On June 28, 2022, Jennifer Abruzzo, the General Counsel for the National Labor Relations Board (NLRB or the Board), announced via Twitter that she petitioned the Board to adopt a compensatory make-whole remedy in refusal to bargain cases. In August 2021, Abruzzo issued an internal memorandum detailing potential changes she sought to effectuate during her tenure. The make-whole remedy, which was briefly mentioned in the General Counsel’s memorandum, would disincentivize employers from refusing to bargain with unions and is consistent with this administration's policy goal of facilitating and increasing collective bargaining.
The traditional remedy for cases where an employer unlawfully refuses to bargain with the chosen bargaining representative of its employees is a bargaining order whereby the NLRB commands the employer to stop its unlawful refusal and bargain with the representative. In her motion to the Board, Abruzzo advocates to overturn the NLRB’s 1970 decision Ex-Cell-O Corp. where the Board held that make-whole orders in refusal to bargain cases were too speculative. According to the Ex-Cell-O Board, such a remedy would require the Board to assume the terms of a contract that the employer would have agreed to had it not unlawfully refused to bargain.
Abruzzo instead believes the Board should rely on the reasoning of the D.C. Circuit which rejected Ex-Cell-O Corp. There, the D.C. Circuit held that the Board has the discretion and power to formulate appropriate remedies for violations of the National Labor Relations Act (NLRA). In situations where the employer’s refusal to bargain is a flagrant violation of the NLRA, the D.C. Circuit held that a make-whole remedy or some other special remedy should be granted.
Although the D.C. Circuit seemingly limited such remedies to flagrant violations of the NLRA, the General Counsel’s motion does not appear to include such a limitation. In her tweets explaining the motion, Abruzzo stated that the Board “has the authority and obligation to make employees whole” and proposed that future remedial orders require employers to provide a compensatory monetary payment to employees “for the lost opportunity to make gains through the collective bargaining process.” She proposes that such remedies should be determined via compliance proceedings after an employer has been convicted of refusing to bargain in violation of the NLRA.
Such an additional remedy would have major implications for employers. There are a number of reasons that an employer may lawfully refuse to bargain with the employees’ chosen bargaining representative. However, the determination of lawfulness in any given situation is ultimately left to the Board. If Abruzzo’s motion is granted, employers could face substantial monetary penalties based on hypothetical contracts. Employers must carefully evaluate the circumstances to assure that any future refusal to bargain does not run afoul of the NLRA. If you have any questions about the potential implications of Abruzzo’s motion on your business, or any other employment-related questions, please contact an attorney on the Faegre Drinker labor and employment team.