Last month, National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo issued not one, but two memoranda directing Regional Offices to pursue a vastly expanded array of “remedies” against employers in unfair labor practice cases. From management’s perspective, the actions prescribed by these memoranda appear to be more punitive than remedial. Each of these memoranda are notable on their own, but taken together they portend a major crackdown on employers alleged to have violated the National Labor Relations Act.

With little relief in sight, employers’ best course is to grit their teeth and invest the time and resources required to review their labor management policies, practices and procedures to ensure legal compliance and avoid the increasingly sharp bite of the NLRB.

This alert reviews GC 21-07, issued on Sept. 15, 2021. We will review GC-21-06, titled "Seeking Full Remedies," in a future alert.

‘Full Remedies in Settlement Agreements’

A significant percentage of all cases in which NLRB Regional Offices find “merit” to the allegations in the charge are resolved by settlement in lieu of trial before an administrative law judge. In GC 21-07, Abruzzo directs Regional Offices to seek a variety of “new and alternative” remedies in the context of voluntary settlement agreements. Simply stated, the price of settlement is going up for employers – and this increase is not likely to be “transitory.”

Stiffer Penalties in Discharge Cases

For example, in cases involving an unlawfully discharged employee, the Board’s policy is to require the employer to “make whole” the employee for their losses. For decades, in most cases, “make whole” relief has been limited to reinstatement and back pay, plus interest. However, Abruzzo has instructed Regional Offices that make whole relief should include “consequential damages” to compensate employees for other economic losses suffered as a direct and foreseeable result of their termination, such as interest or late fees incurred by an unlawfully fired employee on credit cards they used to cover living expenses; penalties incurred by the employee from having to prematurely withdraw money from a retirement account to cover living expenses and/or loss of a home or car due to the employee’s inability to keep up with loan payments.

Abruzzo offered other examples where “relevant compensation would be appropriate,” including:

• Compensation for damages caused to an employee’s credit rating following an unlawful termination
• Compensation for financial losses suffered by an employee for having to liquidate a personal savings account or an investment account to cover living expenses.

To call these remedies “novel” or groundbreaking is a severe understatement – no other generally applicable labor law provides for such remedies. Moreover, many of these remedies would be difficult to administer in the context of a settlement agreement. For example, with regard to compensating employees for “financial losses” associated with liquidating an investment account, would the employer be obligated to compensate the employee for foregone investment gains? If so, over what period of time?

Perhaps most gallingly for employers, Abruzzo also instructs that where employers make an unconditional offer of reinstatement to an unlawfully discharged employee, they should be required to draft a written letter of apology to the employee. Abruzzo argues that this radical new requirement “may assist in de-escalating lingering tensions between the employee and the employer during the reinstatement process.” In reality, compelling employers to issue a forced “apology” may be more likely to dissuade employers from settling the case at all.

Changes to Content of Settlement Agreement

Abruzzo has directed that in most cases, settlement agreements should include “default language,” that empowers the Regional Office to seek and obtain summary judgment against an employer that fails to comply with the terms of a settlement agreement. This marks a return to an Obama Administration practice that had been rescinded in December 2017 by former NLRB General Counsel Peter B. Robb. At the same time, Abruzzo instructs that “non-admissions” language ordinarily should not be included in settlement agreements, and further, that regions should seek the inclusion of “admissions” clauses for repeat violators. This runs directly counter to general practice in most settlements, in which the alleged violator is permitted to deny wrongdoing in exchange for providing relief to the victim(s) of its alleged misconduct.

Wider Distribution of Notice to Employees

An indispensable element of every Board settlement is the posting of a Notice to Employees advising them of their rights under the Act, the manner in which their employer [allegedly] violated those rights, assurances by the employer that it will not violate those rights and a description of any affirmative action taken by the employer to remedy the violation, e.g., reinstating a terminated employee. Historically, the Board has required the employer to physically post the notice in the workplace where notices to employees customarily are posted. Abruzzo observed that requiring employers to disseminate these notices to employees by text message and email will increase employee awareness of the notice and their rights under the Act. Pushing the envelope further, Abruzzo went on to suggest that in some cases, employers should be required to post the notice on their social media websites. Lastly, Abruzzo wrote that in some cases, settlement agreements should include “visitation” clauses empowering Board agents to “drop in” on the workplace to ensure that notices are posted as required.

Conclusion

It has been widely observed that employers would be facing a much more challenging enforcement environment under the Biden Administration, particularly with the appointment of a general counsel who most recently was affiliated with a powerful union (the Communications Workers of America). It is no coincidence that the major policy initiatives announced to date by Abruzzo are designed to stiffen enforcement against employer unfair labor practices, with nary a mention of union ULP’s. As we stated at the outset, now would be a good time for employers to review their labor management policies, practices and procedures to ensure legal compliance in the face of more aggressive NLRB enforcement.

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