VII. PRINCIPLES ESTABLISHED 99The <strong>Board</strong>, upon finding that an employer has a valid objectionto the reinstatement to his former position of an employee discriminatedagainst, has ordered reinstatement to a substantially equivalentposition with respect to which the objection does not hold."The <strong>Board</strong> has refused to reinstate an employee who, subsequentto a discriminatory discharge, offered his services to the employeras an industrial spy, on the ground that reinstatement of such anemployee would not effectuate the policies of the act.18In several cases the <strong>Board</strong> found that the employment secured bythe discharged employee elsewhere was not substantially equivalentto the position held prior to the discrimination, and therefore foundit unnecessary to pass upon the issue as to whether or not reinstatementwould have been ordered if a discharged employee had, infact, secured substantially equivalent employment."In addition to requiring the reinstatement of an employee discriminatedagainst, the <strong>Board</strong> usually orders an employer to makesuch employee whole for loss of pay which he normally would haveearned had the unfair labor practices not occurred. 2° Under appropriatecircumstances the <strong>Board</strong> will enter a back-pay order eventhough it does not order reinstatement.21Since the <strong>Board</strong> seeks to make whole employees who have beendiscriminated against by payment to them of a sum of money equalto that which the employees would normally have earned had theunfair labor practices not occurred, the a-mounts earned elsewhereduring the period of discrimination are excluded from the sumto be paid. 22 If, however, these amounts are earnings which the employeewould have made while in the employ of the respondent, nodeduction will be made. 23 Upon the same principle, the <strong>Board</strong> hasheld that the net earnings to be deducted from back pay should becomputed on the basis of total earnings less the expenses incidentto the seeking of new employment, such as transportation costs.2411 Matter of Douglas Aircraft Company, Inc. and United Automobile Workers of America,International Union, Douglas Local No. 214, 10 N. L. R. B. 242, enforced as modifiedSeptember 22, 1939 (C. C. A. 9) (statute against employment of alien upon Governmentwork precluded reinstatement to former position ; <strong>Board</strong> ordered reinstatement to substantiallyequivalent position with proviso that after alien had acquired citizenship he.should be restored to former position upon application) ; Matter of Harnischfeger Corporationand Amalgamated Association of Iron, Steel and Tin Workers of North America,Lodge 1114, 9 N. L. It. B. 676, enforced, N. L. R. B. v. Harnischfeger Corp., June 6, 1939(C. C. A. 7) (negligent act of employee which damaged valuable machine discovered byemployer subsequent to discriminatory discharge)." Matter of Thompson Cabinet Company and Committee for industrial Organization,Local Industrial Union No. 115, 11 N. L. R. B. 1106.19 of L. C. Smith d Corona Typewriters. Inc. and International Metal Polishers,Buffers and Platers Union of North America, 11 N. L. R. B. 1382; Matter of Automotive.Afaintenance Machinery Company and Steel Workers Organizing Committee et al., 13N. L. R. B.. No. 40.25 See Third Annual Report, p. 201.21 Matter of Crossett Lumber Company and United Brotherhood of Carpenters andJoiners of America, Lumber and Sawmill Workers Union. Local 2590, 8 N. L. R. B. 440,enforced N. L. R. B. v. Crossett Lumber Company, 102 F. (2d) 1003 (C. C. A. 8).(Employees did not desire reinstatement) ; Matter of El Paso Electric Company. a corporationand Local Union 585, International Brotherhood of Electrical -Workers, et al., 13 N. L. R. B..No. 28 (employee died prior to <strong>Board</strong> order ; back pay ordered to be paid to employee'sestate).See Third Annual Report, pp. 201-2.24 Matter of Link Belt Company and Lodge 1604 of Amalgamated Association of Iron..Steel and Tin Workers of North America, at at., 12 N. L. R. B. 854, petition to reviewfiled May 25, 1939 (C. C. A. 7).24 Matter of Crossett Lumber Company and United Brotherhood of Carpenters andJoiners of Americc, lumber and Sawmill Workers Union, Local 2590, 8 N. L. R. B. 440,enforced N. L. R. B. v. Crossett Lumber Company, 102 F. (2d) 1003 (C. C. A. 8). The<strong>Board</strong> said :"Some of the employees maintained homes in Crossett, or its immediate vicinity, wherethey lived with their families, and in going to other places to work, they incurredexpenses such as for transportation, room, and board, which they would not have incurred
100 FOURTH ANNUAL REPORT OF NATIONAL LABOR RELATIONS BOARDWork-relief payments as earnings are properly deductible from theamount of back pay required to make a discriminatorily dischargedemployee whole. The <strong>Board</strong> has held, however, that to permit theemployer to retain such amounts would place the burden of theemployer's imfair labor practices upon governmental relief agencies,and has therefore required employers, in deducting such amounts, topay them over to the work-relief agency which supplied the fundsfor the project upon which the employee worked.25These rules appear in all <strong>Board</strong> decisions involving a back payorder in substantially the following form:By "net earnings" is meant earnings less expenses, such as for transportation,room, and board, incurred by an employee in connection with obtaining workand working elsewhere than for the respondent, which would not have been incurredbut for his unlawful discharge and the consequent necessity of his seekingemployment elsewhere. See Matter of Crossett Lumber Company and UnitedBrotherhood of Carpenters and Joiners of America, Lumber and Sawmill WorkersUnion, Local 2590, 8 N. L. R. B. 440. Monies received for work performed uponFederal, State, county, municipal, or other work-relief projects are not deductibleas "net earnings," but, as provided below in the Order, shall be deducted and paidover to the appropriate fiscal agency of the Federal, State, county, municipal, orother government or governments which supplied the funds for said work-relief.-projects.24Since a back pay order is issued in order to effectuate the policies'of the act, and is not a private right, "but in the interest of thepublic," 27 the <strong>Board</strong> has rejected the contentions that the amount ofdamage done by striking employees to the property of an employershould be computed and set off against the amount of back pay duefrom the employer 28 and that discharged employees are under anobligation to seek work elsewhere and thus mitigate the amount ofback pay to be paid by the employer.25had they continued to work for the respondent and not been forced, by virtue of therespondent's unfair labor practices, to leave their homes. Moreover, many of the saidemployees were forced, by virtue of the respondent's unfair labor practices, to give uprespondent-owned houses, and thereby incurred expenses which they would not haveincurred except for the said unfair labor practices. It is this sort of extra expenseto which reference is to be made in determining the net earnings of the employ,ees.,-.Tothe extent that all such expenses diminished the earnings of the employees whom wehave found were discriminated against during the resp;ctive periods of discrimination,such earnings shall not be deducted in computing the loss of pay the said employees mayhave suffered."25 Matter of Republic Steel Corporation and Steel Workers Organizing Committee, 911-4( N. L. R. B. 219, enforced as modified, Republic Steel Corp. V. N. L. R. B., November 8,1939 (C. C. A. 3). The <strong>Board</strong> said:"Insofar as the employee receives remuneration for such work upon a relief projectduring periods when he would otherwise have been workin g for the re.Qpordent, it wouldnot seem necessary, in restoring him to the status quo, that he be reimbursed in suchamounts. Nevertheless, to hold that the losses accruing from the respondent's unfairlabor practices must be borne by the government or governments financing the workreliefproject would not effectuate the purposes of the Act."Home-relief payments and unemployment compensation are not deducted at all fromback pay either in the form of net earnings or as amounts to be paid to the governmentalagency which made the payments. Matter of Pennsylvania. Furnace and Iron Con/pangand Lodge No. 1828, International Association of Machinists, 13 N. L. R. B., No. 7, enforced.N. L R. B. v. Pennsylvania Furnance and Iron Co., July 5, 1939 (C. C. A. 3)." The footnote first appeared in this form in Matter of C. G. Conn, Ltd., and MetalPolishers International Union, Local No. 77, 10 N. L. R. B. 498, petition to review filedJanuary 17, 1939 (C. C. A. 7). In some subsequent <strong>Board</strong> decisions, there have beensome slight but immaterial variations in the footnote.Agwainea, Inc. v. N. L. R. B., 87 F. (2d) 146 (C. C. A. 5) enforcing Matter ofAgwilines, Inc. and International Longshoremen's Association, Local No. 2402, 2 N. L.R. B. 1.28 Matter of Republic Steel Corporation and Steel Workers Organizing Committee, 9N. L. R. B. 219, enforced as modified, Republic Steel Corp. v. N. L. R. B.. November 8. 1939(C. C. A. 3). The <strong>Board</strong> said : "However proper such set-offs or recoupments might bein a controversy between private litigants over private rights, there is no basis for sucha claim in a controversy, such as this, of a public charaeter, where conformance is soughtwith the public policy of the United States, as expressed in a statute, and where thoseto whom the <strong>Board</strong> has awarded back pay are not private litigants in the Cause.""Matter of Western Felt Works, a corporation and Textile Workers Organizing Committee,Western Felt Local, 10 N. L. R. B. 407, enforced, Western Felt Works v. N. L. R. B.,March 25, 1939 (C. C. A. 7).