NLRB Expands Remedies for Violators
As our clients know, the National Labor Relations Board (NLRB) does not only regulate unionized workforces. Rather, the Board’s rulemaking and legal decisions affect all workplaces: both union and non-union. On December 13, 2022, the NLRB clarified the remedy that can be awarded where employers are found to have committed an Unfair Labor Practice (ULP). Employers, whether you have a unionized workforce or not, take note of this development and understand your obligations – and risks for noncompliance - in this area.
The National Labor Relations Act (NLRA) is relevant to most employers (and employees) - regardless of union status. That is to say, employees who are not represented by a union have rights under the NLRA, just as unionized employees do. Specifically, the NLRA protects the rights of employees to engage in “protected concerted activity”, which according to the NLRB’s own website, “is when two or more employees take action for their mutual aid or protection regarding terms and conditions of employment.” As the NLRB goes on to explain, “[a] single employee may … engage in [such] activity if he or she is acting on the authority of other employees, bringing group complaints to the employer’s attention, trying to induce group action, or seeking to prepare for group action.” And, relevant to employers, Section 8(a)(1) of the NLRA makes it an unfair labor practice to interfere with an employee’s right to engage in such protected concerted activity.
Again, these mandates apply to both unionized and non-unionized workforces. Countless employers with non-unionized workplaces have learned this lesson the hard way when they were accused of violating an employees’ right to engage in protected concerted activity pursuant to 8(a)(1).
On December 13, 2022, the Board issued a 3-2 decision in Thryv, Inc., 20-CA-250250 (2020), in which the majority purported to expand the remedies available to affected employees entitled to “make whole relief” under the NLRA.
The Thryv decision is a continuation of the NLRB’s trend of seeking the expansion of “make-whole” remedies. On September 8, 2021, General Counsel Abruzzo published Memorandum GC 21-06 urging Regions to seek “the full panoply of remedies available to ensure that victims of unlawful conduct are made whole for losses suffered as a result of unfair labor practices.” The General Counsel cited her inspiration for the Memorandum as Chairman McFerran’s footnote in Vorhees Care and Rehabilitation Center, 371 NLRB No. 22 (Aug. 25, 2021), in which Chairman McFerran encouraged the Board to seek public input about “whether to add a new, make-whole remedy to those we traditionally order: an award of consequential damages to make employees whole for economic losses (apart from the loss of pay or benefits) suffered as a direct and foreseeable result of an employer's unfair labor practice.” On November 10, 2021, the Board acted on Chairman McFerran’s footnote and the General Counsel’s Memorandum when it invited amici briefs on the issue in Thryv.
The Thryv decision is the culmination of the Board’s effort to expand the “full panoply of remedies” that the General Counsel is urging all Regions to pursue. The Thryv decision’s holding is clear:
We conclude that in all cases in which our standard remedy would include an order for make-whole relief, the Board will expressly order that the respondent compensate affected employees for all direct or foreseeable pecuniary harms suffered as a result of the respondent’s unfair labor practice. (emphasis added).
This new, enhanced “standardized remedy” applies in all cases (not just egregious ones). In fact, the Board emphasized this point as follows: “[t]o the extent that our prior decisions have not always made clear that we define make-whole relief to include direct or foreseeable pecuniary harms resulting from the respondent’s unfair labor practices, we do so now.” The decision also listed some (but not all) examples of “direct or foreseeable pecuniary harm,” such as:
- Legal expenses and fees incurred
- Cost of clothing (and other personal property) damaged due to discriminatory assignment
- Medical expenses resulting from an unlawful reassignment
- Expenses incurred while searching for work after an unlawful termination
- Amount of investment growth if employee is unlawfully withheld from an employer benefit program
- Interest and late fees on credit cards
- Increased transportation or childcare costs
This list merely represents examples that the Board extrapolated in the Thryv decision. The Board is likely to expand upon what constitutes “direct and foreseeable pecuniary harms” in later decisions.
Effects of the Decision
Union and non-union employers should keep a close eye on developments in this evolving area of the law. Now more than ever, it is critical that employers “refresh” their traditional labor relations compliance. Has your company double checked its policies, practices and decision-making to ensure NLRA compliance?
While it is important for employers to take action, the dissenting members did provide some room to argue against the change going forward. Also, the Board’s decision is likely to be appealed, so the D.C. Circuit or the Ninth Circuit will likely issue an opinion in this matter, and possibly the Supreme Court. Stay tuned for future developments.