3d Cir. 1970), cert. denied, 401 U.S. 976 (1971). We agree with the Master that this is an appropriate case for the award of all costs. Lehigh and Ritter have bargained in bad faith despite this court's order to the contrary. The Master's Report finds that both companies have failed to respond to the Union's repeated requests for bargaining, that representatives of the companies made derisive gestures and faces at Union members when meetings were held, that the companies showed no willingness to compromise in any meaningful way, and that the companies unilaterally granted wage increases without notice to the Union.

Since costs have not been quantified or allocated, we will modify Sanction B(11) to read:

pay to the NLRB all costs and expenditures, including attorneys' salaries, incurred by the NLRB in the investigation, preparation, presentation, and final disposition of this proceeding, said amount, unless agreed upon by the parties, to be fixed by the Master, subject to timely court review, upon submission by the NLRB of a verified statement of costs and expenses, n.10 said costs to be paid by respondents, Lehigh and Ritter, in such proportions as the Master shall set. (The text of footnote ten appears in the Master's Report. We do not reproduce it here.)

This modification will allow the Master to make recommendations of the costs to be awarded to the Board, and to make recommendations regarding the apportionment of the costs between the companies according to their relative culpability. We adopt Sanction B(11) as modified.

The companies also take exception to Sanction B(12), which provides for the payment of fines to this court. The companies characterize the fines as punitive rather than compensatory. Since we think the other sanctions will adequately compensate the Board for the companies' previous noncompliance, we will modify Sanction B(12) to read:

lodge with the Clerk of this Court two checks payabale to the NLRB within ten days of the effective date of this Order, in the sums of $5,000 to be paid by Lehigh and $500 to by Ritter, as deposits to be credited toward the costs ultimately awarded to the NLRB.

We believe this sanction, as modified, will be compensatory, since it will serve a security purpose. We adopt Sanction B(12) as modified.

The Master has also recommended the possibility of an additional sanction, Sanction C, which would order the companies not to use attorney Louis Busch as their negotiator with the Union. Although we agree with the Master that Busch "disrupted the bargaining process," and that "his presence at future negotiations would seriously impede bargaining," we think that the sanctions as imposed are sufficient.

The Board is directed to serve and submit a form of order consistent ...

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