NLRB Reverses Backpay Burden

The NLRB, in a 3-2 decision, has reversed decades of precedent by shifting the burden in certain instances during backpay hearings.  The case is St. George's Warehouse, 351 N.L.R.B. No. 42 (Sept. 29, 2007) [in case you're wondering about the fact that September 29 has been the date for a lot of cases being announced weeks later, that date is the final work day of the previous fiscal year; for an agency that has faced much criticism about delays, having a large number of cases included in that fiscal year is helpful], in which the employer had been found to have violated the NLRA by firing two employees due to their union activity.  In the compliance hearing, the employer challenged the Board's backpay specifications, arguing that evidence of job openings in the area showed that the employees did not properly mitigate.  For the 45-plus years, the employer would have the burden of showing that the employees did not make reasonable attempts to find new work, but no longer.  According to the Board:

The contention that a discriminatee has failed to make a reasonable search for work generally has two elements: (1) there were substantially equivalent jobs within the relevant geographic area, and (2) the discriminatee unreasonably failed to apply for these jobs.  Current Board law places on the respondent-employer the burden of production or going forward with evidence as to both elements of the defense.  As to the first element, we reaffirm that the respondent-employer has the burden of going forward with the evidence.  However, as to the second element, the burden of going forward with the evidence is properly on the discriminatee and the General Counsel who advocates on his behalf to show that the discriminatee took reasonable steps to seek those jobs.  They are in the best position to know of the discriminatee’s search or his reasons for not searching. Thus, following the principle that the burden of going forward should be placed on the party who is the more likely repository of the evidence, we place this burden on the discriminatee and the General Counsel. . . . [T]his burden allocation relieves a respondent of the impractical burden of proving a negative fact. Further, this burden-shifting framework is also consistent with the obligations already imposed on the General Counsel by the NLRB’s Casehandling Manual [requiring the General Counsel to investigate the discrimantee’s job-search efforts].

 

Today, we modify the principles governing the issue of willful loss of earnings in one respect only. When a respondent raises a job search defense to its backpay liability and produces evidence that there were substantially equivalent jobs in the relevant geographic area available for the discriminatee during the backpay period, we will place on the General Counsel the burden of producing evidence concerning the discriminatee’s job search. 

 Not surprisingly, the dissent has a different view:

Departing from more than 45 years of established precedent, the majority relieves wrongdoers of their burden to produce all of the facts to substantiate the affirmative defense that a discriminatee unreasonably failed to mitigate damages and, instead, requires the General Counsel to produce facts to negate it.  The result is to place a stumbling block before discriminatees and, ultimately, to frustrate enforcement of the National Labor Relations Act. Unfortunately, this is just the latest in a series of cases in which the majority has sought to reduce the effectiveness of the Board’s backpay and reinstatement remedies.  The result, of course, is to make it less costly for an employer to violate the Act. . . .

[T]he Board’s [previous] requirement that a respondent come forward with facts to substantiate affirmative defenses to backpay, including an alleged failure to mitigate, is consistent with the general rule that a party asserting an affirmative defense has the burden of producing evidence to support it.  . . . The Board’s approach is also consistent with the Supreme Court’s oft-quoted observation that the “most elementary conceptions of justice and public policy require that the wrongdoer shall bear the risk of the uncertainty which his own wrong has created.”  Bigelow v. RKO Radio Pictures. . . .

There are good reasons to question the presumption that the General Counsel will be fully informed of a discriminatee’s mitigation efforts and location.  As explained above, the General Counsel is not the discriminatee’s lawyer, and the Board’s regional offices necessarily depend on the discriminatee’s cooperation in reporting efforts to find interim employment.  Moreover, although discriminatees are requested to periodically complete forms regarding their mitigation efforts, those forms rarely offer complete information.  . . . In any event, the majority’s presumption utterly ignores the fact that a respondent is often just as likely, if not more likely, to have access to a discriminatee.

It will come as now surprise (especially given that I worked briefly on getting the ULP in this case enforced in the Third Circuit), that I think the dissent has the better argument. The remedies under the NLRA are weak even at their strongest. It is telling that the majority is willing to impose further remedial hurdles for workers already identified as victims of unlawful discrimination. The hostility that the current Board majority has shown to collective rights under the NLRA hasn’t been seen since the Reagan-era Dodson Board. One can only hope that their days are numbered.

-JH