Before yesterday's National Labor Relations Board (“Board”) decision in Thryv, Inc., the Board's traditional make-whole remedy for employee losses suffered as a result of an employer's unfair labor practice was generally limited to back wages and/or reinstatement of employment.
In the Thryv decision, which involved an employer's alleged unfair labor practices relating to bargaining over a reduction in force, the Board dramatically broadened its interpretation of the scope of employer liability under the National Labor Relation Act (“Act'), holding that, in addition to back wages and reinstatement, affected employees may also recover “for all direct or foreseeable pecuniary harms” resulting from employer violations of the Act.
The most impactful aspect of this decision relates to the addition of allegedly “foreseeable” pecuniary losses suffered by employees. As the Board detailed, this category of damages would go beyond lost wages to include indirect consequences of a job loss (or other unfair labor practice) such as credit card debt, medical bills, child-care expenses, job search costs, and potentially even housing-related costs such as moving expenses or losses related to a mortgage foreclosure. While the Board declined to include pain and suffering within the scope of its new make-whole standard, it did so on the basis of the particular facts of the case, declining explicitly to decide that issue one way or another.
The Board's new standard will require the General Counsel (who is responsible for prosecuting unfair labor practice cases against employers) to prove that the alleged loss was “either (a) directly caused by the unfair labor practice; or (b) was foreseeable at the time of the unfair labor practice and was incurred as a result of the unfair labor practice.” At that point, the burden will shift to the employer to establish facts to either “negate” or “mitigate” the alleged loss.
To state the obvious, this decision significantly raises the stakes for employers potentially facing liability under the Act. Moreover, this new remedial standard is not limited to cases brought against unionized employers. The Act's provisions cover most private-sector employees, regardless of whether they are represented by a union. Thus, while this decision is likely to be challenged in a federal court of appeals—and may eventually be overturned—for the time being, it is particularly important for unionized and non-union employers alike to ensure that policies and practices comply with the Act. Employers are well-advised to consult with experienced labor counsel when contemplating layoffs or other employment terminations where the Act may be implicated.
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