Hunton Employment & Labor Perspectives

The National Labor Relations Act (“Act”) empowers the National Labor Relations Board (“Board”) to “take such affirmative action including reinstatement of employees with or without backpay, as will effectuate the policies of this Act.” 29 U.S.C. § 160(c). For much of the Board’s history, that has generally resulted in Board Orders that involve some combination of notice posting, backpay, and reinstatement.

However, the Board now plans to expand the remedies it will order for unfair labor practices. Specifically, the Board has now concluded that “in all cases in which our standard remedy would include an order for make whole relief, the Board will expressly order that the respondent compensate affected employees for all direct or foreseeable pecuniary harms suffered as a result of the respondent’s unfair labor practice.” Thryv, Inc., 372 NLRB No. 22, slip op. at 6 (2021) (emphasis in original).

Chairman McFerran explained in Voorhees Care that she envisions make whole damages to encompass “interest and late fees on credit cards, or penalties [from] early withdrawals from [] retirement account[s]…[or] even los[ing] [a] car or [a] home.” The Voorhees Care and Rehabilitation Center, 371 NLRB No. 22, slip op. at 4 n.14 (2021). What would traditionally have been a financial award to a single employee in the thousands or maybe tens of thousands of dollars, could potentially balloon into hundreds of thousands of dollars under the consequential damages theory of Thryv.

The employer in that case, Thryv, Inc., has petitioned the Fifth Circuit for review of the Board’s order. Thryv, Inc. v. NLRB, Docket No. 23-60132 (5th Cir. Mar. 20, 2023). Thryv, Inc. argued in its brief to the Fifth Circuit that the award of consequential damages was punitive in nature and contrary to both the Act and Supreme Court precedent. Brief for Petitioner at 40-47, Thryv, Inc. v. NLRB, Docket No. 23-60132 (5th Cir. Jun. 22, 2023). In its response, the Board disingenuously accused Thryv of “misleadingly label[ing]” the damages as “consequential damages,” despite the Board itself using that term in the Notice and Invitation to File Briefs in the underlying Board case. Brief for Respondent/Cross-Petitioner at 49-50, Thryv, Inc. v. NLRB, Docket No. 23-60132 (5th Cir. Aug. 11, 2023). The Fifth Circuit heard oral argument in the case on February 6, 2024 and is expected to issue an opinion within a few months. Employers should closely monitor what the Fifth Circuit does with this case, including whether it enforces the Board’s order awarding damages for pecuniary harm that was either direct or foreseeable. The Board has been ordering employers to make employees whole for “direct or foreseeable pecuniary harms” since it issued its decision in Thryv, Inc., and the Fifth Circuit’s opinion could have implications for those cases.