Legal Updates

NLRB General Counsel Pushes For Expansion Of Remedies Under NLRA

Recently, Jennifer Abruzzo (“Abruzzo”), General Counsel of the National Labor Relations Board (“NLRB” or the “Board”), has urged the Board to expand the remedies available under the National Labor Relations Act (“NLRA” or the “Act”) to include various forms of consequential damages. In particular, a January 2022 brief submitted by Abruzzo outlines specific remedies that Abruzzo believes the NLRB should adopt in order to make aggrieved individuals whole.

Employers – particularly those with non-unionized workforces and those faced with union-organizing campaigns – should be aware of the potential for expanded liability in cases before the NLRB.

Background

The NLRB is the federal agency with the responsibility of enforcing the federal labor laws, embodied in the NLRA and later statutes supplementing it. In particular, through hearings before administrative law judges (“ALJs”), the NLRB remedies unfair labor practices, including actions taken by employers in retaliation for protected concerted activity on the part of employees, in unionized as well as non-unionized workplaces.

The General Counsel (who is a Presidential appointee) acts as a prosecutor, and the five (5) member Board (also appointed by the President) hears appeals from cases decided by the ALJs. Board decisions may be appealed to a U.S. Court of Appeals, and ultimately to the Supreme Court.

Historically, upon a finding that an employer has engaged in unfair labor practices, the NLRB has awarded “make whole” remedies. The most common remedies provide that an aggrieved employee must be (i) reinstated to the employee’s previous position or a substantially equivalent position, and (ii) compensated for lost earnings or other benefits that the employee had been denied as a result of the employer’s unlawful actions. In addition, the Board frequently requires employers who have violated the NLRA to post notices in the workplace informing employees of the violation and of their rights under the Act.

General Counsel’s Brief

On September 15, 2021, Abruzzo released guidance in which she encouraged the NLRB’s Regional Offices to “seek from the Board ‘the full panoply of remedies available to ensure that victims of unlawful conduct are made whole for losses suffered as a result of unfair labor practices.’” In this document, Abruzzo proposed a number of “new and alternative” special remedies that, in her view, Regional Offices should consider pursuing, including expanded economic remedies, consequential damages, and letters of apology and other special remedies.

The General Counsel’s Brief submitted in January 2022, in the NLRB case entitled Thryv, Inc., 371 NLRB No. 37 (2021), expands upon the General Counsel’s thinking on the types of consequential damages that should be available to charging parties in NLRB actions, as well as the General Counsel’s justification for seeking these expanded remedies.

Among other things, the Brief specifically targets non-unionized workplaces, arguing that “[b]usinesses increasingly view the cost of unionization as greater than the cost of violating the Act,” and stating further that “an entire industry of union-avoidance experts has arisen to support many employers’ goal of doing whatever it takes to remain union-free.” The Brief argues that the “feebleness” of the remedies currently available to employees incentivizes employers to take the risk of acting in violation of the NLRA, because, even if the employer’s “actions are found to be unlawful,” the “cost savings of avoiding a union” outweigh any penalty that the Board may impose.

The Brief further argues that in order to “fulfill its statutory mandate” to “use its broad discretionary authority under the Act,” the Board should require the offending party to “compensate employees for all consequential harms they sustain because of their unfair labor practices,” in order to make employees whole. The General Counsel’s Brief explains that this includes expenses, penalties, legal fees, late fees, and other costs flowing from an employee’s inability to make a payment due to job loss or other adverse action. In addition, the Brief argues that, similar to the remedial scheme under other federal statutes (e.g., Title VII, FLSA and OSHA), the Board should award damages for harms such as “emotional distress or injury to character, professional standing, or reputation, as well as remedies that are tailored to addressing the public harm and chilling effect, or potential thereof of the unfair labor practice at issue.”

The Brief urges the Board to adopt a standard of “direct and foreseeable harm” in order to determine the type and amount of consequential damages that should be awarded and to apply that standard on a case-by-case basis, stating that “[q]uantifiable expenses should be considered direct and foreseeable so long as it can be shown that the loss occurred because of the unfair labor practice.” The Brief presents a number of examples of the type of losses that would be covered under this standard. For instance, if an employee who is unlawfully discharged is forced to make an early withdrawal from his or her retirement account, the Brief argues that the employee should be permitted to claim any tax penalty resulting from the withdrawal and any lost investment income that would have accrued had the money remained in the account.

What’s Next?

It remains to be seen whether the Board will adopt the more expansive remedial scheme urged by General Counsel Abruzzo, and, if it does, whether those remedies will survive the inevitable challenges in the federal court system. Business groups have already objected to the concept of the NLRB’s awarding consequential damages, arguing, among other things, that the NLRB’s “broad remedial power” does not apply to damages; that consequential damages are – by definition – indirect and therefore not recoverable; and, more practically, that awarding consequential damages would increase and prolong legal disputes under the Act.

Nonetheless, the possibility that the Board might adopt the General Counsel’s position, at least to some extent, cannot be ruled out, particularly given the Board’s current Democrat majority.

Takeaways For Employers

Whether or not the Board ultimately adopts Abruzzo’s expanded concept of damages remains to be seen. However, the position Abruzzo has taken highlights how important it is that employers – including employers of non-unionized workforces – be aware of their obligations under the NLRA, particularly the prohibition on penalizing employees for engaging in protected concerted activity.

Additionally, employers facing unfair labor practice charges should be prepared to see – and defend against – claims for the types of special damages advocated by the General Counsel.