From the Labor & Employment Practice.

Fourth Circuit Rejects Board Back Pay Award In Salting Case

January, 2017

At long last, a rational voice has spoken in a “salt” case. On March 29, 2002, the Fourth Circuit refused to enforce the back pay portion of a National Labor Relations Board (“NLRB” or “Board”) decision ordering an electrical contractor to pay a “salt” from the time he applied for job and was rejected to the date several years later when the contractor, in compliance with a Board order, finally offered him employment.

In Aneco Incorporated, v. National Labor Relations Board, 285 F.3d 326 (4th Cir. 2002), a union official (a “salt”) applied for a job and told the employer that he intended to organize workers and, once hired, would only work for the employer as long as there was a prospect of success at organizing its workers. In fact, as the Court explained, “salts” are trained to leave an employer by striking rather than resigning, so as to preserve their rights to reinstatement. In this case, upon applying for employment, the union official told the contractor that he was a union organizer and that he intended to organize the company´s workers. The employer took the bait and refused to hire him; charges were filed and five years later the NLRB held that the employer was guilty of violating 29 U.S.C. §158(a)(1) and (3). The Board ordered the employer to offer employment and back pay to the salt, including pay from the date he first applied for employment to the date on which the employer would make him a valid offer of employment.

In response to the Board´s Order, the employer offered the union officer employment. He accepted, but only worked for about five weeks, leaving during an unfair labor practice strike. The salt never made an offer to return to work. The employer refused to offer five years of back pay, and a compliance hearing followed. In compliance proceedings, the General Counsel sought back pay for the five year period between the termination and the offer of employment. The employer argued that as a union salt, the individual would have quit the job with the employer when his employment no longer served the union´s organizing interests, and that would have been far less than five years.

The Administrative Law Judge (“ALJ”) who conducted the compliance hearing refused to award the salt the full amount claimed by the General Counsel. Instead, the ALJ recommended an award of five weeks, explaining that as a union salt the individual would have spent no more time working for the employer than was necessary to organize its employees or to conclude that such organizing would not be practical and that had the salt been hired when he applied, he would not have worked more than five weeks. The Board reversed the ALJ and ordered the employer to pay back covering the five year period from the salt´s rejection to the date of the employer´s job offer.

The employer petitioned for review of the Board´s decision on the back pay issue. The Fourth Circuit denied enforcement of the Board´s award of back pay for the entire period between the discrimination and the offer of employment. The Court concluded that the Board had abused its discretion in calculating the back pay period on the assumption that, had the salt been hired in 1993, he would have worked for the employer for five years. According to the Court, there was specific evidence to show that this assumption was indefensible. First, the employee in question was not an ordinary employee, but a union salt, whose acknowledged sole purpose in seeking employment was to organize the workers. Moreover, it was undisputed that he would have left his job with the employer when it no longer served the union’s organizational interests. Clearly, in the Court´s view, his duties to the union undermined the Board’s assumption that the salt would have stayed on the job for five years.

Although the Court agreed with the Board that the mere fact that the salt only worked for five weeks did not prove that he would have “invariably” quit in five weeks had he been hired at the time he originally applied, the Court viewed this fact as strong evidence that the salt´s stint as an employee would have nonetheless been far less than five years, and strongly suggested that the Board’s award of back pay served a punitive rather than compensatory function.

Finally, there were no examples in the record of a union salt even remaining on the payroll of another company for five years. Moreover, even though the union’s business manager testified that some other organizing campaigns lasted several years and that the Union might have desired to keep this salt on the employer´s payroll for five years “if it was productive,” there was no testimony that a union salt had ever been employed at a single company for a five-year period as part of these campaigns, nor was there any indication that the salt in this case would have stayed at the employer for five years under the circumstances.

The Court acknowledged, as did the ALJ, that any calculation of how long the salt would have worked if the employer had hired him when he first applied was “somewhat speculative.” However, the Court applied the well accepted principle that a back pay order is limited to restoring an alleged discriminate to where he would have been financially, as nearly as possible, but for the illegal discrimination.

The Court concluded that in light of the salt´s role as a union representative, as well as the fact that he only worked five weeks when he was hired following the first Board decision, it could not enforce a Board award of back pay premised on the assumption that he would have worked five years had he been hired when he first applied. To do so in the face of the evidence would provide a wind-fall to the salt and would exceed the Board’s authority to award only make-whole remedies, and not punitive sanctions.