The National Labor Relations Board (the “Board”) expanded the remedies available for unfair labor practices (“ULP’s”) to include compensation for “all direct or foreseeable” harm a worker incurs from an employer’s violation. This is a momentous change.
In a split decision down party lines, the Board issued its dramatic ruling. The case involved the IBEW and Thryy Inc. The order explained the Board intended to compensate employees beyond simply mandating back wages when appropriate for violations of the National Labor Relations Act (the “Act”). This marks a dramatic shift in the Board’s prior standard and expands a worker’s ability to recover significant damage awards. In its decision, the Board noted this remedy won’t be limited to extraordinary cases and will be available whenever it is appropriate to make a worker whole.
After the decision the Board’s chair, Lauren McFerran, stated “Employees are not made whole until they are fully compensated for financial harms that they suffered as a result of unlawful conduct.” She went on to say “The Board clearly has the authority to comprehensively address the effects of unfair labor practices. By standardizing the Board’s make-whole relief to fully include the direct or foreseeable financial harms suffered by affected employees, we will better serve the important goals of the National Labor Relations Act.”
Dissenting members of the Board, John Ring and Marvin Kaplan, argued the new standard goes too far and that the U.S. Supreme Court’s prior decisions limit the Board’s remedies that make an employee “whole” and prohibits penalties that extend beyond that. “In our view, this standard opens the door to awards of speculative damages that go beyond the Board’s remedial authority.”
Historically, the Board has limited financial penalties to back pay an employee would have earned but for discriminatory firing or demotion. However, with this decision, the Board has taken its first steps to expand the remedial measures available to include compensating victims for the “direct and foreseeable result of a respondent’s unfair labor practice.” The majority asserted that these additional remedies were necessary to make workers “whole.”
The Board went on to characterize its decision as nothing more than clarifying the scope of its preexisting authority. They cited various cases dating back as far as the 1930’s where the Board had ordered workers compensated for expenses related to medical services, transportation, legal representation, and even damaged clothing. The Board stated the standard to be applied must be based on “specific, defined costs which would not have been incurred but for the employer’s unlawful conduct or were the foreseeable consequence of that conduct.”
In their dissent, the minority said the ruling opens the possibility of employees recovering indirect damages which would beyond the scope of the Board’s authority. Like other NLRB precedent changing decisions, this new standard will most likely be challenged on appeal. On a positive note, the Board did not include as expanded remedies the concepts of consequential damages, pain and suffering or emotional distress, all being concepts which had been advocated for by the NLRB’s General Counsel, Jennifer Abruzzo.
Brody and Associates regularly advises its clients on all labor management issues, including union-related matters, and provides union-free training. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.
