City of Great Falls v. Young by Con ( 1984 )

No. 84-38
IN THE SUPREME COURT OF THE STATE OF MONTANA
IN THE MATTER OF UNFAIR LABOR
PRACTICE :
CITY OF GREAT FALLS, MONTANA,
Defendant/Petitioner and Appellant,
-vs-
BRUCE YOUNG BY CONSTRUCTIOlJ AND
GENERAL LABORERS' LOCAL NO. 1334
AFL-CIO,
Complainant and Respondent,
and
MONTAXA BOARD OF PERSONNEL APPEALS,
Intervenor.
APPEAL FROM: District Court of the Eighth Judicial District,
In and for the County of Cascade,
The Honorable H. William Coder, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
David V. Gliko, City Attorney, Great Falls, Flontana
For Respondent :
D. Patrick McKittrick, Great Falls, Montana
For Intervenor:
James E. Gardner, Board of Personnel Appeals, Helena,
Montana
-- ---.
-.-- -
Submitted on Briefs: March 30, 1984
Decided: June 19, 1984
- --
Clerk
Mr. Justice L.C. Gulbrandson delivered the Opinion of the
Court.
The City of Great Falls (City) appeals from an order
of the District Court of the Eighth Judicial District,
Cascade County, affirming an order of the Board of Personnel
Appeals (Board) awarding backpay and restoring certain
contractual benefits to complainant Bruce Young on account
of an unfair labor practice committed against Young by the
City. We affirm.
This is the third instance in which this Court has
been petitioned to resolve matters arising out of a labor
dispute between the City and Young and his union. In Young
v. City of Great Falls (Mont. 1981), 632 P.2d /Ill, 38
*
St.Rep. 1317 (Young I), this Court addressed the propriety
of joining the Board as a necessary party to any judicial
review in District Court of a Board order. A year later, in
Young v. City of Great Falls (Mont. 1982), 646 P.2d 512, 39
St.Rep. 1047 (Young 11), this Court affirmed a judgment by
the District Court affirming a Board decision that the City
had committed an unfair labor practice in its dealings with
Young. Subsequent to that appeal, on September 30, 1982, a
bearings examiner for the Board conducted a hearing for the
purpose of designing an appropriate remedial order. The
examiner's recommended order, dated January 7, 1983, was
appealed by the City to the Board. The Board adopted the
order without alteration on March 9, 1983. The City
appealed this decision to the District Court, but the court
affirmed. The City's challenge to the remedial order is now
before this Court.
The remedial. order fashioned by the examiner and
affirmed by the Board and the District Court has three
essential components: (1) t h a t the City tender t o Young
back p a y i n t h e amount o f $9,633.66 ( l e s s amounts d e d u c t e d
by s t a t e and federal agencies for contribution to Social
Security, Public Employees' Retirement, and other similar
o b l i g a t i o n s ) p l u s i n t e r e s t of $4,628.09, f o r t h e time p e r i o d
O c t o b e r 3 1 , 1978 t o J u l y 20, 1 9 7 9 ; ( 2 ) t h a t t h e C i t y r e s t o r e
t o Young a l l s e n i o r i t y and l o n g e v i t y r i g h t s d u e him u n d e r
the collective bargaining agreement between the City and
Young's union; (3) that the City c r e d i t Young w i t h other
b e n e f i t s d u e him u n d e r t h e a g r e e m e n t .
The City contests the findings in support of the
hack p a y component and t h e s p e c i f i c t e r m s o f t h e component.
D u r i n g and s i n c e t h e S e p t e m b e r 3 0 , 1982, h e a r i n g , the City
h a s r e s i s t e d a n y award o f back p a y o n t h e g r o u n d t h a t Young
failed to mitigate his financial losses by exercising
r e a s o n a b l e d i l i g e n c e t o o b t a i n i n t e r i m employment. Assuming
t h a t Young is e n t i t l e d t o back p a y , t h e C i t y h a s c h a l l e n g e d
t h e t i m e p e r i o d f o r which t h e award i s t o b e c a l c u l a t e d and
t h e method used by t h e Board t o c a l c u l a t e b o t h t h e amount o f
back p a y and i n t e r e s t d u e on t h a t amount.
On a p p e a l , t h e C i t y r a i s e s t h e f o l l o w i n g i s s u e s :
( 1 ) Whether t h e r e is s u b s t a n t i a l evidence t o support
the Board finding that Young exercised "reasonable
d i l i g e n c e " i n o b t a i n i n g i n t e r i m employment d u r i n g t h e p e r i o d
i n which h e was l a i d o f f by t h e C i t y ?
( 2 ) Whether t h e r e m e d i a l p e r i o d a d o p t e d by t h e h e a r i n g
e x a m i n e r and a f f i r m e d by t h e Board i s p r o p e r ?
( 3 ) Whether t h e Woolworth formula used to calculate
t h e amount o f b a c k p a y owed Young i s a p p r o p r i a t e f o r t h i s
case?
(3) Whether the Florida Steel formula used to
calculate the amount of interest awarded on back pay is
appropriate in light of Montana law respecting interest on
judgments?
Our analysis of these issues is guided by reference to
National Labor Relations Board (NLRB) decisions and federal
judicial interpretation of the National Labor Relations Act
(NLRA). Because of the similarity between the NLRA and the
Montana Public Employees' Collective Bargaining Act, (PECBA)
Sections 39-31-101 to -409, MCA, we have found federal
administrative and judicial construction of the NLRA
instructive and often persuasive regarding the meaning of
our own labor relations law. See, e.g., Teamsters Local #45
v. State ex rel. Bd. of Personnel Appeals (Mont. 1981), 635
P.2d 1310, 1312, 38 St.Rep. 1841, 1844; State ex rel. Bd. of
Personnel Appeals v. District Court (1979), 183 Mont. 223,
THE ISSUE OF "REASONABLE DILIGENCE"
Following federal precedent, all of the parties agree
that back pay is not always an appropriate remedy for an
aggrieved employee:
"A worker who has been the victim of an
unfair labor practice is not entitled to
simply await reimbursement from his or
her employer for wages lost, for 'the
[law] was not intended to encourage
idleness. ' [citations omitted] .
" 'Mitigation [of an employer Is liability
for backpay] will result not only where
the worker has taken in earnings from
another source after discharge, but also
for 'losses willfully incurred1-- such as
when the discriminatee fails to secure
comparable employment without excuse.
[citations omitted] A discharged worker
is not held to the highest standard of
diligence in his or her efforts to secure
comparable employment; I reasonable'
exertions are sufficient. [citations
omitted]." N.L.R.B. v. Mercy Peninsula
Ambulance Serv. (9th Cir. 1979), 589 F.2d
1014, 1017-18.
See also McCann Steel Co. v. N.L.R.B. (6th Cir. 1978), 570
F.2d 652, 656; N.L.R.B. v. Arduini Mfg. Corp. (1st Cir.
1968), 394 F.2d 420, 423; N.L.R.B. v. Armstrong Tire and
Rubber Co. (5th Cir. 1959), 263 F.2d 680, 683; Airport
Service Lines (1977), 231 N.L.R.B. 137, 96 L.R.R.M. (BNA)
The City maintains that Young did not exercise
"reasonable diligence" in seeking interim employment.
According to the City, the record demonstrates that Young
made minimal efforts to secure other employment between
October 31, 1978, the day he was laid off, and July 20,
1979, the day he was reinstated. The City likens Young's
efforts to those of the aggrieved employee in lllercy
Penninsula, supra. In that case, back pay was denied to the
victim of an unfair labor practice upon a finding that he
made but a few, insincere attempts during his nine months of
unemployment to seek other work. 589 F.2d at 1018. See
also Alfred M. Lewis, Inc. v. N.L.R.B. (9th Cir. 1982), 681
F.2d 1154, 1156 (explaining facts of Mercy Peninsula);
Arduini, supra ( court found lack of reasonable diligence
where discriminatee did not apply for job with company he
knew was hiring and where he visited only four other
companies and registered with employment office).
Our review is confined to the question of whether
there is substantial evidence to support the finding of the
Board that Young had exercised reasonable diligence. See
section 2-4-704(2)(e), MCA; Slater v. Emp. Sec. Div. (Mont.
1984), 676 P.2d 220, 222, 41 St.Rep. 247, 249-50.
The record indicates that, following his termination,
Young made weekly contacts with the union hall and with the
local Job Service regarding prospective employment. Through
the union, Young obtained a job of one-week's duration with
a local construction company. Upon obtaining this job,
Young's name was placed at the bottom of the union hall's
hiring list, and, consequently, was unable to obtain
additional work through the union in part because of his
low position on the list. However, he was able to secure,
through his own initiative, another week's worth of work
with a construction firm in Shelby, Montana, approximately
eighty miles from Great Falls. Young also contacted several
other individuals and companies about job prospects, but
could not remember all of their names or the specific number
of individuals and companies approached. There was evidence
that job opportunities were hampered by winter weather
conditions and a slow economy.
The hearing examiner found that Young's efforts
amounted to reasonable diligence, considering all the
attendant circumstances. The Board concurred, and we find
no reason to disturb this finding. Once the Board has
established the amount of back pay owed an otherwise
wrongfully discharged employee, the burden is upon the
employer to produce evidence to mitigate its liability.
Mercy Peninsula, supra, at 1017 (citing cases). Here, the
evidence of Young's job-hunting efforts and the detrimental
effect of weather and economic conditions on the job market
were uncontraverted. Furthermore, the facts of this case
are clearly distinguishable from those in Mercy Peninsula
and - -
Arduini. The City has not demonstrated how the
available evidence can reasonably be interpreted as
indicative of indifference, insincerity or slothfulness on
Young's part in his search for employment.
THE ISSUE OF THE REMEDIAL PERIOD
The period for calculating back pay typically begins
to run at the time of the illegal discharge and ends when
the aggrieved employee's reinstatement becomes effective.
Bob Maddox Plymouth, Inc. (1981), 256 N.L.R.B. 813, 107
L.R.R.M. (BNA) 1325. However, this remedial period can be
reduced if there is proof of mitigating circumstances. The
burden of proof is on the employer to establish that it
would not have had work available for an illegally
discharged employee due to economic or other factors.
N.L.R.B. v. Midwest Hanger Co. (8th Cir. 1977), 550 F.2d
1101, 1104-1105, cert. den. 434 U.S. 830, 98 S. Ct. 112, 54
L. Ed. 2d 90; N.L.R.B. v. Maestro Plastics Corp. (2d Cir.
1965), 354 F.2d 170, 176, cert. den. (1966), 384 U.S. 972,
86 S. Ct. 1862, 16 L. Ed. 2d 682.
The hearing examiner found, and the Board concurred,
that the appropriate remedial period for Young extended from
October 31, 1978, the day of his termination, to July 20,
1979, the day of his reinstatement. The City maintains that
the relevant period should end January 5, 1979, because
Harold Spilde, the employee who had been wrongfully retained
after October 31, had been laid off on January 5, with no
hiring taking place until Young was reinstated July 20.
Because of "budget constraints" in effect at the time
immediately following Spilde's termination, the City reasons
that there would have been no work for Young to perform.
The essence of the City's argument was presented to
this Court in Young I1 and rejected as contrary to the
available evidence:
In
I' addition to Spilde, CETA
[Comprehensive Employment and Training
Act] employees with less seniority than
Young continued to do laborer's work
after Young's discharge [on October 31,
19781. Furthermore, 7 or 8 new employees
were hired by the [City] Street
Department in April 1979, but not Young.
It was in this period that [Bob] Duty,
[Superintendent of the Department ,] said
in effect, 'I don't care what happens. I
won't hire Bruce Young back in the Street
Department.'" 646 P.2d at 514, 39
St.Rep. at 1049.
We find no evidence to dispute our original finding.
Indeed, as the hearing examiner noted in his recommended
remedial order, there is evidence that the City had
laborer's work available after January 5, 1979. Moreover,
it appears that the CETA employees used to perform this work
may have been used illegally, because CETA jobs may not
result in displacement of regular employees and may not
impair existing labor contracts. 41 Fed.Reg. No. 124 (1981)
(since repealed). Had Young not been wrongfully discharged,
he would have had standing to challenge any subsequent
substitution of CETA workers for regular union contract
employees after January 5, 1979. Finally, we note that the
City did not offer evidence at the hearing about any budget
constraints. In short, we find no reason to alter the
prescribed remedial period.
THE APPROPRIATENESS OF THE WOOLWORTH FORMULA
In calculating the amount of back pay due an illegally
discharged employee, the Board utilizes a method first
developed and used by the N.L.R.B. in F.W. Woolworth Co.
(1950), 90 N.L.R.B. 289, 26 L.R.R.M. (BNA) 1185. This
method, commonly referred to as the "Woolworth" formula, has
been approved by the United States Supreme Court. N.L.R.B.
v. Seven-Up Bottling Co. (1953), 344 U.S. 344, 73 S. Ct. 287,
Under this formula, the N.L.R.B. and the Board compute
back pay "on the basis of each separate calendar quarter or
portion thereof" from the time of the illegal discharge to
the time of a proper offer of reinstatement. The quarters
begin with the first day of January, April, July and
October. See Woolworth, 90 N.L.R.B. at 293, 26 L.R.R.M. at
1185-86. See also 8 F.R.E.S. Section 63:74 (1978). In the
instant case, Young's back pay was calculated for four
quarters or portions thereof as follows:
QTR. COMPENSABLE RATE PER GROSS
ENDING HOURS HOUR PAY
Gross pay for the first two quarters listed above was then
reduced by $194.70 and $200, respectively, to reflect
Young's earnings from the two brief jobs with construction
firms. Thus, his total back pay is $9,633.66 for the four
quarters, subject to further reductions for contributions to
Social Security, PERS, and other obligations.
Gi
wcoC1~~'0.17.t
Prior to using the P e A & formula, the N.L.R.B.
?c w A
typically computed back pay by subtracting the total amount
earned in other employment from the earnings the employee
would have made had he or she not been terminated. This
straight subtraction method was ultimately rejected because
many employees could conceivably find work that paid more
during the duration of their absence from the first job than
what they would have earned had they still been employed in
that position. "This," according to the N.L.R.B., "resulted
in the progressive reduction or complete liquidation of
backpay due." 90 N.L.R.B. at 292, 26 L.R.R.M. at 1185.
Consequently, the N.L.R.B. concluded that some employers
might knowingly delay offers of reinstatement in order to
reduce their hack pay liability. Aggrieved employees would
counter by waiving the right to reinstatement and thus toll
the running of back pay to preserve any amounts then owing.
90 N.L.R.B at 292, 26 L.R.R.M. at 1185.
To maintain the effectiveness of reinstatement
policies and restore industrial peace, the quarterly method
of computation or "Woolworth formula" was adopted. Under
this approach:
"[tlhe liability for each quarter may be
determined by reference to factors then
current, and not subject to subsequent
fluctuation. Thus, both employee and
employer will be in a position to know
with some precision the amount that will
be due at the end of each 3-month period,
if discrimination should ultimately be
found." 90 N.L.R.B. at 293, 26 L.R.R.M.
at 1186.
This formula also protects an employee's right to Social
Security benefits, which are based on the number of
quarterly contributions from wages. Thus, the formula
serves the remedial purposes of labor law and retirement
law. 90 N.L.R.B. at 293, 26 L.R.R.M. at 1186.
We emphasize that this method has been approved by the
United States Supreme Court as a proper exercise of informed
discretion. Seven-up Bottling, supra, 344 U.S. at 346-48,
73 S.Ct. at 288-89, 97 L.Ed. at 381-83. The only caveat
expressed by the Court was that the N.L.R.B. could not
"apply a remedy it has worked out on the basis of its
experience, without regard to circumstances which may make
its application to a particular situation oppressive and
therefore not calculated to effectuate a policy of the
[National Labor Relations] Act." 344 U.S. at 349, 73 S.Ct.
at 290, 97 L.Ed. at 383.
The City objects to the use of the Woolworth formula
in the immediate case, primarily because Young allegedly did
not exercise reasonable diligence in obtaining interim
employment during the quarterly periods that he would have
been working for the City. This is not so much a criticism
of the formula for calculating back pay as it is a
reiteration of the already rejected argument that Young did
not exercise reasonable diligence in seeking interim
employment.
Nevertheless, the City makes an additional argument,
i.e., that Woolworth is somehow inapplicable to public
sector employment. We disagree. The City's arguments here
are presented in the form of conclusions as opposed to
reasoned arguments. The Woolworth formula has been applied
in other states to public sector unfair labor practices.
See e.g., Golden Cab. Co., 1 Nat'l Pub. Empl. Rep. (Lab.
Rel. Press) 438 (Pa.Lab. Rel. Bd. Nov. 1, 1979). The City
has offered no reasons why the formula works in an
"oppresive" manner contrary to the goals of the Montana
Public Employees' Collective Bargaining Act. See Seven-Up
Bottling, supra, 3 4 4 U.S. a t 349, 73 S.Ct. a t 290, 97 L.Ed
a t 383. Moreover, we note that the alternative formula
p r o p o s e d by t h e C i t y , which i s b a s e d on a method used i n a
sex discrimination case, E.E.O.C. v. Ford Motor Co. (4th
Cir. 1 9 8 1 ) , 645 F.2d 183, r e v ' d on o t h e r g r o u n d s ( 1 9 8 2 ) , 458
U.S. 219, 102 S. Ct. 3 0 5 7 , 7 3 L. Ed. 2d 721, would, i f applied
to this case, result in the same a m o u n t o f back pay due
Young. The Board did not act erroneously by applying
Woolworth t o t h i s case.
...............................................E L
THE A P P R O P R I A T E N E S S OF THE F L O R I D A S T E FORMULA FOR
CALCULATING INTEREST O BACKPAY
N
In addition to awarding Young back pay, the Board
granted i n t e r e s t on t h a t award, using a formula f i r s t used
b y t h e N.L.R.B. i n F l o r i d a S t e e l Corp. ( 1 9 7 7 ) , 2 3 1 N.L.R.B.
651, 96 L.R.R.M. (BNA) 1070. This formula e s t a b l i s h e s a
variable rate of interest, taken from Internal Revenue
S e r v i c e methods o f interest calculation. The F l o r i d a S t e e l
formula replaces a f i x e d s i x percent i n t e r e s t standard f i r s t
applied in Isis Plumbing and Heating Co. (1962), 138
N.L.R.B. 716, 51 L.R.R.M. (BNA) 112 and accepted as
reasonable by the federal courts. See, e.g., N.L.R.B. v.
I n t ' l Union o f O p e r a t i n g E n g i n e e r s ( 6 t h C i r . 1 9 6 7 ) , 380 F.2d
244. The reasons for rejecting a fixed interest rate i n
favor of a v a r i a b l e rate are c l e a r l y set f o r t h i n F l o r i d a
Steel:
"Taking i n t o c o n s i d e r a t i o n [ i n f l a t i o n a r y
t r e n d s a n d t h e r e m e d i a l p u r p o s e s of t h e
NLRA,] . . . t h e f l a t 6-percent i n t e r e s t
r a t e no l o n g e r e f f e c t u a t e s t h e p o l i c i e s
o f t h e [NLRA]. A r a t e o f i n t e r e s t more
a c c u r a t e l y keyed t o t h e p r i v a t e s e c t o r
money m a r k e t w o u l d h a v e t h e e f f e c t o f
encouraging timely compliance with
[N.L.R.B.] orders, discouraging the
commission of u n f a i r l a b o r p r a c t i c e s , and
more f u l l y c o m p e n s a t i n g d i s c r i m i n a t e e s
f o r t h e i r economic l o s s e s . " 2 3 1 N.L.R.B.
a t 6 5 1 , 9 6 L.R.R.M. a t 1072.
These views were recently reaffirmed in Olympic Medical
Corp. (1980), 250 M.L.R.B. 146, 1 0 4 L.R.R.M. (BNA) 1325.
The Montana Board of Personnel Appeals finds these same
c o n s i d e r a t i o n s r e l e v a n t t o remedying u n f a i r l a b o r p r a c t i c e s
i n Montana.
The C i t y o b j e c t s t o t h e i n t e r e s t award o f $4,628.09 on
grounds t h a t t h e v a r i a b l e rates used by t h e h e a r i n g examiner
and t h e Board exceed t h e s t a t u t o r y l i m i t a t i o n on i n t e r e s t o n
judgments, a n d b e c a u s e t h e i n t e r e s t was c o m p o u n d e d . Section
29-9-205(1), MCA, provides that, e x c e p t i n cases w h e r e t h e
interest t o be recovered on a judgment is s p e c i f i e d i n a
contract, i n t e r e s t is payable "at a rate of 10% p e r annum
and no g r e a t e r r a t e [,and] . . . must n o t be c o m p o u n d e d i n
any nanner o r form." Furthermore, the City maintains t h a t
t h e r a t e on judgments s h o u l d be t h e s i x p e r c e n t r a t e used i n
I n t ' l Union of O p e r a t i n g E n g i n e e r s , supra.
There is n o q u e s t i o n that t h e v a r i a b l e rate formula
used by the hearing examiner and approved by the Board
r e s u l t s i n an e f f e c t i v e i n t e r e s t rate exceeding t e n p e r c e n t .
The following c a l c u l a t i o n s are taken from the hearing
e x a m i n e r ' s recommended o r d e r a s a f f i r m e d b y t h e B o a r d :
QUARTER NET BACK INTEREST INTEREST
ENDING PAY RATE DUE 1-1-83
The c h o i c e of i n t e r e s t r a t e s and method o f c a l c u l a . t i o n was
e x p l a i n e d b y t h e h e a r i n g e x a m i n e r i n h i s recommeded o r d e r :
" T h e NLRB R e g i o n a l O f f i c e i n S e a t t l e
reported t h e following adjusted prime
interest rates which it used in
c a l c u l a t i n g back pay award i n t e r e s t i n
t h e p r i v a t e s e c t o r : 1979-6%; 1980-12%;
1981-12%; 1982-20%. To d e t e r m i n e simple
i n t e r e s t d u e , t h e NLRB t o t a l s t h e r a t e s
f o r t h e y e a r s i n which t h e i n t e r e s t was
due and owing t h e n a p p l i e s t h a t r a t e ( 6 %
+ 1 2 % + 1 2 % + 20% i n t h i s c a s e ) t o t h e
amount t h e employee would h a v e e a r n e d ,
minus i n t e r i m e a r n i n g s , as o f t h e end o f
t h e f i r s t q u a r t e r h e was t e r m i n a t e d . To
a r r i v e a t i n t e r e s t due i n subsequent
q u a r t e r s t h e f i r s t r a t e (50% h e r e ) is
r e d u c e d by o n e f o u r t h o f t h e amount o f
t h e adjusted prime rate i n e f f e c t a t t h e
time ( 6 % x 1 / 4 = 1 . 5 % h e r e ) . "
I n response t o t h e C i t y ' s argument, we n o t e i n i t i a l l y
t h a t t h e i n t e r e s t r a t e was n o t compounded. The a d d i n g o f
i n t e r e s t f o r each quarter is m e r e l y a s h o r t h a n d method o f
calculation. Thus, assuming that section 25-9-205(1)
controls, the calculations are not in violation of the
prohibition against compounding. However, we are n o t
convinced that the statute prevents the use of variable
r a t e s when c a l c u l a t i n g i n t e r e s t d u e o n b a c k p a y a w a r d s .
Several states impose statutory restrictions on the
amount of i n t e r e s t t h a t may b e a w a r d e d o n c o u r t j u d g m e n t s .
See e.g., Fla. Stat. Ann. sec. 55.03(1) (West S u p p . 1984)
(12 percent); Or. Rev. Stat. sec. 82.010(3) (1983) (9
percent). These states i n p a r t i c u l a r have p u b l i c employee
l a b o r r e l a t i o n s laws s i m i l a r t o M o n t a n a ' s . We note that, in
awarding back pay and interest thereon, personnel appeal
boards i n those s t a t e s have l i m i t e d i n t e r e s t awards t o t h e
s t a t u t o r y maximum r a t e . H i a l e a h Housing A u t h o r i t y , 4 N a t ' l
Pub. Empl. Rep. (Lab. R e l . P r e s s ) 777 ( F l a Pub. Empl. Rel.
Comm'n Nov. 12, 1 9 8 1 ) ; Coos County 3 N a t ' l Pub. Empl. Rep
(Lab. Rel. Press) 589 (Or. Empl. Rel. Bd. Oct. 3, 1980).
From our survey of other jurisdictions, it appears that the
Florida and Oregon precedents may be followed elsewhere.
Unfortunately, there are no judicial opinions on the
correctness of these administrative decisions.
Taking into consideration the justification for
awarding interest on any monetary judgment and the remedial
purposes of the Montana Public Employees1 Collective
Bargaining Act, we conclude that the Florida Steel method
for calculating interest is lawful. Section 39-31-406(4),
which gives the Board authority to award back pay and
related remedies, is identical to 29 U.S.C. sec.
160(c)(1976), which the N.L.R.B. relies upon to award back
pay and interest in federal labor relations cases. While
both section 25-9-205 and the above-cited labor law statutes
contemplate that interest on awards or judgments recognizes
the debtor-creditor relationship between parties to an
action, labor relations law employs interest for more than
compensation for the loss of use of the employee's money.
The award of interest encourages more prompt compliance with
Board orders and discourages the commission of unfair labor
practices, thereby effectuating the legitimate ends of labor
legislation. See Florida Steel, 231 N.L.R.B. at 651, 96
L.R.R.M. at 1071, 1072; Isis Plumbing and Heating, 138
N.L.R.B. at 719, 720, 51 L.R.R.M. at 1124, 1125.
Thus, the statutory provision on interest must not
supplant, but should complement, the legitimate ends of
public policy. Here, section 25-9-205(1) does apply to the
extent that Young is entitled to ten percent per annum on
the judgment, which includes the award of back pay and
interest as calculated by the Board, after the district
court affirmance of the Board order. Section 25-9-205(1)
does - however, prevent
not, the use of the Florida Steel
formula at the administrative stage of these proceedings.
One final argument of the City must be addressed. In
its reply brief, the City reiterates its initial argument
that, following N.L.R.B. precedent, the Board should be
limited to awards of six percent based on federal appellate
court decisions. The City argues that N.L.R.B. decisions
like Florida Steel, rendered subsequent to these court
holdings, cannot, as administrative rulings, overrule
federal court precedents. This argument misapprehends the
role of judicial review of these administrative rulings.
Federal court decisions that affirm N.L.R.B. rulings do so
because the rulings are based on substantial evidence and
are in accord with the N.L.R.B.'s statutory mandate. Should
the N.L.R.B. determine at some future time that, in view of
changing factual conditions, a new ruling or policy should
be implemented, that policy will be measured on judicial
review by the same or similar principles of substantial
evidence and statutory compliance that were employed in
previous judicial decisions, not by whether the new ruling
is in accord with the previous court decisions. See, e.g.,
North Cambria Fuel Co. v. N.L.R.B. (3d Cir. 1981), 6 4 5 F.2d
177, cert den. 4 5 4 U.S. 1123, 102 S. Ct. 970, 71 L. Ed. 2d 110,
where the court upheld an N.L. R.B. interest-on-back pay
award using a twelve percent rate on grounds that it was
within the N.L.R.B.'s statutory discretion to implement. We
will adhere to the same principles when evaluating appeals
of future Board decisions.
The decision of the District Court affirming the order
of the Board of Personnel Appeals is affirmed.
,/
We concur: