Thryv Remedies: Supreme Court Review Sought - What Employers Should Do Now

Employers are facing a rapidly evolving legal landscape as courts tackle the National Labor Relations Board’s controversial Thryv decision.¹ This ruling, issued in 2022, expanded remedies for unfair labor practices involving discriminatory terminations beyond traditional back pay and reinstatement to include “all direct or foreseeable pecuniary harms,” such as employees’ credit card late fees, medical expenses, mortgage interest, and job search costs. While the Board argued this approach both aligns with the Board’s authority to issue equitable remedies and deters violations, it represents a sharp departure from 90 years of precedent under the National Labor Relations Act (NLRA).

The Circuit Split and Supreme Court Review

The Third, Fifth, and Sixth Circuit Courts of Appeals have rejected Thryv, holding that Congress never authorized the NLRB to award full compensatory damages and that such remedies blur the line between equitable and legal relief. These courts emphasize that Section 10(c) of the NLRA limits remedies to restoring the status quo (typically reinstatement and backpay in the form of wages and benefits unlawfully withheld).

Conversely, the Ninth Circuit Court of Appeals endorsed the Board’s interpretation, reasoning that compensating foreseeable harm falls within its equitable powers. The Ninth Circuit’s minority ruling has prompted Macy’s, Inc. to petition the U.S. Supreme Court for certiorari to answer whether the NLRB has the statutory or constitutional authority to order employers to pay “any…direct or foreseeable pecuniary harms” their employees incur “as a result of” an unlawful labor practice.

Unless and until the Thryv decision is overturned by the Board itself, the NLRB will likely follow its doctrine of “non-acquiescence” to appellate rulings, meaning it will continue to seek and enforce Thryv remedies until the Supreme Court rules on the matter . Should employers choose to appeal an adverse Board decision, they will face a patchwork of decisions at the Courts of Appeals:

• Ninth Circuit (AK, AZ, CA, HI, ID, MT, NV, OR, WA): Expect enforcement of Thryv remedies.
• Third (DE, NJ, PA), Fifth (LA, MS, TX), Sixth (KY, MI, OH, TN): Remedies limited to back pay and reinstatement.

Why Thryv Matters for Employers

For employers, expanded remedies can dramatically increase exposure. Under Thryv, employers could be responsible for the wide range of downstream costs noted above.

Discriminatory discharge under Section 8(a)(3) of the NLRA is a common unfair labor practice charge. As a result, the Board has ordered Thryv remedies in over a hundred decisions and dozens more by administrative law judges after the Board lost a quorum in January. Even employers located in the circuits that have rejected Thryv must factor these potentially substantial damages into their litigation budgets and settlement strategies.

What Employers Should Consider Doing While Certiorari Is Pending

First, consider preserving defenses. Two defenses that parties are raising include that the NLRB exceeded its statutory authority in Thryv and deprived the employer of its Seventh Amendment right to a jury trial. These defenses should be made early and at each stage of the proceedings, including in statements of position, answers, briefs and exceptions to administrative law judges’ decisions. Failure to preserve arguments and defenses can result in a waiver. Citing the Third, Fifth and Sixth Circuit rulings rejecting expanded remedies may also be persuasive to the NLRB. If you had a case pending at the Board before these rulings were issued, consider filing letters with the NLRB (known as Reliant Energy letters similar to Rule 28(j) letters in federal court) notifying the Board of the favorable new authority.

Second, assess potential damages and litigation costs under two scenarios: a pre-Thryv framework (traditional back pay and benefits, reinstatement) and a Thryv framework that estimates additional costs to the employee like credit card fees, out-of-pocket medical bills, and late mortgage fees. This dual valuation may help determine whether settlement is financially sensible or whether to defend aggressively. Employers, particularly multijurisdictional employers, should evaluate as part of their litigation strategy if they have standing to appeal a Thryv order to one of the favorable circuits and the cost to do so. 

Finally, the most important and often overlooked takeaway from Thryv is to prevent problems before they start. An employer never has to pay Thryv damages if they comply with the law in the first place. Below are several reasons that employers are found liable for discriminatory discharge and some ideas as to how they may be prevented:

1. Inconsistent Rule Enforcement: One of the most common pitfalls for employers is applying workplace rules unevenly. If similar conduct by different employees results in different disciplinary outcomes, the NLRB often views this as evidence of discriminatory motive. Employers may want to audit enforcement practices regularly and conduct training for supervisors to ensure the rules are applied uniformly. All instances of discipline should be documented to show consistency.
2. Outdated or Unclear Policies: Policies that are vague, outdated, unclear or fail to reflect current legal standards create risk. Employers relying on old handbooks or unclear language often struggle to defend terminations because the policies themselves are outdated or not in legal compliance. As a result, employers may want to review and update policies annually. Employers sometimes discipline employees for conduct that is not addressed in any written policy. This opens the door for allegations that the rule was applied selectively or created as a pretext for retaliation. Employers should make sure all workplace expectations, especially attendance and performance expectations, are current, clearly expressed, and documented in writing.
3. Problems with Managers: Managers who are disengaged from the workforce, show favoritism or may have been promoted too quickly without proper training may lead to employee dissatisfaction and legal liability. Empowering managers with training regarding employee rights under the NLRA and actions that constitute unfair labor practices is one way to reduce legal risk and increase management skills.

Bottom Line

The Supreme Court may soon clarify the NLRA’s remedial reach, but until then, employers should consider preserving their defenses early and often, prepare a jurisdiction-specific appellate strategy, and focus on prevention by training managers on the reach of the NLRA (including in non-unionized workplaces), so as to empower them to make employment decisions within the bounds of the law. We will continue to monitor these developments and provide updates as more appellate courts weigh in on the limits – or expansion – of the Board’s authority.