In a follow-up to our December 2022 blog post and December 2023 year-end roundup alert regarding the National Labor Relations Board’s (NLRB or Board) decision in Thryv, Inc., the United States Court of Appeals for the Fifth Circuit has weighed in on Thryv’s petition for review and partially reversed the Board’s order.
Case background
To briefly recap, the Board decision in Thryv resulted in a broadened scope of remedies available to those who suffered an unfair labor practice (ULP). This expanded slate of remedies included all direct or foreseeable pecuniary harms suffered as a result of the ULP. The NLRB explained that this expansion was based on the “make whole” principles of the National Labor Relations Act, which (according to the Board) 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 this case, the employer unilaterally decided to lay off six employees, which the Board determined was an unlawful layoff because the employer failed to negotiate with the union to impasse.
Case update
On May 24, the Fifth Circuit vacated portions of the Board’s order. In the opinion, available here, the court held that the employer did not commit a ULP because it had provided timely notice before initiating the layoffs, bargained in good faith during the notice period and offered voluntary severance to those affected. Therefore, the widescale remedies imposed by the Board served no purpose and were vacated. The court noted that the so-ordered remedies – again, handed down by the Board to make the employees “whole” – was “a novel, consequential-damages-like labor law remedy,” but the court did not strike the notion that the Board could impose consequential damages in unlawful ULP cases in the future. Thus, the proposition that remedies levied as a result of a ULP can include all losses incurred as a direct or foreseeable result of the ULP, arguably the most controversial and consequential portion of the Board’s decision, still stands.
Bottom line
The NLRB experienced an uptick in activity in 2023, which has continued into 2024. Moving forward, employers are reminded to seek counsel when negotiating with a unionized workforce, particularly because the uncertainty as to how far-reaching the employer’s obligation is to make an employee “whole” as a result of the ULP still prevails.
[View source.]
