Employers that violate the National Labor Relations Act (NLRA) will have to pay workers additional damages under a recently issued precedential decision from the National Labor Relations Board (NLRB or Board).
In Thryv, Inc., the NLRB ruled 3-2 that the Board’s standard remedy for make-whole relief should include consequential damages. The Board now 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” to more fully realize the concept of “make-whole relief” under Section 10(c) of the NLRA.
These damages may include “out-of-pocket medical expenses, credit card debt, or other costs simply in order to make ends meet.” Any relief under the decision must be “specifically calculated.” The Board will require the General Counsel to present evidence demonstrating the amount of pecuniary harm, the direct or foreseeable nature of that harm, and why that harm is due to the employer’s unfair labor practice. In response, the employer can present evidence challenging the amount of money claimed, argue that the harm was not direct or foreseeable, or that the damages would have occurred regardless of the unfair labor practice.
Applying these new principles to the case under review, the Board ordered the respondent to compensate the employees for “reasonable search-for-work and interim employment expenses” as a result of the employees’ unlawful layoff. In addition, the Board ordered the respondent to compensate the employees for the adverse tax consequences of receiving a lump-sum back pay award.
The Board will pursue these damages in all cases, not just egregious cases, because the remedies should be restorative and not punitive, according to the Board. In addition, the Board will apply this decision retroactively to pending cases.
The Board’s dissenting members (both Republicans) argued that the new standard is too broad and will lead to speculative damages that exceed the Board’s authority. Legal challenges to the expanded remedy are likely. The expanded remedies also may lead to more appeals of Board decisions that include such make-whole relief.
Ballard Spahr’s Labor and Employment Group regularly advises clients on navigating the shifting landscape of NLRB decisions and regulations, including defense of unfair labor practice charges.