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More than Just Back-Pay for Unfair Labor Practices – the NLRB Adopts New Make-Whole Relief Model

The National Labor Relations Board (“NLRB”) recently adopted a new make-while relief model for possible remedies arising from unfair labor practice charges. Traditionally, damages in such labor disputes have been limited to back-pay and similar financial compensation.  However, the new decision expands “make-whole” relief to include consequential damages caused by the alleged unfair labor practice.

On December 13, 2022, in the case entitled Thryv, Inc. and IBEW, Local 1269, the NLRB held that make-whole remedies include all “direct or foreseeable pecuniary harms” an employee experienced because of unfair labor practices. To obtain this new relief, the NLRB’s general counsel must show:

1. The amount of the pecuniary harm,
2. The direct or foreseeable nature of that harm, and
3. Why the harm was caused by the unfair labor practice(s).

The respondent (typically the employer) can rebut these allegations by presenting evidence to challenge any of these three elements.

While the full range of what constitutes this broader system of “make-whole” relief will develop over time, prior NLRB decisions may provide hints as to the type of damages at issue, such as travel costs associated with job searches, retirement fund contributions and lost investment growth in such contributions, or healthcare expenses incurred after a lapse in health insurance. However, the NLRB also pointed to less obvious pecuniary losses as well, such as the cost of towing employee vehicles or even legal fees an employee suffers following a criminal arrest.

The criminal arrest example is particularly instructive. In Baptist Memorial Hospital and AFSCME, 229 NLRB 45 (1977), a hospital employer contacted law enforcement to remove an employee from its premises who was distributing union literature in the hospital lobby across from the cafeteria during his lunchbreak. Security guards had first approached the employee and instructed him to stop, but he refused. The security guards removed him from the hospital premises and handed him over to local police who charged him with disorderly conduct. He was subsequently convicted and issued a fine.

The NLRB concluded that the employee’s arrest was directly caused by the employer’s unfair labor practices and ordered the employer to pay all of the employee’s legal fees and expenses. Furthermore, the NLRB ordered the employer to petition to the criminal court to expunge the conviction from the employee’s record.

The significance of the new damages model cannot be overstated. With Baptist Memorial Hospital as an example of what to expect, the broader make-whole remedy model embraced by the NLRB decision substantially expands the scope of potential damages in unfair labor practices cases. For more than back pay may be at issue. It ruling also highlights the need to seek legal counsel before taking any action against possible union activities.

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