Employers Face Stronger Unfair Labor Practice Penalties After NLRB Ruling

Author: Robert S. Teachout, Brightmine Legal Editor

December 14, 2022

Employers will now be required to compensate employees for all financial harm that results from a violation of the National Labor Relations Act (NLRA).

The National Labor Relations Board (NLRB) in Thryv, Inc. ruled that make-whole remedies must include compensation for all direct or foreseeable monetary harm that is caused by an unfair labor practice. This means that in addition to backpay for the loss of earnings and benefits, employers would have to reimburse an employer for expenses such as out-of-pocket medical expenses, credit card debt, or other costs resulting from the labor law violation.

Section 10(c) of the NLRA grants the Board the remedial authority "to take such affirmative action including reinstatement of employees with or without backpay, as will effectuate the policies of this Act." Earlier this year, the Board asked for parties to submit briefs on whether the Board should modify its make-whole remedy, which usually is limited to back pay.

NLRB Chairman Lauren McFerran said that standardizing the Board's make-whole relief to fully include the direct or foreseeable financial harms suffered by affected employees will better serve the goals of the NLRA. "Employees are not made whole until they are fully compensated for financial harms that they suffered as a result of unlawful conduct," McFerran said.

Under the new rule, the NLRB General Counsel will be required to present evidence proving:

  • The amount of the financial harm,
  • That it was direct or foreseeable, and
  • That it was due to the unfair labor practice.

The employer or union can then attempt to refute that evidence.

But Ohio employment attorney Jon Hyman, a shareholder at Wickens Herzer Panza and author of the Ohio Employer Law Blog, disagrees that Section 10(c) grants the NLRB this level of authority. Hyman noted that although the NLRB's ruling addresses a key criticism of employees and labor advocates that the NLRA's remedies are insufficient to deter employers' wrongful conduct, "I'm not sure that this expansion of remedies survives the almost certain judicial challenge."

"Backpay is backpay; it's not late fees and interest on credit cards, penalties from early withdrawals from retirement accounts, or the loss of a home or a car," said Hyman. "Whichever circuit court to which this gets appealed, and potentially the Supreme Court, will have to stretch 10(c) pretty darn far to reach this interpretation and application of remedies."