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Proposed Expansion of the NLRB’s Remedial Authority

Jerry M. Cutler

Proposed Expansion of the NLRB’s Remedial Authority
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The National Labor Relations Board (NLRB) has begun examining its authority to award additional monetary relief to employees who have been unlawfully discharged, laid off, or subjected to discrimination by their employers. A particular focus has been the board’s power to remedy such conduct by awarding “consequential damages.” In a recent memorandum (GC 21-06, Sept. 8, 2021), the NLRB’s general counsel emphasized the board’s statutory authority to remedy unfair labor practices by taking “such affirmative action including reinstatement of employees with or without back pay.” It advises that compensation for consequential damages, front pay, and liquidated backpay should also be sought to make employees whole for unfair labor practices.

The board has also recently considered the issue of consequential damages as part of its make-whole remedies. In Thryv, Inc. and IBEW Local 1269, 371 NLRB No. 37 (Nov. 10, 2021), the board noted its historic practice of issuing consequential-type damage awards in response to unfair labor practices, and invited parties to submit briefs to address the following:

  1. Should the board modify its traditional make-whole remedy in all pending and future cases to include relief for consequential damages, where these damages are a direct and foreseeable result of a respondent’s unfair labor practice?
  2. Alternatively, should the make-whole remedy include relief for consequential damages only upon findings of egregious violations by a respondent?
  3. If consequential damages are to be included in make-whole relief, how should they be proved, and what would be required to demonstrate that they are a direct and foreseeable result of an employer’s unfair labor practice?
  4. What considerations support making the proposed change to the board’s traditional make-whole remedies?
  5. What considerations support retaining the board’s traditional exclusion of consequential damages from its make-whole remedies?

Congress has also considered expanding the board’s remedial authority. The Protecting the Right to Organize Act of 2021 (PRO Act) would authorize the board to impose monetary penalties of up to $50,000 on employers for each unfair labor practice they commit, and up to $100,000 for each serious unfair labor practice. The House of Representatives subsequently passed the Build Back Better Act, which incorporates the PRO Act’s monetary penalties. The legislation adds several new unfair labor practices to which the board’s expanded remedial authority would also apply:

  • Permanent strike replacements.  Employees would be prevented from permanently replacing striking employees, discriminating against employees who unconditionally offer to return to work from a strike, or locking out employees so as to influence their position prior to a strike.
  • Worker misclassification. Employers would be prohibited from misrepresenting to employees that they are excluded from coverage under the National Labor Relations Act based on their status as independent contractors, supervisors, etc.
  • Captive-audience meetings. This would prohibit employers from requiring employee attendance at pre-election campaign meetings designed to dissuade them from supporting a union.
  • Collective claims and class-action waiver. Employers would be prohibited from attempting to enforce any agreement in which employees promise not to participate in employment-related class action or collective legal claims.