NLRB Can Ignore Conviction, Resignation, Extended Medical Incapacity for Backpay Award: Sixth Circuit | Practical Law

NLRB Can Ignore Conviction, Resignation, Extended Medical Incapacity for Backpay Award: Sixth Circuit | Practical Law

In NLRB v. Jackson Hospital Corp., the US Court of Appeals for the Sixth Circuit affirmed a National Labor Relations Board (NLRB) backpay and reinstatement award against an employer that committed various unfair labor practices (ULP) in violation of the National Labor Relations Act (NLRA). The NLRB awarded reinstatement and backpay for periods spanning more than nine years despite the former employee's intervening felony conviction, resignation from a subsequent employer and extended medical incapacitation that exceeded both statutorily required medical leave and the longest medical leave that the employer had historically granted to any of its employees.

NLRB Can Ignore Conviction, Resignation, Extended Medical Incapacity for Backpay Award: Sixth Circuit

by PLC Labor & Employment
Published on 06 Feb 2012 • USA (National/Federal)
In NLRB v. Jackson Hospital Corp., the US Court of Appeals for the Sixth Circuit affirmed a National Labor Relations Board (NLRB) backpay and reinstatement award against an employer that committed various unfair labor practices (ULP) in violation of the National Labor Relations Act (NLRA). The NLRB awarded reinstatement and backpay for periods spanning more than nine years despite the former employee's intervening felony conviction, resignation from a subsequent employer and extended medical incapacitation that exceeded both statutorily required medical leave and the longest medical leave that the employer had historically granted to any of its employees.

Key Litigated Issue

On January 31, 2012, the US Court of Appeals for the Sixth Circuit issued an opinion in NLRB v. Jackson Hospital Corp. The key litigated issue was whether an NLRB order for reinstatement and backpay was still enforceable despite the former employee's post-termination:
  • Felony conviction.
  • Resignation from subsequent employment shortly before she would have been terminated.
  • Medical incapacitation, which exceeded both statutorily required medical leave and the longest medical leave that the employer had historically granted to any of its employees.

Background

In 2003, the five member panel (Board) heading the NLRB's judicial functions issued a decision ordering Jackson Hospital Corp. (Jackson) to reinstate and pay backpay to eight former employees that it unlawfully discharged because of their union support and lawful strike in 2000. The US Court of Appeals for the District of Columbia Circuit enforced the Board's decision and order in 2005. In subsequent NLRB compliance proceedings, Jackson asserted that the post-termination actions of one of the former employees, Melissa Turner, forfeited her rights to reinstatement and required that her backpay be tolled. In particular, Jackson argued that Turner's post-termination felony conviction, resignation from a subsequent job and medical incapacitation, which exceeded both statutorily required medical leave and the longest medical leave that the employer had historically granted to any of its employees, each should negate, or at least cut-off Turner's backpay.
The Board tolled backpay for the period where Turner was incapacitated but rejected each of Jackson's contentions and issued a supplemental decision and order about Turner's reinstatement and backpay award, which the NLRB sought to enforce in the US Court of Appeals for the Sixth Circuit.

Outcome

The Sixth Circuit enforced the Board's supplemental decision and order. The court noted that:
  • The Board's remedial power is:
    • broad;
    • discretionary to effectuate the policies of the NLRA; and
    • subject to a limited judicial review for abuse of discretion.
  • Once the NLRB's General Counsel shows the gross amount of backpay due under a Board order, the employer bears the burden of showing that:
    • it does not owe backpay to an individual; or
    • it's backpay liability should be mitigated.
  • Appellate courts can overturn a Board's decision about whether an employer has met its evidentiary burden to eliminate or reduce a backpay award when it is not supported by any substantial evidence.
The Sixth Circuit found that there was evidence to support the Board's factual determinations and conclusions that Turner was entitled to reinstatement and backpay. In particular, the court reasoned that Turner's:
  • Felony conviction for her attempt to obtain a controlled substance from a hospital through fraud did not terminate her right to reinstatement and back pay because, albeit in different circumstances, Jackson had continued to employ both persons convicted of drug-related crimes and persons who admitted abusing controlled substances and entered the employer's substance abuse program. Jackson did not conclusively show that it had:
    • a rule prohibiting it from employing Turner after she was convicted of her particular crime; or
    • a past practice of terminating employees convicted of identical or similar crimes.
  • Resignation from subsequent employment does not affect Jackson Hospital's back pay liability because even though her resignation was a wilful loss of earnings, Turner did not wilfully lose her job for gross misconduct. The court noted that the Board had discretion to credit Turner's reasons for resigning (long commute) over testimony that Jackson introduced from Turner's supervisor at the subsequent employer that he was about to terminate her for:
    • falsifying her timecard;
    • poor attendance;
    • insubordination; and
    • refusing and denying care to patients.
  • Eight-month medical incapacity, which exceeded both statutorily required medical leave and the longest medical leave that Jackson had historically granted to any of its employees did not end Turner's rights to reinstatement or cut-off her backpay. Jackson's leave policies did not expressly state that it would terminate an employee if the employee's leave extended beyond a particular period and permitted employees to extend medical leaves under the FMLA and to take personal leave for an unidentified period of time using unidentified processes.

Practical Implications

Employers that are considering terminating employees must consider in their risk calculus whether the termination might be considered an unfair labor practice (ULP) in violation of the NLRA. This case demonstrates that the Board's remedial authority for ULPs is broad and subject to great deference. The Sixth Circuit enforced the Board's reinstatement and extensive backpay award even though the employer gathered and presented evidence showing that the terminated employee:
  • Engaged in conduct that called into question both the employee's character and capacity to work for portions of an extensive backpay period.
  • Likely would have been terminated for that conduct.
  • Happened to resign shortly before she would have been terminated by a subsequent employer for gross misconduct.
Employer should also recognize that the Board may not cut-off reinstatement and backpay remedies where an employer's policies do not expressly require termination for the criminal activity in which the terminated employee engaged or set a cap on the duration of medical leaves that is shorter than the duration of the terminated employee's incapacity.

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