Does Employer Owe Job-Search Expenses? Answer May Be Delayed

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By Lawrence E. Dubé and Hassan Kanu

A Colorado grocery chain may have to wait longer than expected to learn whether it must pay a fired worker’s job-search expenses ( King Soopers, Inc. v. NLRB , D.C. Cir., No. 16-1316, oral argument 4/3/17 ).

King Soopers Inc. challenged on several grounds the National Labor Relations Board’s 2016 decision that the grocer unlawfully fired barista Wendy Geaslin. The case attracted public attention when the NLRB announced a change in its approach to ordering reimbursement of job-search expenses in unfair labor practice cases.

The U.S. Court of Appeals for the District of Columbia Circuit April 3 devoted only a few minutes of oral argument in the case to the job expense issue. The judges’ comments suggested the court may not immediately rule on the board’s controversial policy shift.

The board’s order would improperly give Geaslin a “windfall,” Raymond M. Deeny of Sherman & Howard LLC in Colorado Springs, Colo., representing the grocer, argued to the court. Deeny told Bloomberg BNA that he wasn’t authorized to comment beyond the arguments made before the appeals court.

But Judge Merrick B. Garland, who heard the case with Judges Thomas B. Griffith and Harry T. Edwards, said the court should wait to see how applying the board’s new approach would actually affect any award to the former employee.

“If the court doesn’t rule on the issue, my hope is that it at least means the board’s ruling would stay in place,” William Lawrence, who wrote an amicus brief for Electrical Workers Local 804 during the NLRB’s King Soopers proceeding, told Bloomberg BNA. “So we would get the new rule going forward,” but who knows “when or if that would be overturned given that we have a new administration.”

Important Issue for Employees

Lawrence, who now works in Kansas state government, told Bloomberg BNA April 3 that claims for job-search expenses may not amount to much in many NLRB cases, but they can be important to individuals, particularly in rural states where a job search may require traveling great distances.

“Our concern,” Lawrence said, was that illegally fired employees were being forced to spend money on job-search expenses during a long period of litigation when “they’re left to pay their own expenses with the very little money they may have.”

“The goal is to make them as whole as possible,” the lawyer said, “so the best way is to make sure that they get those search-for-work expenses.”

Craig Becker, AFL-CIO general counsel and a former member of the NLRB, told Bloomberg BNA the labor federation, which urged the board to revise its approach to job-search expenses, believed the case wasn’t a difficult one.

Employees have a duty under the National Labor Relations Act to mitigate or reduce the damages they incur from an unlawful act. “The notion that you could be discriminated against and suffer injuries and be legally required to attempt to mitigate your damage in good faith but not be able to recover those damages because you haven’t found work just seems perverse,” Becker said.

Becker said the AFL-CIO didn’t anticipate the NLRB would have difficulty winning court enforcement of its revised approach to job expenses.

NLRB Changed Approach to Awards

An NLRB administrative law judge found that Geaslin, a union-represented worker, was unlawfully fired after she questioned a supervisor’s assigning her to bag groceries. The ALJ found that firing the barista violated her rights to engage in union activity and protected concerted activity for the mutual aid or protection of employees.

King Soopers appealed to the board, which affirmed the ALJ’s unfair labor practice findings.

The board, which considered amicus briefs from several invited interested organizations, also announced it was changing its approach to remedial awards.

The board’s traditional practice had been not to award job-search expenses to illegally fired employees, but to allow such expenses to offset or reduce the “interim earnings” that an employee achieved after being discharged by the original employer.

In King Soopers, the board held 3-1 that the traditional approach failed to fully reimburse some employees for their discharge-related losses. The board decided it would be “more appropriate” to calculate job-search expenses separately from back pay and to require that employers compensate illegally fired employees for job-search expenses.

Challenge Now Before D.C. Circuit

The employer petitioned for review in the D.C. Circuit and made several arguments that the NLRB order should be vacated in its entirety, contending the board lacked substantial evidence that Geaslin engaged in any NLRB-protected activity or that she was fired for such activity.

The company also argued that the board’s award of job-search expenses gave the former employee a windfall that was punitive in nature and outside the board’s power under the NLRA.

Employees whose interim earnings equal or exceed lost earnings from their original employment would be compensated for job-search expenses that never actually led to interim earnings, the company argued. “This approach will grant discriminatees a windfall and must be invalidated,” King Soopers argued in its brief to the D.C. Circuit.

The NLRB argued in its brief that the courts have recognized the agency has broad discretion in fashioning remedies for unfair labor practices. Arguing the board acted within that discretion in ordering payment of Geaslin’s job-search expenses, the NLRB contended that adding an award for actual expenses to back pay would only make an employee whole after an illegal discharge, not create a windfall.

Argument Brief, Answer May Be Delayed

However, while Garland said he thought the NLRB remedial order was the principal issue in the case, it was argued for only a few minutes during the court session. Most of the argument time was consumed with arguments about Geaslin’s discharge and the union’s decision not to arbitrate her grievance.

When Garland asked the King Soopers lawyer to address the expense issue, Deeny attempted to argue that the board’s policy change could be traced to a 2011 memorandum by NLRB’s then-acting general counsel, Lafe E. Solomon, who wanted to seek a reversal of the board’s traditional position on job-search expenses.

Deeny pointed out that the D.C. Circuit (and later the U.S. Supreme Court) held Solomon’s service as acting general counsel was unlawful after he received a presidential nomination for the job, but Garland cut the lawyer off and said Solomon’s appointment was “not before us.”

Garland said there might be a statutory problem in awarding a payment for job-search expenses to an employee whose interim earnings were so substantial that the employee had no net back pay, but he asked why the court shouldn’t wait to see if that turns out to be the case.

Garland asked the NLRB’s attorney, Amy H. Ginn, if there would be any problem with the court waiting to make a decision on the expense issue. “No, your honor,” the attorney answered.

Becker agreed with Lawrence that the board’s decision below was appropriate. He told Bloomberg BNA the NLRB should be attentive to the impact of unfair labor practices on illegally fired employees, who have often sustained significant financial injuries.

Ginn, the NLRB’s attorney, didn’t immediately respond to a request for comment April 3.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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