Before the National Labor Relations Board’s (“Board” of “NLRB”) December 13 decision in Thryv, Inc., the Board’s traditional make-whole remedy for employee losses suffered as a result of an employer’s unfair labor practice was generally limited to back wages and/or reinstatement of employment. Following the decision, employers may be required to pay for a broader range of damages.
In the Thryv case, which involved an employer’s alleged unfair labor practices relating to bargaining over a reduction in force, the Board dramatically broadened its interpretation of the scope of employer liability under the National Labor Relation Act (“Act’). It held that, in addition to back wages and reinstatement, affected employees may also recover “for all direct or foreseeable pecuniary harms” resulting from employer violations of the Act.
AGC – in conjunction with the Coalition for a Democratic Workplace (“CDW”) and four fellow CDW-member trade associations – submitted an amicus brief in the case last January. The brief argued that the Board should not make consequential damages available in these types of cases because the agency lacks statutory authority to do so, as routinely confirmed by the courts, and because strong policy reasons support limiting remedies. The Board’s decision to nevertheless expand remedies has significant implications.
The most impactful aspect of this decision relates to the addition of allegedly “foreseeable” pecuniary losses suffered by employees. As the Board detailed, this category of damages would go beyond lost wages to include indirect consequences of a job loss (or other unfair labor practice) such as credit card debt, medical bills, child-care expenses, job search costs, and potentially even housing-related costs such as moving expenses or losses related to a mortgage foreclosure. While the Board declined to include pain and suffering within the scope of its new make-whole standard, it did so on the basis of the particular facts of the case, explicitly declining to decide that issue one way or another.
The Board’s new standard will require the NLRB General Counsel (who is responsible for prosecuting unfair labor practice cases against employers) to prove that the alleged loss was “either (a) directly caused by the unfair labor practice; or (b) was foreseeable at the time of the unfair labor practice and was incurred as a result of the unfair labor practice.” At that point, the burden will shift to the employer to establish facts to either “negate” or “mitigate” the alleged loss.
This decision significantly raises the stakes for employers potentially facing liability under the Act. Moreover, this new remedial standard is not limited to cases brought against unionized employers. The Act’s provisions cover most private-sector employees, regardless of whether they are represented by a union. Thus, while this decision is likely to be challenged in a federal court of appeals—and may eventually be overturned—for the time being, it is particularly important for unionized and non-union employers alike to ensure that policies and practices comply with the Act. Employers are well-advised to consult with experienced labor counsel when contemplating layoffs or other employment terminations where the Act may be implicated.
Editor’s Note: This article was written by guest author Manolis Boulukos of the law firm Ice Miller. Mr. Boulukos is a partner in the Workplace Solutions Group and a member of the AGC Labor and Employment Law Council, a network of labor and employment lawyers who represent AGC members and chapters. This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.