Consistent with recent trends, the Democratic majority National Labor Relations Board (the “NLRB” or the “Board”) has issued two recent decisions that gravely impact employers. First, employers are now liable for all direct or foreseeable damages an employee may incur when an employer violates a federal labor law. Second, the Board has made it easier for smaller worker groups, commonly known as “micro units,” to organize.
1. Employers Liable for Consequential Damages
On December 13, 2022, in Thryv, Inc., NLRB Case No. 20-CA-250250, the Board, in a 3-2 decision, issued a ruling that requires employers to pay so-called “consequential damages” to employees related to any “direct or foreseeable” harm resulting from any violation of the National Labor Relations Act. Such consequential damages include costs such as out-of-pocket medical expenses, late payment fees, overdraft charges, and missed mortgage or rent payments. These consequential damages are in addition to the traditional make-whole remedies that employers were previously required to pay, such as back pay and reinstatement, and are applicable in all cases that call for make-whole relief, not just egregious cases.
Not only are employers now potentially liable for all forms of economic harm an employee may incur, but employers should now be prepared to challenge the damage amount awarded as well as lack of causation and foreseeability. Though the Board’s decision will likely be appealed and be subject to judicial review, employers must be mindful of these additional damages and proceed with caution.
2. Micro Units Once Again Allowed
On December 14, 2022, in American Steel Construction, Inc., NLRB Case No. 07-RC-269162, the Board issued a decision modifying the test used to determine whether additional employees must be included in a petitioned-for unit in order to render it an appropriate bargaining unit. In another 3-2 decision, the Democratic majority Board overturned the Trump-era precedent that made it more difficult for micro units to organize, and reinstated the standard set during the Obama administration. As a result of the Board’s decision, it will be easier for “micro units” to organize.
Micro units, which are usually comprised of a small subset of employees within a larger group, can be as small as just a group of employees who share the same job title. Employers with micro units will likely face greater challenges in managing their workforce since they may be forced to deal with multiple unions, each representing a different micro unit.
What Happens Now?
With petitions for unionization on the rise and increasing union activity across the country, employers in all industries should be wary of the risks associated with unfair labor practices. Now, with the allowance of micro units, there is a greater potential of even more union organization and activity. And given the new reality that employers will face larger damage liability awards, employers must proceed with greater caution to ensure they are not in violation of the National Labor Relations Act or any other applicable federal labor laws.
It remains to be seen whether these decisions will be challenged, and if so, whether the Board’s decisions will withstand judicial scrutiny. Mirick O’Connell will monitor these decisions and provide updates as necessary. In the meantime, if you have any questions regarding the NLRB or these recent decisions, please do not hesitate to reach out to any member of Mirick O’Connell’s Labor, Employment, and Employee Benefits Group.
