NLRB Makes Settlement More Difficult

Ballard Spahr LLP

Ballard Spahr LLP

On September 15, 2021, the National Labor Relations Board (NLRB)’s General Counsel instructed regional offices to take a more aggressive stance in settlement negotiations in unfair labor practice cases, seeking broader remedies for workers.

In GC Memorandum 21-07, which builds upon GC Memorandum 21-06 issued last week, new NLRB General Counsel Jennifer Abruzzo encouraged regional offices to be creative in the remedies sought in settlement, reasoning that they may be able to obtain more for workers during settlement than in litigation before the Board.

The GC opined that backpay and lost benefits are often ineffective remedies in making a worker fully whole, and urged regions to seek compensation for “any and all damages, direct and consequential” that may be attributable to the alleged unfair labor practice, including:

  • Costs associated with obtaining comparable health insurance coverage
  • Moving expenses where an employee is required to relocate to obtain comparable employment
  • Legal expenses incurred as a result of an employer’s unlawful conduct
  • Costs associated with detrimental effects to credit ratings
  • Costs associated with liquidating a bank account to cover living expenses

GC Abruzzo also directed regional offices to again incorporate default language into settlement agreements – a practice that her predecessor had stopped.  Under the NLRB’s default language, in the event of a settlement breach, the General Counsel may file a motion for summary judgment on the Complaint and the respondent would be deemed to have admitted all allegations even though the alleged unfair labor practices had never been adjudicated.  The only issue for litigation would be whether the respondent breached the settlement agreement.

Abruzzo’s additional instructions to the regions include:

  • Seek apology letters from employers to harmed employees
  • Seek no less than 100% of all damages owed. This may indicate a departure from the historically-accepted understanding that the GC will accept 80% of damages owed as full settlement of an unfair labor practice charge.
  • Seek front pay for employees who voluntarily waive reinstatement
  • Obtain outplacement services for employees waiving reinstatement.
  • Require employers to sponsor work authorizations for immigrant employees if the unfair labor practice caused the loss of an employee’s work authorization.

Employers should be prepared for far more difficult settlement discussions at the NLRB, and the possibility of more aggressive litigation as a result.

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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