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On December 13, 2022, the National Labor Relations Board (“NLRB”) in Thryv, Inc. significantly expanded the remedies available to employees who allegedly suffer economic losses due to an employer’s alleged unfair labor practice. Traditionally, these remedies have been backpay and benefits. With the new decision, the Board has adopted a “make-whole” remedy which includes economic losses suffered as a direct and foreseeable consequence of an employer’s unfair labor practice.
The practical impact of this decision for employers charged with unfair labor practices is far-reaching. First, the decision allows for greater damages. Examples include compensation for (1) health care expenses an employee incurred as a result of the termination of health insurance coverage, (2) credit card late fees incurred, or (3) repossession or sale of a home or a car due to lost income.
Second, the decision lengthens all unfair labor practice proceedings in which consequential damages are at issue. As noted by the Board, the General Counsel must present evidence demonstrating the amount of pecuniary harm, the direct or foreseeable nature of that harm, and why that harm is due to the employer’s unfair labor practice. The employer, in turn, has an opportunity to present evidence challenging the amount of money claimed, argue that the harm was not direct or foreseeable, or that it would have occurred regardless of the unfair labor practice. In some cases, such inquiries may take longer than all other issues combined.
Third, the decision complicates the consideration of settlement as an alternative to protracted litigation before the NLRB. If the amount of damages is undisputed, which is generally the case with backpay and benefits, settlement can be a simple alternative to consider. If the amount of damages is disputed, which will generally be the case where a significant amount of consequential damages is sought, settlement may not be a simple alternative to consider.
Fourth, the NLRB left the door open to further expansions of available remedies for unfair labor practices. In this regard, the Board stated “we emphasize that we do not conclude that this reflects the limits of the Board’s statutory remedial authority or that some other form of make-whole relief might not also be necessary in a future case.” This open door is important because the General Counsel has expressed the intent to seek damages for “pain and suffering”, where applicable, in unfair labor practice cases.
The Thryv decision applies prospectively and retroactively to all pending unfair labor practice cases. The employer has the opportunity to appeal the NLRB decision for review by a federal court of appeals. One of the likely issues for appeal is whether the potential for an award of consequential damages infringes the Seventh Amendment right to a jury trial.
For more information, please contact Robert Chadwick at [email protected] or Caroline Wu at [email protected].