Curb Your Remedial Enthusiasm – NLRB Acting General Counsel Offers Remedial Relief to Employers

On May 16, National Labor Relations Board Acting General Counsel William Cowen issued Memorandum GC-25-06, calling for an efficient, practical approach to NLRB settlement agreements. Coming on the heels of Cowen’s prior recission of multiple guidance memoranda issued by former General Counsel Abruzzo, including those addressing remedies and settlements in unfair labor practice (ULP) matters, Cowen’s latest announcement peels back the expansion of remedies the NLRB sought against employers under the prior administration.  

Remedies Remix 

During her tenure, former GC Abruzzo issued guidance memoranda indicating that her office would seek extensive remedies, including “the full panoply of remedies available to” victims of ULPs. Examples of these damages included consequential damages in the case of an unlawful firing, such as compensation for credit card late fees, or for the loss of a home or car. The Board’s decision in Thryv, Inc., 372 NLRB No. 22 (Dec. 13, 2022), expanded the scope of remedies available in addressing ULPs as Abruzzo said she would seek in her guidance memoranda. Regional directors were also directed to take a no-compromise approach to settlements, approving them only with full back pay and default language (described below), and refusing the employer the opportunity to deny fault.  

By contrast, in his new memorandum, Cowen noted that settlement agreements “are the principal means by which unfair labor practices are remedied and employees … are afforded relief under the Act.”  Cowen emphasized that regional directors “once again have significant discretion” to resolve matters. This is a marked difference from Abruzzo’s tenure, during which regional director discretion was rolled back, and settlements often languished awaiting approval or stalled completely if they did not meet all of Abruzzo’s guidance requirements.     

Accordingly, Cowen advised Regions concerning four areas of settlement agreements:  

• Default Language—Regions are no longer required to include “default language” in each settlement agreement. This language permits the Board’s prosecution arm to void a settlement and put a case in the express lane if the charged party did not comply with all terms of the agreement. Cowen noted that while this language can have its benefits, the Region should not insist on its inclusion if it would prevent settlement.
• Non-Admission Clauses—This language may again be included in settlements, except in the cases of a “recidivist violator.” As always, non-admissions clauses are not permissible in a Board-required notice posting.
• Unilateral Settlements—Regions will be permitted to unilaterally force settlements “which effectuate the Act without prior authorization.”
• Make-Whole Relief—Cowen emphasized that Regions should “continue to pursue settlements that deliver full, effective relief.” Directors are permitted to approve settlement agreements “that provide for less than 100 percent of the total amount that could be recovered if the Region fully prevailed on all allegations in the case.”  Cowen restored to regional directors the discretion to consider “the nature of the violations alleged, the weight of the evidence, the inherent risks of litigation, and the extent to which a prompt resolution of a contentious dispute will promote labor peace.”  

Cowen went on to encourage Regions to “be mindful of not allowing our remedial enthusiasm to distract us from achieving a prompt and fair resolution of disputed matters.” Cowen also advised that Regions may tailor remedial relief to each case, and the extraordinary “nonmonetary remedies” GC Abruzzo pursued as a matter of course should be limited to those charges “involving widespread, egregious or severe misconduct.”¹ 

Recommendation of Thryv Dissent  

Cowen concluded the new memorandum by addressing the Board’s decision in Thryv, where the Board held that in cases in which the Board’s standard remedy would include an order for make-whole relief, the employer must compensate affected employees for all “direct” or “foreseeable” pecuniary harms suffered as a result of the employer’s unfair labor practice (i.e., consequential damages).  

The Thryv majority’s failure to define “foreseeable” has made it difficult for both employers and the Regions to know what monetary damages fall within its scope. Accordingly, Cowen recommended the damage formulation from Board Member Kaplan’s dissent in Thryv, namely, that “employees should also be made whole for losses indirectly caused by an unfair labor practice where the causal link between the loss and the unfair labor practice is sufficiently clear.” (Emphasis added in GC 25-06). According to Cowen, this is “the only standard reasonably capable of application.”

 Looking Ahead – Practical Guidance for Employers 

Regions again have significant discretion in their ability to resolve matters and reach settlement agreements that they believe best accomplishes the purposes and policies of the Act. This in turn should result in parties having a greater opportunity to reach settlement, avoid unnecessary litigation, and allow for the efficient resolution of standard ULPs.