Work in the Time of COVID-19: FAQs for Employers

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On September 15, 2021, National Labor Relations Board General Counsel Jennifer Abruzzo issued a Memorandum (GC 21-07) to all Board Field Offices recommending that, when pursuing settlement agreements with employers charged with unfair labor practices, the Board should accept nothing less than “complete relief” to charging parties.  This memorandum follows another recent memorandum (GC 21-06) entitled “Seeking Full Remedies,” in which the General Counsel discussed various expanded forms of relief which should be pursued by the Board in unfair labor practice cases.  These memoranda from the General Counsel, among other recent pronouncements and decisions, indicate a shift by the Board towards a significantly more aggressive enforcement agenda under the National Labor Relations Act (NLRA).

Where an employer commits an unfair labor practice in violation of the NLRA, the Board is authorized to order the employer to cease and desist from such practice, as well as to award affirmative make-whole relief to the aggrieved employee.  Common remedies have traditionally included backpay, lost benefits, and reinstatement.  However, in GC Memorandum 21-07, Abruzzo states that a remedy comprised only of backpay and lost benefits “often fails to truly make whole victims of an unfair labor practice….” Therefore, in negotiating settlement agreements, and in addition to seeking “no less than 100 percent of the backpay and benefits owed,” Abruzzo encourages Board Regions “to seek compensation for any and all damages, direct and consequential, attributable to an unfair labor practice.”

According to Abruzzo, the Board has broad discretion to consider and insist upon a wide range of direct and consequential damages and remedies in settlement agreements.  GC Memorandum 21-07 cites the following examples:

– costs associated with loss of health insurance coverage;

– medical, legal or moving expenses;

– detrimental effects to credit ratings;

– liquidating a bank account to cover living expenses;

– training or coursework required to obtain or renew a security clearance, certification,                                  or license.

– legal expenses incurred by the employee in connection with the employer’s alleged unlawful conduct;

– letters of apology and neutral references;

– agreement by employer not to contest unemployment compensation.

The foregoing list is not exclusive, and other examples of possible remedies are noted in GC Memorandum 21-07.  In cases where the victim of an unfair labor practice waives employment reinstatement as a remedy, Abruzzo further states that front pay should be awarded.  And, in cases where an employer’s unfair labor practice causes the loss of an employee’s work authorization, Abruzzo recommends that a settlement agreement require the employer to sponsor the work authorization of the affected employee and reimburse the employee for any associated fees and costs.

Perhaps the most aggressive recommendation contained in Memorandum 21-07 concerns the use of “default language” in settlement agreements.  Such language would require that if the employer fails to comply with the terms of settlement agreement, the Board would reissue the underlying complaint which was settled and all allegations contained therein would be deemed admitted by the employer — which would automatically result in summary judgment against the employer without the availability of a trial on the merits of the case.  The Board would then issue an order providing a full remedy for the violations.  Abruzzo also strongly recommends an additional provision in settlement agreements involving “repeat violators,” whereby such an employer would be required to admit that it engaged in the alleged unfair labor practice.

An employer might reasonably ask whether the General Counsel’s recommendations leave any room for compromise in settlement agreements.  Given the Board’s current position of settling for nothing less than full relief with broad remedies, it will also be interesting to see what incentives an employer may find to engage in settlement of an unfair labor practice case, other than perhaps to avoid the cost of litigation. Employers should consult with their legal counsel in carefully assessing those costs and the merits of their case in determining whether seeking a settlement is a productive course of action.

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