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12/29/89 Consolidated Freightways, v. National Labor

December 29, 1989





Rehearing Denied March 5, 1990. Reported at: 1990 U.S. App. Lexis 3976.

Petition for Review of an Order of the National Labor Relations Board.


Wald, Chief Judge, and Buckley and Sentelle, Circuit Judges. Opinion for the court filed by Circuit Judge Buckley.


Consolidated Freightways petitions for review of a supplemental decision of the National Labor Relations Board affirming an earlier Board decision that ordered Consolidated to reinstate a former employee with full backpay because its previous reinstatement offer had been conditional and therefore invalid. On review of the original decision, we noted the Board's failure to reconcile its decision with its own precedent and remanded with instructions that the Board explain the circumstances, if any, that would permit an inquiry into an employee's reasons for refusing a reinstatement offer. Consolidated Freightways v. NLRB, 215 U.S. App. D.C. 404, 669 F.2d 790 (D.C. Cir. 1981).

Consolidated contends that the Board has failed to comply with our remand instructions. Although we find the Board's treatment of its precedent unconvincing, we hold that the Board has complied with our remand by announcing a new rule: An employer's reinstatement offer must be unconditional on its face in order to terminate the accrual of backpay liability, regardless of the employee's reasons for declining the offer. We also hold that, as a matter of equity, Consolidated is liable to its former employee for backpay only from the date the Administrative Law Judge articulated the new rule. I. BACKGROUND

A. Factual Background and the Board's First Decision

Consolidated Freightways is engaged in the business of intrastate and interstate transportation of goods and materials by truck. Charles Hennessey was hired by Consolidated as a truck driver in 1977. Two years later, on March 22, 1979, Consolidated discharged Hennessey after he refused to drive a tractor that he believed to be unsafe. Hennessey filed a grievance challenging his discharge and requesting reinstatement with full backpay and health and welfare benefits. On May 1, 1979, the grievance was heard before the Joint State Committee, an arbitration panel established under the collective bargaining agreement between Consolidated and Hennessey's union. Consolidated Freightways, 253 N.L.R.B. 988, 990-94 (1981). The parties later stipulated that Hennessey's grievance was covered by the collective bargaining agreement; that Consolidated, the union, and Hennessey had agreed to be bound by the Committee's decision; and that the entire grievance and arbitration procedure was fair and regular in all respects. Id. at 994.

After hearing the arguments of the parties, the Committee ordered that Hennessey be reinstated to his former job with full seniority and benefits, but without backpay, and that a "final warning letter" be placed in Hennessey's file. Id. Under the terms of the collective bargaining agreement, Consolidated may not suspend or discharge an employee until at least one warning notice of the particular complaint at issue has been given (except for drug and alcohol use and certain other causes for discharge). Warning letters remain in effect for a maximum of nine months. Thus if he had accepted the offer, Hennessey would have been subject, for a limited period, to immediate discharge if he again engaged in the conduct for which he was first dismissed. Hennessey did not learn about the warning letter until well after he had refused an offer of reinstatement from Consolidated, explaining that he would not return without backpay.

On July 11, 1979, Hennessey filed an unfair labor practice charge with the NLRB. After a hearing, an Administrative Law Judge found that Consolidated had discharged Hennessey for engaging in protected activity in violation of section 8(a)(1) of the National Labor Relations Act ("Act"), 29 U.S.C. ยง 158(a)(1) (1982). 253 N.L.R.B. at 995. The ALJ declined to defer to the arbitration award because by putting Hennessey "under the gun of a 'warning letter,'" the award "fails to remedy the alleged unfair labor practices." Id. at 994. The ALJ then determined that Consolidated's obligation to reinstate Hennessey "continues until a proper offer of reinstatement is made." Id. Asserting that the accrual of backpay liability is not terminated until a valid, unconditional reinstatement offer is made, the ALJ ordered that Hennessey be offered unconditional reinstatement with full backpay. Id. at 995.

Consolidated filed exceptions to the ALJ's conclusion that its reinstatement offer was conditional, but not to his finding that Consolidated had engaged in an unfair labor practice or his refusal to defer to the arbitration award. Id. at 988 n.1. In a Decision and Order dated January 5, 1981, the Board agreed that the warning letter had rendered Consolidated's reinstatement offer conditional, and therefore invalid, and affirmed the ALJ's decision. Id. at 988.

B. This Court's First Decision

Consolidated petitioned this court for review, arguing that its reinstatement offer was unconditional and thus terminated the accrual of backpay liability. Furthermore, Consolidated claimed that as Hennessey had refused the offer for an admittedly invalid reason (the denial of backpay), he was not entitled to either a second reinstatement offer or accrued backpay. The Board countered that as the offer was conditioned on the issuance of the warning letter, it was invalid; ...

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