In a recent 3-1 decision, the National Labor Relations Board ("NLRB") modified its backpay formula to make unlawfully terminated workers whole. In King Soopers, the NLRB found that its previous formula was inadequate to fully compensate workers who were unlawfully terminated. Specifically, the Board found search-for-work expenses and interim work expenses should be treated as a separate component of the backpay award, rather than an offset against interim wages.
When an employee is terminated for union activities, he or she is required to find and maintain interim employment to mitigate damages while the unfair labor practice case is decided. The pay the discriminatee receives from interim employment is deducted from the backpay award. However, the search for interim employment, and sometimes the interim employment itself, often causes the discriminatee to endure additional financial hardship. This is especially true if the discriminatee is forced to relocate, commute longer distances, or pay for additional training for the interim employment.
In the past, the NLRB treated search-for-work expenses and interim employment expenses as offsets to interim earnings. This prevented discriminatees who were unable to find interim employment to receive any compensation for search-for-work expenses. Similarly, discriminatees whose interim job wages were less than their total expenses were not compensated for the amount of expenses that exceeded their interim wages.
The Board now treats search-for-work expenses and interim work expenses as a separate component of the backpay award. The purpose of make-whole relief is to restore, as nearly as possible, that which the discriminatee would have earned if he or she had not been unlawfully terminated, and to deter future unfair labor practices. The Board found that this new formula better serves both purposes. As a result, discriminatees who prevail on their unfair labor practices will be fully compensated for the financial hardships caused by their unlawful terminations.
The Public Employment Relations Board currently treats search-for-work expenses and interim employment expenses as offsets to interim earnings. But PERB will likely follow suit and treat search-for-work expenses and interim job expenses as a separate component of the backpay award to ensure discriminatees are fully compensated.
