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NLRB Decisions Adopt New Remedial Policies

November 2, 2010

By Adam S. Collier & Jennifer A. Sabovik


On October 25, 2010, the National Labor Relations Board issued two decisions adopting new remedial policies: one requiring that back pay now be compounded daily and the other requiring that notices be distributed to employees electronically. We discuss these decisions in order below.

Daily Compounding of Interest: In Jackson Hospital Corp. d/b/a Kentucky River Medical Center, the Board decided that interest on back pay and other monetary awards will be compounded on a daily basis instead of the simple interest the Board had previously required. The Board determined that “compound interest better effectuates the remedial policies of the Act” and better serves it primary goal of making employees whole. It justified its new policy by noting that daily compound interest is the norm in connection with private lending practices (such as credit card debt), is imposed by the Internal Revenue Code, is available to federal employees under the Back Pay Act, and that federal courts have discretion to order compound interest on back pay awards, although they do not always compound interest on a daily basis.

Electronic Notices to Employees: In J & R Flooring Inc. d/b/a J. Picini Flooring, the Board adopted a new policy requiring employers (or labor organizations) to not only post paper notices to remedy unfair labor practices, but also to send the notices to employees electronically if employers (or labor organizations) customarily use such technology for other messages to employees. The Board noted that “given the increasing prevalence of electronic communications at and away from the workplace,” a party should be required to distribute remedial notices electronically “when that is a customary means of communicating with employees or members.” The policy applies to all organizations that customarily use intranets, websites, e-mails, or other electronic methods to communicate with employees or union members.

One Board member dissented from the decision noting that no federal agency or court regularly requires the use of electronic communications as a remedial matter. The dissent further noted that such electronic communications are at “much greater risk of being anonymously altered and broadly distributed to nonemployees, customers, stockholders, or competitors,” thereby “perverting the remedial purposes of the Act.”

These are just two of many decisions that recently have been issued by the Board. The current Board is generally considered to be “union friendly” and we expect it will continue to issue decisions and adopt new policies that burden employers. We will continue to monitor NLRB cases and alert you to important decisions.