For nearly eighty years, when awarding back pay to unlawfully terminated employees, the National Labor Relations Board (the “Board”) treated search-for-work and interim employment expenses (“search-for-work expenses”) as an offset to interim earnings. With yesterday’s decision in King Soopers, Inc., 364 NLRB No. 93 (August 24, 2016), the Board announced that it will no longer do so and instead will treat search-for-work expenses as a separate element of damages. As a result of King Soopers, in addition to back pay, wrongfully terminated employees will be able to recover their reasonable search-for-work expenses, regardless of interim earnings.
Under the Board’s traditional approach, wrongfully terminated employees who were unable to find interim employment did not receive any reimbursement for their search-for-work expenses. Likewise, wrongfully terminated employees whose search-for-work expenses exceeded their interim earnings could not recover the excess. Explaining that the Board’s traditional approach to search-for-work expenses resulted in less than make-whole relief, the Board invoked its “broad, discretionary” authority to overturn nearly eight decades of precedent and fashion a new remedy. The Board now will award search-for-work expenses regardless of interim employment earnings and separately from back pay. Notably, the Board will apply its new approach retroactively in “all pending cases in whatever stage,” unless doing so would cause “manifest injustice.”
Although Member Miscimarra did “not discount the fact that parties and claimants experience substantial, often oppressive non-monetary consequences as the result of unfair labor practices,” he dissented from the Board’s new approach to search-for-work expenses. Noting that the new approach would produce a windfall when a wrongfully terminated employee’s interim earnings exceed his or her back pay, Member Miscimarra concluded that the new approach exceeded the Board’s statutory authority to provide only remedial relief.
On January 30, 2015, Board General Counsel Richard Griffin directed Regional Directors to “affirmatively allege in their initial unfair labor complaint that search-for-work and work-related expenses are being sought regardless of whether they exceed interim earnings.” The Board’s King Soopers decision thus concludes Mr. Griffin’s crusade to effectuate a change in the Board’s treatment of search-for-work expenses.