NLRB Decision Footnote Could Foreshadow Rulemaking on Compound Interest Awards
Late last week the NLRB decided two additional cases. In Scheid Electric, 355 NLRB No. 27 (Apr. 29, 2010), the Board found that the employer unlawfully withdrew recognition of the union representative, unilaterally changed terms and conditions of employment and interrogated and constructively discharged a union steward.
The second case contains a far more interesting footnote. In San Juan Teachers Assn., 355 NLRB No. 28 (Apr. 30, 2010), without much discussion the Board affirmed the Administrative Law Judge’s finding that the employer violated Sections 8(a)(1) and (5) of the National Labor Relations Act by unilaterally reducing the hours of two unit employees. Regarding the remedy, the Board states in footnote 1:
In his exceptions and supporting brief, the General Counsel seeks compound interest computed on a quarterly basis for any backpay or other monetary award. Having duly considered the matter, we are not prepared at this time to deviate from our current practice of assessing simple interest. See, e.g., Cardi Corp., 353 NLRB No. 97, slip op. at 1 fn. 2 (2009); Rogers Corp., 344 NLRB 504, 504 (2005).
For years, General Counsel Ronald Meisburg has sought to add compound interest as a routine remedy available to the Board. In General Counsel Memorandum GC 07-07 (May 2, 2007), Meisburg declared simple interest “inadequate” as a “make whole” remedy, and directed all Regional Offices as follows:
…Regions should begin seeking quarterly compound interest in all future unfair labor practice cases where a monetary award is available.[] Regions should plead this remedy in their complaints and should include in their briefs to administrative law judges a model brief section containing standard arguments in support of this new position.
Even before this GC Memo, prior General Counsels had sought compound interest in Board cases. Each time, however, the Board has similarly declined to “deviate” from the practice of assessing simple interest. Some of these cases are cited in the Board’s San Juan Teachers Assn. footnote, above. The Board’s earliest apparent consideration of this issue is reflected in Accurate Tool & Manufacturing Inc. dba Accurate Wire Harness, 335 NLRB 1096 (2001). In footnote 1 therein the Board explained:
The General Counsel’s exceptions relate to the calculation of interest on backpay awarded to the discriminatees. The General Counsel asks that the Board change its practice of awarding simple interest on back-pay and, instead, calculate interest on a daily compounded basis. Having duly considered the matter, we are not prepared at this time to deviate from our current practice. Members Liebman and Walsh, however, do not foreclose future consideration of the request. In Member Truesdale’s view it would be preferable for the Board to address the General Counsel’s request for compound interest in a rulemaking proceeding.
Indeed, in 1992, the Board published a notice of rulemaking which included such a provision, but the measure was withdrawn after public comment. [See 57 Fed. Reg. 7897-7900, unavailable online.] With Republican appointees (Meisburg, Truesdale) suggesting rulemaking and/or implementation, and the current Chairwoman, a Democrat, having expressly reserved an interest in considering the issue, this would seem to be an issue the current Board may well explore via the rulemaking process.
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