NLRB Mulls “Consequential Damages”

The National Labor Relations Board (NLRB) issued a ruling on August 25, 2021, finding that a New Jersey nursing home violated federal labor law by unilaterally changing its employee health insurance plan. While the finding of a violation is rather commonplace, what is most interesting about the NLRB’s decision is that NLRB Chair Lauren McFerran stated in her written opinion that she believes the NLRB should consider adding “consequential damages” to the list of remedies it can order in a case. Even more interesting is that fellow Board Member John Ring, who has a more conservative political bend, joined McFerran’s call to consider such damages.

Currently NLRB penalties are largely limited to reinstatement of workers and the issuance of back-pay to make the employee whole for the employer’s unlawful conduct. Consequential damages, however, would open the door for more substantial awards. For example, in a situation where an employer unlawfully fires an employee, consequential damages could conceivably include expenses from car repossessions if the employee is able to show that he or she was unable to make car payments due to his or her loss of job. The test would likely look to see if the loss suffered was “a direct and foreseeable result of an employer’s unfair labor practice.”

While consequential damages were not issued in the Board’s recent decision, the Board noted that the General Counsel had not asked for them in the complaint that was filed. McFerran thus urged the General Counsel to consider asking for such an award in future cases.

We will be following the potential imposition of consequential damages and will update the blog regularly.