Thryv, Inc. operates a marketing agency that sells Yellow Pages advertising and other marketing products. The International Brotherhood of Electrical Workers (IBEW) represents a unit of employees that includes Thryv’s outside salesforce. Thryv laid off six salesforce employees over the objections of IBEW.
The Board, in a 3-2 ruling, held that Thryv violated the federal National Labor Relations Act (NLRA) by unilaterally laying off this group of employees before bargaining with the union. In doing so, the Board also added: “all direct or foreseeable pecuniary harms suffered as a result” of an unfair labor practice to the remedies available to the affected employees.
Prior to this decision, employees seeking relief under the NLRA were limited to “make-whole remedies” such as back pay and reinstatement as a result of an unfair labor practice. However, on September 8, 2021, newly appointed NLRB General Counsel Jennifer A. Abruzzo issued a memorandum that pushed for expanded remedies against employers. In November 2021, the Board also solicited comments on the scope of make-whole remedies, signaling its intent to add consequential damages. Fourteen amicus briefs, filed on behalf of workers and management, weighed in on the potential change.
Now employers may be liable for consequential damages, which may include out-of-pocket expenses, credit card debt, “other costs… in order to make ends meet,” or any other “direct and foreseeable” financial harm employees alleged to have suffered. In this case, the Board ordered Thryv to compensate the laid-off employees for “reasonable search-for-work and interim employment expenses.” Additionally, the Board ordered Thryv to pay the affected employees for any adverse tax consequences of receiving a lump-sum backpay award.
The Board made clear that it will not reserve this expansion of this remedy to only the most “egregious” unfair labor practices because the remedies are restorative and not punitive. Additionally, the Board announced that it will apply this remedy retroactively to all cases currently pending. The NLRB General Counsel’s office, which prosecutes unfair labor practices, must present evidence during the proceedings to establish the amount of economic harm and why the employer is responsible for those damages. Employers will have the opportunity to challenge the amount and dispute why the harm was not direct or foreseeable.
Thryv, Inc., 372 NLRB No. 22 (Dec. 13, 2022).
Note: Legal challenges to this expanded remedy are likely, given the significant implications on the make-whole remedy now available to workers. LCW will be closely monitoring any appeals.