                                                                                                                           Opinions of the United
2001 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


3-16-2001

Atlantic Limousine v. NLRB
Precedential or Non-Precedential:

Docket 99-5609




Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2001

Recommended Citation
"Atlantic Limousine v. NLRB" (2001). 2001 Decisions. Paper 50.
http://digitalcommons.law.villanova.edu/thirdcircuit_2001/50


This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2001 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
Filed March 16, 2001

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

Nos. 99-5609 and 99-5725

ATLANTIC LIMOUSINE, INC.,
       Petitioner No. 99-5609

v.

NATIONAL LABOR RELATIONS BOARD,
       Respondent

NATIONAL LABOR RELATIONS BOARD,
       Petitioner No. 99-5725

v.

ATLANTIC LIMOUSINE, INC.,
       Respondent

On Petition for Review of an Order of the
National Labor Relations Board
and
Cross-Application for Enforcement
(NLRB Docket Nos. 4-CA-21505, 4-CA-21552,
4-CA-21697, and 4-CA-21740)

Argued December 1, 2000

Before: BECKER, Chief Judge, RENDELL,
and MAGILL,* Circuit Judges

(Opinion Filed: March 16, 2001)
_________________________________________________________________

* Honorable Frank J. Magill, Senior Judge of the United States Court of
Appeals for the Eighth Circuit, sitting by designation.
       Angelo J. Genova, Esq. [ARGUED]
       Brian O. Lipman, Esq.
       GENOVA, BURNS & VERNOIA
       354 Eisenhower Parkway
       Plaza II, Suite 2575
       Livingston, NJ 07039
        Counsel for Atlantic Limousine

       Jeffrey Horowitz, Esq. [ARGUED]
       Aileen A. Armstrong, Esq.
       Frederick C. Havard, Esq.
       Margaret A. Gaines, Esq.
       Fred B. Jacob, Esq.
       National Labor Relations Board
       1099 14th Street N.W.
       Washington, DC 20570-0001
        Counsel for NLRB

OPINION OF THE COURT

RENDELL, Circuit Judge.

Atlantic Limousine, a limousine service providing services
primarily to hotels and casinos in Atlantic City, New Jersey,
has petitioned this court for review of the Or der of the
National Labor Relations Board awarding backpay in the
amount of $22,507.74 plus interest to V ictor Jenkins, and
$17,296.73 plus interest to Henry Purcell, both of whom
were limousine drivers for Atlantic. The Boar d has cross-
applied for enforcement of the same order .

Specifically, Atlantic challenges the amount of tips the
Board determined the two had earned, arguing that: (1)
federal tax policy requires that the amount of tips Purcell
and Jenkins declared on their income tax r eturns for those
periods be dispositive on the issue of their past income; and
(2) there was a lack of substantial evidence in support of
the Board's backpay award. In addition, Atlantic contends
that Jenkins failed to mitigate his damages because he was
unavailable for work during the seven months between his
termination and his reinstatement. Because we find both
that the Board's reliance on the evidence adduced was

                               2
proper, and that there was substantial evidence to support
the Board's findings regarding both backpay and
mitigation, we will deny the petition for review and enforce
the order of the Board.

I. Procedural History

On March 4, 1995, the Board found that Atlantic had
engaged in unfair labor practices in violation of 29 U.S.C.
158(a)(3) and (4) of the National Labor Relations Act ("Act")
by discharging four and suspending one of its employees
for their union activities.1 Once the Board finds that an
employer has committed an unfair labor practice, it has
broad discretion under the Act to or der the wrongdoer "to
take such affirmative action including r einstatement of
employees with or without backpay, as will ef fectuate the
policies of [the Act]." 29 U.S.C. S 160(c). The purpose of the
backpay remedy is to "mak[e] the employees whole for
losses suffered on account of an unfair labor practice,"
Nathanson v. NLRB, 344 U.S. 25, 27 (1953), by r estoring
"the situation, as nearly as possible, to that which would
have [been] obtained but for the illegal discrimination."
Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 194 (1941).

On May 28, 1997, the Board filed a compliance
specification outlining the amount of backpay that should
be paid to the aggrieved employees under the Boar d's
March 4, 1995 remedial order. Atlantic challenged the
compliance specification, and a hearing was held before an
Administrative Law Judge ("ALJ"). The ALJ upheld the
backpay award, and the Board affir med its decision. We
now review the Board's order.

II. Background

The standard formula the Board employs in arriving at a
compliance specification is based on the ear nings of the
claimant in a representative period prior to the backpay
_________________________________________________________________

1. Although the proceeding before the Board involved five claimants, after
the Board's decision, the parties enter ed into negotiations and three of
those employees settled. This appeal, therefor e, only addresses the
backpay awards for Purcell and Jenkins.

                                3
period. The Board then applies the averages of those
earnings to the backpay period. Atlantic does not challenge
the formula used. Rather, it contends that the average
weekly tip earnings used in the formula were incorrect
because they exceeded the amounts reported on the
employees' tax returns and were unsupported by the
evidence.

Atlantic's drivers can be tipped in a variety of ways.
Certain corporate and business clients have a contractual
relationship with Atlantic, and are billed for services with
charges that include a preset gratuity for the driver, which
is distributed in the next paycheck. These tips ar e referred
to as "tips on the bill." The drivers can also receive tips in
cash or they can be added to a payment by cr edit card.
Because tips on the bill and credit car d tips are reflected in
amounts transmitted directly to Atlantic, the only tip
amounts disputed on appeal are the claimants' cash tips,
since the drivers receive them directly fr om customers
without receipts showing the amount given.

Atlantic requires its drivers to submit weekly time sheets
indicating the number of hours they worked and the
specific runs they made. These sheets also have a space at
the bottom for the drivers to record the amount of cash tips
they received, though the General Manager for Atlantic,
Leon Geiger, testified that most drivers do not provide any
information regarding their cash tips on their time sheets.
Atlantic processes the timesheets and generates weekly tip
declarations reflecting credit car d tips, tips on the bill, and
the cash tips reported on the time sheets. These tip
declaration reports are then distributed to the drivers for
their review and signature. The employees are instructed
not to sign a tip declaration report if the tip amount
indicated is incorrect.

Jenkins and Purcell claimed that they ear ned more in
tips than reported in payroll and tax documents. Jenkins
testified that he earned approximately $450 per week in
tips, while Purcell claimed to have ear ned anywhere from
$300 to $480 per week. Both admitted they had not
accurately reported these earnings to the Internal Revenue
Service ("IRS"). Jenkins had reported annual tip income to
the IRS that reflected an average of $158 per week during

                                4
this time, and Purcell, $115. Jenkins also testified that he
would submit only the carbon copy of the time sheet to
Atlantic, omitting his cash tips, but that he would record
his cash tips on the original copy in a column listed as
"Added Tips." He submitted the original copy of the time
sheet for the last week he had worked for Atlantic in order
to demonstrate this practice. This original copy r eflected
cash tip earnings of $430 for that week. That document
was the only one submitted by Jenkins in support of his
claim of higher tip levels. Purcell did not pr ovide any
documentation.

Jenkins also testified regarding his search for interim
employment. He indicated that he searched for employment
during the seven months he was unemployed by applying
to two limousine companies approximately two weeks after
he was terminated, answering newspaper ads for jobs at
three casinos, and sending out many resumes. During
those seven months, he was caring for his mother , who was
ill. He stated that because his mother was sick and he was
her caretaker, he was only available for work in the evening
hours, though he explained that his time restriction did not
prevent him from being able to work full-time. He also
emphasized that he searched for employment during the
entire period in question. He posited that the reason he
could not find another limousine job right away was
because he was "blackballed."

Seeking to counter the testimony of Jenkins and Pur cell,
Atlantic provided payroll recor ds for 1992 and 1993
reflecting credit card tips, tips on the bill, and any cash tips
declared by employees to Atlantic. Atlantic ur ged that these
records, along with the tax retur ns filed by Jenkins and
Purcell, should form the basis for deter mining its backpay
liability.

On February 26, 1998, the ALJ issued its Supplemental
Decision awarding Jenkins and Purcell $360 and $325 per
week in backpay, respectively, which wer e the amounts set
forth in the Board's compliance specification. First, the ALJ
ruled that claimants may assert tip income that had not
been reported in their tax returns. While the ALJ
recognized that both claimants had failed to r eport all of
their tip earnings to the IRS, he found that an admission of

                               5
underreporting tips to the IRS does not pr eclude such tips
from being included in a backpay award. The ALJ also
determined that "both the employees and the Respondent
had offsetting interest [sic] in under reporting actual
income." ALJ Dec. at 4.

The ALJ stated its conclusion: "While the evidence is less
than overwhelming, under these circumstances, I am not
persuaded that the compliance figures for weekly tips of
$360 for Jenkins and $325 for Purcell ar e unreasonable or
inaccurate." Id. The ALJ further noted that "[t]he reported
tips, relied upon by [Atlantic], clearly are not an accurate
reflection of the actual tip income r eceived." Id. The ALJ
also found the testimony of Jenkins and Purcell to be
"believable." Id. Finally, the ALJ concluded that there was
"a sound and reasonable basis for [awar ding] the figures set
forth in the compliance specification," and that Atlantic had
not offered convincing evidence that Jenkins and Purcell
had earned less. Id.

The ALJ next turned to the issue of the mitigation of
damages, finding that Jenkins testified cr edibly that he
began to search for work immediately after his termination.
The ALJ found that despite the fact that Jenkins had no
interim earnings, this lack of success did not indicate a
"willful failure or an unreasonable search for employment."
Id. In addition, the ALJ rejected Atlantic's contention that
Jenkins was unavailable for work due to his need to care
for his mother.

On April 30, 1999, the Board issued its Supplemental
Decision and Order affirming the ALJ's conclusion that "the
gross backpay computations in the backpay specifications
are the most accurate possible estimates of backpay and
that [Atlantic] has failed to establish any r easonable
alternative basis for a diminution of damages." Id. The
Board agreed that "Victor Jenkins' lack of interim earnings
for the backpay period of May 31, 1993, through January
17, 1994, was not indicative of an unreasonable search for
employment related to his care for his mother . . . . " Supp.
Dec. at 1. It also held that the ALJ's analysis of the issue
of whether or not to consider evidence of underr eported tips
was in accord with Board precedent, and noted that the IRS
would receive a copy of its decision. Id. at 2. One member

                               6
of the three member panel dissented because he would not
have allowed the discriminatees to claim income not
reported to the IRS, and because he believed that Jenkins
did not make an adequate search for employment during
the time period in question.

III. Discussion

We have appellate jurisdiction pursuant to 29 U.S.C.
S 160 (e) and (f). The Board's findings of fact in a backpay
proceeding will be upheld unless the recor d, considered as
a whole, shows no substantial evidence to support those
findings. 88 Transit Lines, Inc. v. NLRB , 55 F.3d 823, 825
(3d Cir. 1995). "While we do not substitute our judgment
for that of the Board, we may modify an or der to ensure
that it effectuates the policies of the Act." Tubari Ltd., Inc.
v. NLRB, 959 F.2d 451, 453 (3d Cir . 1992). With respect to
legal questions, we exercise plenary review, although we
give due deference to the Board's expertise in labor matters.
88 Transit, 55 F.3d at 825.

A. Backpay Determination

Atlantic presented the Board with the income tax returns
of Jenkins and Purcell, and urged that itfind those records
to be conclusive as to the amount of tips ear ned by each of
them, because to not do so would be to ignor e federal tax
policy. The Board rejected this reasoning, and on appeal,
Atlantic argues that this decision is err oneous. To support
its argument, Atlantic relies on two Supr eme Court cases,
our precedent, and its view of the policy implications of the
Board's ruling.2
_________________________________________________________________

2. By asserting that the discriminatees' testimony should have been
rejected because their testimony was inconsistent with their sworn tax
returns, Atlantic may also be claiming, but has never explicitly urged,
that the discriminatees should be "estopped" from asserting higher
income, having earlier misreported their true income. While a policy of
judicial estoppel has evolved that can apply in the event a litigant seeks
to assert a position inconsistent with one made in connection with a
previous judicial proceeding, e.g., In re Chambers Dev. Co., 148 F.3d
214, 229 (3d Cir. 1998), we know of no basis for crafting a theory of
estoppel based upon sworn statements in a tax return and will not
explore such a theory sua sponte.

                               7
First, Atlantic points to Southern Steamship Co. v. NLRB,
316 U.S. 31 (1942). There, employees engaged in a strike in
response to the shipowner's unfair labor practices, and the
shipowner terminated five of the strikers. Id. at 34-35. The
Board ordered the shipowner to r einstate the five men with
backpay. Id. at 36. The Supreme Court, however,
determined that under maritime law, the type of striking
conduct in which they engaged was illegal,3 and it reversed
the order of reinstatement. Id. at 40, 48.

The Supreme Court expressed the need to limit the
Board's discretion in enforcing the policies of the Act when
the Board's remedial action contravened important
Congressional policy. Id. at 46. In r eaching its conclusion
that the claimants' violation of the maritime laws precluded
the relief they sought under the Act, the Court made the
following observation, which Atlantic argues supports its
position:

       It is sufficient for this case to observe that the Board
       has not been commissioned to effectuate the policies of
       the Labor Relations Act so single-mindedly that it may
       wholly ignore other and equally important
       Congressional objectives. Frequently the entire scope of
       Congressional purpose calls for careful accommodation
       of one statutory scheme to another, and it is not too
       much to demand of an administrative body that it
       undertake this accommodation without excessive
       emphasis upon its immediate task.

Id. at 47.

Essentially, the issue before the Supreme Court was
whether the labor policy prohibiting an employer from firing
an employee for striking in response to an unfair labor
_________________________________________________________________

3. The Court stated:

       It may hardly be disputed that each of the strikers resisted the
       captain and other officers in the free and lawful exercise of their
       authority and command, within the meaning of S 293, or that they
       combined and conspired to that end, within the meaning of S 292.
       Deliberately and persistently they defied dir ect commands to
       perform their duties in making r eady for the departure from port.

Id. at 40.

                               8
practice can apply, let alone prevail, when the strike is
illegal under a competing federal scheme. In the case before
us, by contrast, the issue does not involve a competing
policy that runs counter to an award of backpay. Unlike in
Southern Steamship, the policies sought to be advanced
here are not diametrically opposed to one another. In fact,
the policies, to the extent they do compete, can be
accommodated, and in fact have been accommodated her e.
The Board's basing its finding on the evidence before it,
consistent with its procedure for fixing and awarding
backpay, while at the same time notifying the IRS of its
decision, recognizes the existence and equal importance of
both policies -- enforcing our nation's tax laws and making
the discriminatees' whole. If the Board had chosen to award
the amount stated on the tax returns for the sole reason
that the discriminatees would have to "reap what they had
sown," it would have ignored the remedial underpinnings of
the law, and rewarded Atlantic, the of fending party.

Moreover, we submit that while federal tax policy
discourages underreporting of income, and favors
punishing those who do, federal tax policy would appear to
have no interest in limiting a backpay awar d. In fact, it
could be said that it has the opposite inter est because once
Jenkins and Purcell receive an awar d (that is not limited by
reference to reported income), they will have to pay tax on
what they receive, paying the federal gover nment more than
if the award had been limited to their r eported income.4

Here, despite Atlantic's contentions, we conclude that no
federal policy is relegated to a lesser status. The IRS will
have the information necessary to prosecute the
discriminatees if it so chooses, and will reap tax revenue.
And Atlantic will have to "make whole" two employees
_________________________________________________________________

4. Backpay awards for violations of the Act would appear to be the type
of non-tort recovery that is taxable. See Commissioner of Internal
Revenue v. Schleier, 515 U.S. 323, 337 (1995) (holding that settlement
for backpay in age discrimination case was not excludable from
taxpayer's reported gross income because"[r]ecovery for back wages does
not satisfy the critical requirement [of the IRS tax code] of being on
account of any personal injury," nor is it "based upon tort or tort type
rights.")

                               9
against whom it wrongly discriminated, fulfilling the
purpose of the Act.

Atlantic also relies on Sure-T an, Inc. v. NLRB, 467 U.S.
883, 886 (1984), but we do not find this decision
particularly relevant to the instant situation. There, the
Board had determined that the employer committed an
unfair labor practice by requesting that the Immigration
and Naturalization Service investigate certain employees
who were involved in a union campaign. Id. at 888.
Because some of these employees were undocumented
aliens, they fled the country to avoid deportation. Id. at
887. The Board awarded backpay, subject to the employees'
legal availability to work. Id. at 889.

On appeal, the Court of Appeals for the Seventh Cir cuit
modified the backpay award by ordering that the aggrieved
employees be guaranteed a minimum of six months'
backpay. Id. at 890. The court reasoned that because some
of the employees may not have been lawfully available for
employment, without the backpay minimum, they would
not receive any backpay at all. Id. The Supreme Court
reversed the backpay modification, stating:"The probable
unavailability of the Act's more effective remedies in light of
the practical workings of the immigration laws, however,
simply cannot justify the judicial arrogation of remedial
authority not fairly encompassed within the Act." Id. at
904. The key to the Court's reversal of the modification was
the Court of Appeals' imposition of a minimum awar d
"without regard to the employees' actual economic losses or
legal availability for work . . . . plainly exceed[ing] its limited
authority under the Act." Id. at 904-05. And, while the
Board in the instant case surely shar ed the same concern
as the court of appeals in Sure-T an, that is, providing a
financial disincentive to the employer against r epetition of
similar discrimination, id. at 904, her e, unlike in Sure-Tan,
the award of backpay does reflect the discriminatees' actual
loss, consistent with the remedial scheme.

Atlantic also maintains that the Board's decision is
contrary to our precedent. We do not agr ee. We have
previously upheld an award of backpay when it was based
on evidence of income in an amount differ ent from that
declared by the claimant to the IRS. In NLRB v. Louton, Inc.,

                                10
822 F.2d 412, 414 (3d Cir. 1987), we upheld the Board's
backpay award where the recor d showed substantial
evidence to support the tip income awarded. 5 In doing so,
we rejected the employer's argument that the tip income
evidence was "of no value" since it dif fered from the amount
the discriminatees had declared to the IRS. Id.

Moreover, while we note Atlantic's ar gument that
awarding backpay based on unreported tips rewards the
discriminatees for their dishonesty to the IRS, Atlantic fails
to recognize that we would be rewar ding the employers' tax
dishonesty if we were to disregard evidence of the
employees' actual, more substantial reportable income.
That is, if we rely on reported income that concededly did
not accurately reflect the employee's ear nings, we would
actually be rewarding employers who, as noted by the ALJ,6
have benefitted from paying a lesser amount of
employment-related taxes as a result of the underreporting.
This benefit is in addition to the benefit that Atlantic would
reap, in contravention of backpay policy, by having to pay
aggrieved employees less in backpay than they actually
would have earned.

Lastly, Atlantic contends that if we reject its proposed
rule that we should disregard evidence that differs from an
employee's tax returns, we would be guaranteeing that all
discriminatees seeking backpay will lie about their
earnings. However, Atlantic ignor es the fact that this
deception will probably be quite costly in other ways. By
testifying that they had underreported their income to the
IRS, Purcell and Jenkins subjected themselves to
prosecution for tax evasion. Therefor e, any incentive that
they might have to lie to inflate their income is countered
_________________________________________________________________

5. We acknowledge that, as we discuss below, the discriminatees
provided more documentary support in Louton than in the instant case,
and we note that it is unclear whether the employer's argument in that
case was based on policy considerations. However , the distinction is
immaterial, where, as here, we have nonetheless determined that the
discriminatees' credible testimony (and supporting document) are
sufficient to meet the "substantial evidence" standard.

6. "[T]he lower the reported earnings [of an employee are], the lower the
employer's payroll tax liability [is]." ALJ Dec. at 4.

                               11
by the fear, and very real possibility, of criminal charges.
We noted this in Louton, when we found that the employees'
claims were actually strengthened by the fact that they had
maintained the veracity of their tip claims in the face of
potential prosecution for tax evasion or perjury. 822 F.2d at
414.

Accordingly, we reject Atlantic's contention that the
evidence regarding the discriminatees' unr eported tips in
the Board's backpay award should be disr egarded because
it undermines federal tax policy.

B. Substantial Evidence Determination

As noted above, the Board's findings of fact in a backpay
proceeding will be upheld unless the recor d, considered as
a whole, shows no substantial evidence to support those
findings. 88 Transit, 55 F.3d at 825. Substantial evidence
has been defined as evidence that a reasonable mind would
accept as adequate to support an agency's conclusion.
Broome v. U.S. Dept. of Labor, 870 F .2d 95, 102 (3d Cir.
1989). We will not disturb a backpay or der "unless it can be
shown that the order is a patent attempt to achieve ends
other than those which can be fairly said to ef fectuate the
policies of the Act." 88 Transit, 55 F.3d at 825.

In Louton, we held that "the recor d, when considered as
a whole, shows substantial evidence to support the Board's
findings." 822 F.2d at 414. In that case, the Board's
decision was based on documented tip evidence of the
discriminatees, the ALJ's determination that the
discriminatees were credible, the fact that the
discriminatees' testimony was bolstered by their facing
prosecution for perjury or tax evasion due to their
admission that they had underreported their tips to the
IRS, and the employer's failure to submit gr oss receipts in
order to demonstrate that the tips being claimed were
reasonable. Id.

In the instant case, the discriminatees' claims wer e
proven, for the most part, through their own testimony, and
accordingly, the outcome was affected by their credibility.
In Louton, we stressed the importance of the ALJ's reliance
on the demeanor of the discriminatees during their

                                12
testimony regarding their tip income, noting that where
credibility determinations are based on the ALJ's
assessment of demeanor, those determinations are entitled
to great deference as long as relevant factors are considered
and resolutions explained. Id.; see also NLRB v. Lee Hotel
Corp., 13 F.3d 1347, 1351 (9th Cir . 1994) (enforcing
Board's order basing backpay award on amount of tip
income which differed from amount r eported on income tax
returns where ALJ found employees' testimony credible
based on both corroborative evidence and potential
ramifications of the discriminatees' testimony). In the
instant case, while the documentary evidence was not
comparable to the submissions in Louton, the ALJ credited
the discriminatees' testimony, harkening back to our stated
view in Louton regarding the importance of credibility and
the deference we should afford the ALJ's determinations in
the absence of any evidence indicating otherwise. 822 F.2d
at 414; Lee Hotel, 13 F.3d at 1351 ("The ALJ's credibility
determinations should not be reversed unless inherently
incredible or patently unreasonable").

In addition, Jenkins presented the original copy of the
time sheet he had submitted for the week of May 19, 1993,
which indicated he had made $430 in cash tips that week.
He acknowledged that the carbon copy of that time sheet,
which was submitted to Atlantic, did not reflect any cash
tips. Thus, he asserted that this document corr oborates his
testimony that he would leave the space for cash tips blank
on the copy of the time sheet he gave to his employer, while
keeping another for himself where he recor ded his tips.
This document is the only written proof of the unreported
tips earned. As we have noted, the ALJ concluded that
while the evidence was not "overwhelming," the Board had
"established a sound and reasonable basis for the figures
set forth in the compliance specification . . . ." and he was
not persuaded that the figures were"unreasonable or
inaccurate." ALJ Dec. at 4.

In a backpay proceeding, once the Board's General
Counsel demonstrates the gross amount of backpay that
the claimant is due, the burden shifts to the employer to
demonstrate that no backpay is due or that the amount
due had been improperly determined. 88 Transit Lines, 55

                               13
F.3d at 827; Angle v. NLRB, 683 F .2d 1296, 1301 (10th Cir.
1982); NLRB v. United Bhd. of Carpenters & Joiners of Am.,
Local 1913, 531 F.2d 424, 426 (9th Cir . 1976). If there is
substantial evidence supporting the Board's conclusion that
Atlantic has not met its burden "to establish facts which
would negative the existence of liability . . . . or which
would mitigate that liability," we must uphold the Board's
conclusion. 88 Transit Lines, 55 F .3d at 827; see also
Angle, 683 F.2d at 1302 (granting the Board's order for
enforcement where employer did not pr esent necessary
"sufficient credible evidence" to support assertions that
Board's calculations were wrong); Carpenters, 531 F.2d at
426 (upholding Board's conclusion where employer had
"not met its burden of negativing the General Counsel's
findings").

Atlantic submitted evidence that it contends was pr oof of
the discriminatees' income. It relied on the tax return
evidence, which, as we have mentioned, could be said to
cut both ways. Even though the tax retur ns contradict the
discriminatees' claims, the fact that their swor n testimony
that they underreported their income exposed them to tax
evasion and perjury charges actually bolsters their
credibility. Louton, 822 F.2d at 414. Aside from its assertion
that disregarding tax evidence under mines an important
congressional policy, which we have rejected, Atlantic
presented no basis for concluding that the employees' tax
returns, rather than their testimony, r eflected the actual
amount of their income. Atlantic also submitted the weekly
signed tip declarations, urging that these for ms were the
employees' "oaths" that they had declar ed all the cash tips
they had earned, and that they should have to stand by
what they declared. However, the evidence in this regard
was conflicting. Jenkins testified that David Geiger, one of
Atlantic's owners, had actually instructed him not to enter
his cash tips on the carbon copy of the time sheet that he
submitted. Jenkins stated that the time sheet was even
returned to him once when he mistakenly wrote his cash
tips on that form. Further, Leon Geiger testified, and
Atlantic does not dispute, that most workers did not write
in any cash tips on their time sheets. It seems obvious that
Atlantic was aware that most employees wer e earning, but
simply not declaring, their cash tips. Hence, we do not take

                               14
issue with the ALJ's finding that Atlantic's position that the
time sheets actually reflected total tips was nothing more
than a "fiction." ALJ Dec. at 3.

Atlantic also attacks the quality of the evidence that
Jenkins and Purcell have produced to support their claims
of tips earned, contending that they lack corr oboration.
However, we do not regard that as dispositive. Rather, we
deem it fairly common for employees not to keep r ecords of
the tips they earn. Further, as a practical matter, it would
probably be difficult for Purcell and Jenkins to bring
forward witnesses to corroborate their actual tip income
and earnings, given the fact that if their co-workers testified
that they too had declared lower cash tips than what they
actually had earned and reported, they would be subjecting
themselves to prosecution for tax fraud. And, the issue
before us under the substantial evidence standard is
whether a reasonable mind would accept the evidence as
adequate, not whether it could have been bolster ed through
corroboration or additional testimony.

Atlantic complains that there really is no defense an
employer can present to overcome the discriminatees'
assertions, but we disagree. Atlantic could have leveled
further attacks on the employees' credibility, kept the type
of records that would have rebutted these types of claims,
or produced witnesses to attack the claimants' stories.
Atlantic did not submit other evidence which would tend to
disprove the discriminatees' claims. As in Louton, where we
noted the company's failure to produce gr oss receipts which
would have allowed the ALJ to ascertain whether the tips
asserted by the discriminatees were reasonable, 822 F.2d at
414, here, Atlantic did not introduce r eceipts of total sales
from which we could glean how much the drivers should
have earned in tips. Atlantic's urging that the
discriminatees should be foreclosed based on their tax
returns and purported tip declarations does not convince
us that the Board's decision lacks substantial evidentiary
support.

Atlantic's attacks on the employees' proof, and its
excuses for lack of evidence, cannot distract us fr om the
fact that the burden of proof is on the employer, as the
wrongdoer, to establish facts to dispute the claim of the

                                15
aggrieved employee. NLRB v. Brown & Root, Inc., 311 F.2d
447, 454 (8th Cir. 1963). Once Jenkins and Purcell had
presented their case, the onus for the pr oduction of
witnesses was not on the claimant, but rather , on Atlantic.
In Hacienda Hotel and Casino v. Willow Bowe , 279 N.L.R.B.
601, 602 (1986), the ALJ had the benefit of the testimony
of the discriminatee's co-workers, and yet these witnesses
were produced not by the discriminatee, but by her
employer, who submitted the conflicting testimony in an
effort to at least limit the discriminatee's backpay to the
lesser amount testified to by the plaintiff 's fellow waitresses.7
Id. at 604. Here, Atlantic did not pr oduce similar testimony,
and, as we have explained, the evidence it did intr oduce
was not really persuasive on the issue.

The Board's dissent also questioned the ALJ's
calculations because both the ALJ's award and the
compliance specification concluded that backpay should be
in an amount that differed from both what Atlantic alleged
the discriminatees earned, and what the discriminatees
themselves claimed to have earned. Yet, as observed by the
Board, the tip amounts for Jenkins and Pur cell used in the
compliance specification and adopted by the ALJ ar e only
approximations that "fall within the middle range of the tip
income claimed by the discriminatees in their testimony."
Supp. Dec. at 2. This methodology, while a bit impr ecise,
does not render the award invalid. See Buncher v. NLRB,
405 F.2d 787, 790 (3d Cir. 1968) (en banc) (stating that
Board seeks only "approximation" of backpay owed and
thus specification was not objectionable on gr ound of
inconsistencies with work histories of some employees).
Also, in Hacienda Hotel, 279 N.L.R.B. at 605, when
quantifying the amount of backpay, the Board attempted to
resolve significant testimonial conflict over the amount of
tips cocktail waitresses received, and arrived at a
reasonable approximation based on the evidence before it.
_________________________________________________________________

7. We note that while conflicting testimony lends support to an
employer's assertion that an employee is lying about the amount of tips
earned, this type of evidence is also not dispositive. In Hacienda Hotel,
the Board upheld the backpay award even though it exceeded both the
discriminatee's tax returns and the amounts testified to by the other
witnesses.

                                16
In doing so, the Board noted that "exactitude is not
possible . . . ." Id. We agr ee that such approximations are
not improper.

We therefore find that, viewing the record as a whole, the
Board's order of backpay was supported by substantial
evidence.

C. Substantial Evidence of Mitigated Damages

Atlantic also contends that by failing to make r easonable
efforts to obtain interim employment, Jenkins did not
mitigate his damages and Atlantic is, therefor e, not
obligated to pay Jenkins back wages. See Tubari , 959 F.2d
at 454 (holding that where employee has not exercised
reasonable diligence in efforts to secur e employment,
employer has established that employee did not pr operly
mitigate damages). Once the amount of backpay has been
established, the burden to produce evidence of a failure to
mitigate is on the employer. Id. at 453. This burden is
heavy: "A discharged worker is not held to the highest
standard of diligence in his or her efforts to secure
comparable employment; reasonable exertions ar e
sufficient." NLRB v. Mercy Peninsula Ambulance Serv., 589
F.2d 1014, 1018 (9th Cir. 1979); see also NLRB v. Westin
Hotel, 758 F.2d 1126, 1130 (6th Cir . 1985) ("[A] wrongfully-
discharged employee is only requir ed to make a reasonable
effort to mitigate damages, and is not held to the highest
standard of diligence"); Fabi Fashions, Inc. v. Local 107, 291
N.L.R.B. 586, 587 (1988) ("[I]n seeking to mitigate loss of
income a backpay claimant is held . . . only to`reasonable
exertions in this regard, not the highest standard of
diligence' . . . . The principle of mitigation of damages does
not require success, it only requir es an honest good faith
effort . . . .") (quoting NLRB v. Ar duini Mfg. Corp., 394 F.2d
420, 423 (1st Cir. 1968)). Once again, we r eview the factual
determination of the Board regar ding Jenkins' due diligence
in seeking interim employment under the standar d of
substantial evidence. Westin Hotel, 758 F.2d at 1130.

We find that Jenkins' testimony supports the Board's
determination that his search for employment was not
unreasonable. Jenkins did testify that during the seven

                                17
month period in question, he was caring for his mother,
who was ill. Atlantic argues that this r esponsibility made
him unavailable for work. However, Jenkins testified on
redirect examination that during the entir e seven months,
he continued to seek employment in a variety of ways.
Jenkins also noted that he was still caring for his mother
when he did find a position, which supports his ar gument
that would have accepted full-time work throughout the
seven month period in question. Based on his testimony as
a whole, we agree with the Board that ther e is substantial
evidence that Atlantic has not met its burden of
establishing that Jenkins' lack of interim ear nings was
indicative of an unreasonable search for employment, and
therefore, we find that Atlantic has not established the
affirmative defense of failure to mitigate his damages.

IV. Conclusion

For the foregoing reasons we will deny the Petition for
Review of the Order of the National Labor Relations Board
and grant the Cross-Application for Enfor cement of the
Order of the National Labor Relations Boar d.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               18
