NLRB Decision Significantly Expands Menu of Available “Make-Whole” Remedies Against Employers

The National Labor Relations Board has expanded its “make-whole” remedies to include compensation for “all direct or foreseeable” harms incurred by a charging party arising out of an employer’s unfair labor practice. In Thryv, Inc., the Board made it clear that this standard for determining an appropriate remedy is to be employed in all unfair labor practice cases, not just the most egregious. This is a considerable departure from the Board’s practice.

In the decision, the Board indicated it would consider out-of-pocket medical expenses incurred by the charging party, “search for work” and new job expenses, compensation for any tax effect of a lump-sum back-pay award, pre-judgment interest, late fees on credit cards, investment losses from early withdrawal from retirement accounts, increased transportation costs due to a loss of a car, or, possibly, losses incurred as a result of a loss of a home through mortgage foreclosure, to name some examples. The Board was not specific in its description of direct or foreseeable losses incurred.

The boundaries of allowable and not allowable damages have not been determined. However, the Board majority went to great pains to explain that the damages that could be awarded are not to be considered “consequential” damages or considered under any other common law standard under tort or contract law.

In an earlier opinion, the Board’s Office of the General Counsel indicated that it would also pursue such expanded remedies in cases involving an employer’s refusal to bargain in good faith. According to the General Counsel, those damages could involve a union’s attorneys’ fees and, perhaps, awards of retroactive back pay or benefits. Following this decision, those remedies should be considered in play in refusal to bargain cases.

The Thryv decision and the expanded remedies are sure to be appealed. However, it must be remembered that even if the decision is reversed by a Circuit Court of Appeals, the Board does not recognize a precedential effect. The Board can pursue these expanded remedies even if a Court of Appeals overturns this decision. The Board would only be required to follow a decision of the Supreme Court. As the dissenters pointed out, there are several grounds for such an appeal, including significant constitutional grounds, but until the Supreme Court rules, it is unlikely the Board, as it is currently composed, will change this decision. The General Counsel and Regional Directors throughout the country will be following this decision and pursuing such damages in all unfair labor practice cases. Administrative Law Judges will be considering and awarding these damages going forward.

Another troubling aspect of this decision is that these expanded remedies will likely be ruled on without significant discovery by employers. Discovery is not generally permitted by Board rules. Unless that procedure is modified employers will be at a significant disadvantage when challenging these expanded money damage claims.

One other result could be that there would be an increased interest by Plaintiffs’ counsel in pursuing cases at the Board.

If you have any questions, please feel free to contact Daniel Kinsella, Renee Fell, or any other member of Clark Hill’s Labor and Employment team.

The views and opinions expressed in the article represent the view of the authors and not necessarily the official view of Clark Hill PLC. Nothing in this article constitutes professional legal advice nor is it intended to be a substitute for professional legal advice.