NLRB Adopts New Approach to Job Search Expenses in King Soopers Ruling

By Michael Rose

Aug. 24 — The National Labor Relations Board made changes to the formula used to calculate back pay for workers whose federal labor law rights are violated ( King Soopers Inc. , 2016 BL 274675, 364 N.L.R.B. No. 93, 8/24/16 ).

In a case involving grocery store chain King Soopers, a division of Kroger Co., the board decided Aug. 24 that expenses incurred by workers in searching for employment after being terminated in an unfair labor practice shouldn’t be offset from interim earnings, as was previously the case.

As a result of the decision, workers who are terminated but later ordered to be made whole with back pay likely will receive larger monetary awards. It’s unclear, however, whether the change will affect many cases.

The board invited amicus briefs in the case, but the only party to file a brief arguing in favor of what the board called its “traditional” approach to the calculation of expenses was King Soopers itself.

Attorneys for King Soopers didn’t respond to a request for comment, nor did a spokeswoman for the grocery chain.

Issue Doesn't Come Up Often

The AFL-CIO, the Service Employees International Union and an International Brotherhood of Electrical Workers local in Kansas filed amicus briefs in support of the NLRB general counsel’s proposed changes, which the board adopted.

NLRB Chairman Mark Gaston Pearce and Members Kent Y. Hirozawa and Lauren McFerran wrote the majority opinion. Member Philip A. Miscimarra concurred in part and dissented in part.

David Rosenfeld, a partner with Weinberg, Roger & Rosenfeld in Alameda, Calif., also filed an amicus brief. He told Bloomberg BNA Aug. 24 that he doesn’t expect the effects of the decision to be drastic, since the issue of interim earnings and job search-related expenses doesn’t come up very often in unfair labor practice cases.

“People do find jobs” after being terminated, Rosenfeld said, and “often they do find jobs that are the equivalent of what they lost, so there isn’t a lot of back pay.”

The board majority agreed, writing that “Board proceedings have rarely involved litigation over search-for-work and interim employment expenses.”

Less Compensation Under Old Procedure

Under previous NLRB procedures, expenses involved in a search for work—such as travel or expenses incurred in a move to a location where the worker finds a job—couldn't exceed a worker’s interim earnings, or what the worker made between the time he or she was terminated and when awarded back pay.

This had the effect of often reducing compensation that terminated workers could be awarded, the board wrote.

As a result of the King Soopers decision, workers found to have been wrongly terminated will be able to receive separate reimbursement for their job search expenses, along with back pay.

In his dissent, Miscimarra said the “traditional approach” to calculating job search expenses “makes claimants whole in most cases, and the change adopted by my colleagues will result in greater than make-whole relief in other cases.”

“I do not discount the fact that parties and claimants experience substantial, often oppressive non-monetary consequences as the result of unfair labor practices,” Miscimarra wrote. “Nonetheless, the [National Labor Relations Act] only permits the Board to award relief that is remedial” rather than compensatory.

He also argued that the change would lead to “protracted Board litigation” over such expenses, and that the “traditional” approach was in line with the ways in which other statutes calculate the expenses as a component of back pay.

To contact the reporter on this story: Michael Rose in Washington at mrose@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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