Hunton Employment & Labor Perspectives

The National Labor Relations Act (“Act”) empowers the National Labor Relations Board (“Board”) to “take such affirmative action including reinstatement of employees with or without backpay, as will effectuate the policies of this Act.” 29 U.S.C. § 160(c). For much of the Board’s history, that has generally resulted in Board Orders that involve some combination of notice posting, backpay, and reinstatement.

As a result of the National Labor Relations Board’s (the “Board”) decision in Latino Express, Inc., 359 NLRB No. 44 (Dec. 18, 2012), employers will now have greater obligations in cases where individuals are awarded lump-sum backpay.  Making good on its earlier promise, the Board held that employers must reimburse individuals for any additional federal or state income taxes, which may result when a lump-sum backpay award covers more than one calendar year.  The Board also held that employers must submit appropriate documentation to the Social Security Administration (“SSA”) so that backpay is allocated to the appropriate calendar quarters.  The Board’s decision follows, a March 2011 memorandum issued by Acting General Counsel, Lafe Solomon, in which he addressed both of these issues instructing Regions to seek a remedy with a tax component in cases involving lump-sum backpay as well as a remedy requiring employers to notify the SSA of the appropriate periods for allocating backpay.

This week, the United States Supreme Court issued its decision in what has been called the “most important class action case in more than a decade.”  In Wal-Mart Stores, Inc. v. Dukes, et al., No. 10-277, 564 U.S. ___ (June 20, 2010), the plaintiffs, current and former employees of the Nation’s largest private employer, Wal-Mart, sought judgment against the company for injunctive and declaratory relief, punitive damages, and backpay, on behalf of themselves and a nationwide class of some 1.5 million female employees, alleging sex discrimination in violation of Title VII of the Civil Rights Act of 1964.