NLRB back pay memo controversial

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Management-side attorneys are ratcheting up criticism of the National Labor Relations Board and its acting general counsel in the wake of a memo that was sent to regional agency officials urging them seek out cases that can be used to overturn recent precedent restricting back pay for illegally discharged employees.

Attorneys claim the memorandum, issued by Acting General Counsel Lafe E. Solomon, demonstrates pro-union activism never before displayed by anyone acting as the agency’s top prosecutor.

“The acting general counsel — who has not been confirmed by the Senate — is taking an extremely aggressive pro-union agenda,” said management-side attorney William Emanuel, who practices in the Los Angeles office of Littler Mendelson.

The approach taken by Solomon seems to be unprecedented, said Howard M. Bloom, a partner in the Boston office of Jackson Lewis.

“I’ve been practicing in this area since 1979, and I have not seen a flurry of activity from a general counsel [as] I’ve seen from Lafe Solomon,” Bloom said.

In a March 11 memo to the agency’s officers and directors, Solomon said he will urge the Board to reverse two 2007 decisions: Grosvenor Resort and St. George Warehouse.

Grosvenor Resort required illegally discharged employees to start looking for a new job within two weeks of termination. In St. George Warehouse, the board shifted the burden from the employer to the board’s general counsel to prove that employees had sought work throughout the back pay period.

“Based on our assessment of board mitigation law and of mitigation principles as they have developed in common law and under other statutes, we have concluded that it is appropriate to take two steps to enhance the effectiveness of the back pay remedy and protect discriminatees’ rights to an effective remedy in a manner consistent with well-established mitigation law,” Solomon said.

Those steps, he said, are seeking the reversal of the two rulings and directing regional offices to apply a “totality of the circumstances” test on the issue of back pay mitigation.

Solomon also directed regional officials to “identify cases that may be proper vehicles for asking the Board to reconsider these recent changes in mitigation law,” “seek reversal of St. George Warehouse and the changed burden of production in all cases where a discriminatee’s reasonable search for work is being litigated,” and “seek reversal of Grosvenor Resort in cases in which the region determines that a delay of more than two weeks is reasonable.”
Solomon said he is urging such action to ensure that improperly discharged workers have effective back pay remedies. But Emanuel said the move demonstrates Solomon’s activism.

“Traditionally, the general counsel performed his function within the framework of Board precedent,” Emanuel said. “[T]he board [may] want to change precedent, which it does from time to time. [But] the general counsel is supposed to follow precedent in prosecuting cases.”

‘Tilting the playing field’?

The memo comes at a time of increasing criticism of the Board and its counsel by management-side attorneys and lawmakers who say the NLRB is overstepping its bounds.

“Numerous actions by the board suggest it’s eager to tilt the playing field in favor of powerful special interests against the interests of rank-and-file workers,” said Rep. Phil Roe., R-Tenn., at a recent hearing before the House Committee on Education & the Workforce.

Actions by the board and its general counsel spurring controversy include: a memorandum issued by Solomon outlining an expedited process for issuing injunctions for  unfair labor practices during union organizing campaigns; a proposed board rule that would require employers to post a notice informing employees of their right to organize; and the board’s solicitation of amicus briefs on labor issues raised in pending cases.

One management-side lawyer who testified at the hearing, G. Roger King, a partner in Jones Day’s Columbus, Ohio office, suggested that the Board cease deciding important issues of labor law or engaging in rule making entirely until it again has five Senate-approved members.

Currently, three of the board’s four members have been approved by Congress. The fourth member, Craig Becker, was appointed to the board by President Obama in a recess appointment.

“Though I recognize that that board has the statutory discretion to decide whether to proceed in rulemaking or adjudication, I suggest as a matter of sound public policy that [the board] should wait until a five-member board has been confirmed and then proceed through formal rulemaking” before reviewing any “well-established principle of labor law,” King told House lawmakers at the hearing.

In a letter to Congress responding to King’s comments, Board Chairman Wilma B. Liebman said that King’s position “has little if any support in the board’s history,” and would essentially tie the hands of the agency, which has been plagued by vacancies for most of the last decade.

“[I]t would be an abdication of the board’s statutory duty to defer acting on important issues until, at some unknowable time in the future, it has five confirmed members,” Liebman wrote. “[I]tit has been more than seven years since that ideal has been realized.”

Impact on litigation unclear

While attorneys acknowledged that the board’s positions have historically changed whenever there is a party change in the White House — and, by extension, in the board’s majority — they say the recent moves go beyond the normal partisan shift.

“There has always been some jockeying back and forth,” Bloom said. “But it seems that what is [going on] here is unlike before. [Solomon] is reaching out to cause change instead of taking it as it comes.”

Attorneys disagreed about the impact Solomon’s recent action will have on litigation.

“I think it could have a significant impact,” said Bloom. “It will give the board, which seems undeniably pro-labor, the opportunity to change the wording [of the law] and use a ‘totality of the circumstances’ test in mitigation cases. Then it can come up with a laundry list of factors that they might take into account that are unreasonable and that would not have been included under the 2007 rulings.”

Emanuel wasn’t so sure.

“I don’t think that [the recent action] will increase the number of cases,” Emanuel said, noting that only about 7 percent of the American workforce is unionized. “While every individual employer faced with a labor relations issue has to be careful to adhere to the law, and to look ahead to likely changes in the law, the overall caseload does not seem to change” from administration to administration.