Landmark NLRB Decision Expands Labor Violations

17 January 2023 Labor & Employment Law Perspectives Blog
Author(s): Paul King Jr

As we’ve recently informed our readers, the National Labor Relations Board (“NLRB” or the “Board”) ended 2022 with a series of consequential decisions for employers. One such decision – issued on December 13, 2022, dramatically expands the scope of remedies available to workers who succeed on claims of labor law violations.  In that case, Thryv, Inc. and the International Brotherhood of Electrical Workers, Local 1269, the NLRB (in a 3-2 split) ruled for the first time that consequential damages unquestionably are available under the National Labor Relations Act (“NLRA” or the “Act”) as part of the “make-whole” remedies that the Board is empowered to award. 

Consequential damages have not previously been a common form of remedy in the labor law arena, and go far beyond the remedies like back pay and reinstatement that the Board has historically awarded when fashioning relief to address a suspected or established unfair labor practice.  While revolutionary, the Board’s move was far from unexpected.

The Board’s recent decision follows a memorandum that Board General Counsel, Jennifer Abruzzo, issued on September 15, 2021, urging NLRB field offices to seek all available remedies to fully address conduct that violates the Act, including compensation for any consequential damages.  In connection with the General Counsel’s memorandum, the Board noted that the policy shift is based on the belief that traditional monetary remedies like back pay and lost benefits frequently fail to make whole the victim of an unfair labor practice.  Given President Biden’s outspoken stance in favor of expanding workers’ rights under a wide range of federal laws, labor law practitioners anticipated that federal agencies would seek new means of obtaining relief for employees. 

The Board’s decision in Thryv, Inc. is only one recent—but significant—example of this initiative operating in full swing.  As we’ve noted, in the span of one week, the Board also issued decisions that expand employees’ rights to protest on third-party property, that restrict employers’ ability to interview employees while an unfair labor practice charge is pending, and that promoted employees’ ability to organize smaller cohorts of employees within larger workplaces.  Taken together, these employee-friendly rulings signal a stark shift in the Board’s ideology and priorities, as compared to the more employer-friendly decisions we saw the Board produce under the prior administration.  Employers should expect this trend to continue so long as President Biden remains in command of the Board’s direction, given his alignment with Secretary of Labor, Marty Walsh, on scaling up employee and union rights under the NLRA.

Under longstanding precedent, the Act’s remedial provisions generally are aimed at restoring an employee to the position they would have obtained but for the employer’s unlawful conduct.  It is from that foundational principle that the Board derived this “direct or foreseeable” consequential damages remedy.  In the Board’s view, Thryv, Inc. only makes clear what has long been available in the arsenal of tools for prior Boards that have fashioned similar relief for violations.  Pursuant to the Board’s clarified standard, for consequential damages to be awarded, the Board must present sufficient evidence to prove the amount of the financial harm the employee suffered, that it was a direct or foreseeable result of the employer’s unlawful action, and that the financial harm was attributable to the unfair labor practice that the employer committed.

When faced with a threatened or actual unfair labor practice charge, employers must now ensure that they evaluate the universe of potential direct or foreseeable financial harms that a particular employee could experience in connection with an alleged violation.  The Board provides the following examples of potential consequential damages:  health insurance coverage; medical, legal or moving expenses; detrimental effects to credit ratings; having to liquidate a bank account to cover living expenses; and training or coursework required to obtain or renew a certification or license.  While instructive for employers, this list is certainly not exhaustive. 

In sum, labor law violations have just gotten a lot more costly for employers. Going forward, employers should expect the Board to include additional categories as a means of gaining leverage to achieve a final settlement agreement that provides relief to an aggrieved employee.  To that end, employers should evaluate the unique circumstances applicable to each employee in determining the scope of potential damages, with the understanding that the Board will take a liberal view of what may be encompassed.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.


Related Services