Employers must compensate workers for unfair labor practices

Employers that violate federal labor law must compensate workers for the direct consequences of unfair labor practices, the National Labor Relations Board (NLRB) has ruled.

In its decision in Thryv, Inc., the Board clarified its make-whole remedy, making clear that workers who are victims of labor law violations must be compensated for all “direct or foreseeable pecuniary harm” suffered as a result of those practices.

The NLRB’s make-whole remedy for employees who are unfairly discharged, laid off or otherwise discriminated against is intended to account completely for their actual economic losses.

In the past, remedies have included reinstatement of employment, backpay, payment of dues and fines, and end to unlawful rules or practices, or the posting of notices at the workplace.

The new ruling adds a host of other remedies to the list, such as:

• Compensation for health care expenses an employee incurred as a result of an unlawful termination of health insurance.
• Compensation for credit card late fees.
• Compensation for loss of a home or a car an employee suffered as a result of an unlawful discharge.
• Employer sponsorship of work authorizations for fired undocumented workers.

According to the decision, victims of unfair labor practices may incur significant financial costs, such as out-of-pocket medical expenses, credit card debt, or other costs in addition to the loss of earnings and benefits.

The Board held that compensation for those losses should be part of the standard, make-whole remedy for labor law violations.

It went on to say that the General Counsel will be required to present evidence in a compliance proceeding proving the amount of the financial harm, that it was direct or foreseeable, and that it was due to an unfair labor practice. The employer or union would then have the opportunity to rebut that evidence.

“Employees are not made whole until they are fully compensated for financial harms that they suffered as a result of unlawful conduct,” said NLRB Chairman Lauren McFerran. “The Board clearly has the authority to comprehensively address the effects of unfair labor practices. By standardizing the Board’s make-whole relief to fully include the direct or foreseeable financial harms suffered by affected employees we will better serve the important goals of the National Labor Relations Act.”

This clarification will apply in every case in which the Board’s standard remedy would include make-whole relief for employees. It will be applied retroactively to all cases currently pending.