The remedy applies to pending cases not in the compliance stage as of December 18, 2012. However, pursuant to the Board’s decision in Lee’s Industries, Inc., 359 NLRB No. 69 (2013), the Acting General Counsel may request that the Board modify a previously issued order in a pending case to include an applicable remedy where the Board still has jurisdiction.
Regions should ensure that all complaints issued prior to December 18, 2012, in which backpay may be owed, pled the request for compensation for the excess tax liability, and for those that did not, must decide whether to file a motion to modify the remedial provisions with the Board in these cases, considering whether respondent has complied with the Board’s order or is engaged in serious discussions with the Region regarding compliance efforts. If the case is pending before an appellate court, the Region should discuss whether it is prudent to withdraw the case before the court in order to file a motion to modify. A sample Motion to Modify Remedial Order is attached to OM 13-41 (Revised). Additionally, Regions should continue to plead the excess tax liability remedy in all appropriate complaints (See GC 13-03 and OM 13-41 (Revised)), but no longer need to brief the issue.
The remedy, should be included in all formal and informal settlement agreements in which the backpay period spans two or more calendar years or where backpay is being paid in a year different from when backpay was earned.
The Board’s order inDon Chavas, LLC, supra, leaves to compliance respondent’s opportunity to fully litigate the excess tax liability remedy. Accordingly, Regions should include excess tax liability remedy language in all Compliance Specifications in which the backpay period spans two or more years. Appendix 17 contains language that should be included in compliance specifications for cases where the Board order requires the excess tax liability remedy.
10557 Reporting of Backpay Allocation to the Social Security Administration
The Acting General Counsel has developed a standard form to be provided to respondents that the respondents will need to complete and submit to the SSA. See Appendix 24. In cases involving installment payment plans, the form should be sent by respondents once all of the backpay has been paid. In cases involving the payment of front pay pursuant to GC 13-02, unless the settlement agreement sets forth the period of time the front pay is intended to cover, the front pay should be reported to SSA as payment of wages in the year in which the payment was made.
The remedy should be included in all formal and informal settlement agreements in which the backpay period spans two or more calendar years or where backpay is being paid in a year different from when backpay was earned. The remedy is to be applied retroactively to all pending cases involving backpay without a court judgment. Regions should ensure that all complaints issued prior to December 18, 2012, in which backpay may be owed, pled the request for the filing of the earnings report to SSA, and should continue to plead the requirement to file the SSA report in all appropriate complaints.
When the union is not an employer in an unfair labor practice proceeding, it should not be required to report the backpay paid to the Social Security Administration report. See Laborers International Union of North America, Local 1177 (Turner Industrial Maintenance), 15-CB-005974.
10558 Mitigation
10558 Mitigation 10558.1 Overview
A discriminatee must make reasonable efforts during the backpay period to seek and to hold interim employment. This is known as the discriminatee’s obligation to mitigate. A discriminatee is not due backpay for any period within the backpay period during which it is determined that he or she failed to make a reasonable effort to mitigate.123 In cases where the discriminatee has qualified for unemployment compensation by satisfying the state’s work-search requirements, the Board has concluded that receipt of unemployment benefits is prima facie evidence of a reasonable search for work.124
Respondents often question a discriminatee’s efforts to seek employment, particularly when the discriminatee has been unemployed for a substantial period. The Compliance Officer should investigate the discriminatee’s search for work, keeping in mind that the Board and courts have found that the discriminatee’s obligation is to make a reasonable effort to find work under existing circumstances.125 The focus of the investigation is on the search for work; the discriminatee’s success or failure in finding work is not determinative.126 The Board has found that a wide range of efforts meets the reasonable effort standard and resolved doubt in favor of the discriminatee as the wronged party.127 However, the Board, in Grosvenor Resort, 350 NLRB 1197, 1201–
1202, (2007), found that discriminatees who applied for work one or two times a month, engaged in an inadequate search for work.
If, following the investigation, the Region concludes that the discriminatee has met his or her obligation to mitigate, it is the respondent’s burden to establish that the discriminatee failed to make a reasonable effort to seek interim employment.
See Section 10592.6 regarding treatment of disputed mitigation in settlement discussions. See Sections 10648.4 and 10648.6 regarding treatment of mitigation in a compliance proceeding.
10558.2 Investigating Mitigation
The Compliance Officer is responsible for investigating mitigation issues. The discriminatee’s account of his or her efforts to obtain employment and of any loss of interim employment will be the primary source of information upon which a determination will be based. Whenever there is a mitigation issue, the discriminatee should give a complete account of his or her efforts to seek employment. Particular attention is appropriate for prolonged periods of unemployment.
123See, for example, Painters Local 419 (Spoon Tile Co.), 117 NLRB 1596, 1598 fn. 7 (1957); Gimrock Construction, 356 NLRB No. 83, slip op. at 11 (2011).
124Taylor Machine Products., 338 NLRB 831, 832 (2003), enfd. 98 Fed. App. 424, 175 LRRM 2320 (6th Cir. 2004); Birch Run Welding, 286 NLRB 1316, 1319 (1987), enfd. mem. 860 F.2d 1080 (6th Cir. 1988).
125See, for example, NLRB v. Arduini Mfg. Co., 384 F.2d 420, 422–423 (1st Cir. 1968); see also Aircraft & Helicopter Leasing, 227 NLRB 644, 646 (1976).
126See, for example, Midwest Motel Management Corp., 278 NLRB 421 (1986).
127See, for example, United Aircraft Corp., 204 NLRB 1068 (1973); see also Lundy Packing Co., 286 NLRB 141 (1987); Gimrock Construction, 356 NLRB No. 83, slip op. at 11 (2011).
10558 Mitigation
Where a discriminatee has qualified for unemployment compensation, compliance with the state requirements is a well-grounded proxy for the reasonable search for work as required by mitigation law. A separate detailed inquiry into the discriminatee’s job search efforts is duplicative and unnecessary. The Region should accept and use receipt of unemployment benefits as evidence of a reasonable search for work. See GC 11-07.
Where discriminatees have not received or are no longer receiving unemployment compensation, Regions should continue to use the Board’s requirements as the standard for what constitutes a reasonable search for work.
The Region should not allow respondent counsel to interview discriminatees concerning mitigation issues without clearance from the Division of Operations-Management. Section 10592.7.
As set forth in Section 10508.8, the Compliance Officer is responsible for communicating with discriminatees as soon as the Region has determined that a violation has occurred that may result in a backpay remedy. Disputes concerning mitigation may be avoided if the discriminatee is clearly advised at that time of his or her obligation to mitigate; the discriminatee should be further advised to keep careful notes or records of his or her efforts to seek interim employment. Form NLRB-4288 contains such advice.
10558.3 Evaluating Mitigation Efforts, Including Willful Loss of Earnings
The efforts a discriminatee is expected to make to get interim employment are those expected of reasonable persons in like circumstances. A variety of actions may demonstrate an effort to seek employment, including registering with state or private employment services, checking newspaper ads, visiting employers, utilizing online application resources, and asking friends and relatives.128 Specific actions to seek employment may be influenced by age, health, education, employment history, and station in life, as well as by employment and unemployment trends in the area. The presence or absence of any particular search activity does not determine mitigation. In seeking interim employment, however, a discriminatee need only follow their regular method of obtaining work.129
Failure to obtain interim employment, even for a prolonged period, does not establish a failure to mitigate. Additionally, the fact that a self-employed discriminatee is not successful in their business venture does not establish a failure to mitigate. Rather, mitigation only requires that a discriminatee make a good faith effort to succeed in their business venture. See Lorge School, 355 NLRB No. 92 (2010).
The evaluation of mitigation must take into account circumstances that limit opportunities and discourage efforts (for example, unemployment may be high or a discriminatee may have limited skills). In such circumstances, the number of employment applications filed or even the amount of time devoted to searching for employment is not dispositive of mitigation. Moreover, the Board has found that poor
128Allied Mechanical, Inc., 352 NLRB 880 (2008).
129See Gimrock Construction, 356 NLRB No. 83, slip op. at 11 (2011).
10558 Mitigation
record keeping, uncertain memory and even exaggeration do not necessarily disqualify an employee from receiving backpay.130
Discriminatees who have been terminated from skilled or high wage employment may reasonably limit their job search to equivalent employment.131 Discriminatees are not normally required to accept lower-paying employment,132 or to move in order to accept employment,133 accept work which they are not physically able to perform,134 work which might be dangerous or injurious to their health,135 or to accept work involving equipment that the discriminatee never operated.136
In connection with the issue of searching for work, the Board has held that an unlawfully discharged employee does not have to instantly seek new employment.137 However, the Board has also stated that absent circumstances justifying a longer delay, discriminatees must begin their search for work within 2 weeks from the time they were discharged to be entitled to backpay for the first two weeks following their discharge. If they fail to start seeking work within the 2 week period, entitlement to backpay will not begin until they begin a proper search for employment.138
In the end, a determination of mitigation will depend on applying the standard of reasonable efforts to the unique circumstances of the case.
10558.4 Loss of Interim Employment
An unreasonable discriminatee action that results in a loss of interim employment may constitute a failure to mitigate. Should a discriminatee reject an offer of interim employment, quit interim employment,139 or be terminated from interim employment, the circumstances should be fully investigated. The discriminatee should be interviewed and corroboration sought from the interim employer if appropriate.
130G & T Terminal Packaging Co., 356 NLRB No. 41, JD slip op. at 10 (2010); Teamsters Local 509 (ABC Studios), 357 NLRB No.
138, slip op. at 7–8 (2011).
131Discriminatees with “extensive experience in a specialized field” may be required to seek interim employment within their area of specialization avoid a finding of willful loss. Associated Grocers, 295 NLRB 806, 811 (1989); NHE/Freeway, Inc., 218 NLRB 259 (1975); Knickerbocker Plastic Co., 132 NLRB 1209 (1961).
132G & T Terminal Packaging Co., supra, 356 NLRB No. 41; Hacienda Hotel & Casino, 279 NLRB 601, 606 (1986).
133Midwestern Personnel Services, 346 NLRB 624, 634 (2006) (affirming ALJ’s finding that “discriminatees were not obliged, as part of their duty to mitigate damages, to seek jobs in locations that would have forced them to relocate or to commute hundreds of miles.)
134Gimrock Construction, supra, 356 NLRB No. 83; G & T Terminal Packaging Co., supra, 356 NLRB No. 41.
135Id; Iron Workers Local 15, 298 NLRB 445, 469 (1990).
136Gimrock Construction, supra, 356 NLRB No. 83.
137See, for example, Saginaw Aggregates, 198 NLRB 598 (1972); see also Retail Delivery Systems, 292 NLRB 121, 125 (1988).
138Grosvenor Resort, 350 NLRB 1197 (2007); Domsey Trading Corp., 351 NLRB 824, 831–832 (2007). In KSM Industries, 353 NLRB 1124 (2009), the Board adopted the ALJ’s conclusion that backpay was not tolled for a striking employee who made an unconditional offer to return to work and then made no search for work for more than 2 weeks thereafter because he reasonably believed that the Employer would recall him to work.
139In Grosvenor Resort, 350 NLRB at 1201 the Board found that the discriminatee was not justified in quitting an interim job because she was embarrassed by the comment of a co-worker made in the presence of customers. The Employer was permitted an offset of an amount equal to that which she would have earned had she not quit, until she found another job. In Kentucky River Medical Center, 352 NLRB 194 (2008), the General Counsel conceded that the discriminatee unreasonably quit her interim
employment but argued that any resulting offset against her backpay should be limited because her interim employer had closed down about five months after the discriminatee quit her job. The Board agreed that the offset period ended when the interim employer closed. Atlantic Veal & Lamb, Inc., 358 NLRB No. 74 (2012).
10558 Mitigation
When a discriminatee voluntarily quits interim employment, the burden shifts from the respondent to the Region to show that the decision was reasonable.140 The Region will be able to carry its burden if the interim job was “substantially more onerous,” or was “unsuitable,”or “threatened to become unsuitable” or if the quit was caused by “unreasonable working conditions.” (See Grosvenor Resort, above, 350 NLRB 1201 (2007), citing Lundy Packing Co., 286 NLRB 141, 144 (1987), enfd. 856 F.2d 627 (4th Cir. 1988).)
When a discriminatee has been involuntarily terminated from interim employment, however, a higher standard may apply, namely that the discriminatee must have engaged in gross misconduct, before the termination constitutes a failure to mitigate.141 The burden is on respondent to establish such deliberate or gross misconduct by the discriminatee.142
When it is determined that a loss of interim employment was a failure to mitigate, the amount of lost interim earnings should be calculated and offset against gross backpay as though actually earned by the discriminatee.143
140See, for example, Pope Concrete Products, 312 NLRB 1171, 1173 (1993); Big Three Industrial Gas Co., 263 NLRB 1189, 1199 (1982); and Alamo Cement Co., 298 NLRB 638 (1990); Gimrock Construction, supra, 356 NLRB No. 83.
141See Ryder Systems, 302 NLRB 608, 610 (1991); Atlantic Veal & Lamb Inc., 358 NLRB No. 74 (2012).
142See Gimrock Construction, supra, 356 NLRB No. 83, slip op. at 12 (2011).
143See Knickerbocker Plastic Co., 132 NLRB 1209, 1212–1216 (1961).