NLRB Expresses Concerns Over Standard Remedy for Unlawful Discharge in the Construction Industry

The Bush Board recently signaled “concerns” over precedent holding that the standard remedy for unlawful discharge in the construction industry is reinstatement and backpay. Cheney Construction, Inc., 344 NLRB No. 9 (2005).

The construction industry is unique because employers frequently hire employees to work on a single construction project. Employees often work on a project until it ends and then seek work from another employer. Sometimes, however, a construction-industry employee will move to her employer’s next project.

The Board has grappled with the question of the appropriate remedy for unlawful discharge in the construction industry. In Dean General Contractors, 285 NLRB 573 (1987), the Board set forth the current law. The Board majority held that a standard remedial order will require a construction-industry employer to reinstate a discriminatee and pay him backpay. The majority explained that an employer will have an opportunity at the compliance stage of litigation to prove that it would not have transferred the discriminatee to a new project. If the employer makes that showing, then reinstatement is inappropriate and backpay will terminate on the date that the discriminatee’s project ended.

The dissent in Dean General argued for a presumption that a discriminatee in the construction industry was hired only for a single project. Consequently, the dissent would place the burden on the General Counsel to prove that a discriminatee would have continued to work for the employer after the project ended. Only if the General Counsel could satisfy this burden of proof would the dissent order reinstatement and backpay beyond the date of the project. The dissent indicated that the General Counsel could make this showing at the hearing on the merits or at the compliance stage (provided that the General Counsel inform the ALJ at the original hearing that it intended to litigate the issue at the compliance stage).

Thus, in Dean General, the majority and the dissent disagreed about which party bears the burden of proving continued employment. The majority placed the burden on the employer to show that the discriminatee would not have continued employment beyond the project. If an employer fails to satisfy its burden, the Board order will require reinstatement and backpay. In contrast, the dissent in Dean General would have placed the burden on the General Counsel to prove that the discriminatee would have continued employment beyond the project. If the General Counsel fails to satisfy his burden, the Board order will not require reinstatement and will limit backpay to the end of the completed project.

In Cheney Construction, Chairman Battista and Member Schaumber recognized that Dean General represents current Board law. However, they expressed concerns “whether that case was correctly decided.” 343 NLRB No. 9, slip op. at 1 fn.9. In the absence of a third Republican Board Member, the Board applied Dean General.