The National Labor Relations Board has issued a decision that expands employer exposure under the National Labor Relations Act, requiring for the first time that employers compensate employees for “foreseeable pecuniary harms” resulting from unfair labor practices. The Board’s December 13, 2022 ruling in Thryv, Inc., 372 NLRB No. 22 (2022), creates a new standard that adds a greater degree of ambiguity and risk to a remedial process that was formerly grounded in clear and direct causation.
Historically, when it found that an employer had committed an unfair labor practice, the Board ordered the employer to cease and desist from the unlawful action and to make employees whole for all losses suffered as a direct result of its actions. This traditional make-whole approach could include a broad range of remedies, such as reinstatement to the employee’s former position, removal of discipline from their personnel file and back pay for lost wages. The approach effectively put the employee back in the situation they occupied before the employer’s unfair labor practice – as if it had never happened. Remedies were established by a clear causal link to the employer’s unfair labor practices and were not meant to be punitive or speculative.
Now, the Board has abruptly changed course. In Thryv, the Board states that “in all cases in which our standard remedy would include an order for make-whole relief, the Board will expressly order that the respondent compensate affected employees for all direct or foreseeable pecuniary harms suffered as a result of the respondent’s unfair labor practice.” What does the Board classify as a pecuniary harm that must be remedied? It lists several in its decision, including:
- expenses for transportation, room and board
- legal expenses and fees
- monetary reimbursement for ruined clothes resulting from a work assignment
- medical and health insurance expenses
- search-for-work and interim employment expenses
- compensation for investment growth that 401(k) matches would have experienced
- interest and late fees on credit cards
- penalties on early withdrawals from retirement accounts
- increased childcare and transportation costs
- loss of a car or home due to missed loan payments
The Board is careful to mention that it has not “enumerate[d] all the pecuniary harms that may be considered direct or foreseeable in the myriad of unfair labor practice cases that come before us.” Moreover, the Board also emphasized that it “do[es] not conclude that [relief for direct or foreseeable pecuniary harms] 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.” Accordingly, the Board has reserved the right to reach even further in the future.
The Board’s decision to expand its remedial approach is striking, but not surprising. In November 2021, the Board initially raised this remedial issue by inviting interested parties to file briefs, without any of the parties in Thryv originally asking for this issue to be considered. Nevertheless, the Board majority ignored critics of its new approach, taking great pains to state that its decision simply intends to “clarify” its traditional remedy, not to serve as a seismic shift in position. However, dissenting Board Members Marvin Kaplan and John Ring stated that “this standard opens the door to awards of speculative damages that go beyond the Board’s remedial authority.” The Board’s response to that criticism, a simple statement that it “will not issue remedial orders for harms which are unquantifiable, speculative, or nonspecific” rings hollow – a proverbial plea of: we won’t… trust us.
Given the potential ramifications of the Board’s decision, employers should seek out experienced legal counsel to help them determine their rights under the National Labor Relations Act and how best to limit their exposure to the Board’s new remedial position.
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