Last year, the National Labor Relations Board (NLRB), the agency tasked with enforcing employee rights to organize and discuss terms of employment, issued a number of decisions that impacted U.S. labor law. One decision stands out as fundamentally changing enforcement mechanisms under the National Labor Relations Act (NLRA). PilieroMazza discusses the decision and important takeaways for employers below.
On December 13, 2022, the NLRB issued a decision in Thryv, Inc. and International Brotherhood of Electrical Workers, Local 1269. The decision held that, where companies commit an unfair labor practice (ULP), they are responsible for consequential damages in addition to traditionally required lost wages and benefits. The NLRB reasoned that, to best effectuate the purposes of the NLRA, “our make whole-whole remedy shall expressly order respondents to compensate affected employees for all direct or foreseeable pecuniary harms that these employees suffer.”
In this case, the NLRB found that Thryv, Inc., a software company, had unlawfully laid off workers by failing to bargain with the employees’ union. While neither the General Counsel nor the union specifically requested a remedy for consequential damages in the case, the NLRB relied on its broad discretion under the NLRA to evaluate the appropriate remedy.
The NLRB noted that, where employees are laid off or are otherwise targets of ULPs, “they may be forced to incur significant financial costs, such as out-of-pocket medical expenses, credit card debt, or other costs simply in order to make ends meet.” While the NLRB did not define what “direct or foreseeable pecuniary harms” may entail, here those harms included “reasonable search-for-work and interim employment expenses.” The NLRB explained that employees under these circumstances are not “made whole” until they receive full compensation for these types of harms. The NLRB made clear that this should not be viewed as an extraordinary remedy but must be applied in any case where the NLRB orders an employer to make a worker whole.
The potential impact of this decision is far-reaching, as employees and their bargaining representatives will now have a broad range of additional damages to claim when alleging a ULP. While damages must be direct and foreseeable, the briefings in the case speculated that such damages could extend to lost investment income, lost job perks, or even attorneys’ fees. This may lead to an increase in ULP charges, and it certainly blurs the line of where an employer will be found responsible for extended remedies. Indeed, the decision’s dissent warned that the remedy “opens the door to awards of speculative damages.”
The decision is also likely to lead to increased costs when companies defend against ULPs due to the potential for additional hurdles to settlement, protracted litigation in evaluating these harms, and ultimately, delayed resolution of NLRB proceedings. To avoid these added costs, companies should always consult counsel when navigating matters that touch on employee rights under the NLRA, such as organizing campaigns, bargaining obligations, and potential retaliation claims.
Special thanks to law clerk Georgianne Kokenis for her assistance with this post.