The Acting General Counsel of the National Labor Relations Board continues his efforts to promote change and implement new standards. However, in a refreshing change of pace, the Acting GC Lafe Solomon recently issued a memorandum and new directive that could benefit employers. Indeed, the Acting GC’s modification to prior Board settlement protocol could prove an asset for employers seeking to resolve NLRB cases. Specifically, the recent memorandum (pdf) explains and directs that National Labor Relations Board settlement agreements may now include front pay to charging parties. This is a significant departure from prior Board precedent and alters the NLRB’s institutional approach towards the monetary elements of brokering settlements.

For those familiar with employment litigation and disputes involving other federal administrative agencies, the concept of front pay – compensation in lieu of a claimant’s reinstatement – as a remedy is well known. Yet, Board policy had required that settlements involving a waiver of reinstatement for payments that exceed 100% backpay be set forth in non-Board “side letters” that would accompany the official Board-endorsed settlement. In Acting GC Solomon’s memorandum, he explains that the NLRB’s policy should favor settlements. In this spirit, the memorandum further advises that the Board’s Compliance Casehandling Manual (CHM) §10592.8 has been revised – specifically, so as to permit the inclusion of front pay in Board settlements of discriminatory discharge or layoff cases. This represents a new approach by the Board to handling resolution options pertaining to unfair labor practice litigation.

Despite the above support for “front pay” options, the Acting GC’s memorandum emphasizes that reinstatement remains the preferred remedy in unfair labor practice termination cases. The memorandum also provides guidance as to how regional officers should convey the employer’s offer of front pay without encouraging the charging party to accept this offer and waive reinstatement. The revised CHM emphasizes that the region must clearly communicate that it is merely a “conduit” for such proposals and would not seek front pay in formal proceedings should the case fail to settle. However, the region is now authorized to raise the issue of front pay to encourage settlement where it believes reinstatement is not a viable option without litigation. The Acting General Counsel’s memorandum also makes clear that the region, in the course of such settlement discussions, must stress to the charging party that it will not formally seek such a front pay remedy (if litigation proceeds to trial).

Employers should view the Board’s new endorsement to formally settle cases with front pay in lieu of reinstatement as being quite useful towards resolving difficult cases. Employers should also be aware that any waivers of reinstatement must be in writing unless the Board’s Operations-Management division decides otherwise.

Photo credit: YanC