Otay Water District * * * OVERRULED IN PART by Bellflower Unified School District (2022) PERB Decision No. 2544a * * * (PERB 1634M)

STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
STATE OF CALIFORNIA
DECISION OF THE
PUBLIC EMPLOYMENT RELATIONS BOARD
DONNA BARTLETT-MAY, ET AL.,
Charging Parties,
V .
OT A Y WATER DISTRICT,
Respondent.
DONNA BARTLETT-MAY, ET AL.,
Charging Parties,
V.
OTAY WATER DISTRICT,
Respondent.
Case No. LA-CE-9-M
PERB Decision No. 	1634-M
May 	19, 	2004
Case No. LA-CE-9-M
PERB Decision No. 1634-M
May 19, 2004
Appearances:	Appearances: Gattey Baranic, by James M. Gattey, Attorney, for Donna Bartlett-May, et al.;
Burke, Williams & Sorensen, by James R. Lynch, Attorney, for Otay Water District.
Gattey Baranic, by James M. Gattey, Attorney, for Donna Bartlett-May, et al.;
Before Duncan, Chairman; Whitehead and Neima, Members.	Before Duncan, Chairman; Whitehead and Neima, Members.
Burke, Williams & Sorensen, by James R. Lynch, Attorney, for Otay Water District.
DECISION	DECISION
DUNCAN, Chairman: This case is before the Public Employment Relations Board
(PERB or Board) on exceptions filed by Donna Bartlett-May, et al. (Charging Parties), to a
proposed decision ( attached) on a compliance proceeding of an administrative law judge
(ALJ). 	The issue before the ALJ was whether there was compliance with the stipulation of the
parties that Charging Parties were to be made whole for all lost back pay and benefits suffered
by reason of their layoffs, less any amounts received in mitigation. The ALJ found that the
Otay Water District (District) fully complied with the Order of the Board in Otay Water
District (2002) PERB Decision No. HO-U-818-M and dismissed the Notice of Objection.
DUNCAN, Chairman: This case is before the Public Employment Relations Board
(PERB or Board) on exceptions filed by Donna Bartlett-May, et al. (Charging Parties), to a
proposed decision (attached) on a compliance proceeding of an administrative law judge
(ALJ). The issue before the ALJ was whether there was compliance with the stipulation of the
parties that Charging Parties were to be made whole for all lost back pay and benefits suffered
by reason of their layoffs, less any amounts received in mitigation. The ALJ found that the
Otay Water District (District) fully complied with the Order of the Board in Otay Water
District (2002) PERB Decision No. HO-U-818-M and dismissed the Notice of Objection.
The Board has reviewed the entire record in this matter, including the ALJ's proposed
decision, Charging Parties' exceptions, the District's response, post trial briefs and
supplemental documents. The Board finds the ALJ' s findings of fact and conclusions of law to
be free of prejudicial error and adopts the proposed decision as the decision of the Board itself
The Board has reviewed the entire record in this matter, including the ALJ's proposed
decision, Charging Parties' exceptions, the District's response, post trial briefs and
supplemental documents. The Board finds the ALJ's findings of fact and conclusions of law to
be free of prejudicial error and adopts the proposed decision as the decision of the Board itself.
* * * OVERRULED IN PART by Bellflower Unified School District (2022) PERB
Decision No. 2544a * * *

ORDER	ORDER
N
The Charging Parties' Notice
of
Objection, dated January 28, 2003, to the District's
alleged compliance with PERB Decision No. HO-U-818-M,
is
hereby DISMISSED
WITHOUT LEA VE TO AMEND.
The Charging Parties' Notice of Objection, dated January 28, 2003, to the District's
Members Neima and Whitehead joined in this Decision.	Members Neima and Whitehead joined in this Decision.
2
alleged compliance with PERB Decision No. HO-U-818-M, is hereby DISMISSED
WITHOUT LEAVE TO AMEND.

STATE OF CALIFORNIA
PUBLIC EMPLOYMENT RELATIONS BOARD
STATE OF CALIFORNIA
PUBLIC EMPLOYMENT RELATIONS BOARD
DONNA BARTLETT-MAY, ET AL.,
Charging Parties,
V .
OTA Y WATER DISTRICT,
Respondent.
DONNA BARTLETT-MAY, ET AL.,
Charging Parties,
V.
OTAY WATER DISTRICT,
Respondent.
UNFAIR PRACTICE
CASE NO. LA-CE-9-M
PROPOSED DECISION
(1/14/04)
UNFAIR PRACTICE
CASE NO. LA-CE-9-M
PROPOSED DECISION
(1/14/04)
Appearances:	Appearances 	Gattey Baranic, LLP by James M. Gattey, Attorney, for Donna Bartlett-May,
et al.; Burke, Williams & Sorensen, LLP by James R. Lynch, Attorney, for Otay Water
District.
: Gattey Baranic, LLP by James M. Gattey, Attorney, for Donna Bartlett-May,
Before Ann L. Weinman, Administrative Law Judge.	Before Ann L. Weinman, Administrative Law Judge.
et al.; Burke, Williams & Sorensen, LLP by James R. Lynch, Attorney, for Otay Water
District.
PROCEDURAL HISTORY	PROCEDURAL HISTORY
On August 7, 2001, Donna Bartlett-May (Bartlett-May), Clarence L. Cassens (Cassens),
James K. Clements (Clements), Michael Coleman (Coleman), Mona Favorite-Hill (Favorite-
Hill) and City Employee Association (CEA) (collectively called Charging Parties) filed an
unfair practice charge alleging that the Otay Water District (District) retaliated against Bartlett-
May, Clements and Favorite-Hill because of their protected activities and interfered with the
rights of each of the Charging Parties by eliminating the positions of the individual Charging
Parties and laying them off in February and March 2001 without providing CEA prior notice or
opportunity to meet and confer. The Office of the General Counsel of the Public Employment
Relations Board (PERB or Board) issued a complaint on January 15, 2002, alleging that by the
above conduct, the District violated the Meyers-Milias-Brown Act (MMBA) sections 3503 and
3506.
On August 7, 2001, Donna Bartlett-May (Bartlett-May), Clarence L. Cassens (Cassens),
1
James K. Clements (Clements), Michael Coleman (Coleman), Mona Favorite-Hill (Favorite-
Hill) and City Employee Association (CEA) (collectively called Charging Parties) filed an
unfair practice charge alleging that the Otay Water District (District) retaliated against Bartlett-
May, Clements and Favorite-Hill because of their protected activities and interfered with the
rights of each of the Charging Parties by eliminating the positions of the individual Charging
Parties and laying them off in February and March 2001 without providing CEA prior notice or
opportunity to meet and confer. The Office of the General Counsel of the Public Employment
Relations Board (PERB or Board) issued a complaint on January 15, 2002, alleging that by the
above conduct, the District violated the Meyers-Milias-Brown Act (MMBA) sections 3503 and
3506.'
1 The MMBA is codified at Government Code section 3500 et seq.	The MMBA is codified at Government Code section 3500 et seq.

2
Prior to formal hearing, the parties filed stipulations stating, in effect, that the District
violated the MMBA as alleged, and that it be ordered, inter alia, to "[M]ake all individual
Charging Parties whole for all lost back pay and benefits suffered by reason
of
their layoffs,
less any amounts received by them in mitigation." On October 2, 2002, the undersigned issued
a Proposed Order (Order) based on the parties' stipulations. No exceptions having been filed,
on November 4, 2002, PERB issued Decision No. HO-U-818-M declaring the Order final.
Prior to formal hearing, the parties filed stipulations stating, in effect, that the District
By letter
of
January 15, 2003, the District notified PERB that it had fully complied with
the Order. However, on January 28, 2003, counsel for Charging Parties filed a Notice
of
Objection and on February 5, 2003 filed a Supplement #2 to Notice
of
Objection, claiming that
the District had failed to pay the individual Charging Parties certain amounts due to them
pursuant to the Order.2
By letter of January 15, 2003, the District notified PERB that it had fully complied with
An informal conference held on June 2, 2003, failed to resolve the matter. Formal
hearing was held in the Los Angeles office
of
PERB on November 4, 2003, before the
undersigned. After the filing
of
post-hearing briefs, the matter was submitted for decision on
December 22, 2003.
An informal conference held on June 2, 2003, failed to resolve the matter. Formal
FINDINGS OF FACT	FINDINGS OF FACT
This compliance proceeding presents no disputed issues
of
fact. 	On November 8, 2002,
the District paid to the individual Charging Parties lump sums ranging from approximately
$22,000 to $157,300, representing their lost back pay and benefits less amounts in mitigation,
plus 7 percent annual interest. However, the tax liability on these lump sums was greater than
This compliance proceeding presents no disputed issues of fact. On November 8, 2002,
2 The Order also required the District to cease and desist its unlawful conduct, offer
reinstatement to the individual Charging Parties, and post copies of the Order. It is undisputed
that the District complied in these respects, and that only Clements accepted the offer
of 
I	reinstatement. The exact date(s) of the offers ofreinstatement is not reflected in the record.
therefore assume they were made at some time between the Order on October 2, 2002, and the
District's payment of back pay on November 8, 2002.
The Order also required the District to cease and desist its unlawful conduct, offer
2
violated the MMBA as alleged, and that it be ordered, inter alia, to "[Mjake all individual
Charging Parties whole for all lost back pay and benefits suffered by reason of their layoffs,
less any amounts received by them in mitigation." On October 2, 2002, the undersigned issued
a Proposed Order (Order) based on the parties' stipulations. No exceptions having been filed,
on November 4, 2002, PERB issued Decision No. HO-U-818-M declaring the Order final.
the Order. However, on January 28, 2003, counsel for Charging Parties filed a Notice of
Objection and on February 5, 2003 filed a Supplement #2 to Notice of Objection, claiming that
the District had failed to pay the individual Charging Parties certain amounts due to them
pursuant to the Order.
hearing was held in the Los Angeles office of PERB on November 4, 2003, before the
undersigned. After the filing of post-hearing briefs, the matter was submitted for decision on
December 22, 2003.
the District paid to the individual Charging Parties lump sums ranging from approximately
$22,000 to $157,300, representing their lost back pay and benefits less amounts in mitigation,
plus 7 percent annual interest. However, the tax liability on these lump sums was greater than
reinstatement to the individual Charging Parties, and post copies of the Order. It is undisputed
that the District complied in these respects, and that only Clements accepted the offer of
reinstatement. The exact date(s) of the offers of reinstatement is not reflected in the record. I
therefore assume they were made at some time between the Order on October 2, 2002, and the
District's payment of back pay on November 8, 2002.

3
it would have been had the individuals remained employed by the District and received the
amounts in incremental paychecks. Charging Parties contend that the District should
reimburse them for the additional tax liability, amounting to an aggregate sum of $67,699. The
District contends that there is no federal or state precedent awarding such damages. Further,
the District argues that the individual Charging Parties themselves created the damage by
requesting that the District issue the back pay checks jointly to themselves and to their
attorney. As the individuals would in tum use a portion of these amounts to pay their attorney
fees, the District argues that it was therefore required to report these amounts on 1099 tax
forms (non-employment income) rather than on W-2 tax forms (employment income). The
District suggests that if it is found to have erroneously filed 1099 forms instead of W-2 forms,
it could appropriately be ordered to file amended W-2 information. The individual Charging
Parties admit that they did not consult a tax professional prior to receiving their lump sum
awards.
it would have been had the individuals remained employed by the District and received the
Charging Parties also contend that the individuals incurred certain expenses in
obtaining interim employment which should be set off against the amounts credited to the
District for mitigation.
Charging Parties also contend that the individuals incurred certain expenses in
3 Relevant facts are as follows:
Cassens	Cassens
Cassens was employed by the District for 14 years, the last 3 of which were as an	Cassens was employed by the District for 14 years, the last 3 of which were as an
engineering technician and the prior 11 as a public affairs officer. After his layoff from the	engineering technician and the prior 11 as a public affairs officer. After his layoff from the
3
In In their Notice of Objection and Supplement #2, Charging Parties also argued that the
District should reimburse Clements for certain medical expenses and that his reimbursement
for medical premiums should not have been reported on a 1099 form as income; that Coleman
should be reimbursed for the loss of his wife's salary and the cost of certain medical
deductibles; and that the District erroneously reported on 1099 tax forms the full amount of
back pay as income to both the Charging Parties and to their attorney. No evidence or
argument was presented at the hearing to support these contentions and Charging Parties did
not raise them its in post-hearing brief. I therefore assume that Charging Parties no longer
object on the basis of these contentions and I shall disregard them.
their Notice of Objection and Supplement #2, Charging Parties also argued that the
3
amounts in incremental paychecks. Charging Parties contend that the District should
reimburse them for the additional tax liability, amounting to an aggregate sum of $67,699. The
District contends that there is no federal or state precedent awarding such damages. Further,
the District argues that the individual Charging Parties themselves created the damage by
requesting that the District issue the back pay checks jointly to themselves and to their
attorney. As the individuals would in turn use a portion of these amounts to pay their attorney
fees, the District argues that it was therefore required to report these amounts on 1099 tax
forms (non-employment income) rather than on W-2 tax forms (employment income). The
District suggests that if it is found to have erroneously filed 1099 forms instead of W-2 forms,
it could appropriately be ordered to file amended W-2 information. The individual Charging
Parties admit that they did not consult a tax professional prior to receiving their lump sum
awards.
obtaining interim employment which should be set off against the amounts credited to the
District for mitigation.' Relevant facts are as follows:
District should reimburse Clements for certain medical expenses and that his reimbursement
for medical premiums should not have been reported on a 1099 form as income; that Coleman
should be reimbursed for the loss of his wife's salary and the cost of certain medical
deductibles; and that the District erroneously reported on 1099 tax forms the full amount of
back pay as income to both the Charging Parties and to their attorney. No evidence or
argument was presented at the hearing to support these contentions and Charging Parties did
not raise them its in post-hearing brief. I therefore assume that Charging Parties no longer
object on the basis of these contentions and I shall disregard them.

4
District, Cassens applied for work in public affairs and engineering, restricting his search to
government agencies in south San Diego County. He submitted approximately two dozen
applications but received no response. He then expanded his search to the southwestern states;
the only response to approximately three dozen applications came from Lake Havasu City,
Arizona. Cassens accepted a position as that city's Public Information Officer and began
employment in September 2001; his family joined him in Arizona in November 2001.
District, Cassens applied for work in public affairs and engineering, restricting his search to
4
In San Diego, Cassens' wife Kathy had been employed for 15 years as special projects
coordinator for the Mission Federal Credit Union (MFCU). Since approximately 1994, Kathy
had performed this work at home, via MFCU's new telecommuting program, and by early
2001 she was earning approximately $47,000 per year. Anticipating the move to Arizona,
Kathy perused local newspapers for possible jobs and made inquiry to the Lake Havasu Credit
Union, but was told they had no marketing positions outside their headquarters in Los Angeles.
After the move, she applied for a part-time job as a receptionist and, according to Cassens, has
"kept an eye open for jobs in the financial fields where she has experience," but has been
unable to find work. As the District correctly points out, no explanation was offered as to why
Kathy could not have kept her job with MFCU by continuing to telecommute from Lake
Havasu City.
In San Diego, Cassens' wife Kathy had been employed for 15 years as special projects
Kathy's work at home in San Diego and her desire for part-time work in Lake Havasu
City was due in part to the Cassens' 20-year old daughter Molly, born with hydrocephalus,
able to feed herself but dependent on others for everything else. The Cassens had long ago
decided not to institutionalize her but to keep her at home. In both California and Arizona,
Molly has been provided public medical assistance. However, in California she received $812
Kathy's work at home in San Diego and her desire for part-time work in Lake Havasu
government agencies in south San Diego County. He submitted approximately two dozen
applications but received no response. He then expanded his search to the southwestern states;
the only response to approximately three dozen applications came from Lake Havasu City,
Arizona. Cassens accepted a position as that city's Public Information Officer and began
employment in September 2001; his family joined him in Arizona in November 2001.
coordinator for the Mission Federal Credit Union (MFCU). Since approximately 1994, Kathy
had performed this work at home, via MFCU's new telecommuting program, and by early
2001 she was earning approximately $47,000 per year. Anticipating the move to Arizona,
Kathy perused local newspapers for possible jobs and made inquiry to the Lake Havasu Credit
Union, but was told they had no marketing positions outside their headquarters in Los Angeles.
After the move, she applied for a part-time job as a receptionist and, according to Cassens, has
"kept an eye open for jobs in the financial fields where she has experience," but has been
unable to find work. As the District correctly points out, no explanation was offered as to why
Kathy could not have kept her job with MFCU by continuing to telecommute from Lake
Havasu City.
City was due in part to the Cassens' 20-year old daughter Molly, born with hydrocephalus,
able to feed herself but dependent on others for everything else. The Cassens had long ago
decided not to institutionalize her but to keep her at home. In both California and Arizona,
Molly has been provided public medical assistance. However, in California she received $812

5
per month in Social Security Disability payments, which were reduced to $545 per month in
January 2002 after the move to Arizona.
per month in Social Security Disability payments, which were reduced to $545 per month in
January 2002 after the move to Arizona.*4
Charging Parties contend that the District's mitigation credit should be offset by
Kathy's loss of salary and by the reduction in Molly's disability benefits, which Charging
Parties characterize as expenses incurred as a result of Cassens taking the job in Arizona. The
District argues that these losses are damages, not mitigation expenses, and are therefore not
covered by the Order. The District also argues that neither Cassens nor his wife adequately
mitigated their damages, as they limited their job searches, and that in any case, the District's
liability for their losses was terminated by its offer of reinstatement which Cassens rejected.
Cassens, however, claims that to accept the offer and move his family back to California would
have been financially and emotionally unreasonable.
Charging Parties contend that the District's mitigation credit should be offset by
Coleman	Coleman
Shortly after his layoff from the District, Coleman accepted a job with the California
Department of Water Resources in Sacramento. He rented a small apartment there and
returned to his home in San Diego on weekends. As this was a temporary position, he
continued to seek permanent employment, and in July 2002 he accepted a permanent job with
the Santa Clara Valley Water District in San Jose. He then took an apartment in San Jose and
put his house in San Diego up for sale. On weekends either he went back to San Diego or his
wife joined him in San Jose to search for a new house. At an unspecified time thereafter,
Coleman began leasing a house in Santa Cruz, 40 miles from San Jose. The San Diego house
finally sold in March 2003 and the Colemans, unable to find an affordable house in San Jose,
purchased the Santa Cruz house. In San Diego, Coleman had only a 5-minute commute
between his home and his job with the District.
Shortly after his layoff from the District, Coleman accepted a job with the California
4 Arizona, unlike California, does not provide a supplement to the federal benefit.	*Arizona, unlike California, does not provide a supplement to the federal benefit.
5
Kathy's loss of salary and by the reduction in Molly's disability benefits, which Charging
Parties characterize as expenses incurred as a result of Cassens taking the job in Arizona. The
District argues that these losses are damages, not mitigation expenses, and are therefore not
covered by the Order. The District also argues that neither Cassens nor his wife adequately
mitigated their damages, as they limited their job searches, and that in any case, the District's
liability for their losses was terminated by its offer of reinstatement which Cassens rejected.
Cassens, however, claims that to accept the offer and move his family back to California would
have been financially and emotionally unreasonable.
Department of Water Resources in Sacramento. He rented a small apartment there and
returned to his home in San Diego on weekends. As this was a temporary position, he
continued to seek permanent employment, and in July 2002 he accepted a permanent job with
the Santa Clara Valley Water District in San Jose. He then took an apartment in San Jose and
put his house in San Diego up for sale. On weekends either he went back to San Diego or his
wife joined him in San Jose to search for a new house. At an unspecified time thereafter,
Coleman began leasing a house in Santa Cruz, 40 miles from San Jose. The San Diego house
finally sold in March 2003 and the Colemans, unable to find an affordable house in San Jose,
purchased the Santa Cruz house. In San Diego, Coleman had only a 5-minute commute
between his home and his job with the District.

Charging Parties contend that the District should reimburse Coleman for costs of
$26,800 incurred in selling the San Diego house and $8,718 in purchasing the Santa Cruz
house, and for his cost of commuting between the house in Santa Cruz and the job in San Jose.
In its closing brief, the District argues that the San Diego house was not sold nor the Santa
Cruz house purchased until after Coleman rejected its offer ofreinstatement, therefore the
District is not liable for the costs incurred. 	Coleman testified that his family had already
moved to Santa Cruz and his daughter was already enrolled in a new school prior to the
reinstatement offer, thus it would have been unfair to "drag [them] all the way back to
San Diego .... " Coleman also postulated that ifhe moved back to San Diego, he might have
incurred penalties on the lease of the Santa Cruz house, as well as moving costs.
Charging Parties contend that the District should reimburse Coleman for costs of
ISSUES	ISSUES
1 . 	Is the District obligated to reimburse the individual Charging Parties for their
increased tax liability?
I.
$26,800 incurred in selling the San Diego house and $8,718 in purchasing the Santa Cruz
house, and for his cost of commuting between the house in Santa Cruz and the job in San Jose.
In its closing brief, the District argues that the San Diego house was not sold nor the Santa
Cruz house purchased until after Coleman rejected its offer of reinstatement, therefore the
District is not liable for the costs incurred. Coleman testified that his family had already
moved to Santa Cruz and his daughter was already enrolled in a new school prior to the
reinstatement offer, thus it would have been unfair to "drag [them] all the way back to
San Diego . . .." Coleman also postulated that if he moved back to San Diego, he might have
incurred penalties on the lease of the Santa Cruz house, as well as moving costs.
Is the District obligated to reimburse the individual Charging Parties for their
increased tax liability?
2. 	Is the District obligated to reimburse Cassens for his wife's lost salary and his
daughter's reduced disability benefits?
2. 	Is the District obligated to reimburse Cassens for his wife's lost salary and his
daughter's reduced disability benefits?
3. 	Is the District obligated to reimburse Coleman for costs in selling his San Diego
house and purchasing his Santa Cruz house, and for his costs commuting between Santa Cruz
and San Jose?
3. 	Is the District obligated to reimburse Coleman for costs in selling his San Diego
house and purchasing his Santa Cruz house, and for his costs commuting between Santa Cruz
and San Jose?
CONCLUSIONS OF LAW	CONCLUSIONS OF LAW
1 . 	Tax Liability	1. 	Tax Liability
6
The standard remedy for unlawful layoff or discharge, in cases under PERB's
jurisdiction as well as those previously before the courts under the MMBA, is to require the
employer to "make whole" the discriminatee for any losses suffered as a result of its unlawful
The standard remedy for unlawful layoff or discharge, in cases under PERB's
6
jurisdiction as well as those previously before the courts under the MMBA, is to require the
employer to "make whole" the discriminatee for any losses suffered as a result of its unlawful

7
conduct. The losses typically consist
of
back pay, but may also include medical expenses,
retirement benefits and other benefits formerly provided by the employer. (Regents
of
the
University
of
California (1997) PERB Decision No. 1188-H; San Diego Community College
District (1983) PERB Decision No. 368; Fugitt
v.
City
of
Placentia (1977) 70 Cal.App.3d 868	Cal.App.3d 868
[139 Cal.Rptr.123].)
conduct. The losses typically consist of back pay, but may also include medical expenses,
However, there is no precedent for the reimbursement
of
additional tax liability.
issue, although it has been	Neither PERB nor the California courts have dealt with this
addressed by the National Labor Relations Board (NLRB). In its Casehandling Manual, NLRB
regional directors are instructed to inform discriminatees
of
their responsibility for the tax
consequences
of
their back pay awards, and to caution them that large awards may result in
increased tax liability, which may be reduced by federal income averaging procedures. Thus in
Laborers Local 282 (Austin Co.) (1984) 271 NLRB 878 [117 LRRM 1083] (Austin),
However, there is no precedent for the reimbursement of additional tax liability.
5 the	Laborers Local 282 (Austin Co.) (1984) 271 NLRB 878 [117 LRRM 1083] (Austin), the
NLRB overruled the administrative law judge's remedial order and held that the availability
of
income averaging plus the agency's duty to inform discriminatees
of
their tax responsibilities
was sufficient to "meet the [judge's] concerns" that the discriminatees were forced into higher
tax brackets. And in Hendrickson Bros. (1985) 272 NLRB 438 [118 LRRM 1144], citing both
Austin and the Casehandling Manual, the NLRB held that ordering an employer to pay the
wronged employee's increased taxes "is contrary to settled Board policy." Since income
averaging was abolished in 1986, the NLRB has not changed its position or expanded its
NLRB overruled the administrative law judge's remedial order and held that the availability of
5
W When interpreting the MMBA, it is appropriate to take guidance from NLRB cases
interpreting similar provisions. (Firefighters v. City of Vallejo (1974) 12 Cal.3d 608 [116
Cal.Rptr. 507].)
7
retirement benefits and other benefits formerly provided by the employer. (Regents of the
University of California (1997) PERB Decision No. 1188-H; San Diego Community College
District (1983) PERB Decision No. 368; Fugitt v. City of Placentia (1977) 70
[139 Cal.Rptr.123].)
Neither PERB nor the California courts have dealt with this issue, although it has been
addressed by the National Labor Relations Board (NLRB). In its Casehandling Manual, NLRB
regional directors are instructed to inform discriminatees of their responsibility for the tax
consequences of their back pay awards, and to caution them that large awards may result in
increased tax liability, which may be reduced by federal income averaging procedures. Thus in
income averaging plus the agency's duty to inform discriminatees of their tax responsibilities
was sufficient to "meet the [judge's] concerns" that the discriminatees were forced into higher
tax brackets. And in Hendrickson Bros. (1985) 272 NLRB 438 [118 LRRM 1144], citing both
Austin and the Casehandling Manual, the NLRB held that ordering an employer to pay the
wronged employee's increased taxes "is contrary to settled Board policy." Since income
averaging was abolished in 1986, the NLRB has not changed its position or expanded its
hen interpreting the MMBA, it is appropriate to take guidance from NLRB cases
interpreting similar provisions. (Firefighters v. City of Vallejo (1974) 12 Cal.3d 608 [116
Cal.Rptr. 507].)

8
remedial scope. However, in Bouille Clark Plumbing, Heating, and Electric, Inc. (2002) 337
NLRB 743 [
__
LRRM
__
], the NLRB indicated it would consider such a change "after a
full briefing by all affected parties."
remedial scope. However, in Bouille Clark Plumbing, Heating, and Electric, Inc. (2002) 337
6
Charging Parties argue that because the tax increases resulted from the District's
unlawful conduct, are fixed and ascertainable amounts which the District has not rebutted, and
as there is no statute or regulation prohibiting reimbursement, the District should be held
liable. 	Charging Parties also argue that the tax increases could not have been avoided even
if
a
tax professional had been consulted, thus the District failed its burden to show that the
individual Charging Parties did not take reasonable steps to mitigate their losses.
Charging Parties argue that because the tax increases resulted from the District's
While I find Charging Parties' arguments persuasive, I cannot find the authority to
honor them. In this case
of
first impression within PERB' s jurisdiction, I find no guidelines,
either in statute, regulation, or case law, to support Charging Parties' contentions, other than
the general principle that a respondent is liable for all losses resulting from its unlawful
conduct. However, I do not find this case appropriate for an expansion
of
PERB's remedies
based on that general principle, as the Order was derived solely from the parties' stipulations,
which sought only "back pay and benefits," and the District issued back pay awards based on
Charging Parties' own calculations, which did not reflect any increased tax liability.
While I find Charging Parties' arguments persuasive, I cannot find the authority to
6
C Charging Parties cite Gelof v. Papineau (USDC, Del. 1986) 648 F.Supp. 912, where
the plaintiffs lump sum back pay award, arising from the employer's violation
of
federal age
discrimination laws, put him into a higher tax bracket which could no longer be ameliorated by
income averaging; thus the lower court ordered the employer, inter alia, to reimburse the
plaintiff for his increased tax liability. Charging Parties note that this portion of the ruling was
"not disturbed on appeal." However, in its appeal, the employer conceded its liability for the
increased taxes and contested only the calculated amount. Thus, the appellate court
specifically declined to "address the question of whether such an award should be made in all
back pay cases." (Gelof v. Papineau (3d Cir. 1987) 829 F.2d 452, at fn. 2.) Accordingly, I do
not find this case persuasive.
harging Parties cite Gelof v. Papineau (USDC, Del. 1986) 648 F.Supp. 912, where
8
NLRB 743 [ LRRM ], the NLRB indicated it would consider such a change "after a
full briefing by all affected parties."
unlawful conduct, are fixed and ascertainable amounts which the District has not rebutted, and
as there is no statute or regulation prohibiting reimbursement, the District should be held
liable. Charging Parties also argue that the tax increases could not have been avoided even if a
tax professional had been consulted, thus the District failed its burden to show that the
individual Charging Parties did not take reasonable steps to mitigate their losses.
honor them. In this case of first impression within PERB's jurisdiction, I find no guidelines,
either in statute, regulation, or case law, to support Charging Parties' contentions, other than
the general principle that a respondent is liable for all losses resulting from its unlawful
conduct. However, I do not find this case appropriate for an expansion of PERB's remedies
based on that general principle, as the Order was derived solely from the parties' stipulations,
which sought only "back pay and benefits," and the District issued back pay awards based on
Charging Parties' own calculations, which did not reflect any increased tax liability.
the plaintiff's lump sum back pay award, arising from the employer's violation of federal age
discrimination laws, put him into a higher tax bracket which could no longer be ameliorated by
income averaging; thus the lower court ordered the employer, inter alia, to reimburse the
plaintiff for his increased tax liability. Charging Parties note that this portion of the ruling was
"not disturbed on appeal." However, in its appeal, the employer conceded its liability for the
increased taxes and contested only the calculated amount. Thus, the appellate court
specifically declined to "address the question of whether such an award should be made in all
back pay cases." (Gelof v. Papineau (3d Cir. 1987) 829 F.2d 452, at fn. 2.) Accordingly, I do
not find this case persuasive.

9
Accordingly, I conclude that the District is not liable for the individual Charging
Parties' increased tax liability arising from their lump sum back pay awards.
Accordingly, I conclude that the District is not liable for the individual Charging
7
Parties' increased tax liability arising from their lump sum back pay awards."
2. 	Cassens	2.
A respondent may offset from its back pay liability any amounts the discriminatee
received in mitigation, typically "interim earnings" from other employment between the time
of layoff and the time of the offer of reinstatement. Although the discriminatee must be
forthcoming regarding the amount of his interim earnings, the respondent bears the burden of
proving its entitlement to an offset. (Fresno County Office of Education (1996) PERB
Decision No. 1171; California School Employees Association v. Personnel Commission (1973)
30 Cal.App.3d 241 [106 Cal.Rptr. 283]; NLRB v. Brown & Root, Inc. (8 th Cir. 1963) 311 F.2d
447 [52 LRRM 2115].) This mitigation may in turn be reduced by any necessary and
reasonable expenses incurred by the discriminatee in searching for and obtaining interim
employment, e.g., transportation and moving expenses, expenses commuting to the new job.
The discriminatee bears this burden of proof. (Hansen Brothers Enterprises (1993) 313 NLRB
599 [146 LRRM 1133]; Baddour, Inc. (1991) 304 NLRB 681 [139 LRRM 1064].)
A respondent may offset from its back pay liability any amounts the discriminatee
Here, Cassens' wife's salary was lost and his daughter's disability benefits were
reduced as a direct result of the family's move to Arizona. I find these losses were not
damages caused directly by Cassens' layoff but were rather expenses incurred by his obtaining
employment with Lake Havasu City. However, only scant details were provided as to what
Kathy Cassens' search for employment consisted of. Nor was any explanation given as to why
she could not continue to telecommute for the MFCU, or for any other company, from their
Here, Cassens' wife's salary was lost and his daughter's disability benefits were
7 As Charging Parties have not contended that the District erroneously reported the
back pay awards on 1099 forms instead of on W-2 forms, I make no finding or order thereon. I
assume, however, that the District's offer to file amended W-2 information is still open, and
that could reduce the individual Charging Parties' tax consequences.
As Charging Parties have not contended that the District erroneously reported the
9
Cassens
received in mitigation, typically "interim earnings" from other employment between the time
of layoff and the time of the offer of reinstatement. Although the discriminatee must be
forthcoming regarding the amount of his interim earnings, the respondent bears the burden of
proving its entitlement to an offset. (Fresno County Office of Education (1996) PERB
Decision No. 1171; California School Employees Association v. Personnel Commission (1973)
30 Cal.App.3d 241 [106 Cal.Rptr. 283]; NLRB v. Brown & Root, Inc. (8" Cir. 1963) 311 F.2d
447 [52 LRRM 2115].) This mitigation may in turn be reduced by any necessary and
reasonable expenses incurred by the discriminatee in searching for and obtaining interim
employment, e.g., transportation and moving expenses, expenses commuting to the new job.
The discriminatee bears this burden of proof. (Hansen Brothers Enterprises (1993) 313 NLRB
599 [146 LRRM 1133]; Baddour, Inc. (1991) 304 NLRB 681 [139 LRRM 1064].)
reduced as a direct result of the family's move to Arizona. I find these losses were not
damages caused directly by Cassens' layoff but were rather expenses incurred by his obtaining
employment with Lake Havasu City. However, only scant details were provided as to what
Kathy Cassens' search for employment consisted of. Nor was any explanation given as to why
she could not continue to telecommute for the MFCU, or for any other company, from their
back pay awards on 1099 forms instead of on W-2 forms, I make no finding or order thereon. I
assume, however, that the District's offer to file amended W-2 information is still open, and
that could reduce the individual Charging Parties' tax consequences.

10
home in Arizona. Thus, I find Charging Parties have not sustained their burden of proving that
Kathy's lost salary was a reasonable expense. As to Molly, I am not convinced by the
evidence that Cassens could not have found a job in a state which would supplement Molly's
federal disability benefit. Thus, while I do not question the wisdom of Cassens' decision to
take the job with Lake Havasu City, I find Charging Parties have not sustained their burden of
proving that Molly's reduced disability benefits was a reasonable expense.
home in Arizona. Thus, I find Charging Parties have not sustained their burden of proving that
Further, notwithstanding Charging Parties' argument that remedies should be tailored to
each situation and that terminated employees, along with their families, often must move in
order to take new jobs, there is no precedent for holding an employer liable for losses suffered
by family members.
Further, notwithstanding Charging Parties' argument that remedies should be tailored to
Accordingly, I conclude that the District is not liable for the loss of Kathy Cassens'
salary or the reduction of Molly Cassens' disability benefits.
Accordingly, I conclude that the District is not liable for the loss of Kathy Cassens'
3. 	Coleman	3.
Charging Parties seek reimbursement to Coleman for two types of losses:	Charging Parties seek reimbursement to Coleman for two types of losses:
(1) commissions and other closing costs on the sale of his San Diego house and purchase of his	(1)
Santa Cruz house in March 2003; and (2) costs of commuting 80 miles round trip from his
house in Santa Cruz to his job in San Jose. There is no question that these are expenses arising
directly from Coleman's acceptance of the job in San Jose. However, the closing costs on the
two houses were not incurred until after the District's offer ofreinstatement which, as noted
above, presumably occurred some time in October or November 2002. As to commuting
expenses, Coleman accepted the job in San Jose in July 2002. He first took a local apartment,
then began leasing the house in Santa Cruz and moved his family there. However, the record
does not reflect when Coleman first started commuting from Santa Cruz, or whether his
commissions and other closing costs on the sale of his San Diego house and purchase of his
10
Kathy's lost salary was a reasonable expense. As to Molly, I am not convinced by the
evidence that Cassens could not have found a job in a state which would supplement Molly's
federal disability benefit. Thus, while I do not question the wisdom of Cassens' decision to
take the job with Lake Havasu City, I find Charging Parties have not sustained their burden of
proving that Molly's reduced disability benefits was a reasonable expense.
each situation and that terminated employees, along with their families, often must move in
order to take new jobs, there is no precedent for holding an employer liable for losses suffered
by family members.
salary or the reduction of Molly Cassens' disability benefits.
Coleman
Santa Cruz house in March 2003; and (2) costs of commuting 80 miles round trip from his
house in Santa Cruz to his job in San Jose. There is no question that these are expenses arising
directly from Coleman's acceptance of the job in San Jose. However, the closing costs on the
two houses were not incurred until after the District's offer of reinstatement which, as noted
above, presumably occurred some time in October or November 2002. As to commuting
expenses, Coleman accepted the job in San Jose in July 2002. He first took a local apartment,
then began leasing the house in Santa Cruz and moved his family there. However, the record
does not reflect when Coleman first started commuting from Santa Cruz, or whether his

11
commute began prior to the offer of reinstatement. Thus, I cannot find that Coleman incurred
any commuting costs prior to the offer of reinstatement.
commute began prior to the offer of reinstatement. Thus, I cannot find that Coleman incurred
Coleman rejected the District's offer ofreinstatement, contending that it would have
been unfair to "drag" his family from Santa Cruz back to San Diego. There is no contention
that the offer of reinstatement was not valid.
Coleman rejected the District's offer of reinstatement, contending that it would have
Generally, the employer's liability is terminated by the discriminatee's rejection of a
valid offer ofreinstatement. (NLRB v. Ryder System, Inc. et al (6 th Cir. 1993) 983 F.2d 705
[142 LRRM 2290].) Thus, in St. Regis Paper Company (1991) 301 NLRB 1236
[136 LRRM 1283], the employee's additional expense commuting to his new jobsite were no
longer chargeable to the employer when he rejected its offer to return to his former jobsite.
Similarly, in Continental Insurance Co. (1988) 289 NLRB 579[131 LRRM 1202], the
employee rejected reinstatement because she was afraid to ride the subway, which she would
need to do to reach the employer's new location; she thereby ended her entitlement to back pay
and expenses. Of particular relevance is the decision in Preterm, Inc. (1984) 273 NLRB 683,
698-99 [118 LRRM 1622) (Preterm). The discriminatee had moved to another state to accept
interim employment; the employer argued she was not entitled to any back pay at all, as she
had removed herself from the labor market. The NLRB disagreed, finding that it was only
"speculative" as to whether she would accept reinstatement to her former job, thus she was
entitled to back pay. However, her rejection of the reinstatement offer served to terminate the
employer's liability.
Generally, the employer's liability is terminated by the discriminatee's rejection of a
11
Here, had Coleman decided, when he first took the job in Sacramento or the job in
San Jose, that he would not return to San Diego, the reasoning in Perterm might lead to a
finding that he had taken himself out of the job market at that time and was no longer eligible
for any back pay. There is no evidence to sustain such a finding. 	However, notwithstanding
Here, had Coleman decided, when he first took the job in Sacramento or the job in
any commuting costs prior to the offer of reinstatement.
been unfair to "drag" his family from Santa Cruz back to San Diego. There is no contention
that the offer of reinstatement was not valid.
valid offer of reinstatement. (NLRB v. Ryder System, Inc. et al (6" Cir. 1993) 983 F.2d 705
[142 LRRM 2290].) Thus, in St. Regis Paper Company (1991) 301 NLRB 1236
[136 LRRM 1283], the employee's additional expense commuting to his new jobsite were no
longer chargeable to the employer when he rejected its offer to return to his former jobsite.
Similarly, in Continental Insurance Co. (1988) 289 NLRB 579 [131 LRRM 1202], the
employee rejected reinstatement because she was afraid to ride the subway, which she would
need to do to reach the employer's new location; she thereby ended her entitlement to back pay
and expenses. Of particular relevance is the decision in Preterm, Inc. (1984) 273 NLRB 683,
698-99 [1 18 LRRM 1622) (Preterm). The discriminatee had moved to another state to accept
interim employment; the employer argued she was not entitled to any back pay at all, as she
had removed herself from the labor market. The NLRB disagreed, finding that it was only
"speculative" as to whether she would accept reinstatement to her former job, thus she was
entitled to back pay. However, her rejection of the reinstatement offer served to terminate the
employer's liability.
San Jose, that he would not return to San Diego, the reasoning in Perterm might lead to a
finding that he had taken himself out of the job market at that time and was no longer eligible
for any back pay. There is no evidence to sustain such a finding. However, notwithstanding

that a move back to San Diego would have disrupted Coleman's family, Charging Parties have
not shown that it would have been impossible.
that a move back to San Diego would have disrupted Coleman's family, Charging Parties have
8 Coleman's concern that he might incur lease
forfeiture payments and additional moving costs in accepting reinstatement would assumedly
have been satisfied by the District's reimbursement for these additional expenses. Thus, there
is no legal basis for finding that his rejection of the reinstatement offer did not terminate the
District's liability.
not shown that it would have been impossible." Coleman's concern that he might incur lease
Accordingly, I conclude that the District is not liable for Coleman's expenses in the sale
and purchase of his two houses or his commuting costs.
Accordingly, I conclude that the District is not liable for Coleman's expenses in the sale
PROPOSED ORDER	PROPOSED ORDER
Upon the findings of fact and conclusions of law and the entire record in this case, it is
found that the Otay Water District (District) has fully complied with the order of the Public
Employment Relations Board (PERB or Board) in Otay Water District (2002) PERB Decision
No. HO-U-818-M. It is hereby ordered that the Charging Parties' Notice of Objection to
District's Alleged Compliance With PERB's Order, dated January 28, 2003, be DISMISSED.
Pursuant to California Code of Regulations, title 8, section 32305, this Proposed
Decision and Order shall become final unless a party files a statement of exceptions with the
Board itself within 20 days of service of this Decision. The Board's address is:
Upon the findings of fact and conclusions of law and the entire record in this case, it is
Public Employment Relations Board
Attention: Appeals Assistant
1031 18th Street
Sacramento, CA 95814-4174
FAX: (916) 327-7960
Public Employment Relations Board
Contrary to Charging Parties' contention, as the District's offer of reinstatement was
valid, it is Coleman's burden to show why he was unable to accept it, rather than the District's
burden to show that his rejection was unreasonable.
Contrary to Charging Parties' contention, as the District's offer of reinstatement was
12	12
forfeiture payments and additional moving costs in accepting reinstatement would assumedly
have been satisfied by the District's reimbursement for these additional expenses. Thus, there
is no legal basis for finding that his rejection of the reinstatement offer did not terminate the
District's liability.
and purchase of his two houses or his commuting costs.
found that the Otay Water District (District) has fully complied with the order of the Public
Employment Relations Board (PERB or Board) in Otay Water District (2002) PERB Decision
No. HO-U-818-M. It is hereby ordered that the Charging Parties' Notice of Objection to
District's Alleged Compliance With PERB's Order, dated January 28, 2003, be DISMISSED.
Pursuant to California Code of Regulations, title 8, section 32305, this Proposed
Decision and Order shall become final unless a party files a statement of exceptions with the
Board itself within 20 days of service of this Decision. The Board's address is:
Attention: Appeals Assistant
1031 18th Street
Sacramento, CA 95814-4174
FAX: (916) 327-7960
valid, it is Coleman's burden to show why he was unable to accept it, rather than the District's
burden to show that his rejection was unreasonable.

In accordance with PERB regulations, the statement of exceptions should identify by
page citation or exhibit number the portions of the record, if any, relied upon for such
exceptions. (Cal. Code Regs., tit. 8, sec. 32300.)
In accordance with PERB regulations, the statement of exceptions should identify by
A document is considered "filed" when actually received before the close of business
(5 p.m.) on the last day set for filing. 	(Cal. Code Regs., tit. 8, secs. 32135(a) and 32130.) A
document is also considered "filed" when received by facsimile transmission before the close
of business on the last day for filing together with a Facsimile Transmission Cover Sheet
which meets the requirements of California Code of Regulations, title 8, section 32135(d),
provided the filing party also places the original, together with the required number of copies
and proof of service, in the U.S. mail. (Cal. Code Regs., tit. 8, sec. 32135(b ), (c) and (d); see
also Cal. Code Regs., tit. 8, secs. 32090 and 32130.)
A document is considered "filed" when actually received before the close of business
13
Any statement of exceptions and supporting brief must be served concurrently with its
filing upon each party to this proceeding. Proof of service shall accompany each copy served
on a party or filed with the Board itself. (See Cal. Code Regs., tit. 8, secs. 32300, 32305,
32140, and 32135(c).)
Any statement of exceptions and supporting brief must be served concurrently with its
13
Ann L. Weinman
Administrative Law Judge
Ann L. Weinman
page citation or exhibit number the portions of the record, if any, relied upon for such
exceptions. (Cal. Code Regs., tit. 8, sec. 32300.)
(5 p.m.) on the last day set for filing. (Cal. Code Regs., tit. 8, secs. 32135(a) and 32130.) A
document is also considered "filed" when received by facsimile transmission before the close
of business on the last day for filing together with a Facsimile Transmission Cover Sheet
which meets the requirements of California Code of Regulations, title 8, section 32135(d),
provided the filing party also places the original, together with the required number of copies
and proof of service, in the U.S. mail. (Cal. Code Regs., tit. 8, sec. 32135(b), (c) and (d); see
also Cal. Code Regs., tit. 8, secs. 32090 and 32130.)
filing upon each party to this proceeding. Proof of service shall accompany each copy served
on a party or filed with the Board itself. (See Cal. Code Regs., tit. 8, secs. 32300, 32305,
32140, and 32135(c).)
Administrative Law Judge