If enacted into law, the so-called Build Back Better reconciliation package (“BBB”) will drastically expand the remedial power of the National Labor Relations Board (“NLRB”) effective January 1, 2022.  The BBB incorporates the penalty provisions the PRO Act, which is a pro-labor bill that had been pending in the Senate after passing the House.

This proposed legislation, the text of which has been released but has not passed the House or the Senate, would provide for the following:

• Civil penalties up to $100,000 for violations of the National Labor Relations Act (“NLRA”). Penalties can reach $100,000 if an employee is discharged or faces “other serious economic harm.”  Other violations are subject to fines up to $50,000.
• Individual liability for corporate officers and directors for the civil penalties.

Currently, the NLRB does not have the authority to issue monetary fines.  Instead, the NLRB has the power to order employers to reinstate employees, pay backpay to employees who are unlawfully terminated, and grant other remedies like cease and desist orders to prevent future violations of the National Labor Relations Act.

Penalties would be payable to Uncle Sam, not the affected employee(s).  Moreover, employers should be aware that these new penalties could be based on highly technical violations of the NLRA, which, for example, could depend solely on language written in an employee handbook that the NLRB views as interfering with employee rights.  Consistent with the Administration’s “get tough” approach to employers, the penalties in the BBB only apply to unfair labor practices by employers, not those committed by unions.

The individual liability for officers and directors would apply where the officer or director committed the violation of the law, established a policy that led to the violation of the law, or had actual or constructive knowledge of the violation but failed to prevent it from occurring.  These broad grounds for individual liability could apply to almost any employment decision or policy that leads to a violation of the NLRA.

The civil penalty provisions outlined above will not only affect employers with a unionized workforce.  The NLRA applies to most private employers, regardless of union status.  Even employers without any unions or ongoing union activity are subject to the restrictions of the NLRA  The civil penalty provisions and possible officer and director liability, coupled with new aggressive enforcement by the NLRB’s General Counsel, should put private employers on notice of the seriousness of these impending amendments.  Employers – both union and non-union – should consult with experienced labor counsel to address these changes to federal labor law.

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