This is the first in a series of blog posts discussing the recently issued memos that guide the National Labor Relations Board’s administration of the National Labor Relations Act (NLRA). Each post in the series will include our notable takeaways for employers and the anticipated impacts on both unionized and non-unionized workplaces.
On September 15, 2021, National Labor Relations Board General Counsel Jennifer Abruzzo issued Memorandum GC 21-07 (“Full Remedies in Settlement Agreements”), which urges the Regions to seek remedies in the settlement of unfair labor practices (ULP) charges that provide “full remedies” to the charging party. Memorandum GC 21-07 broadens GC Abruzzo’s directive in Memorandum GC 21-06 (“Seeking Full Remedies”), stating that “[r]egions should request from the Board the full panoply of remedies available to ensure that victims of unlawful conduct are made whole for losses suffered as a result of unfair labor practices.”
The directive in Memorandum GC 21-07 to seek full remedies in settlement agreements is problematic because settlements, by nature, represent a compromise between the parties. The concept that a party should get full relief in a settlement—everything they would receive if they prevailed at hearing—disincentivizes a responding employer from settling except in the most straightforward or hopeless cases.
In addition, the GC’s evaluation of “full relief” is staggeringly broad. In fact, the below list goes beyond what is available to the charging party upon a wholly-successful hearing.
This includes:
- Full back pay
- Reinstatement or front-pay when reinstatement is not possible
- Job placement at the Employer’s expense
- Full consequential damages including
- Interest and late fees on credit cards
- Early withdrawal penalties for retirement accounts
- Loss of vehicle costs
- Loss of housing costs (including potential moving expenses)
- Value of harm to credit score
- Cost of job retraining
- Cost of training to recover professional license or clearance
- Cost of obtaining health care coverage
- Personal injury expenses for physical injury, which likely would include mental health injury
- Letter(s) of Apology
- Confessions of Judgment or promissory notes
- Expanded notice posting requirements
Finally, the GC condemned the use of “no admission clauses,” in which an employer expressly denies unlawful conduct in settlement agreements, despite the fact that such clauses are ubiquitous in settlements in other areas of the law and have previously been used in ULP settlements. The employer and charging party may agree on terms of a settlement that is not approved by the Region. However, as the Board is charged with administration of the Act, such an agreement between the two parties may have little effect except for extraordinary measures. If the Board does not approve the settlement agreement that is approved by the charging party and the respondent, the only recourse is to seek enforcement through the federal courts, over the Board’s objection, which will require lengthy and expensive litigation adverse to the Board itself.
Employer Takeaways
Since being appointed last year, National Labor Relations Board General Counsel Jennifer Abruzzo has been proactive in fulfilling the Biden Administration’s promise of being “the most pro-union president in American history.” These efforts have consisted of, in part, the issuance of numerous advisory memos that guide the Board’s administration of the NLRA. In some cases, GC Abruzzo compels the Board’s 32 Regions to depart from decades of precedent, and seeks to establish new rules that depart from the plain language of the Act.
Employers should expect the cost to settle unfair labor practices—in time, money, and other resources—to go up as a result of the GC’s directives. Moreover, elements that were agreed to in previous NLRB-approved settlements may not be available, namely no admission clauses, the exclusion of which may seem like an implied admission of wrongdoing to some employers. In many cases, a negotiated resolution to a ULP complaint may still be the best outcome, but understanding recent changes by the GC will be essential to employers’ cost-benefit analysis.
Stay tuned to Employment Law in Motion for additional important updates on the rapidly shifting policies of the NLRB and their effect on union and non-unions employers alike.
