Opinion ID: 758676
Heading Depth: 4
Heading Rank: 2

Heading: The Backpay Formula

Text: 81 The NLRB calculated its backpay award using the projected earnings formula, which bases the amount of the award on the average pre-termination earnings of the employee. Coronet argues that this choice of formula was not supported by substantial evidence and did not take account of the changes that Coronet would have made to the department for business reasons. Instead, Coronet suggests that the NLRB should have used the replacement earnings formula, which calculates backpay on the basis of the wages earned by the workers who replaced the terminated employees. 82 The Board permissibly found that Coronet would not have made changes sufficiently drastic so as to make the projected earnings formula inappropriate. Although Coronet's transportation department had operating problems since at least 1986, Coronet took no action to remedy the problems prior to its illegal closing of the department in 1989. Thus, the Board's choice of formula is supported by the record. 83 In addition, as the NLRB noted, application of the projected earnings formula in these circumstances had practical advantages. When an employer suggests a backpay formula different from the Board General Counsel's formula, the NLRB must determine the 'most accurate' method of determining backpay amounts. Woodline Motor Freight, Inc., 305 N.L.R.B. 6, 1991 WL 204271, at  1 (1991) (citation omitted). In this case, the NLRB's formula allowed for the most accurate consideration of individual workers' pay because it took into account the fact that some of the terminated drivers, mechanics, and loaders worked overtime or received compensation for doing supplemental work, while others did not. 84 Further, by applying the projected earnings formula, the Board was able to avoid several difficulties that would have arisen had it tried to use the replacement earnings formula. First, it would have been difficult to determine who were the appropriate replacement employees because Coronet's transportation department was smaller than, and organized differently than, the outside contractor's business. The duties of the contractor's employees could reasonably be distinguished from those of Coronet's employees. Second, Coronet failed to provide information on the outside contractor's employees' wages needed to make the replacement earnings calculations. Thus, the Board's choice appears to yield the most accurate result in the circumstances. 85 Coronet cites two cases in which the Board opted to use a replacement earnings formula in situations such as this. See Woodline Motor Freight, Inc., 305 N.L.R.B. 6, 1991 WL 204271 (1991); Avj Graphics, Inc., 282 N.L.R.B. 277, 1986 WL 54255 (1986). In both of those cases, however, it was the NLRB, not the court, that chose the replacement earnings formula. In a situation such as this, [t]he fact that the Board necessarily chose to proceed by one method rather than another hardly makes out a case of abuse of discretion. Bagel Bakers Council v. NLRB, 555 F.2d 304, 305 (2d Cir.1977).