In a pivotal decision, the National Labor Relations Board in Thryv, Inc. and International Brotherhood of Electrical Workers, Local 1269 Cases 20-CA-250250 and 20-CA-251105, appears to have expanded the potential exposure for employers in actions brought claiming violations of the National Labor Relations Act (NLRA). Signaling a shift from prior agency interpretation, the National Labor Relations Board (NLRB) has now said that the NLRA's "make whole remedy" requires employers in violation of the law to compensate affected employees for all "direct or foreseeable pecuniary harms" suffered as a result of the respondent's unfair labor practices.
Background of National Labor Relations Act Section 10(c)
The NLRB derives its authority from section 10 (c) of the NLRA. This section provides broad discretionary authority to the NLRB to provide remedies in situations where an employee has been affected by an unfair labor practice by an employer. The main aim is to restore the employee to the status they would have enjoyed, but for the unfair labor practice. The Board seeks to use section 10(c) to procure a "restorative effect" for employees subjected to unfair labor practices.
Implications of the Thryv Decision for Employers
In this decision, the NLRB specifically clarified that it is now "standardizing" its "make whole" remedy to include "all direct or foreseeable pecuniary harms" that may be present in any unfair labor practice case. While the particular facts of the case are not necessarily important to this analysis, it is the NLRB's interpretation of its own authority under the NLRA section 10 (c) that has serious implications for employers navigating labor law challenges moving forward. According to this decision, this section confers broad authority to the NLRB to provide remedy in a situation where an employee has been negatively affected by an unfair labor practice, with the main aim to restore the employee to the status they would have enjoyed, but for the unfair labor practice. To put it another way, the NLRB took the time here to explain how and why it was revisiting and clarifying its existing practice of ordering relief that ensures affected employees are made whole for the consequences of an employer's unlawful conduct. It implied that the process for granting relief in past cases may not have been sufficient to truly make some employees whole.
In the past, an employee harmed by an unfair labor practice in violation of the provisions of the NLRA was provided with a more limited basis of relief that would try to make them "whole." This relief typically took the form of back wages, but not, for instance, compensatory damages associated with job loss.
However, in Thryv, the Board expressed a preference for expanding – and standardizing – the remedies in cases where "made whole relief" was awarded. It read its grant of authority under Section 10(c) to include the ability to award relief for all "direct and foreseeable pecuniary harm" that may result from the unfair labor practice. The Board specified that these "foreseeable and pecuniary" harms could include the costs associated with searching for another job, credit card debt incurred while unemployed, out-of-pocket medical expenses due to loss of medical insurance, and "any other additional costs to make ends meet while unemployed."
Although the opinion does not lay out an exhaustive list of these "direct and foreseeable pecuniary harms" may look like, it does suggest that future cases involving alleged NLRA violations may (1) expand the scope of potential relief that may be awarded to complaining employees; and (2) potentially increase the time, cost, and expense associated with determining what these additional "direct and foreseeable pecuniary" harms may be.
- NLRB expressed a preference of interpreting its own authority to award greater relief to complaining employees under the NLRA. This may create greater exposure for employers in cases involving NLRA violations; and
- The particulars of what will constitute a "direct and foreseeable pecuniary harm" is not yet known setting-up a potential for great uncertainty; and
- Employers should be aware that the amount and type of damages assessed in favor of employees may increase in the future.
The attorneys at WSHB stand ready to assist employers as they navigate the implications of this decision moving forward. Please do not hesitate to reach out to a member of our team with any questions or concerns.