On Tuesday, the National Labor Relations Board, in a 3-2 decision, expanded the remedy available for unfair labor practices to include a make-whole remedy for "all direct or foreseeable pecuniary harms” resulting from the violations. The additional remedy will go beyond the traditional back pay and reinstatement remedy typically available.
The Board majority made a not-very-convincing effort to explain that it was not adopting all “consequential damages” as a remedy. Instead, the majority said that it was limiting the scope of its remedy to “make-whole” relief. The Board majority found that the expanded remedy was “firmly rooted within the Board’s statutory authority” under Section 10(c) of the National Labor Relations Act, which provides, in pertinent part, that the Board may issue an order for a respondent “to take such affirmative action including reinstatement of employees with or without backpay, as will effectuate the policies of this Act.”
The case involved allegations that software company Thryv, Inc., violated Sections 8(a)(1) and 8(a)(5) of the NLRA by failing to bargain in good faith about layoffs with a local of the International Brotherhood of Electrical Workers union. The new remedy will be available in all unfair labor practice cases and will apply to all pending cases retroactively.
In its decision, the NLRB majority stated as follows:
Where, as here, our standard remedy would include an order for make-whole relief, we find it necessary to ensure that affected employees are made fully whole for the costs they incur as a result of the respondent’s unlawful actions. Accordingly, to best effectuate the purposes of the Act, our make-whole remedy shall expressly order respondents to compensate affected employees for all direct or foreseeable pecuniary harms that these employees suffer as a result of the repondent’s unfair labor practice.
The majority did not provide a comprehensive list of the types of “pecuniary harms” that could be included in a remedy, but it did reference medical expenses and credit card debt as types of harms an employee might suffer as a result of an unfair labor practice. The majority said that an employee could not be “made whole” without the ability to recover such costs if they were the "direct or foreseeable" result of the unfair labor practice.
In a statement accompanying the release of the decision, Chair Lauren McFerran stated, "Employees are not made whole until they are fully compensated for financial harms that they suffered as a result of unlawful conduct." She added, "The board clearly has the authority to comprehensively address the effects of unfair labor practices. By standardizing the board's make-whole relief to fully include the direct or foreseeable financial harms suffered by affected employees, we will better serve the important goals of the National Labor Relations Act."
Chair McFerran and Members Gwynne Wilcox and David Prouty, all Democrats, joined in the Board decision. Republican Members John Ring and Marvin Kaplan dissented. They said, "In our view, this standard opens the door to awards of speculative damages that go beyond the board's remedial authority."