New England Biz Law Update
The scope of the National Labor Relations Board’s monetary remedies remains uncertain after the 6th U.S. Circuit Court of Appeals ruled that the board exceeded its authority by awarding Thryv-style “make-whole” damages in an unfair labor practice case involving a Starbucks barista.
Thryv was a 2022 NLRB decision in which the board said employers should pay workers for all direct and foreseeable financial harms caused by unlawful conduct, such as extra childcare costs, credit card interest, late rent fees, or bank penalties.
What happened
The case centers on a barista in Michigan who became an active part of early union-organizing efforts at her store in January 2022. She wore union pins, placed union stickers in the store, and appeared at an NLRB videoconference related to the Workers United’s campaign.
About a month into these activities, she left her shift early, which meant a coworker was left alone in violation of the store’s “two-employee rule.” Starbucks later cited that incident when it removed her from her role in April 2022.
Workers United filed an unfair labor practice charge alleging she was fired because of her organizing efforts. The NLRB agreed, finding the dismissal unlawful.
While the Sixth Circuit agreed the discharge violated the NLRA, it rejected the Board’s Thryv-level remedy.
Why the court rejected Thryv
The court held that the NLRA authorizes only equitable remedies, such as reinstatement and backpay, not compensatory damages for things like late fees, extra expenses, or other financial harms the employee might have experienced.
It also noted that awarding broader monetary damages raises potential Seventh Amendment issues, because such relief typically triggers a right to a jury trial.
The panel concluded that restoring the status quo is within the Board’s power, but Thryv goes “much farther” by sweeping in harms only loosely connected to the unfair labor practice.
Growing circuit split
The Sixth Circuit now joins the Third and Fifth Circuits in ruling that the NLRB exceeded its authority under Thryv. The Ninth Circuit remains the only federal appeals court to uphold the expanded standard, creating a three-to-one split and increasing pressure for the U.S. Supreme Court to settle the question.
Employers should continue to track developments. The NLRB may revisit its approach once a quorum is restored and new General Counsel guidance is possible.
Employers are further advised to continue supervisor training over how to respond to protected union and organizing activity. Even without Thryv, the board retains broad authority to order reinstatement, backpay, and traditional make-whole relief.
