In a 3-2 decision, the Board recently clarified a long-held principle in backpay cases. In St. George Warehouse, 351 NLRB No. 42 (Sept. 30, 2007), the Board reaffirmed that an employer bears the ultimate burden of persuasion if it alleges that an employee failed to mitigate damages by making reasonable efforts to seek interim employment. However, the Board determined that the employer and the General Counsel shared the burden of production with regard to this issue.

An employer is required to “make whole” a wrongfully discharged employee by paying what he or she would have earned normally during the period of the employer’s discriminatory action, less earnings from other employment held during that period. Under the “willful loss of earnings” affirmative defense, an employer may limit its liability by showing that the employee failed to make reasonable efforts to seek and sustain interim employment.

Prior to this decision, an employer was required to demonstrate by a preponderance of the evidence that a former employee failed to make a good faith effort to seek employment. This burden was satisfied if the employer could produce facts sufficient to show that substantially equivalent jobs were available in the former employee’s relevant geographic area, and that the former employee failed to make reasonable efforts to apply for those available jobs.

St. George Warehouse shifts part of the burden of production to the General Counsel. The employer must still produce evidence that there were substantially equivalent jobs within the relevant geographic area, but then the burden of production shifts to the General Counsel to show that the former employee took reasonable steps to seek those available jobs. The Board reasoned that the General Counsel, as the advocate for the discriminatee, was more likely to have information concerning the former employee’s job seeking activities. In their dissenting opinion, Members Liebman and Walsh declared that the majority had departed from over 45 years of established precedent in relieving the wrongdoer-employer of its burden of production.