Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
On December 13, 2022, the National Labor Relations Board (“Board”) made another move to expand relief available to workers who allege unfair labor practices by their employers. Historically, employees seeking relief under the National Labor Relations Act (“NLRA” or “the Act”) were limited to “make-whole” remedies, such as reinstatement, backpay, and loss recovery benefits lost as a result of an unfair labor practice. In Thryv, Inc., 372 NLRB No. 22 (Dec. 13, 2022), the Board expanded the scope of these remedies, such that aggrieved workers will now be able to recover compensation for “any other direct or foreseeable pecuniary harm incurred.”
The Board initially solicited comments on the scope of make-whole remedies in November of 2021, signaling its intent to expand the range of relief available. This is in line with the NLRB general counsel’s publicly-announced position that she would be aggressive in seeking consequential damages in cases she brings before the Board. As expected, in Thryv, the Board concurred in part with the general counsel and dramatically expanded relief available under the Act.
Prior to Thryv, Inc., the make-whole remedy was limited to reinstatement and backpay. On November 10, 2021, the Board invited parties through a Notice and Invitation to File Briefs to comment on whether the make-whole remedy rule should be altered. Fourteen amicus briefs were filed in January of 2022 on behalf of workers and management, weighing in on the potential rule change.
Amici filed by unions and workers urged the Board to consider a menu of remedies that would “modernize the make-whole remedy in all pending and future cases”1 by “address[ing] the gamut of economic injuries that result from protracted job loss.”2 In contrast, other amici urged the Board to reconsider expanding the make-whole remedy, urging that “federal labor law remain[ ] faithful to the statutory framework that Congress adopted in the [National Labor Relations Act]”3 and warning that endless iterations of consequential damages could become fair game,4 and that the Board’s decision “will have immediate long-lasting effects on [ ] labor relations, workplace morale and productivity.”5
In its 3-2 decision, the Board held that to “best effectuate” the National Labor Relations Act, “[the] make-whole remedy shall expressly order [employers] to compensate affected employees for all direct or foreseeable pecuniary harms that these employees suffer as a result of [an employer’s] unfair labor practice.” In other words, employees may now recover far more than “just” reinstatement or backpay, and may now request that the Board hold an employer responsible for any “direct and foreseeable” financial harm they allege to have suffered as a result of an employer’s actions.
The Board made clear that this remedy will not be reserved for “the most egregious cases,” but will apply to all cases in which make-whole relief is at issue. Additionally, the remedy will apply retroactively to any pending cases.6
The expansion of the make-whole remedy will likely lead to major economic penalties for employers, as employees will have the ability to point to evidence of pecuniary harm via “receipts, invoices, medical bills, and credit card and other financial statements.” Further, because the Board offers little guidance regarding whether damages were “direct” and “foreseeable,” protracted litigation over the scope of this standard is certain.
The majority signaled that the Board might not stop here when it comes to expanding remedies, directly responding to additional forms of relief suggested by amici and the general counsel. In response to the general counsel’s suggestion of compensation for pain and suffering or emotional distress, and front pay, compensation for legal fees, or heightened bargaining remedies by amici, the Board avoided the issue for now, responding that these issues were not implicated in the underlying facts of Thryv, Inc., but noted that its decision “[does] not conclude that this reflects the limits of the Board’s statutory remedial authority or that some other form of make-whole relief might not also be necessary in a future case. Rather, our decision today is meant to make clear that make-whole relief encompasses, at a minimum, these direct or foreseeable pecuniary harms that are a consequence of a respondent’s unfair labor practices.”
The dissent focused on the “foreseeable” component of the rule, raising the same concerns articulated by some of the amici: how far will the remedies available to workers go? Has the Board “open[ed] the door to awards of speculative damages that go beyond the Board’s remedial authority”? Does this new rule open the door to drawn-out litigation? Will it subject employees to “intrusive and potentially humiliating inquiries into employees’ personal financial circumstances for the purpose of determining whether and to what extent the employee’s own financial decisions contributed to the losses”?
While the decision leaves many of these questions unanswered, one thing is certain: The Board’s decision will have extensive implications on the make-whole remedy available to workers and will likely lead to widespread litigation. It is not certain yet whether the decision will be appealed, but given the significance of the case and the potential breadth of its impact, it seems more than likely that it will, to any one of a number of circuit courts of appeals that would have jurisdiction (including the Fifth, Ninth, and D.C. Circuits). Littler’s Workplace Policy Institute will keep readers apprised of developments.
1 Thryv, Inc., Brief Amicus Curiae of the Communications Workers of America at p. 2 (Jan. 10, 2022).
2 Thryv, Inc., Brief Amicus Curiae of Carlos Gonzalez-Rivera at p. 1 (Jan. 10, 2022).
3 Thryv, Inc., Brief Amicus Curiae of the Chamber of Commerce of the United States of America at p. 1 (Jan. 10, 2022).
4 See, e.g., Thryv, Inc., Brief Amicus Curiae of Weinberg, Roger & Rosenfeld at pp. 2-3 (Jan. 10, 2022).
5 Brief Amicus Curiae of Associated Builders and Contractors, Associated General Contractors of America, Inc., Coalition for a Democratic Workplace, HR Policy Association, National Federal Independent Business, and the National Retail Federation at p. 3.
6 National Labor Relations Board, Office of Public Affairs, Board Rules Remedies Must Compensate Employees for All Direct or Foreseeable Financial Harms (available at https://www.nlrb.gov/news-outreach/news-story/board-rules-remedies-must-compensate-employees-for-all-direct-or); See also Thryv, Inc. at *12.