NLRB Changes Backpay Formula for Terminated Employees: Harmful to Employers

The NLRB voted 3-1 to revise its backpay formula for compensating workers found to have been unlawfully terminated, ordering an employer to pay for a former employee’s interim-employment and search-for-work expenses.

The Board had previously treated those types of expenses as offsets that reduced the amount of interim earnings that were then subtracted from gross back pay. This ruling, though, establishes that employees will now be compensated for such expenses, even when interim earnings are nonexistent or less than those expenses.

“The Board has been awarding search-for-work and interim employment expenses for 80 years,” the majority wrote. “The changes we make today only affect how the board calculates search-for-work and interim employment expenses, not whether these expenses are a permissible remedy.”

But in his dissent, Member Miscimarra wrote, “I do not discount the fact that parties and claimants experience substantial, often oppressive non-monetary consequences as the result of unfair labor practices. “Nonetheless, the NLRA only permits the board to award relief that is remedial.”

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

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