## Facts

- An employee of Ralph’s Grocery Company was terminated.
- The employee grieved the discharge and prevailed, establishing the termination was without just cause.
- An arbitrator ordered that the employee “should be reinstated with full back pay and benefits.”
- After the reinstatement award, the union and Ralph’s could not agree on the amount of back pay, if any, owed for the period between termination and reinstatement.
- During the interim period, the employee’s efforts and unemployment-benefit status varied:
  - Between November 1995 and May 1996, the employee collected unemployment compensation while searching for work.
  - Between May 1996 and June 1996, the employee did not receive unemployment compensation and did not search for work.
  - Between June 1996 and December 1996, the employee attended training programs to qualify for an extension of unemployment benefits and did not search for work.
  - Between December 1996 and January 1997, the employee again looked for work.
- The union argued that “full back pay and benefits” required payment without reduction for unemployment compensation (or other offsets) and also sought an additional $1,000 characterized as punitive damages and/or interest tied to the original award.
- Ralph’s argued that the employee failed to take reasonable steps to mitigate losses during significant portions of the interim period, that unemployment compensation should reduce any back-pay amount, and that the award did not authorize anything beyond back pay and benefits.

## Issues

1. Does an award directing reinstatement with “full back pay and benefits” permit reducing back pay for periods when the employee did not make reasonable efforts to seek interim work?
2. May unemployment compensation received during the interim period be considered in calculating a make-whole back-pay remedy?
3. Can the arbitrator award an additional $1,000 as punitive damages or an interest-type amount when the reinstatement remedy states only “full back pay and benefits”?

## Decision

- The arbitrator treated “full back pay and benefits” as a make-whole remedy that is normally implemented with common remedial limits, including mitigation expectations, rather than as an unconditional guarantee of gross wages for every week after discharge.
- The arbitrator reduced (or denied) back pay for periods in which the employee did not make reasonable efforts to find work, including the stretches when the employee stopped searching for employment—most notably while attending training aimed at extending unemployment benefits.
- The arbitrator considered unemployment compensation in implementing the back-pay remedy so the employee would not receive duplicative recovery for the same period of wage loss.
- The arbitrator denied the union’s request for an added $1,000 punitive-damages/interest component because the reinstatement remedy did not authorize an extra payment beyond back pay and benefits.

## Legal Principles

- A reinstatement order granting “full back pay and benefits” is generally applied as make-whole relief, not as automatic payment of gross wages without regard to interim circumstances.
- Employees seeking back pay after a wrongful discharge are generally expected to take reasonable steps to mitigate losses by searching for interim work; unreasonable inactivity can justify reducing back pay for the affected periods.
- In implementing make-whole relief, unemployment compensation may be considered to prevent duplicative recovery for the same loss period.
- Punitive damages, penalties, or stand-alone interest-type add-ons are typically unavailable in labor arbitration unless the collective-bargaining agreement or the prior award clearly authorizes them.

## Conclusion

In *Ralph’s Grocery Co., 108 Lab. Arb. Rep. 718 (1997)*, the arbitrator resolved a post-award dispute over the meaning of an order reinstating a wrongfully discharged employee with “full back pay and benefits,” ruling that back pay could be reduced for periods when the employee failed to reasonably search for work, that unemployment compensation could be taken into account to prevent duplicative recovery, and that the union’s requested additional $1,000 punitive/interest payment was not authorized by the remedy.


Ralph's Grocery Co., 108 Lab. Arb. Rep. 718 (1997)