Federal appeals courts are increasingly divided as to whether the NLRB can make employers pay for indirect, but foreseeable, costs (“expanded remedies”) resulting from labor law violations.
The issue stems from Thryv, a 2022 NLRB decision that expanded the Board’s remedies beyond traditional job reinstatement, back pay, and other direct costs. Thryv allows the NLRB to compel employers to pay workers for medical costs, automobile maintenance costs, credit card interest, and similar expenses.
In 2024, in NLRB v. Starbucks Corp., the Third Circuit blocked expanded remedies, citing lack of authority. On October 21, in IUOE, Local 39 v. NLRB, the Ninth Circuit upheld an NLRB order that Macy’s pay expanded remedies after the company refused to rehire strikers. On October 31, in Hiran Management v. NLRB, the Fifth Circuit ruled that the NLRB overstepped when it ordered a restaurant owner to compensate illegally fired workers for their foreseeable losses. It concluded the Board is not allowed to award compensatory damages.
Supreme Court review may be necessary to resolve the circuit split, or the Trump NLRB could change course once it regains a quorum.
Members of the Center for Workplace Compliance (CWC), our affiliated nonprofit membership association, can read more here.