SJC Rules That Terminated Employees Have Duty to Find Work, While Employers Have a Duty to Raise This Argument
Generally, a worker whose termination is reversed by an arbitrator is entitled to the wages and benefits they lost from the time they were terminated to the date they were reinstated. But, employers have succeeded in persuading arbitrators and courts that employees are not entitled to keep all their lost wages and benefits. Back pay awards, employers argue, must be reduced by the amount of pay and benefits the employees earned during the period after termination. Employers argue that back pay awards also should be reduced by the amount that employees could have earned in the interim, even if they actually earned nothing. This concept is known as the employee's duty to mitigate, and is intended to discourage or punish terminated employees from sitting at home, even though it is the employer's fault they are out of work.
The Supreme Judicial Court discussed the wrongfully terminated employee's duty to mitigate within the context of a recent public sector arbitration appeal. In
Suffolk County Sheriff versus Jail Officers & Employees, it took nine years for the employee to be put back to work. This delay was the result of the employer appealing the labor arbitration decision, which found that the termination was without just cause. The employee earned only $15,000 during that 9-year period. The Sheriff argued that the employee violated his duty to mitigate and, as a result, the Sheriff should be able to reduce the back pay award significantly.
The SJC affirmed that the employee had a duty to mitigate his damages, but concluded that the Sheriff failed to raise this argument before the arbitrator or in the Sheriff's initial appeal to court of the arbitration decision. Much as the employee has a duty to mitigate unemployment, the Sheriff has an obligation to present this argument to an arbitrator, or at least to the court, instead of waiting several years and a subsequent court action.
There is much to dislike about a duty to mitigate. A mistreated employee should not have an obligation to reduce the employer's damages. Plus, an employer who wrongfully terminates an employee subject to arbitration or civil service, suffers no economic penalty if the employee is able to find same or similar employment elsewhere.
That said, the SJC's decision indicated that the duty to mitigate may be less hostile to employees and unions than it initially appears. The Court noted that the employer has the burden to raise the issue and persuade a decisionmaker that the employee could have obtained "comparable employment." In other words, the employee or union has no duty to show that the terminated employee actually looked for work or that no comparable jobs existed.
The SJC also noted that the duty to mitigate does not require the employee to accept any work. The Court cited cases that state, an "unemployed or underemployed claimant need not go into another line of work, accept a demotion, or take a demeaning position" and that position is not comparable unless it offers "similar long-term benefits and opportunities for promotion as compared to the original position."
