Labor Board Defends Layoff Ruling That Led to Expanded Remedies

A federal appeals court panel grilled a National Labor Relations Board lawyer about a ruling that ultimately expanded the agency’s ability to order employers to pay for economic harm stemming from a labor law violation.

Judges on the US Court of Appeals for the Fifth Circuit during oral argument Tuesday seemed leery of the 2022 decision finding that software company Thryv Inc. violated the National Labor Relations Act by laying off six workers without properly bargaining with their union.

After making that determination, the NLRB held that the board can charge companies for “all direct or foreseeable pecuniary harms” stemming from illegal conduct, including workers’ late credit card bills, medical expenses, and even fees for late rent and car payments. A determination that those remedies are not available would remove a weapon in the NLRB’s limited arsenal for enforcing federal labor law.

Thryv had argued in its appellate brief that the NLRB ruled against it simply to get to the remedies issue, an argument the board called “conspiratorial.”

But instead of focusing on the broader challenge to the expanded remedies, the attorneys and judges spent most of the arguments parsing out the facts of the underlying case.

Thryv laid off six workers in 2019 despite never reaching a collective bargaining agreement with the International Brotherhood of Electrical Workers that covered layoff procedures. All five NLRB members at the time agreed that Thryv wrongly depended on its final contract offer that was instituted in 2017 after the company declared an impasse in negotiations.

The NLRB general counsel’s office initially concluded that the final offer withstood legal muster. But the agency’s attorney told the Fifth Circuit on Tuesday that the company couldn’t carry the terms of that agreement into the next few years if there was no longer an impasse.

“If the impasse was broken, as the board found it was here, then this court has affirmed that an employer cannot rely on a management rights clause it implemented a year earlier,” NLRB attorney Eric Weitz said. “The employer here cannot just invoke the final offer as if it were a contract agreement.”

“The whipsawing of the employer in this case is staggering,” Judge Andrew Oldham, a Trump appointee, told Weitz. “It’s almost like Alice in Wonderland where stuff that was long dead, long gone, long settled, is resurrected and they get hammered with it.”

Lucas Aubrey of Sherman, Dunn, Cohen, Leifer & Yellig PC, representing the union in the case, said Thryv had broken the legal impasse by refusing to provide necessary information to IBEW.

“This court has said that if there’s a unilaterally implemented management rights clause but the impasse is broken by the employer’s failure to provide requested information, then the employer can no longer count on that clause,” he said.

Arthur Telegen of Seyfarth Shaw LLP, who represented Thryv, spent much of his time blaming the union for slowing negotiations by refusing to put up legitimate counter-proposals to what the company was offering.

“A party isn’t required to put their policy proposals in writing but it is required to make sure the other side knows what is a proposal and what isn’t,” Telegen said. “The board’s decision makes up facts, and it twists the facts.”

Judge Edith Jones, a Reagan appointee, appeared to agree with Telegen’s argument, referring to the delay between the company notifying the union of the layoffs and the union making representatives available for negotiations.

“The union had 30 days to do something and it didn’t do anything,” she said. “They could have filed something in writing to the employer. Bargaining is bargaining.”

“Bargaining is bargaining but you cannot put all the onus on the union, especially when they don’t have all the relevant information to give a counter offer,” Weitz rebutted. “There needs to be a give and take. There needs to be information given to the union from the employer which simply never occurred here.”

Judge Carolyn King, a Carter appointee, also sat on the Fifth Circuit panel.

The case is Thryv Inc. v. NLRB, 5th Cir., No. 23-60132, oral arguments held 2/6/24.