By: Cary Burke
It’s no secret that one of National Labor Relations Board General Counsel Jennifer Abruzzo’s primary priorities is to broaden the damages available to an aggrieved party. Indeed, as we’ve previously discussed here, last December, the Board ruled in Thryv, Inc., 372 NLRB No. 22 (Dec. 13, 2022), that aggrieved employees are entitled to recover damages that are a “direct and foreseeable” result of an unfair labor practice. This sea change, though, appears to be a beach-head, rather than an end in and of itself. Damages stemming from employers refusing to follow bargaining orders pending appeal appear to be next on the list.
By way of brief background, the Board ruled in Ex-Cell-O Corp., 185 NLRB 107 (1970), that Supreme Court precedent prevented the imposition of financial penalties on employers that refuse to bargain pending appeal of a bargaining order. According to General Counsel Abruzzo, however, the lack of the availability of a monetary remedy incentivizes employers to refuse to bargain.
Given the General Counsel’s focus on expansion of remedies – and her success in this arena already – we expect the Board to revisit Ex-Cell-O. More to the point, the Board’s decision in Thryv allowing for the recovery of direct and foreseeable damages strongly suggests that the Democratic Board majority would overrule Ex-Cell-O if presented with the opportunity to do so. This expected ruling, in turn, would very likely allow for the recovery of financial penalties upon the finding that an employer refused to comply with a bargaining order pending appeal. Such financial penalties could conceivably encompass “lost opportunity damages,” which could include wages and benefits an employee might have earned had the employer chosen to bargain.
How such lost opportunity damages might be calculated, of course, is anyone’s guess. Perhaps, wage rates and benefits packages of employees working for “comparable” employers that offer similar services or manufacture similar products might be the basis for such calculations. Or such purported lost opportunity damages might be tied to cost-of-living increases or even federal prevailing wages.
Not to belabor the point, but we expect that remedies available to aggrieved parties will continue to broaden (and become more speculative). For this reason, employers should carefully consider the merits of any appeal of a bargaining order. An unsuccessful appeal could saddle an employer with significant liability, should the Board rule that financial penalties are recoverable upon a refusal to bargain finding.
Employers with questions are advised to speak with their labor counsel at Seyfarth.