On January 9, 2013, Lafe E. Solomon, the NLRB's Acting General Counsel (AGC), announced a policy modification permitting settlements of NLRB disputes to include front pay, which is a monetary payment made in lieu of reinstatement. Although reinstatement is the NLRB's preferred method of vindicating an employee's statutory rights and restoring the status quo after his employer's unlawful discrimination, the parties are free to negotiate a waiver in return for front pay. Under previous policy, the parties were required to set forth the terms of the front pay agreement in "side letters," rather than in a formal settlement agreement approved by the panel heading the NLRB's judicial functions (Board) or an informal settlement approved by the applicable NLRB regional office. However, since the NLRB's policy is to encourage Board settlements, the NLRB modified its prior policy to permit front pay in Board settlements.

Under the new policy, although NLRB regional offices (Regions) should not pressure discriminatees to waive their rights to reinstatement, they should communicate any offer of front pay in lieu of reinstatement. Regions may raise the issue of front pay themselves if they are confident that reinstatement will not be achieved absent litigation. The AGC also reinstated a prior NLRB policy requiring waivers to be in writing, unless otherwise authorized.

It appears that the NLRB's impetus for the policy change, at least in part, is capturing more settlements of unfair labor practices in informal or formal settlements, so the NLRB can better police and enforce those settlements. The NLRB can enforce formal Board settlements in federal appellate courts. The NLRB requires informal settlements to include boilerplate language providing for default judgments on all NLRB complaint allegations, which can be first granted by the Board and then enforced by federal appellate courts (see NLRB Gen. Counsel Mem. 11-04 (Jan. 12, 2011) and NLRB Gen. Counsel Mem. 11-10 (March 30, 2011)).