Employers Beware: NLRB Special Remedies Are Becoming Extra Special

The National Labor Relations Board (NLRB) issues "make whole" remedies. What that entails is changing drastically. Because non-union employers will be disproportionately affected, the stronger remedies might come as an unwelcome surprise.

Historically, the types of remedies imposed for unfair labor practices have included standard awards such as reinstatement, backpay, rescission of unlawful or unilaterally imposed employment rules or practices, cease and desist orders, and notice posting at the workplace. The latest slew of decisions shows a very different reality for employers.

On September 15, 2021, Jennifer Abruzzo, the newly appointed General Counsel of the NLRB, released guidance urging Regions to "seek 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,'" including "new and alternative" special remedies. Given the General Counsel's emphasis on protecting employees' right to pursue union representation, these remedies will figure most often in cases where there's a union organizing campaign or cases where non-union employees work in concert to address their workplace concerns.

The General Counsel encouraged Regions to seek special remedies including but not limited to:

Expanded Economic Remedies

• Front pay (i.e., anticipated future wage loss).
• In-house or third-party outplacement services.
• Neutral references.
• Agreement not to contest unemployment claims.

Consequential Damages¹

• Interest fees on credit card charges.
• Penalties incurred from withdrawing money from retirement accounts or other accounts.
• Compensation for loss of a home or car.
• Compensation for damages caused to an employee's credit rating.
• Requiring employers to request reinstatement of an employee's license or certification.

Letters of Apology, Dissemination of Notice, and Other Special Remedies

• Requiring employers to issue a letter of apology to "assist in de-escalating lingering tensions between the employee and the employer."
• Requiring employers to read notices aloud to employees in the presence of an NLRB agent and union agent.
• Disseminating notice by texting employee cell phones or posting on the employer's public social media account.
• Requiring employers to allow union organizers to come onto company property.
• Requiring employers to submit photographs of all locations where notices are posted.
• An affirmative bargaining order.
• Requiring employers to reimburse the union for collective bargaining costs.

The Regions appear to have taken this message to heart. A pair of recent cases, however, raise questions about whether the NLRB should examine the use of special remedies, as well as their enforceability.²

The General Counsel Imposes (No Longer) Special Remedies

In Absolute Healthcare, decided on February 8, 2022, the Administrative Law Judge (ALJ) held that an employer committed a series of unfair labor practices in response to an organizing drive. Specifically, the ALJ concluded that the employer had: (1) unlawfully terminated an employee because they were a leading union proponent; (2) threatened employees that they would lose their tips if they formed a union; (3) promised employees they'd receive certain benefits if they did not form a union; and (4) unlawfully created an impression of surveillance when it singled out the sole female organizer.

The ALJ ordered the employer to make the employee whole through awarding backpay with interest, paying compensation during the employee's search for work, and compensation for adverse tax consequences. Importantly, however, to remedy the unfair labor practices and "dissipate the detrimental and lingering effects of the [employer's] unfair labor practices," the ALJ also ordered special remedies, including requiring management—naming the specific management representative—to read the notice aloud to all affected employees in the presence of an NLRB agent and a union representative so employees "will fully perceive that the [employer] and its managers are bound by the requirements of the [National Labor Relations] Act." The ALJ also ordered the employer to provide the Union "notice of, and equal time and facilities for the Union to respond to, any address made by the [employer] to its employees on the question of union representation."

As the General Counsel urges regions to pursue "the full panoply of remedies," it is likely these types of novel remedies will become the "standard."

No Apology Necessary

While some ALJs have been inclined to liberally impose special awards, others have recognized a need to carefully examine their use. In United Scrap Metal, decided January 18, 2022, the ALJ found the employer retaliated against an employee who led a spontaneous walkout to protest a lack of COVID-19 protections. The General Counsel asked the ALJ to order the employer to write the employee a letter of apology. The ALJ refused, explaining that infringement on employees' rights under Section 7 could only be addressed through meaningful action, which a letter of apology was not. The ALJ wrote:

As part of "an appropriate Order and Remedy," the General Counsel specifically requested only that the Respondent be directed to "send a letter of apology to Alejandro Castillo for each of the independent Section 8(a)(1) violations, to be signed by Managers Cuevas and Quinn Morales on behalf of Respondent." I decline to do that. The infringement of employees' Section 7 rights can only be remedied with meaningful action. A remedial order can only do that if the violations are addressed by actions restoring [sic] employee's terms and conditions that have been infringed upon and ensuring the violations do not occur again. Requiring the Respondent's managers to tell [the employee] that they're sorry is not the role of the Act.

Only time will tell whether the General Counsel will appeal the ALJ's decision. If the General Counsel does appeal, the Biden NLRB will have an opportunity to consider the bounds of special remedial measures appropriately ordered in response to unfair labor practices.

Takeaways for Employers:

• 1. Employers should expect to see expanded and creative use of special remedies to rectify unfair labor practices as encouraged in the General Counsel's memorandum.
• 2. These decisions are likely to be appealed to the applicable circuit court and, potentially, to the Supreme Court. In the meantime, the NLRB majority is likely to continue expanding the types of special remedies it orders.
• 3. Employers should consider the potential of these special awards when evaluating risk exposure.

Because questions regarding union-related matters and employees' concerted activities present a variety of complex issues, we recommend consulting one of DWT's traditional labor law experts to discuss them further.

FOOTNOTES

1  Existing NLRB law supports consequential damages remedies in the form of moving expenses, the cost of obtaining comparable health insurance coverage, and the cost of medical expenses incurred as a result of loss of health insurance.
2  Whether the NLRB is exceeding its scope of remedial authority is not a new question. In HTH Corp., decided in 2016, the NLRB affirmed the findings of an ALJ that the employer engaged in a series of pervasive and egregious unfair labor practices and sua sponte ordered special remedies which the General Counsel had not requested in the underlying proceeding. Two Board members dissented, raising concerns that the NLRB's award of remedies exceeded its remedial authority under the NLRA. In 2016, a D.C. Circuit panel discussed these issues at length, doubting, for example, the constitutionality of making an employer read the notice out loud, but ultimately upholding the Board's application of the remedies. Recently, however, the Fifth and Sixth Circuit Courts of Appeal vacated parts of NLRB decisions ordering employers to read notices aloud.