Board Awards Unprecedented Remedies and Signals It Could Go Further

The National Labor Relations Board’s decision in HTH Corporation, 361 NLRB No. 65 (2014), re-affirms the Board’s intent to impose aggressive, unprecedented remedies.  In this case, the Board openly signaled that it has not yet reached the outer limits of its authority, and is prepared to go even further.  

All five Board members denounced the employer, operator of a hotel in Honolulu, finding a repeated failure to comply with Board and court orders over ten years.  Those orders stemmed from a litany of unfair labor practice charges, including bad faith bargaining, retaliation against employees who exercised their Section 7 rights, and maintaining an unlawful solicitation policy.  Based on the Board’s “inherent power” to control its proceedings, the three-member Democrat-appointed majority ordered the employer to pay the litigation expenses of the NLRB’s General Counsel’s Office and the union.  The Board also ordered the employer to reimburse the union’s bargaining costs for willfully defying the Board and the National Labor Relations Act.  The majority said that these remedies were “clearly compensatory” in nature (rather than punitive) and were ordered to preserve the integrity of Board processes, serve as a deterrent to violations of Board Orders, and protect the rights of parties.  The majority also signaled, sua sponte, that it may order front pay in lieu of reinstatement under appropriate circumstances. 

Members Miscimarra and Johnson vigorously dissented from the majority’s conclusion that the Board has authority to order fee-shifting.  Miscimarra discussed extensively the limits of the Board’s remedial authority, which he does not believe includes authority to order fee shifting or front pay (neither of which was requested or briefed by the parties).  He argued that regular awards of litigation costs and front pay would “substantially alter the character of NLRB litigation, and would disrupt the ‘balancing [of] competing interests of labor and management,’ which is the province of Congress and not the Board.”  Member Miscimarra concluded that the NLRA does not authorize fee shifting and noted that the D.C. Circuit, in Unbelievable, Inc. v. NLRB (118 F.3d 795, 806 (D.C. Cir. 1997), “squarely held that the Board cannot impose fee-shifting as a remedy for unfair labor practices,” because the Board lacks statutory authority to do so.  Fee shifting, he argued, involves exercise of a discretionary punitive power entrusted to courts only when specifically authorized by Congress, and as such falls outside the Board’s role as an expert in labor relations.  Miscimarra also noted that, in Unbelievable Inc., the Board disclaimed a right to impose attorney’s fees based on its “inherent authority.”  He also dissented from the majority’s position that the Board can order front pay in lieu of reinstatement, noting that in its 80-year history the Board has never ordered front pay.  In addition to a dearth of statutory authority supporting a Board order of front pay, Member Miscimarra wrote that one of the hallmarks of the NLRA is its unique focus on collective and group activities among employees, which is materially different from other discrimination laws, such as Title VII, ADA, and the ADEA, that focus on individual treatment and afford individualized remedies determined and fashioned by courts, rather than agencies. 

Member Johnson adopted Miscimarra’s dissent on fee shifting and agreed that the Board cannot engage in fee shifting absent express statutory authorization, since the “Board is an administrative agency created by statute, not an Article III court.” 

A deep split in the Board on the fundamental issue of its remedial authority is troubling, but not particularly surprising in light of past decisions that signal this Board’s assertion of breathtakingly broad authority, the likes of which has not been seen in its 80-year history.  Based on the long history of this particular litigation, we should expect an appeal of the decision, which may result in judicial clarification of the actual scope of the Board’s remedial authority.  In the meantime, we will watch with interest as the Board awaits an appropriate case in which to order front pay in lieu of reinstatement.

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.