United States: NLRB Gifts Employees Expansive Remedies In Time For The Holiday Season

Employers found to have committed an unfair labor practice (ULP) now may be required to compensate employees for interest and late fees on credit cards, penalties for early withdrawals from retirement accounts, out-of-pocket medical expenses, and other costs incurred to make ends meet. The National Labor Relations Board (NLRB or Board) recently held that employers must compensate employees for all direct or foreseeable pecuniary harms suffered as a result of the employer's ULP. Thryv, Inc., 372 NLRB No. 22 (issued Dec. 13, 2022).

In Thryv, Inc., the employer unilaterally decided to lay off six employees. The Board found that this layoff was unlawful because the employer failed to negotiate with the union to impasse. But what really stood out was the NLRB's decision on remedies. Historically, when the Board has decided that an employee was wrongfully terminated, employers could expect the Board to order an employee's reinstatement to their previous or equivalent position and compensation for lost earnings and benefits. The Board, however, now expanded the remedies available to include all foreseeable pecuniary harms resulting from a ULP. The Board noted that its decision is based on the "make whole" principles of the National Labor Relations Act, which in the Board's view may include compensation for incurring out-of-pocket medical expenses, credit card debt and other significant financial costs as a result of an unlawful layoff or other ULP.

In the wake of the NLRB's decision, employers face uncertainty as to how far the link between the ULP and the employee's loss will extend. For example, if an employee whom the Board finds was unlawfully terminated cannot make their credit card payment, accumulates interest and late fees, and damages their credit score, will the employer now be responsible for not only the interest and late fees but also the cost of restoring the employee's credit score? Or, if an employee whom the Board finds was unlawfully terminated cannot pay their rent and expends legal fees defending the eviction, will the employer now be responsible for the late rent fees, legal fees for defending the eviction, and any child care costs that resulted from the time the employee spent fighting the eviction? Only time will tell, but going forward, employers need to be aware of their increased potential exposure when considering taking personnel actions that might result in a ULP charge.