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NLRB to Award Compensatory Damages for Labor Law Violations

    Client Alerts
  • December 16, 2022

During 2022, there has been a considerable uptick in labor activity, including high profile organizing efforts at Amazon, Starbucks, and other nationwide employers. Inevitably, these efforts result in claims from unions that employers are unlawfully interfering with employees’ rights to organize. On Tuesday in Thryv Inc. v. IBEW, Local 1269, the National Labor Relations Board (NLRB) gave employees a new option for recovery against violations of their rights under federal labor law.

Prior to this 3-2 decision, employees who demonstrated unfair labor practices could win reinstatement and back wages. The NLRB majority concluded that in order to make workers whole, the Board has the authority to award compensatory damages. These could include reimbursement of healthcare expenses resulting from lost insurance coverage, damages relating to home foreclosures or automobile repossessions, credit card debt, or other losses related to the employer’s actions.

Federal law limits the NLRB to making employees whole for losses suffered as a result of legal violations. The addition of compensatory damages to this arsenal raises questions over the speculative nature of such damages, as well as the use of such remedies to penalize companies rather than address actual employee losses. Employers are certain to challenge the new NLRB interpretation in federal court, and seek a judicial interpretation that would limit the Board’s remedial powers to more traditional damages.