414 U.S. 168 (1973)
Kenneth L. Baker was discharged by Golden State Bottling Co. on August 16, 1963.1 On June 10, 1964, the National Labor Relations Board found that the discharge constituted an unfair labor practice and ordered Golden State, its officers, agents, successors, and assigns to reinstate Baker with backpay.2 The Court of Appeals for the Ninth Circuit enforced the Board's order with respect to Baker on December 2, 1965, and a final decree was entered on November 27, 1968.3
On January 31, 1968, All American Beverages, Inc. purchased Golden State's soft drink bottling and distribution business.4 All American continued to carry on the business without interruption or substantial changes in method of operation, employee complement, or supervisory personnel.5 The sales contract conditioned the purchase on Eugene Schilling, Golden State's secretary and manager who had discharged Baker, agreeing to remain employed by All American for one year as general manager.6
In a subsequent backpay specification proceeding to which both Golden State and All American were parties, the Board found that All American had purchased the business with knowledge of the outstanding Board order and was a successor liable for reinstatement with backpay.7 The Board ordered All American to reinstate Baker and directed that Golden State and All American jointly or severally pay Baker a specified sum of net backpay.8 The Court of Appeals for the Ninth Circuit enforced the order, one judge dissenting, and the Supreme Court granted certiorari.9
When Baker was discharged he was Golden State's leading driver-salesman.10 On October 1, 1964, Golden State began converting its top driver-salesmen to distributors who realized net profits after deduction of operating expenses from the purchase and resale of products.11 The Board found that Baker would have become a distributor on October 1, 1964, but for his discharge and therefore computed his gross backpay subsequent to that date on the basis of what he would have earned as a distributor.12
Whether the bona fide purchaser of a business, who acquires and continues the business with knowledge that his predecessor has committed an unfair labor practice in the discharge of an employee, may be ordered by the National Labor Relations Board to reinstate the employee with backpay?13
Section 10(c) of the National Labor Relations Act authorizes the Board to issue orders requiring reinstatement with backpay against a bona fide successor.14 The successor must acquire and continue the business with knowledge of the predecessor's unfair labor practice.15 The statutory language empowering the Board to take affirmative action to effectuate the policies of the Act extends to successors in privity under Rule 65(d) when a continuing business enterprise is found.16
Yes. The Board's remedial powers under section 10(c) are not limited to the offending employer but extend to bona fide successors who continue the enterprise without substantial change.17 Because the employing industry remained essentially the same, All American stood to benefit from any unremedied unfair labor practices. The Board properly balanced the equities and imposed reinstatement and backpay liability on All American to avoid labor unrest and protect employee rights under section 7 of the Act.18
The order runs to All American not because its purchase was itself an unfair labor practice but because such relief is necessary to effectuate national labor policy.19
The bona fide purchaser may be ordered by the Board to reinstate the employee with backpay.20
Whether the Court of Appeals erred in determining that the evidence offered substantial support for the Board's finding that All American purchased the bottling business with knowledge of the unfair labor practice litigation?21
Under the substantial evidence standard articulated in Universal Camera Corp. v. NLRB, a court of appeals determination that agency findings are supported by substantial evidence on the record as a whole may be disturbed by the Supreme Court only in the rare instance when the standard has been misapprehended or grossly misapplied.22 This Court will intervene only when the standard appears to have been misapprehended or grossly misapplied.23
No. The Court of Appeals correctly applied the substantial evidence standard when it upheld the Board's finding that All American purchased the business with knowledge of the unfair labor practice litigation.24 The Court reviewed the record evidence that Eugene Schilling, who had discharged Baker and followed the litigation, remained as general manager under All American pursuant to an express contractual condition and participated in sale negotiations.25 The trial examiner discredited contrary testimony from Schilling and Crofoot while drawing an adverse inference from All American's failure to produce its negotiators.26 Because these facts supplied a sufficient basis for inferring pre-sale knowledge and the Court of Appeals did not misapprehend or grossly misapply the Universal Camera standard, the Supreme Court declined to substitute its own judgment.27
The Court of Appeals did not err in determining that substantial evidence supported the Board's knowledge finding.28
Whether the Board properly exercised its discretion in issuing an order imposing joint and several liability on the predecessor employer for a specified sum of net backpay?29
The Board acts within its discretion under section 10(c) when it imposes joint and several backpay liability on a predecessor employer.30 The violator of the Act cannot shed responsibility for remedying its own unfair labor practices simply by disposing of the business.31 Joint liability additionally protects the employee against the risk of successor insolvency.32
Yes. The Board properly exercised its discretion by ordering Golden State and All American jointly and severally liable for the specified sum of net backpay.33 The Court applied the rule to the facts by recognizing that Golden State committed the unfair labor practice more than four years before the January 31, 1968 sale. Therefore Golden State could not terminate its continuing liability merely by transferring ownership.34 Joint and several liability ensures full recompense to Baker while protecting against the possibility that All American might delay reinstatement, and any contractual indemnity obligation between the parties does not displace the Board's remedial order.35
The Board struck an equitable balance among the public interest, the predecessor's responsibility, and the employee's need for complete relief.36
The Board properly exercised its discretion in imposing joint and several liability on the predecessor for the specified sum of net backpay.37
Whether the Board properly computed the discharged employee's gross backpay subsequent to October 1, 1964, on the basis of what he would have earned as a distributor?38
An order requiring reinstatement and backpay is aimed at restoring the economic status quo that would have obtained but for the wrongful discharge.39 Therefore the Board may properly compute gross backpay on the basis of the position the employee would have attained, including a position as an independent contractor excluded from the Act, when the evidence shows the employee would have been promoted or transferred to that position absent the discrimination.40 The Act's remedies are not thwarted by the fact that an employee who is within the Act's protections when the discrimination occurs would have been promoted or transferred to a position not covered by the Act if he had not been discriminated against.41
Yes. The Board properly computed Baker's gross backpay after October 1, 1964, on the basis of distributor earnings.42 The Court applied the rule to the facts by noting that Baker was Golden State's leading driver-salesman when discharged on August 16, 1963, and that the Board found he would have become a distributor on October 1, 1964, when Golden State began converting its top driver-salesmen to independent contractors.43 Because the remedy seeks to restore the economic status quo that would have existed but for the unlawful discharge, the computation correctly used net profits as a distributor rather than terminating liability on the date the position changed.44
The Act's protections are not lost merely because the employee would have moved to a non-covered position in the absence of discrimination.45
The Board properly computed the discharged employee's gross backpay subsequent to October 1, 1964, on the basis of what he would have earned as a distributor.46