Employers May Face Higher Damages in NLRB Cases

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Snell & WilmerIn a recent Memorandum to the Regional Offices (September 8, 2021), the General Counsel (“GC”) of the National Labor Relations Board (“Board” or “NLRB”) directs the Regions to seek additional remedies from the Board in unfair labor practice litigation. The additional remedies discussed in the Memorandum would significantly increase the financial exposure risks that employers face in those proceedings. In essence, the Memorandum directs the Regions to seek additional and much more burdensome and costly remedies against employers in complaints alleging three types of unfair labor practice: a) unlawful firings of discriminatees; b) unlawful conduct committed during union organizing drives; and c) unlawful failures to bargain.

The cases that most employers are likely to confront are cases involving allegations of unlawful terminations of employees. Therefore, special attention should be given to the remedies sought by the GC in cases involving allegations of discrimination for union or other protected activities. (See prior articles on concerted/protected activities)

Nevertheless, employers are alerted that in cases involving alleged unlawful conduct during union organizing drives, the GC proposes that the Board be asked to issue orders requiring employers to provide unions with employee contact information, equal time to address employees if the employer convenes employee meetings to discuss union representation issues and “reasonable access to employer’s bulletin boards and all places where notices to employees are customarily posted.” Importantly, the GC also proposes that, as part of the remedies in those cases, employers be required to reimburse the unions for the organizational costs that a union incurs in a re-run election, when such elections are required to remedy employer unlawful conduct.

Similarly, in cases alleging employer unlawful failures to bargain in good faith, the GC proposes that, among other remedies, the Board be asked to order employers to reimburse unions for “collective bargaining expenses” and to engage a mediator from the Federal Mediation and Conciliation Service (FMCS) to facilitate bargaining.

With respect to alleged unlawful terminations of employees, the GC instructs the Regions that, in addition to the traditional remedies of backpay and reinstatement, “consequential damages” should be sought in all cases. Such damages may include health care expenses incurred by the alleged discriminatees because of the termination of health insurance, compensation for credit card late fees, and compensation for the loss of a home or car that occurs because of the alleged unlawful termination.

The Memorandum makes clear that a much more aggressive approach will be implemented against employers. The greater financial and other risks that employers will confront in NLRB cases make it critical that a determination be made, as soon as or even before a complaint is issued by an NLRB Regional Office, of the financial remedy that will be sought in the case. Such a determination would facilitate exploration of settlement in the early stages of the case.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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