by Robert S. Teachout, Brightmine Legal Editor
The 5th Circuit and 6th Circuit Courts of Appeals each ruled recently that the National Labor Relations Board (NLRB) does not have authority to order employers to pay consequential damages for unfair labor practices. The rulings widen a split among the circuit courts, increasing the likelihood of the NLRB’s remedial power being reviewed by the Supreme Court.
In 2022, the NLRB held in Thryv, Inc., that it could order employers to compensate employees for all direct or foreseeable pecuniary harms resulting from the employer’s violations of the National Labor Relations Act (NLRA). Prior to Thryv, Inc., NLRB remedies were typically limited to reinstatement and back pay.
On October 31, the 5th Circuit ruled against the NLRB’s expanded remedies in Hiran Management v. NLRB, holding that “the Thryv remedy goes beyond the text of the NLRA.” The Court explained that the NLRA permits only equitable relief (such as reinstatement and back pay) and not legal relief (such as compensatory, consequential or punitive damages).
Then the 6th Circuit weighed in by vacating the NLRB’s award of consequential damages in NLRB v. Starbucks, ruling that the NLRB exceeded its statutory authority when it awarded “direct and foreseeable monetary damages” beyond back pay. Such compensable damages would include a “myriad” of components, such as “interest and late fees on credit cards, penalties on early withdrawals from retirement accounts, and the loss of a car or home from missed loan or mortgage payments,” the Court explained in limiting the Board to traditional relief.
The rulings expand a Circuit Court split over the NLRB’s claimed remedial authority in Thyrv, Inc. In December, 2024, the 3rd Circuit held that the NLRB exceeded its statutory authority by ordering consequential remedies, while in January, 2025, the 9th Circuit upheld Thryv remedies because they “further the policy of the NLRA,” are “directly targeted” at unlawful conduct and are “aimed at restoring the economic strength that is necessary to ensure a return to the status quo ante.”
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About the author
Robert S. Teachout, SHRM-SCP
Legal Editor, Brightmine
Robert Teachout has more than 30 years’ experience in legal publishing covering employment laws on the state and federal level. At Brightmine, he covers labor relations, performance appraisals and promotions, succession and workforce planning, HR professional development and employment contracts. He often writes on the intersection of compliance with HR strategy and practice.
Before joining Brightmine, Robert was a senior HR editor at Thompson Information Services, covering FMLA, ADA, EEO issues and federal and state leave laws. Prior to that he was the primary editor of Bloomberg BNA’s State Labor Laws binders and was the principal writer and editor of the State Wage Assignment and Garnishment Handbook. Robert also served as a union unit leader and shop steward in the Washington-Baltimore Newspaper Guild of the Communications Workers of America. Actively involved in the HR profession, Robert is a member of SHRM at both the national and local levels, and gives back to the profession by serving as the communications vice president on the board of his local chapter.
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