NLRB Considers Overturning Long-Standing Precedent

If you have ever been involved in litigation surrounding the discharge of an employee, you have heard of the “duty to mitigate.” The duty to mitigate, recognized as a precondition to backpay in Title VII and ADA claims, to an award of backpay in labor arbitration, and required by the NLRB, requires a discharged employee, even a wrongfully discharged employee, to make good faith efforts to find substantially equivalent work (and earn interim wages) after his or her discharge. The public policy is clear: people need to make reasonable efforts to work – not sit at home for months waiting for a big backpay check.

Substantially equivalent work is that which is consummate with a person’s skills, background, and experience. Thus if a waitress is wrongfully discharged, but makes reasonable efforts to obtain a new waitressing job, she has satisfied the duty to mitigate and may attempt to recover backpay. Imagine instead, that the waitress searched for work as an engineer. The waitress will likely never obtain a job as an engineer, even if she submits three new job applications every day. Here, the waitress did not such for substantially equivalent work so she would fail to satisfy her duty to mitigate. While the waitress is certainly entitled to begin a new career path after being discharged, she is not entitled to do so at the potential expense of the employer.

The NLRB is currently considering overturning a long-standing precedent which will make the waters of interim wages and the duty to mitigate a bit murkier. For nearly eighty years, the NLRB has offset “search for work expenses” such as transportation costs of attending interviews, costs of printing and mailing applications, etc against the discharged employee’s interim earnings. In an award calculation, “interim earnings” will be a lower amount, entitling the employee to a higher backpay amount. However, employees who fail to obtain interim wages do not get any offsets for “search for work expenses” and are not reimbursed for such expenses.

In King Soopers, Inc., NLRB, No. 27-CA-129598 (2/19/16) the NLRB is considering changing its position so that discharged employees will be eligible for reimbursement of “search for work” expenses regardless of whether they are successful in obtaining interim wages. The Board accepted Amicus Briefs from The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), the Service Employees International Union (SEIU), the law firm of Weinberg, Roger and Rosenfeld (a firm that exclusively represents trade unions and their institutions and workers), and the International Brotherhood of Electrical Workers, Local 304 – all in support of this change in precedent.

While the entities submitting Amicus Briefs sided with General Counsel for the NLRB, discussing how unfair it is for those who do not obtain interim wages to be even further damaged by not recovering their “search for work” expenses, they miss an important point. Public policy is to encourage discharged employees to obtain work. Under the proposed change, if a discharged employee flies to Hawaii to interview for a position he has no realistic chance of obtaining – the employer may be responsible for those “search for work” costs. If the Board overturns this precedent, discharged employees considering the risks and costs of starting a new career may just be more willing to take a chance when they know their former employer may get stuck with the bill if they do not succeed. Simply put, the change would do nothing to encourage discharged employees to be reasonable and faithful in their search for work.

We will follow this story and update our readers when the NLRB issues its decision. The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters for over sixty years, and are available to discuss these issues and others.  As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.