NLRB Schools Its General Counsel on How to Seek More Extraordinary, More Punitive Remedies & Penalties

Last December, we reported on the NLRB's gross expansion of make-whole remedies in unfair labor practice cases in the Thryv case. https://shermanhoward.com/publications/truth-or-consequentials-the-nlrb-expands-make-whole-relief/. Among other things, the Board in Thryv held that it can award amounts for all direct or foreseeable pecuniary damages resulting from the alleged unfair labor practice, or so-called consequential damages to put it in the tort context. Last week, a 2-1 majority of the NLRB took this a giant step further, essentially instructing the General Counsel's team of prosecutors to seek these expanded remedies in more and more cases. Noah's Ark Processors, LLC https://www.law360.com/articles/1599542/attachments/0

The Noah's Ark case is a paradigm example of bad facts making godawful law. The employer in the case had a long history of unfair labor practices. Its conduct was disturbing enough to earn it a federal court "cease-and-desist order" as well as a federal court contempt finding. The culmination of its misconduct was its unlawful bargaining against the union, which included falsely declaring a negotiation impasse and unilaterally imposing its final bargaining offer on the bargaining unit. All three members of the NLRB agreed that the employer was a recidivist bad actor and that remedial steps were necessary to correct the misbehavior, taking into account the employer's checkered history. 

Based on the egregious conduct of the employer, the two-member majority ordered the employer to: (1) pay the union for its bargaining expenses, including paying bargaining unit employees for lost earnings incurred during bargaining sessions; (2) have its CEO personally sign and personally read the NLRB's remedial notice to all bargaining unit employees; (3) individually distribute the remedial notice to each bargaining unit employee present at the reading; (4) individually mail the remedial notice to each bargaining unit employee by certified mail; (5) post and individually mail an explanation of employee rights under the NLRA to each bargaining unit employee; (6) maintain a posting of the remedial notice and the explanation of NLRA rights for a full year; (7) make employees financially whole for any direct or foreseeable pecuniary harms incurred by the employer's implementation of its final bargaining offer; and (8) permit an NLRB agent to visit the facility to ensure compliance with the NLRB's ruling. As dissenting Member Kaplan noted in extraordinary detail, the vast majority of these remedies lack precedential, logical, or factual support. 

More importantly perhaps, Member Kaplan explained that the majority's exhortation to the General Counsel to seek more broad cease-and-desist orders and use those orders to seek these unprecedented and insupportable extraordinary remedies is simply insupportable under the NLRA. The purpose of the NLRA is remedial, not punitive. Yet, the remedies invoked in this case appear far more than remedial. And the NLRB's instruction to its chief prosecutor, the General Counsel, to seek these remedies with greater frequency threatens to render unfair labor practice proceedings far more risky and costly for employers. This, in turn, will force employers to more vigorously contest more unfair labor practice claims, which is the antithesis of the purposes underlying the NLRA. As Member Kaplan noted, "With today's decision, it seems likely that extraordinary remedies are about to become far less extraordinary. It bears watching whether my colleagues' deployment of such remedies becomes punitive and thus exceeds the powers granted them under Section 10(c)."  

The Majority seems unconcerned--it is determined to break out the labor law equivalent of the stocks and pillory for repeat violators of the Act.