Hartman Brothers Heating & Air Conditioning, Inc. v. National Labor Relations Board

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 01-1321 and 01-1549
Hartman Brothers Heating & Air Conditioning,
Inc.,
Petitioner/Cross-Respondent,
v.
National Labor Relations Board,
Respondent/Cross-Petitioner,
and
Sheet Metal Workers’ International Association,
Local Union No. 20,
Intervening Respondent.
Petition for Review and Cross-Application
for Enforcement of an Order of the
National Labor Relations Board
Argued October 25, 2001--Decided February 6, 2002
Before Bauer, Posner, and Evans, Circuit
Judges.
Posner, Circuit Judge. "Salting" is the
practice whereby a union inserts its
organizers into some employer’s workforce
in the hope that they will be able to
organize it. Though salts do not intend
to remain in the company’s employ after
the plant or other facility is organized,
the Supreme Court has held that they are
employees within the meaning of the
National Labor Relations Act, implying
that to fire or refuse to hire otherwise
qualified salts merely because they are
salts is an unfair labor practice because
on the assumption that they are qualified
the employer’s motive must be the
forbidden one of discriminating against
employees on the basis of their being
union supporters. NLRB v. Town & Country
Electric, Inc., 516 U.S. 85, 87 (1995).
In the present case, a small heating and
air-conditioning contractor in rural
Indiana "sent home" one salt (Starnes)
before discharging him on proper grounds
and refused to hire another (Till), and
the Labor Board found that these actions

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were improperly motivated by hostility to
unionizing. Besides ordering the company
to cease and desist from discriminating
against salts and other union supporters,
the Board ordered it to give backpay to
Starnes and Till and offer reinstatement
to Till, the exact amount of backpay for
each salt to be determined in subsequent
proceedings.
Doubtless to conceal the fact that he
was a salt, Starnes stated on his job
application that he had been laid off by
a previous employer from a job paying $11
an hour, when in truth he had taken a
leave of absence from that employer in
order to participate in the union’s
organizing efforts. Hartman was only
offering about $8.50 an hour, so had
Starnes disclosed that he had taken a
leave of absence from a much better
paying job the company might have smelled
a rat--for why would someone do that
unless he was a salt? (There are reasons,
such as a spouse’s relocation, but the
possibility of such reasons might not be
enough to dispel the employer’s
suspicion.) In the case of Till, the com
pany smelled a rat right off because he
had applied for the job in the company of
a known union organizer, declared he was
a union organizer, and worn a baseball
cap with the union’s logo on it. The
company did not offer Till a job, but it
did hire Starnes--who, however,
immediately upon being hired, told Mr.
Hartman himself that he was a union
organizer and intended to organize the
company, whereupon Hartman told him to
leave the workplace, though he did not
discharge him--yet.
Starnes’s action in proclaiming his
union-organizer status before doing any
organizing supports the widespread
suspicion that the purpose of salting is
not in fact to organize, but to
precipitate the commission of unfair
labor practices by startled employers,
Starcon, Inc. v. NLRB, 176 F.3d 948, 949
(7th Cir. 1999); Chairman’s Summary of
Committee Activity for the 104th
Congress, S. Rep. No. 105-63, 105th
Cong., 1st Sess. 29-30 (1997); Herbert R.
Northrup, "’Salting’ the Contractors’
Labor Force: Construction Unions
Organizing With NLRB Assistance," 14 J.
Lab. Research 469, 471-73 (1993); Note,
"Organizing Worth Its Salt: TheProtected
Status of Paid Union Organizers," 108

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Harv. L. Rev. 1341, 1345-46 (1995);
Kathleen Sheil Scheidt, Comment,
"National Labor Relations Board v. Town &
Country Electric, Inc.: Allowing a Trojan
Horse to Trample Employer Rights," 24 J.
Corporation Law 89, 90-91 (1998), though
to what ultimate end is unclear; the
alleged unfair labor practices in this
case occurred in 1995, and six years
later the Hartman company is still not
unionized. But all this is neither here
nor there, as the Supreme Court has made
clear that the Labor Board can condone
salting and the Board has done so.
The question presented by this case,
left open in Town & Country, is whether a
salt may lie to get a job. (The salt in
Beverly California Corp. v. NLRB, 227
F.3d 817, 833-34 (7th Cir. 2000), had
lied, but we made nothing of this fact.)
We think that he may, at least if the lie
concerns merely his status as a salt,
union organizer, or union supporter and
not his qualifications for the job. Cf.
Frazier Industrial Co. v. NLRB, 213 F.3d
750, 760 (D.C. Cir. 2000). A lie about
his union status or unionizing objective
is not material, because, as Town &
Country held, an employer cannot turn
down a job applicant just because he’s a
salt or other type of union organizer or
supporter. In other words, the fact that
the applicant is a salt does not entitle
the employer to infer that he won’t be a
bona fide employee. An employer still may
insist that every employee do eight
hours’ work for eight hours’ pay; and if
a particular employee diverts time to
other activities (rather than promoting
the union on his own time), the employer
is not required to keep him on the
payroll. Disclosure of one’s status as a
salt thus may be important information
that an employer is entitled to so that
it can keep an eye on a worker whose
allegiance implies that he will not do
full-time work. But this argument against
allowing a salt to lie his way into a job
is not made in this case, so we shall not
try to decide its merit, which may
moreover depend on the precise type of
job--the less a worker is supervised, the
more important his undivided loyalty to
the firm is.
Hartman points to an Indiana statute
that makes it a crime for a person to
"knowingly or intentionally make[ ] a
false or misleading written statement

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with intent to obtain . . . employment,"
Ind. Code sec. 35-43-5-3(a)(2), an apt
description of Starnes’s job application.
But if interpreted to entitle an employer
to turn down a job application on the
basis of a lie about salt status, the
statute would be preempted by the
National Labor Relations Act because it
would interfere with union organizing
activity without any justification
consistent with the Act. As we have said,
a lie related solely to one’s union
affiliation or unionizing intentions
rather than to one’s fitness for the job
cannot, consistent with the Act as it was
interpreted in Town & Country, be
material to the hiring decision. (The
Indiana statute contains no requirement
of proving materiality.) The only purpose
of criminalizing such a lie could be to
discourage salting, an activity protected
by the Act.
What we have said so far shows that the
Board was entitled to find that the
company had committed an unfair labor
practice and to order the company to
offer Till reinstatement (actually
"instatement," since Till had not been
hired) and give him backpay. Starnes’s
situation is more complicated. The job
for which the company hired him required
driving and so the company had told him
that its liability insurer would be
checking his driving record and if upon
checking the insurance company refused to
provide insurance coverage for his
driving, he would be discharged. A few
hours after Starnes had been ordered off
the premises, the insurance company
report came through; it was negative; and
Starnes--who had misrepresented his
driving record, stating that he had only
one speeding ticket (he had two)--was
immediately discharged. The Board ruled
that the discharge was proper because it
was done pursuant to a company policy
that was applied across the board and
thus without regard to an employee’s
attitude toward unions. That is why the
Board didn’t order Hartman to offer
reinstatement to Starnes, as opposed to
Till.
But the Board did order the company to
pay Starnes backpay, albeit limited to
the few hours between his hiring and his
termination, the hours after he was
ordered off the premises and before he
was formally terminated upon Hartman’s

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receipt of the report from the insurance
company. Hartman challenges this award,
and as the issue is not one of
computation of backpay, which has
beenreserved to compliance proceedings
pursuant to Sure-Tan, Inc. v. NLRB, 467
U.S. 883, 902 (1984), it is properly
raised by the company’s petition to
review the Board’s order.
The Board has applied the maxim de
minimis non curat lex quite frequently,
most recently in In re Golden Stevedoring
Co., 335 N.L.R.B. No. 37, 2001 WL
1033831, at *6 (NLRB Aug. 27, 2001), and
Robert Orr-Sysco Food Services &
Teamsters Local 480, 334 N.L.R.B. No.
122, 2001 WL 910764, at *2 (NLRB Aug. 7,
2001), and we should have thought this a
prime case for its application. See NLRB
v. General Truck Drivers, Warehousemen,
Helpers & Automotive Employees of Contra
Costa County, Local No. 315, 20 F.3d
1017, 1022 (9th Cir. 1994); NLRB v. Big
Three Industrial Gas & Equipment Co., 441
F.2d 774, 778 (5th Cir. 1971). It is true
(or so at least we were told at argument
without contradiction) that salts are
permitted to retain the wages they
receive from the employers that they
salt, rather than having to remit those
wages to the union, which pays salts
generous salaries--in the range of
$30,000 to $40,000, we were told--for
their part-time organizing work. But
Hartman paid Starnes for 4 hours of work
even though he was at work for only 15
minutes; so even if the insurance
company’s report on his driving record
came through at the very end of an 8-hour
day, the most Starnes could have lost in
backpay would have been $34 ($8.50 x 4).
It is hard to believe that soaking
Hartman for this amount could have a
deterrent effect justifying the
expenditure of government funds necessary
to determine and collect the exact amount
owed.
Hartman’s argument, however, is not
that; instead it is that the backpay
order exceeded the Board’s authority
because the complaint against the
company--the complaint, filed by the
Board’s General Counsel, that commenced
the unfair labor practice proceeding
before the Board and thus corresponds to
the initial pleading (also called the
complaint) that commences a lawsuit in
federal district court-- charges that the

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company committed an unfair labor
practice by discharging Starnes, whereas
the unfair labor practice proved was
sending him home, thus depriving him of
an opportunity to begin organizing and,
incidentally, earn some wages on top of
his union salary. Although Labor Board
proceedings are not graced with pretrial
orders, making the complaint a more
important stage in those proceedings than
in federal district court proceedings, we
cannot think of any reason to hold the
Board to the letter of the complaint
unless there is prejudice to the employer
or to whoever else is the respondent in
the proceeding. Complaints are based on
preliminary investigations, and the trial
may cast the facts in a different light.
To require that the complaint be amended
to conform the pleadings to the facts
proved, even if the discrepancy is
harmless, would be to complicate these
proceedings to no purpose. There was no
prejudice here, since the question of the
company’s motive in sending Starnes home
before it fired him was fully ventilated
in the evidentiary hearing on the
complaint. The Board was therefore
entitled to proceed as it did, basing
judgment on facts proved though not
alleged. NLRB v. Quality C.A.T.V., Inc.,
824 F.2d 542, 545-46 (7th Cir. 1987);
Electri-Flex Co. v. NLRB, 570 F.2d 1327,
1335 (7th Cir. 1978); Tasty Baking Co. v.
NLRB, 254 F.3d 114, 122 (D.C. Cir. 2001).
Hartman also argues, however, though
unclearly, that the award of backpay to
Starnes violates the rule that while the
purpose of awarding backpay to employees
victimized by an employer’s hostility to
unionization is deterrent as well as
compensatory, Kraszewski v. State Farm
General Ins. Co., 912 F.2d 1182, 1186
(9th Cir. 1990); Hedstrom Co. v. NLRB,
629 F.2d 305, 317 (3d Cir. 1980) (en
banc), the award is limited to replacing
wages that the employee would have earned
had it not been for that hostility. Sure-
Tan, Inc. v. NLRB, supra, 467 U.S. at
900-01; NLRB v. J.S. Alberici
Construction Co., 591 F.2d 463, 470 (8th
Cir. 1979); NLRB v. Martin A. Gleason,
Inc., 534 F.2d 466, 479 (2d Cir. 1976).
Starnes obtained employment by a fraud
concerning his driving record. Had he
told the truth he would not have been
hired and so he would not have accrued
any wages and therefore would not have
been eligible for any award of backpay

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even if the employer had committed an
unfair labor practice.
This argument is defeated by the Supreme
Court’s rejection in McKennon v.
Nashville Banner Publishing Co., 513 U.S.
352, 360-62 (1995), of the "after-
acquired evidence" doctrine. Developed in
lower courts before McKennon, the
doctrine holds that there is no right to
backpay if in the course of litigation
over a discriminatory or otherwise
unlawful discharge the employer unearths
evidence that, had he known it at the
outset, would have caused him, without
fault, to refuse to hire the employee.
See, e.g., Washington v. Lake County, 969
F.2d 250, 252-53 (7th Cir. 1992);
Milligan-Jensen v. Michigan Technological
University, 975 F.2d 302, 303-05 (6th
Cir. 1992); Summers v. State Farm Mutual
Automobile Insurance Co., 864 F.2d 700,
708 (10th Cir. 1988). For the application
of McKennon to lying on a job
application, see Sheehan v. Donlen Corp.,
173 F.3d 1039, 1047-48 (7th Cir. 1999);
Wallace v. Dunn Construction Co., 62 F.3d
374, 378-79 (11th Cir. 1995) (en banc),
and for its application to an unfair
labor practices case where, as in this
case, the employee concealed a
disqualifying condition, see Hoffman
Plastic Compounds, Inc. v. NLRB, 237 F.3d
639, 648-49 (D.C. Cir. 2001) (en banc),
cert. granted, 122 S. Ct. 23 (2001).
It is true that unlike the defendant in
McKennon or in the other cases that we
have cited, Hartman did not discover
Starnes’s disqualification by combing
through discovery materials. He
discovered it in the regular course of
processing the application, by routine
inquiry of his liability insurance
company made and completed within hours
of Starnes’s beginning work--indeed, so
far as appears, at the earliest feasible
opportunity. This is not a case in which
"the information might have gone
undiscovered absent the suit," McKennon
v. Nashville Banner Publishing Co.,
supra, 513 U.S. at 362, in which event
barring backpay might give employers an
incentive to dig for dirt in the
litigation process in order to deter
suits. The Court stated that the "concern
that employers might as a routine matter
undertake extensive discovery into an
employee’s background or performance on
the job to resist claims under the Act is

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not an insubstantial one." Id. at 363.
There can be no basis for such a concern
here. In McKennon itself the
disqualifying condition was discovered at
the deposition of the plaintiff.
But McKennon cuts deeper. The real basis
of the "after-acquired evidence" doctrine
was not, as it might seem, that there can
be no award of backpay unless the
employee would have obtained wages had it
not been for the employer’s unlawful act.
That principle is entirely sound. It is
the principle that forbids an award if
the plaintiff would have been fired even
if the employer had not been anti-union,
see, e.g., NLRB v. Martin A. Gleason,
Inc., supra, 534 F.2d at 479, and that
subtends the part of the after-acquired
evidence doctrine preserved by McKennon,
the part terminating the accrual of
backpay as soon as the employer obtains
evidence that because it shows that the
employee is disqualified on noninvidious
grounds, permits the employer to
terminate the employee at that point.
McKennon v. Nashville Banner Publishing
Co., supra, 513 U.S. at 362. Both are
situations in which the causal relation
between the unlawful conduct and the
employee’s termination is severed. Had
the Board awarded backpay to Starnes for
any period after the company learned of
his driving record, the cases that we
have cited would require us to invalidate
the award. But if the company had not
been motivated by hostility to salts, it
would not have sent Starnes home until it
learned of his driving record; it would
have paid him up to that point; and it
would have made no attempt to get the
money back. Cf. Sheehan v. Donlen Corp.,
supra, 173 F.3d at 1047-48. The version
of the after-acquired evidence doctrine
that would have barred an award of
backpay for this period before McKennon
despite the absence of a causal
connection between the employee’s resume
fraud or other false statement and his
termination was really just the old
"unclean hands" defense of equity. See
McKennon v. Nashville Banner Publishing
Co., supra, 513 U.S. at 360; Hoffman
Plastic Compounds, Inc. v. NLRB, supra,
237 F.3d at 648-49. The Court rejected
the application of the doctrine "where
Congress authorizes broad equitable
relief to serve important national
policies," McKennon v. Nashville Banner
Publishing Co., supra, 513 U.S. at 360,

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citing the rejection of the doctrine’s
application to antitrust in Perma Life
Mufflers, Inc. v. International Parts
Corp., 392 U.S. 134, 138 (1968). There is
no basis for distinguishing in this
respect between the antitrust and age-
discrimination laws (McKennon was an-age-
discrimination case) on the one hand and
the National Labor Relations Act on the
other. See Hoffman Plastic Compounds,
Inc. v. NLRB, supra.
The Board’s order is
Enforced.

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