Federal Court Affirms NLRB’s Change In Calculation For Job Search Expenses In Wrongful Termination Cases

The U.S. Court of Appeals for the District of Colombia Circuit just recently upheld the National Labor Relations Board’s (NLRB) decision for a change in its method of calculation for how unlawfully discharged employees should be compensated by their former employers. The NLRB will now allow employees who were wrongfully discharged to seek out compensation for the costs they incurred while searching for a new job. This change can have a significant impact on wrongful termination cases.

The decision leading to this change involved grocery store chain King Soopers, a division of Kroger Co. The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the Service Employees International Union, and an International Brotherhood of Electrical Workers local in Kansas all filed amicus briefs in favor of the proposed changes. The majority opinion was written by NLRB chairman Mark Gaston Peirce, NLRB member Kent Y. Hirozawa and NLRB member Lauren McFerran.

Previously, the NLRB had not awarded these job search costs to employees who claimed that they were unlawfully terminated as these expenses were only used to offset the interim earnings which limited the back pay to which an employee would be entitled to. As a result of this previously used policy, the compensation that a worker could be awarded was limited.

To illustrate the method historically used by the NLRB, say the plaintiff bringing suit has incurred $250 in expenses searching for a new job and has also lost $5,000 in gross earnings from his employer while failing to secure another job in the interim meaning that he has $0 in interim earnings. Under the traditional approach, the Board would award the plaintiff $5,000 in back pay which in reality would only result in the plaintiff recovering $4,750 once you subtract the $250 the plaintiff spent job searching. In this situation using the traditional approach, the plaintiff would not receive the $250 incurred in job search expenses because traditionally this amount was only awarded as an offset against interim earnings. Therefore, under the traditional approach, the only circumstance under which one could recover the expenses they incurred in job searching was if they were able to secure interim employment. Now, under this change in direction by the NLRB, the plaintiff will be able to be compensated for their job search expenses even if they are unable to secure interim employment.

Despite a strong showing of support for this change, NLRB member Phillip A. Miscimarra, who concurred in part and dissented in part, made some intriguing points in support of the traditional approach in his dissent. He felt that the traditional method of calculation was an effective method in most cases stating it “makes claimants whole in most cases, and the change adopted by my colleagues will result in greater than make-whole relief in other cases.” He continued to explain his worries regarding the change in approach stating “I do not discount the fact that parties and claimants experience substantial, often oppressive non-monetary consequences as the result of unfair labor practices, nonetheless, the [National Labor Relations Act] only permits the Board to award the relief that is remedial” not relief that compensates the plaintiff for everything they have lost. Additionally, he explained that the change in approach would open the door for “protracted board litigation” over job search expenses and that this newly adopted approach does not correlate with the method of calculation used by other statutes when calculating back pay.

Due to the impact of this decision, workers who are discharged and later ordered to be compensated with back pay will likely be awarded with greater amounts of money. However, it is still up in the air as to how much of an impact this change by the NLRB will truly have as David Rosenfeld, of Weinberg, Roger & Rosenfeld who also filed an amicus brief stated that job search expenses is a scarcely addressed topic in unfair labor practice cases. In an interview with Bloomberg BNA, Rosenfeld explained “people do find jobs, often they do find jobs that are the equivalent of what they lost, so there isn’t a lot of back pay.” In the majority opinion, the board wrote “Board proceedings have rarely involved litigation over search-for-work and interim employment expenses.”

If you have questions regarding a labor or employment issues, call Gilbert Law Group today at (631) 630-0100.

Contributed by: Richard (R.J.) Cherpak

NLRB Expands Concept of Protected Concerted Activity

On April 30, 2015, the National Labor Relations Board handed down a decision which expanded upon a prior theory of protected concerted activity. It had already expanded the concept of protected concerted activity in the past by classifying communications which are “inherently concerted” despite not being designed to engender “group action.” This case was brought before the Board as a result of an employee being terminated after discussing her job security with another employee.

The concept of protected concerted activity gives employees the right to act together to try to improve their pay and working conditions, with or without a union. If employees are fired, suspended, or otherwise penalized for taking part in protected group activity, the National Labor Relations Board will fight to restore what was unlawfully taken away. Historically this concept as only applied to group action.

In Sabo, Inc., however, the Board determined that the discussion between the two employees was “inherently concerted” because job security “[is] a vital term and condition of employment and the ‘grist on which concerted activity feeds’” and concerns about job security have a powerful impact on the rest of a work force and are protected whether or not engaged in for the purpose of inducing group action. In the past, only such communications regarding wages were extended this protection. Now it is extended to job security. Employers should anticipate that the current Board will find other subjects of concern to employees to be likewise protected.

Should you be experiencing an issue involving protected concerted activity, call Gilbert Law Group today.