Acting General Counsel Solomon has informed the Board's regional offices that he will ask the NLRB to overrule two 2007 decisions involving back pay and has issued another memorandum changing the Board's back pay guidelines.
In Memorandum 11-07, Solomon noted that two 2007 NLRB decisions increased the burden on employees and the General Counsel to show adequate mitigation of lost earnings. In Grosvenor Resort, the Board said that a failure to begin a job search within two weeks of discharge would result in a reduction of back pay. The two-week rule makes Board law inconsistent with the traditional "totality of circumstances" approach to mitigation that federal courts and the Board, pre-Grosvenor, have applied, according to Solomon. In St. George Warehouse, a 3-2 decision, the majority held that the employer was required only to show the availability of substantially equivalent jobs. If that burden was met, the General Counsel was required to produce evidence establishing that the employee made a reasonable search for work. According to Solomon, the "St. George Warehouse shift" is contrary to common law and general principles of mitigation.
In Memorandum 11-08, Solomon provided a four-step process to be used in computing back pay. Quarterly interim earnings will be allocated on a proportional basis, but interest on back pay awards will continue to compound on a daily basis. Solomon also said that search-for-work and work-related expenses will be calculated separately from back pay and will be charged to the Respondent regardless of whether the employee received interim earnings during the period. Solomon also instructed the Regional Offices to begin immediately to seek a "tax component" to compensate employees for receiving back pay in lump sum payments that increase their federal and state income tax liabilities for the year in which the award is received.