Morgan Lewis

National Labor Relations Board Orders Electronic Notice Posting, Compound Interest Moving Forward

By Labor and Employment Practice

LawFlash/Client Alert

  • published on:

    10/27/2010
  • by:

    Labor and Employment Practice

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Last week, the National Labor Relations Board (NLRB or Board) issued two decisions that modify its standard remedial order in unfair labor practice cases. In J. Picini Flooring, 356 N.L.R.B. No. 9, the Board modified its standard notice-posting remedy to require employers and unions to post and distribute remedial notices electronically, in addition to posting a paper notice, if the employer or union customarily communicates with employees electronically. In Kentucky River Medical Center, 356 N.L.R.B. No. 8, the Board ordered that interest on back-pay awards be compounded daily.

While these decisions are significant in and of themselves, they reveal the current Board's willingness to impose additional remedies through case law adjudication, rather than rulemaking. The NLRB invited amicus briefs in both cases, but rejected arguments that these remedial changes should be imposed only through rulemaking. By issuing these decisions through its traditional adjudicatory process, the Board avoided difficult and time-consuming rulemaking procedures to address these issues.

Electronic Notice Posting and Email Distribution

The Board's standard notice-posting remedy requires the respondent employer or union to post a remedial notice for a period of 60 days "in conspicuous places including all places where notices to employees are customarily posted." For employers, this remedy has traditionally required posting of paper copies of the notice at fixed locations, usually on bulletin boards as well as near time clocks and department entrances.

In J. Picini Flooring, the Board modified its standard notice-posting remedy to specify that, in addition to physical postings, remedial notices should be posted electronically via the following methods:

  • Posted on a respondent's intranet or Internet site, if the respondent customarily uses such electronic postings to communicate with its employees or members.

  • Distributed by email (or any other electronic means), if the respondent customarily uses email (or any other electronic means) to communicate with its employees or members.

The Board overruled its existing precedent in International Business Machines Corp., 339 N.L.R.B. 966 (2003), and Nordstrom, Inc., 347 N.L.R.B. 294 (2006), and held that any questions concerning the propriety of electronic notice posting or email distribution should be resolved at the compliance stage. In compliance proceedings, an employer may present evidence about any peculiarities in its email, intranet, Internet, or other electronic communication systems that would affect its ability to post remedial notices electronically. The Board also held that, to the extent practicable, the electronic notification should be limited to the affected employees and the location(s) where the unfair labor practices occurred.

Compound Interest

In Kentucky River Medical Center, the NLRB reversed its longstanding practice of ordering simple rather than compound interest as part of its standard back-pay remedy. The Board held that daily compound interest "better effectuates" the "make whole" purpose underlying the remedial provisions of the National Labor Relations Act than does the traditional practice of ordering only simple interest.

In its decision, the Board defended its power to implement this change through case law adjudication rather than rulemaking. The Board did so even though this change was the subject of a proposed rulemaking in 1992, which was withdrawn in 1998. The Board asserted that this issue is "neither novel, nor complex" and had been raised "repeatedly" over the past two decades. The Board announced that this new policy of compounding interest on a daily basis will be applied retroactively "in all pending cases in whatever stage, given the absence of any 'manifest injustice' in doing so."

Conclusion

Employers with pending cases at the Board will be immediately impacted by these decisions. Both remedies will be applied retroactively to all pending cases, regardless of at what stage the case may be in the Board's processes. These decisions also demonstrate that the current Board is willing to impose new remedies and reverse longstanding precedent by deciding cases rather than engaging in rulemaking.

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