Decision 2890M – El Centro Regional Medical Center
LA-CE-1566-M
Decision Date: February 21, 2024
Decision Type: PERB Decision
Description: This case came before the Board on exceptions by El Centro Regional Medical Center to the proposed decision of an administrative law judge, which concluded that the hospital violated the Meyers-Milias-Brown Act (MMBA) when it failed to pay the Laboratory Unit employees an annual raise because they engaged in protected activities. The ALJ also determined that the hospital’s decision to not pay the wage increase was a unilateral change to the status quo, and that the hospital’s refusal to pay the increase constituted discrimination and interference. The ALJ’s proposed decision included a backpay award backpay for all current and former Laboratory Unit employees who had commenced employment before January 1, 2021, for an amount equal to two (2) percent of any wages earned between July 4, 2021 and July 26, 2022, augmented by interest at a rate of seven (7) percent per annum.
Disposition: The Board affirmed the ALJ’s determinations, supplemented the ALJ’s analysis, and modified one aspect of the remedy. The Board determined that, by failing to pay the Laboratory Unit employees the July 2021 wage increase, ECRMC unlawfully committed a unilateral change and engaged in unlawful discrimination and interference. Regarding remedies, the Board modified the remedy and adopted a new policy under which interest on backpay will be compounded on a daily basis (rather than annually). Consistent with the Board’s practice, daily compounding interest will apply retroactively in the instant case and in all pending cases.
Perc Vol: 48
Perc Index: 128
Decision Headnotes
1201.03000 – Back Pay; Interest
The Board adopts a policy under which interest on backpay will be compounded on a daily basis. Consistent with the Board’s practice, the Board will apply this policy retroactively in this case and in all pending cases in whatever stage, given the absence of any manifest injustice in doing so.
1201.03000 – Back Pay; Interest
In 2010 the NLRB began including daily compound interest in all monetary relief. (Bellflower Unified School District (2022) PERB Decision No. 2544a, p. 41, fn. 23 [judicial appeal pending] (Bellflower), citing Kentucky River Medical Center 356 NLRB 6, 6.) The Board declined to reach that issue in Bellflower due to an agreement between the parties to apply simple annual interest. (Ibid.) The Board considered the issue in Tahoe-Truckee Sanitation Agency (2022) PERB Decision Number 2826-M, noting the possibility of considering whether PERB should adopt that method of calculating interest in a future case. (Tahoe-Truckee, pp. 3-4 [declining to award daily compounding interest because of the parties’ request to withdraw.].)
1201.03000 – Back Pay; Interest
In its discussion of interest, the Bellflower decision noted that “the ending accrual date is normally the date on which an employee resumes work after accepting a reinstatement offer or declines reinstatement.” (Bellflower Unified School District (2022) PERB Decision No. 2544a, p. 42.) But the date on which an employee resumes work after accepting a reinstatement offer or declines reinstatement is when new damages normally stop accruing. Interest on an amount owed stops accruing on the date of payment.
1201.01000 – In General
The MMBA grants PERB broad discretion to order remedies necessary to effectuate the policies and purposes of the Act. (County of Lassen (2018) PERB Decision No. 2612-M, p. 7.) “Back pay, front pay and/or other monetary awards, plus interest, are an ordinary part of Board-ordered remedies where necessary to compensate injured parties or affected employees for out-of-pocket losses caused, in whole or in part, by an unfair practice.” (Sonoma County Superior Court (2017) PERB Decision No. 2532-C, p. 42 [Banks concurring in part and dissenting in part, citing Fairfield-Suisun Unified School District (2012) PERB Decision No. 2262 (Fairfield-Suisun), pp. 18-19; Los Angeles Unified School District (2001) PERB Decision No. 1469 (LAUSD), pp. 5-6, 11; San Ysidro School District (1997) PERB Decision No. 1198, p. 5; Fresno County Office of Education (1996) PERB Decision No. 1171 (Fresno), pp. 7-8, and proposed decision at pp. 1-2.].) PERB precedent awarding interest on monetary damages as part of a make whole remedy is well established. (State of California (California Correctional Health Care Services) (Healy) (2021) PERB Decision No. 2760-S, pp. 48-49, fn. 31 [judicial appeal pending]). Moreover, monetary awards should be calculated to account for the loss of the present value of money to ensure that the respondent does not retain the fruits of its wrongful conduct. (County of San Joaquin v. PERB (2022) 82 Cal.App.5th 1053, 1068.)