                              No. 84-38

               IN THE SUPREME COURT OF THE STATE OF MONTANA




IN THE MATTER OF UNFAIR LABOR
PRACTICE :
CITY OF GREAT FALLS, MONTANA,
                       Defendant/Petitioner and Appellant,
       -vs-

BRUCE YOUNG BY CONSTRUCTIOlJ AND
GENERAL LABORERS' LOCAL NO. 1334
AFL-CIO,
                      Complainant and Respondent,
       and

MONTAXA BOARD OF PERSONNEL APPEALS,
                       Intervenor.



APPEAL FROM:    District Court of the Eighth Judicial District,
                In and for the County of Cascade,
                The Honorable H. William Coder, Judge presiding.

COUNSEL OF RECORD:

         For Appellant:

               David V. Gliko, City Attorney, Great Falls, Flontana
         For Respondent :

               D. Patrick McKittrick, Great Falls, Montana
        For Intervenor:

               James E. Gardner, Board of Personnel Appeals, Helena,
               Montana

                               --                      ---.
                                                        -.--     -
                               Submitted on Briefs:   March 30, 1984
                                           Decided:   June 19, 1984




    -                        --
                               Clerk
Mr. Justice L.C.        Gulbrandson delivered the Opinion of the
Court.

         The City of Great Falls (City) appeals from an order
of   the District           Court    of    the Eighth Judicial District,
Cascade County, affirming an order of the Board of Personnel
Appeals        (Board) awarding backpay and restoring certain
contractual benefits to complainant Bruce Young on account
of an unfair labor practice committed against Young by the
City.     We affirm.
         This is the third instance in which this Court has
been petitioned to resolve matters arising out of a labor
dispute between the City and Young and his union.                     In Young
v.   City      of   Great    Falls    (Mont. 1981), 632 P.2d /Ill, 38
                                                                     *
St.Rep. 1317 (Young I), this Court addressed the propriety
of joining the Board as a necessary party to any judicial
review in District Court of a Board order.                   A year later, in
Young v. City of Great Falls (Mont. 1982), 646 P.2d 512, 39
St.Rep.     1047 (Young 11), this Court affirmed a judgment by
the District Court affirming a Board decision that the City
had committed an unfair labor practice in its dealings with
Young.      Subsequent to that appeal, on September 30, 1982, a
bearings examiner for the Board conducted a hearing for the
purpose of designing an appropriate remedial order.                          The
examiner's recommended order, dated January 7, 1983, was
appealed by the City to the Board.                     The Board adopted the
order     without     alteration          on   March   9,   1983.     The    City
appealed this decision to the District Court, but the court
affirmed.       The City's challenge to the remedial order is now
before this Court.
         The    remedial. order           fashioned    by   the   examiner   and
affirmed        by    the     Board      and      the    District          Court        has        three

essential         components:            (1) t h a t      the City tender                t o Young

back p a y i n t h e amount o f              $9,633.66           ( l e s s amounts d e d u c t e d

by    s t a t e and     federal       agencies          for     contribution            to     Social

Security,         Public      Employees'          Retirement,           and    other         similar

o b l i g a t i o n s ) p l u s i n t e r e s t of $4,628.09,         f o r t h e time p e r i o d

O c t o b e r 3 1 , 1978 t o J u l y 20, 1 9 7 9 ; ( 2 ) t h a t t h e C i t y r e s t o r e

t o Young       a l l s e n i o r i t y and l o n g e v i t y       r i g h t s d u e him u n d e r

the    collective          bargaining          agreement          between      the       City        and

Young's       union;        (3) that       the City           c r e d i t Young w i t h            other

b e n e f i t s d u e him u n d e r t h e a g r e e m e n t .

         The       City     contests        the     findings          in    support           of     the

hack p a y component and t h e s p e c i f i c t e r m s o f                  t h e component.

D u r i n g and s i n c e t h e S e p t e m b e r 3 0 ,         1982, h e a r i n g ,    the City

h a s r e s i s t e d a n y award o f back p a y o n t h e g r o u n d t h a t Young

failed       to      mitigate       his     financial            losses       by   exercising

r e a s o n a b l e d i l i g e n c e t o o b t a i n i n t e r i m employment.          Assuming

t h a t Young is e n t i t l e d t o back p a y , t h e C i t y h a s c h a l l e n g e d

t h e t i m e p e r i o d f o r which t h e award i s t o b e c a l c u l a t e d and

t h e method used by t h e Board t o c a l c u l a t e b o t h t h e amount o f

back p a y and i n t e r e s t d u e on t h a t amount.

         On a p p e a l , t h e C i t y r a i s e s t h e f o l l o w i n g i s s u e s :

          ( 1 ) Whether        t h e r e is s u b s t a n t i a l    evidence        t o support

the     Board         finding        that       Young         exercised            "reasonable

d i l i g e n c e " i n o b t a i n i n g i n t e r i m employment d u r i n g t h e p e r i o d

i n which         h e was l a i d o f f by t h e C i t y ?

          ( 2 ) Whether t h e r e m e d i a l p e r i o d a d o p t e d by t h e h e a r i n g

e x a m i n e r and a f f i r m e d by t h e Board i s p r o p e r ?

          ( 3 ) Whether        t h e Woolworth           formula used           to      calculate

t h e amount o f          b a c k p a y owed Young i s a p p r o p r i a t e f o r t h i s
case?
        (3) Whether   the    Florida Steel    formula       used   to
calculate the amount of       interest awarded on back pay         is
appropriate in light of Montana law respecting interest on
judgments?
        Our analysis of these issues is guided by reference to
National Labor Relations Board (NLRB) decisions and federal
judicial interpretation of the National Labor Relations Act

(NLRA).    Because of the similarity between the NLRA and the
Montana Public Employees' Collective Bargaining Act, (PECBA)

Sections 39-31-101 to       -409, MCA, we    have   found    federal
administrative and     judicial construction        of   the   NLRA
instructive and often persuasive regarding the meaning of
our own labor relations law.     See, e.g., Teamsters Local #45
v. State ex rel. Bd. of Personnel Appeals (Mont. 1981), 635
P.2d 1310, 1312, 38 St.Rep. 1841, 1844; State ex rel. Bd. of
Personnel Appeals v. District Court (1979), 183 Mont. 223,




THE ISSUE OF "REASONABLE DILIGENCE"
        Following federal precedent, all of the parties agree

that back pay is not always an appropriate remedy for an
aggrieved employee:
             "A worker who has been the victim of an
             unfair labor practice is not entitled to
             simply await reimbursement from his or
             her employer for wages lost, for 'the
             [law] was not intended to encourage
             idleness. ' [citations omitted]  .
             " 'Mitigation [of an employer Is liability
             for backpay] will result not only where
             the worker has taken in earnings from
             another source after discharge, but also
             for 'losses willfully incurred1-- such as
                when the discriminatee fails to secure
                comparable employment without excuse.
                [citations omitted] A discharged worker
                is not held to the highest standard of
                diligence in his or her efforts to secure
                comparable    employment;   I reasonable'

                exertions are sufficient. [citations
                omitted]."   N.L.R.B. v. Mercy Peninsula
                Ambulance Serv. (9th Cir. 1979), 589 F.2d
                1014, 1017-18.
See also McCann Steel Co. v. N.L.R.B.                     (6th Cir. 1978), 570
F.2d   652, 656; N.L.R.B.              v.    Arduini Mfg.     Corp.    (1st Cir.
1968), 394 F.2d          420, 423; N.L.R.B.          v.    Armstrong Tire and
Rubber    Co.       (5th Cir.     1959), 263 F.2d           680, 683; Airport
Service Lines (1977), 231 N.L.R.B.                  137, 96 L.R.R.M.         (BNA)


         The    City maintains              that Young     did   not    exercise
"reasonable diligence"                 in seeking       interim employment.
According to the City, the record demonstrates that Young
made minimal         efforts      to   secure other        employment between
October 31, 1978, the day he was laid off, and July 20,
1979, the day he was reinstated.                   The City likens Young's
efforts        to   those    of   the       aggrieved     employee     in lllercy
Penninsula, supra.           In that case, back pay was denied to the
victim of an unfair labor practice upon a finding that he
made but a few, insincere attempts during his nine months of
unemployment to seek other work.                   589 F.2d      at 1018.      See
also Alfred M. Lewis, Inc. v. N.L.R.B.                    (9th Cir. 1982), 681
F.2d   1154, 1156 (explaining facts of Mercy Peninsula);
Arduini, supra         ( court    found lack of reasonable diligence
where discriminatee did not apply for job with company he
knew   was      hiring      and   where      he   visited    only     four   other
companies and registered with employment office).
         Our    review is confined to the question of whether
there is substantial evidence to support the finding of the
Board that Young had exercised reasonable diligence.                        See
section 2-4-704(2)(e), MCA; Slater v. Emp. Sec. Div. (Mont.
1984), 676 P.2d 220, 222, 41 St.Rep. 247, 249-50.
        The record indicates that, following his termination,
Young made weekly contacts with the union hall and with the
local Job Service regarding prospective employment.                   Through
the union, Young obtained a job of one-week's duration with
a    local construction company.          Upon obtaining this job,
Young's name was placed at the bottom of the union hall's
hiring    list, and, consequently, was                unable       to obtain
additional work through the union              in part because of his
low position on the list.         However, he was able to secure,
through his own initiative, another week's worth of work
with a construction firm in Shelby, Montana, approximately
eighty miles from Great Falls.         Young also contacted several
other    individuals and      companies about job prospects, but
could not remember all of their names or the specific number
of individuals and companies approached.              There was evidence
that    job   opportunities    were   hampered       by     winter    weather
conditions and a slow economy.
        The hearing    examiner       found    that Young's           efforts
amounted      to reasonable diligence, considering                   all the
attendant circumstances.        The Board concurred, and we find
no   reason to disturb this finding.                Once the Board has
established     the amount of back            pay    owed    an otherwise
wrongfully     discharged     employee,   the       burden    is     upon   the
employer to produce evidence           to mitigate          its liability.
Mercy Peninsula, supra, at 1017 (citing cases).                    Here, the
evidence of Young's job-hunting efforts and the detrimental
effect of weather and economic conditions on the job market
were uncontraverted.             Furthermore, the facts of this case
are clearly distinguishable from those in Mercy Peninsula
and -  -
    Arduini.             The City has        not   demonstrated     how   the
available         evidence      can     reasonably    be   interpreted     as
indicative of indifference, insincerity or slothfulness on
Young's part in his search for employment.


THE ISSUE OF THE REMEDIAL PERIOD
         The period for calculating back pay typically begins
to run at the time of the illegal discharge and ends when
the aggrieved employee's reinstatement becomes effective.
Bob Maddox Plymouth,             Inc.    (1981), 256 N.L.R.B.       813, 107
L.R.R.M.     (BNA) 1325.        However, this remedial period can be

reduced if there is proof of mitigating circumstances.                    The
burden of proof          is on the employer to establish that it
would      not    have    had    work     available    for   an   illegally
discharged employee due to economic or other                        factors.
N.L.R.B.     v.    Midwest Hanger Co.         (8th Cir. 1977), 550 F.2d
1101, 1104-1105, cert. den. 434 U.S.                830, 98 S.Ct.    112, 54
L.Ed.2d     90; N.L.R.B.         v.   Maestro Plastics Corp.        (2d Cir.
1965), 354 F.2d 170, 176, cert. den. (1966), 384 U.S.                     972,
86 S.Ct. 1862, 16 L.Ed.2d             682.
         The hearing examiner found, and the Board concurred,

that the appropriate remedial period for Young extended from
October 31, 1978, the day of his termination, to July 20,
1979, the day of his reinstatement.                The City maintains that
the relevant period             should end    January 5, 1979, because
Harold Spilde, the employee who had been wrongfully retained
after October 31, had been laid off on January 5, with no
hiring     taking place         until Young was reinstated July 20.
Because      of        "budget constraints"        in   effect    at    the    time

immediately following Spilde's termination, the City reasons
that there would have been no work for Young to perform.
       The essence of the City's argument was presented to
this Court             in Young I1 and     rejected as contrary           to    the

available evidence:
                   In
                  I'     addition     to    Spilde,    CETA
                  [Comprehensive Employment and Training
                  Act] employees with less seniority than
                  Young continued to do laborer's work
                  after Young's discharge [on October 31,
                  19781. Furthermore, 7 or 8 new employees
                  were   hired   by   the   [City] Street
                  Department in April 1979, but not Young.
                  It was in this period that [Bob] Duty,
                  [Superintendent of the Department ,] said
                  in effect, 'I don't care what happens. I
                  won't hire Bruce Young back in the Street
                  Department.'"     646 P.2d at 514, 39
                  St.Rep. at 1049.
       We find no evidence to dispute our original finding.
Indeed, as the hearing examiner noted                    in his recommended
remedial      order,        there   is     evidence     that     the   City    had
laborer's work available after January 5, 1979.                        Moreover,
it appears that the CETA employees used to perform this work

may have been used              illegally, because CETA jobs may not
result in displacement of regular employees and may                            not
impair existing labor contracts.                 41 Fed.Reg. No. 124 (1981)
(since repealed).           Had Young not been wrongfully discharged,
he   would    have        had   standing    to   challenge     any     subsequent
substitution of CETA workers                 for    regular    union    contract

employees after January 5, 1979.                 Finally, we note that the
City did not offer evidence at the hearing about any budget
constraints.             In short, we      find no      reason to alter        the
prescribed remedial period.


THE APPROPRIATENESS OF THE WOOLWORTH FORMULA
         In calculating the amount of back pay due an illegally
discharged      employee,     the    Board    utilizes     a   method     first
developed and used by the N.L.R.B.                  in F.W.    Woolworth Co.
(1950), 90 N.L.R.B.         289, 26 L.R.R.M.            (BNA) 1185.       This
method, commonly referred to as the "Woolworth" formula, has
been approved by the United States Supreme Court. N.L.R.B.
v. Seven-Up Bottling Co. (1953), 344 U.S. 344, 73 S.Ct. 287,


         Under this formula, the N.L.R.B.            and the Board compute
back pay "on the basis of each separate calendar quarter or
portion thereof" from the time of the illegal discharge to
the time of a proper offer of reinstatement.                    The quarters
begin    with   the   first    day    of     January,    April,    July    and
October.     See Woolworth, 90 N.L.R.B.             at 293, 26 L.R.R.M.     at
1185-86.     See also 8 F.R.E.S.       Section 63:74 (1978).            In the
instant    case, Young's       back    pay    was    calculated    for    four
quarters or portions thereof as follows:

 QTR.            COMPENSABLE                 RATE PER                    GROSS
ENDING              HOURS                      HOUR                       PAY




Gross pay for the first two quarters listed above was then
reduced by $194.70          and     $200, respectively, to reflect
Young's earnings from the two brief jobs with construction
firms.     Thus, his total back pay is $9,633.66 for the four

quarters, subject to further reductions for contributions to
Social Security, PERS, and other obligations.
                                      Gi
                           wcoC1~~'0.17.t
      Prior to using the P e A & formula, the N.L.R.B.
                             ?c w A

typically computed back pay by subtracting the total amount
earned in other employment from the earnings the employee

would have made had he or she not been terminated.                       This
straight subtraction method was ultimately rejected because
many employees could conceivably find work that paid more
during the duration of their absence from the first job than

what they would have earned had they still been employed in
that position.         "This," according to the N.L.R.B.,            "resulted
in     the    progressive   reduction or      complete   liquidation of
backpay due."          90 N.L.R.B.    at 292, 26 L.R.R.M.            at 1185.
Consequently, the N.L.R.B.            concluded that some employers
might knowingly delay offers of reinstatement in order to

reduce their hack pay liability.            Aggrieved employees would
counter by waiving the right to reinstatement and thus toll
the running of back pay to preserve any amounts then owing.
90 N.L.R.B      at 292, 26 L.R.R.M.    at 1185.
         To    maintain     the   effectiveness     of     reinstatement
policies and restore industrial peace, the quarterly method

of computation or "Woolworth formula" was adopted.                      Under
this approach:
                "[tlhe liability for each quarter may be
                determined by reference to factors then
                current, and not subject to subsequent
                fluctuation.    Thus, both employee and
                employer will be in a position to know
                with some precision the amount that will
                be due at the end of each 3-month period,
                if discrimination should ultimately be
                found." 90 N.L.R.B.   at 293, 26 L.R.R.M.
                at 1186.
This formula also protects an employee's right to Social
Security       benefits, which        are   based   on   the    number     of
quarterly       contributions     from wages.       Thus,      the    formula
serves the remedial purposes of labor law and retirement
law.     90 N.L.R.B.    at 293, 26 L.R.R.M.     at 1186.
         We emphasize that this method has been approved by the
United States Supreme Court as a proper exercise of informed
discretion.        Seven-up Bottling, supra, 344 U.S.               at 346-48,
73 S.Ct.    at 288-89, 97 L.Ed.          at 381-83.       The only caveat
expressed    by    the Court was         that the N.L.R.B.          could      not
"apply a remedy it has worked               out on       the basis of          its
experience, without regard to circumstances which may make
its application to a particular situation oppressive and
therefore not       calculated      to   effectuate      a policy        of    the
[National Labor Relations] Act."             344 U.S.     at 349, 73 S.Ct.
at 290, 97 L.Ed. at 383.
        The City objects to the use of the Woolworth formula
in the immediate case, primarily because Young allegedly did
not exercise reasonable diligence in obtaining                           interim
employment during the quarterly periods that he would have
been working for the City.           This is not so much a criticism
of    the   formula      for   calculating       back    pay   as    it       is    a
reiteration of the already rejected argument that Young did
not     exercise    reasonable      diligence       in    seeking        interim
employment.
        Nevertheless, the City makes an additional argument,
i.e.,    that     Woolworth    is   somehow      inapplicable       to    public
sector employment.        We disagree.       The City's arguments here
are presented       in   the   form of     conclusions as opposed                  to
reasoned arguments.        The Woolworth formula has been applied
in other states to public sector unfair labor practices.
See e.g.,    Golden Cab. Co., 1 Nat'l             Pub. Empl. Rep.             (Lab.
Rel. Press) 438 (Pa.Lab. Rel. Bd. Nov. 1, 1979).                     The City
has     offered    no    reasons why       the    formula works           in       an
"oppresive" manner         contrary to the goals of the Montana
Public Employees' Collective Bargaining Act.                   See Seven-Up
Bottling,       supra,         3 4 4 U.S.     a t 349, 73 S.Ct.              a t 290,      97 L.Ed

a t    383.      Moreover,            we     note    that     the       alternative        formula

p r o p o s e d by t h e C i t y ,      which i s b a s e d on a method used i n a

sex     discrimination            case,       E.E.O.C.        v.     Ford     Motor       Co.    (4th

Cir.    1 9 8 1 ) , 645 F.2d          183, r e v ' d on o t h e r g r o u n d s ( 1 9 8 2 ) , 458

U.S.    219,     102 S.Ct.         3 0 5 7 , 7 3 L.Ed.2d           721, would,        i f applied

to     this    case,      result        in    the    same a m o u n t o f        back      pay    due

Young.          The      Board        did     not    act     erroneously            by    applying

Woolworth t o t h i s case.



...............................................E L
THE A P P R O P R I A T E N E S S OF THE F L O R I D A S T E                      FORMULA FOR

CALCULATING INTEREST O BACKPAY
                      N

         In     addition         to     awarding          Young     back     pay,        the    Board

granted       i n t e r e s t on t h a t award,            using a formula f i r s t used

b y t h e N.L.R.B.         i n F l o r i d a S t e e l Corp.         ( 1 9 7 7 ) , 2 3 1 N.L.R.B.

651,     96    L.R.R.M.         (BNA)        1070.        This     formula e s t a b l i s h e s    a
variable        rate      of     interest,           taken        from     Internal        Revenue

S e r v i c e methods o f        interest calculation.                     The F l o r i d a S t e e l

formula replaces a f i x e d s i x percent i n t e r e s t standard f i r s t

applied        in     Isis      Plumbing            and    Heating         Co.     (1962),       138

N.L.R.B.        716,       51     L.R.R.M.           (BNA)         112   and      accepted         as

reasonable          by   the     federal courts.                 See,    e.g.,      N.L.R.B.       v.

I n t ' l Union o f O p e r a t i n g E n g i n e e r s ( 6 t h C i r .       1 9 6 7 ) , 380 F.2d

244.      The       reasons       for       rejecting       a fixed         interest       rate i n

favor of       a v a r i a b l e rate are c l e a r l y set f o r t h i n F l o r i d a

Steel:

                 "Taking i n t o c o n s i d e r a t i o n [ i n f l a t i o n a r y
                 t r e n d s a n d t h e r e m e d i a l p u r p o s e s of t h e
                 NLRA,]         . . .  t h e f l a t 6-percent i n t e r e s t
                 r a t e no l o n g e r e f f e c t u a t e s t h e p o l i c i e s
                 o f t h e [NLRA].          A r a t e o f i n t e r e s t more
                 a c c u r a t e l y keyed t o t h e p r i v a t e s e c t o r
                 money m a r k e t w o u l d h a v e t h e e f f e c t o f
                 encouraging             timely        compliance           with
                 [N.L.R.B.]         orders,        discouraging              the
                 commission of u n f a i r l a b o r p r a c t i c e s , and
                 more f u l l y c o m p e n s a t i n g d i s c r i m i n a t e e s
                 f o r t h e i r economic l o s s e s . "   2 3 1 N.L.R.B.
                 a t 6 5 1 , 9 6 L.R.R.M.    a t 1072.

These      views      were     recently        reaffirmed          in    Olympic       Medical

Corp.     (1980),       250    M.L.R.B.        146,        1 0 4 L.R.R.M.         (BNA)   1325.

The     Montana       Board     of     Personnel        Appeals         finds     these    same

c o n s i d e r a t i o n s r e l e v a n t t o remedying u n f a i r l a b o r p r a c t i c e s

i n Montana.

         The C i t y o b j e c t s t o t h e i n t e r e s t award o f $4,628.09              on

grounds t h a t t h e v a r i a b l e rates used by t h e h e a r i n g examiner

and t h e Board exceed t h e s t a t u t o r y l i m i t a t i o n on i n t e r e s t o n

judgments,       a n d b e c a u s e t h e i n t e r e s t was c o m p o u n d e d .   Section

29-9-205(1),          MCA,    provides that,            e x c e p t i n cases w h e r e t h e

interest       t o be     recovered          on a     judgment       is s p e c i f i e d i n a

contract,       i n t e r e s t is payable "at a rate of                     10% p e r    annum

and no g r e a t e r r a t e        [,and]    . . . must         n o t be c o m p o u n d e d i n

any nanner o r form."                 Furthermore,           the City maintains t h a t

t h e r a t e on judgments s h o u l d be t h e s i x p e r c e n t r a t e used i n

I n t ' l Union of O p e r a t i n g E n g i n e e r s ,    supra.

         There       is n o q u e s t i o n    that     t h e v a r i a b l e rate formula

used     by    the     hearing       examiner        and      approved       by    the    Board

r e s u l t s i n an e f f e c t i v e i n t e r e s t rate exceeding t e n p e r c e n t .

The     following        c a l c u l a t i o n s are       taken     from       the    hearing

e x a m i n e r ' s recommended o r d e r a s a f f i r m e d b y t h e B o a r d :


QUARTER                   NET BACK                      INTEREST                     INTEREST
 ENDING                       PAY                         RATE                     DUE 1-1-83




The c h o i c e of      i n t e r e s t r a t e s and method o f c a l c u l a . t i o n was
e x p l a i n e d b y t h e h e a r i n g e x a m i n e r i n h i s recommeded o r d e r :

                  " T h e NLRB R e g i o n a l O f f i c e i n S e a t t l e
                  reported t h e following adjusted prime
                  interest             rates     which      it       used     in
                  c a l c u l a t i n g back pay award i n t e r e s t i n
                  t h e p r i v a t e s e c t o r : 1979-6%; 1980-12%;
                  1981-12%; 1982-20%.               To d e t e r m i n e simple
                  i n t e r e s t d u e , t h e NLRB t o t a l s t h e r a t e s
                  f o r t h e y e a r s i n which t h e i n t e r e s t was
                  due and owing t h e n a p p l i e s t h a t r a t e ( 6 %
                  + 1 2 % + 1 2 % + 20% i n t h i s c a s e ) t o t h e
                  amount t h e employee would h a v e e a r n e d ,
                  minus i n t e r i m e a r n i n g s , as o f t h e end o f
                  t h e f i r s t q u a r t e r h e was t e r m i n a t e d . To
                  a r r i v e a t i n t e r e s t due i n subsequent
                  q u a r t e r s t h e f i r s t r a t e (50% h e r e ) is
                  r e d u c e d by o n e f o u r t h o f t h e amount o f
                  t h e adjusted prime rate i n e f f e c t a t t h e
                  time ( 6 % x 1 / 4 = 1 . 5 % h e r e ) . "

          I n response t o t h e C i t y ' s argument, we n o t e i n i t i a l l y

t h a t t h e i n t e r e s t r a t e was n o t compounded.                     The a d d i n g o f

i n t e r e s t f o r each quarter             is m e r e l y a s h o r t h a n d method o f
calculation.               Thus,       assuming         that       section          25-9-205(1)

controls,         the      calculations          are     not       in     violation           of     the

prohibition            against         compounding.              However,           we    are n o t

convinced         that     the     statute        prevents         the        use   of    variable

r a t e s when c a l c u l a t i n g i n t e r e s t d u e o n b a c k p a y a w a r d s .

          Several        states        impose     statutory         restrictions              on     the

amount of        i n t e r e s t t h a t may b e a w a r d e d o n c o u r t j u d g m e n t s .

See e.g.,         Fla.     Stat.       Ann.    sec.     55.03(1)          (West S u p p .          1984)

(12     percent);          Or.     Rev.       Stat.      sec.      82.010(3)             (1983)       (9

percent).          These states i n p a r t i c u l a r have p u b l i c employee

l a b o r r e l a t i o n s laws s i m i l a r t o M o n t a n a ' s .        We note that,           in

awarding        back      pay    and      interest       thereon,             personnel       appeal

boards i n those s t a t e s have l i m i t e d i n t e r e s t awards t o t h e

s t a t u t o r y maximum r a t e .        H i a l e a h Housing A u t h o r i t y , 4 N a t ' l

Pub.    Empl.      Rep.     (Lab. R e l .      P r e s s ) 777     ( F l a Pub.        Empl.       Rel.

Comm'n Nov.          12,     1 9 8 1 ) ; Coos County 3 N a t ' l                Pub.     Empl.       Rep

(Lab.     Rel.     Press)        589    (Or.     Empl.      Rel.        Bd.    Oct.      3,    1980).
From our survey of other jurisdictions, it appears that the
Florida and Oregon precedents may               be        followed elsewhere.
Unfortunately,           there    are no   judicial opinions             on    the

correctness of these administrative decisions.
        Taking     into     consideration       the       justification        for
awarding interest on any monetary judgment and the remedial
purposes      of   the     Montana    Public    Employees1 Collective
Bargaining Act, we conclude that the Florida Steel method
for calculating interest is lawful.                  Section 39-31-406(4),
which      gives   the    Board    authority    to    award     back   pay     and
related       remedies,      is     identical        to    29   U.S.C.        sec.

160(c)(1976), which the N.L.R.B.            relies upon to award back
pay and interest in federal labor relations cases.                        While
both section 25-9-205 and the above-cited labor law statutes
contemplate that interest on awards or judgments recognizes

the debtor-creditor relationship between parties to an
action, labor relations law employs interest for more than
compensation for the loss of use of the employee's money.
The award of interest encourages more prompt compliance with
Board orders and discourages the commission of unfair labor
practices, thereby effectuating the legitimate ends of labor
legislation.        See Florida Steel, 231 N.L.R.B.               at 651, 96
L.R.R.M.      at 1071, 1072; Isis Plumbing and Heating, 138
N.L.R.B.     at 719, 720, 51 L.R.R.M.       at 1124, 1125.
        Thus, the statutory provision on interest must not
supplant, but       should       complement,    the       legitimate ends of
public policy.       Here, section 25-9-205(1) does apply to the
extent that Young is entitled to ten percent per annum on
the   judgment, which        includes the award             of back    pay     and
interest as calculated by             the Board, after the district
court affirmance of the Board order.                Section 25-9-205(1)
does - however, prevent
     not,                             the use of the Florida Steel
formula at the administrative stage of these proceedings.

        One final argument of the City must be addressed.                In
its reply brief, the City reiterates its initial argument
that,   following N.L.R.B.          precedent,    the Board    should    be
limited to awards of six percent based on federal appellate
court decisions.         The City argues that N.L.R.B.         decisions
like Florida Steel, rendered subsequent to these court
holdings,      cannot, as administrative rulings, overrule
federal court precedents.            This argument misapprehends the
role of judicial review of             these administrative rulings.
Federal court decisions that affirm N.L.R.B.              rulings do so
because the rulings are based on substantial evidence and
are in accord with the N.L.R.B.'s          statutory mandate.      Should
the N.L.R.B.        determine at some future time that, in view of
changing factual conditions, a new ruling or policy should
be   implemented, that policy will be measured on judicial
review by      the same or        similar principles     of   substantial
evidence      and    statutory    compliance     that were employed      in
previous judicial decisions, not by whether the new ruling

is in accord with the previous court decisions.               See, e.g.,
North Cambria Fuel Co. v. N.L.R.B.             (3d Cir. 1981), 6 4 5 F.2d
177, cert den. 4 5 4 U.S.        1123, 102 S.Ct. 970, 71 L.Ed.2d      110,
where   the    court upheld       an N.L. R.B.     interest-on-back     pay

award using a twelve percent rate on grounds that it was
within the N.L.R.B.'s       statutory discretion to implement.          We
will adhere to the same principles when evaluating appeals
of future Board decisions.
      The decision of the District Court affirming the order
of the Board of Personnel Appeals is affirmed.
                                          ,/




We concur:
