NLRB Expands Remedies for Unfair Labor Practices

On Tuesday, December 13th 2022, the National Labor Relations Board (NLRB) ruled that employers may have to compensate employees who are “victims of labor law violations” for “all direct or foreseeable pecuniary harm” that those employees experience as a result of the unfair labor practice.

The NLRB explained that it has a make-whole protocol for employees who are unfairly discharged, laid off, or otherwise discriminated against to fully account for their actual economic losses. Historically, the “make-whole” remedies included reinstatement of employment, back pay, payment of dues and fines, stopping unlawful rules or practices, or a notice posted at the workplace. The NLRB’s recent decision expands that list significantly.

For example, under this new ruling, if an employer terminates an employee in violation of the National Labor Relations Act, then the employer may be liable for the following damages incurred by the employee due to the employee’s termination:

• Credit-card debt
• Interest and late fees on credit-card debt
• Out-of-pocket medical expenses
• Penalties incurred from making an early withdraw from a retirement account to defray living expenses
• Loss of a car or home if the employee is unable to make loan, rent, or mortgage payments

The NLRB chairman rationalized the NLRB’s decision by stating: “Employees are not made whole until they are fully compensated for financial harms that they suffered as a result of unlawful conduct….The [NLRB] clearly has the authority to comprehensively address the effects of unfair labor practices. By standardizing the [NLRB]’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.”

Procedurally, the General Counsel’s office, which prosecutes unfair labor practice cases, will present evidence during compliance proceedings to show the amount of economic harm and why an employer is responsible for those damages. Employers will then have the chance to challenge the amount, argue that the harm was not direct or foreseeable, or contend that the harm would have occurred regardless of the unlawful conduct.

Under the new precedent, the NLRB will now consider the economic consequences of labor law violations in every case that calls for make-whole relief, not just the most egregious cases. The NLRB will also apply this remedy retroactively to all cases currently pending.

The announcement and decision may be found here.

If you have questions about this update or other labor & employment law issues, please contact our Labor & Employment team or call 814-459-2800.

For more information, please contact Sarah Holland.