October 23, 2018

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NLRB Interest Rate Will Increase to Five Percent

Board awards in unfair labor practice cases are usually premised in a make-whole remedy which, in the case of back-pay awards for example, include interest. Interest has been part of the remedy for decades. More recently, daily compound interest became the rule. The Board can reset the rate quarterly using the short-term federal rate plus three percent, which is the rate the IRS uses for underpayment of taxes. For several years, the rate was three or four percent, given the state of the economy. Interest awards can really add up, especially when a make-whole remedy impacts a large workforce and interest accrues over the many  years it can take for final decision in a ULP case. As such, interest is normally a factor in litigation and settlement of these cases.

Effective April 1, 2018 to June 30, 2018, the Board reset the rate to five percent. This will incrementally increase the risk of an adverse award. If you believe the federal short term interest rate will increase further, you would expect the NLRB rate to increase further and interest will factor higher in strategic decisions about pending and future litigation before the Board.

Click here to view a copy of the Board’s Memorandum on the subject.

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About this Author

Mark Terman, Business and employment law attorney, Drinker Biddle
Partner

Mark E. Terman is a results-driven litigator whose work extends from restrictive covenants, trade secret, fraud and other business torts and employee misconduct; to wrongful termination, discrimination and sexual harassment, wage & hour, and unfair labor practices matters; and to corporate/shareholder disputes – from case inception to injunction, summary judgment and trial proceedings. His counseling work includes claim prevention, crisis management/mitigation, investigation, M&A, contract/equity/executive compensation, competitive business practices/restrictive...

310-203-4051
Stephanie Gournis, labor and employment lawyer, Drinker Biddle
Partner

Stephanie Dodge Gournis is engaged exclusively in the representation of management in all aspects of traditional labor and employment matters.

She regularly represents employers in defending administrative and federal/state court complaints involving equal employment opportunity discrimination, retaliatory discharge, harassment, whistleblower rights, the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), the Fair Labor Standards Act (FLSA) and state wage and hour claims. Stephanie also counsels management in all areas of employment law including merger and acquisition, due diligence, workplace safety, employee confidentiality and privacy rights, restrictive covenants, social media, employee wellness programs, federal contracting, workplace reductions, employee separation and release, wage payment and collection and exemption status.

312-569-1327