Late last week, NLRB Acting General Counsel Lafe Solomon issued two Memoranda regarding expanded powers of the Board when it comes to monetary remedies. 

Memorandum GC 11-08 (March 11, 2011) outlines new methods for calculating backpay in Board cases.  First, it explains how Regions are to compute backpay to include interest compounded daily, consistent with the Board’s change of direction in Kentucky River Medical Center, 356 NLRB No. 9 (Oct. 22, 2010).  It also instructs Regions to award additional financial offsets to cover the tax consequences of a lump-sum financial settlement, and to reimburse a discriminatee for the costs of any interim job search.  Moreover, it advises Regions to seek language in future remedial orders requiring the employer to advise the Social Security Administration of the allocation of any backpay award to the appropriate timeframes.  Finally, it indicates that the Board will be conducting training this week for Regional staff on these issues.

The other memo, Memorandum GC 11-07 (March 11, 2011), urges the Board to reconsider two 2007 decisions that require discharged employees to mitigate potential damages promptly. 

In Grosvenor Resort, 350 NLRB 1197 (2007), the Board held that a number of discriminatees did not fulfill their duty to mitigate their damages because they delayed their search for new employment by up to eight (8) weeks.  Based upon a review of earlier Board cases regarding mitigation and the circumstances of the case, the Board ruled that anyone in the case who had waited more than two weeks to commence a job search had waited too long.  The backpay awards for any such discriminatee was calculated from the beginning of his or her search.

In St. George Warehouse, 351 NLRB 961 (2007), the Board shifted the burden of production in mitigation cases to the General Counsel to establish that a discriminatee took reasonable steps to seek equivalent jobs in the relevant market. 

The new Memorandum asks the Regional Offices to identify cases that may be proper vehicles for overruling these two cases, thus:

    • St. George Warehouse — Regions are authorize to seek reversal of St. George Warehouse and the changed burden of production in all cases where a discriminatees’ [sic] reasonable search for work is being litigated.  In such cases, Regions should object to the shifted burden of production and challenge the St. George Warehouse rule, bt should put forth the reasonable search evidence as required under that decision (consistent with this Guideline Memorandum’s discussion of using receipt of unemployment beenfits as prima facie evidence).  In arguing against St. George Warehouse, Regions should use the legal argument set forth [herein] and may consult the Division of Advice for further assistance in litigating this issue.

    • Grosvenor Resort — Regions should determine, as part of their compliance investigation, what is a reasonable period of time for the discriminatee to begin to search for work.  Regions are authorized to seek reversal of Grosvenor Resort in cases in which the Region determines that a delay of more than two weeks is reasonable. 

Employers with cases pending at Regional Offices should take specific note of these Memoranda.  Others should also see them as the latest developments in a few trends — most notably, the current Board’s intent to overturn caselaw from the prior administration; and, to expand the Board’s remedial powers.