NLRB’s Money Damages Remedy Rejected in Unlawful Discharge Case

Takeaway: The 3rd, 5th, and 6th U.S. Circuit Courts of Appeal have rejected the National Labor Relations Board’s imposition of foreseeable monetary damages on employers that commit unfair labor practices. The 9th Circuit has upheld that remedy. The split among the circuits forecasts possible U.S. Supreme Court review of the issue. It is also possible, however, that the currently Republican-dominated board will reverse the 2022 ruling (Thryv Inc.) that adopted that remedy. 

An employer unlawfully threatened, suspended, and terminated an employee in violation of the National Labor Relations Act (NLRA), but was not obligated to reimburse the employee for monetary losses resulting from the discharge, the 5th U.S. Circuit Court of Appeals decided. Although the National Labor Relations Board’s (NLRB’s) rulings on the employer’s unfair labor practices were supported by substantial evidence, the award of consequential damages exceeded the board’s statutory authority, the court said.

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The employer, a janitorial company, assigned the employee, a cleaner, to clean microwaves and refrigerators, which, she said, violated the collective bargaining agreement. A supervisor told the cleaner that she could end up with a warning or a suspension if she complained about that to the NLRB. In other encounters with management, she was told variously not to return to work if she continued to express her opinions and to stop interfering or go home. Eventually, she was formally suspended and ultimately terminated. 

Section 7 of the NLRA guarantees employees’ “right to self-organization, to form, join, or assist labor organizations, and to bargain collectively, as well as engage in other concerted activities for the purpose of … mutual aid or protection.” It is an unfair labor practice for an employer to “interfere with, restrain, or coerce employees in the exercise of their Section 7 rights,” under Section 8(a)(1) of the act.

In reviewing the board’s decision in an unfair labor practice case, an appeals court is “bound to defer to the [administrative law judge’s (ALJ’s)] credibility determinations unless a high bar is met,” the court said. Likewise, the substantial-evidence standard for evaluating an NLRB decision is “easy for [the] board to satisfy.”

In this case, the 5th Circuit upheld the board’s decision that the employer’s statements amounted to unfair labor practices. The ALJ’s credibility ruling was reasonable, and the board’s rulings were supported by substantial evidence, the court said. Similarly, with respect to the cleaner’s suspension and later termination, the court upheld the board’s ruling that the cleaner’s conduct was protected concerted activity, and the employer’s disciplinary actions were unlawful.

The court also upheld the ALJ’s finding that the company had been motivated by protected activity in firing the cleaner. “Managers had threatened [the cleaner] with a suspension or warning during previous times when she had engaged in protected activity, so the ALJ was reasonable to find that they were motivated by that activity when they finally fired her,” the court said. Moreover, the ALJ also reasonably found that the company had imposed less punishment for “similar or more severe misconduct.” 

Finally, the court rejected the employer’s assertion that it would have fired the cleaner regardless of the protected conduct. Even if the cleaner had talked back to the supervisor, such misconduct was not comparable to refusing to work, for example, said the court. Moreover, the board reasonably rejected testimony that the cleaner had used profanity or disrupted the workplace. “Its conclusion was reasonable, and we defer to it,” the court said.

With respect to the remedy, however, the court rejected the NLRB’s imposition of direct and foreseeable pecuniary damages as exceeding the board’s statutory authority. Having disposed of the board’s jurisdictional challenge to the court’s authority to consider that argument, the 5th Circuit applied its own 2025 decision in Hiran Management Inc. v. NLRB to hold that “the Thryv remedy does exceed the NLRB’s statutory authority because the board can give only equitable relief, and the Thryv remedy is legal relief.” 

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Equitable relief includes reinstatement with back pay because “it is based on what an employer has wrongfully withheld from an employee,” the court said. But the board’s make-whole remedy is not equitable as “incidental or intertwined with injunctive relief.” If “make whole” were to be the rule, potential damages would be limited only by “the board’s imagination.”

Harvard Maintenance Inc. v. NLRB, 5th Cir., No. 24-60523, Feb. 2, 2026.

Margaret M. Clark, J.D., SHRM-SCP, is a freelance writer in Arlington, Va.