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July 25, 2014

NLRB Now Permits Front Pay in Lieu of Reinstatement in Board Settlements

The National Labor Relations Board "NLRB" has traditionally refused to include the concept of front pay in lieu of reinstatement in formal Board settlements. As such, if an employer was interested in resolving an NLRB case that involved employee terminations, but not interested in bringing those terminated employees back to work, the only avenue was a non-Board settlement. That may change based on a new guidance memo the Acting General Counsel issued Jan. 9, 2013.

Noting that most agreements involving waivers of reinstatement in exchange for payment of front pay "are entirely non-Board" settlements, and that Agency policy should favor Board settlements, not discourage them, the AGC “decided to modify existing policy to permit Agency settlements to include front pay.” The Board's Case Handling Manual will be revised to reflect this change. The updated manual instructs that offers of front pay in lieu of reinstatement be communicated to alleged discriminatees, but without pressuring them to waive reinstatement. The Region is "serving only as a conduit for the proposal" pursuant to the updated language in the Manual.

The memo also requires that waiver of reinstatement be in writing, unless otherwise authorized by Operations-Management in a particular case. The full memo with updated language in the Case Handling Manual can be found here.

© 2014 BARNES & THORNBURG LLP

About the Author

John Koenig, Labor and Employment Attorney, Barnes Thornburg, Law Firm
Partner

John T.L. Koenig is a partner in the Atlanta office of Barnes & Thornburg LLP within the Labor and Employment Law Department. He maintains a full-service practice representing employers throughout the country in virtually all aspects of both traditional labor and employment law.

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