A U.S. appeals court on Friday reversed a National Labor Relations Board ruling that significantly expanded the limited financial remedies available to workers who are fired or laid off in violation of federal labor law.
A unanimous three-judge panel of the New Orleans-based 5th U.S. Circuit Court of Appeals said the board was wrong to rule that Texas-based Thryv Inc, which sells Yellow Pages advertising, violated the National Labor Relations Act (NLRA) by laying off six sales workers without bargaining with their union.
As a result, the court did not weigh whether the board's novel order that Thryv reimburse the workers for any "direct or foreseeable pecuniary harms" resulting from the layoffs, such as out-of-pocket medical expenses and credit card fees, was proper.
Circuit Judge Andrew Oldham, an appointee of Republican former President Donald Trump, called the board's expansion of remedies "draconian" without further explanation in the opinion he penned for the court.
An NLRB spokeswoman declined to comment. Lawyers for Thryv did not immediately respond to requests for comment.
The NLRA permits the board to order employers to reinstate workers who illegally lost their jobs, and also to grant workers remedial damages to make them whole. For decades those damages were generally limited to backpay and lost benefits and, after a 2016 ruling, expenses related to searching for a new job.
Thryv in 2019 laid off six sales workers over the objections of an International Brotherhood of Electrical Workers affiliate, which had requested to bargain with the company before any employees were terminated, according to filings in the case.
Prompted by a complaint from the union, the board's general counsel accused Thryv of unlawfully laying off the workers without bargaining and refusing to respond to its numerous requests for information about the job cuts.
An administrative law judge sided with the union in 2021 and ordered Thryv to reinstate the workers and pay them backpay, which is the wages they would have earned had they not been fired.
Thryv appealed to the board, which called for public input on whether it should use the case to expand the money damages available to workers who are subjected to illegal labor practices.
Business groups including the U.S. Chamber of Commerce pushed back, arguing in briefs that the "consequential damages" the board was considering were too similar to punitive damages that can be awarded by courts but are off limits to the NLRB.
The board in its ruling rejected those claims, saying damages are not punitive when they compensate workers for their financial losses.
Thryv appealed to the 5th Circuit, and the court on Friday agreed with the company that it had not violated the NLRA by unilaterally laying off the workers, so no damages were warranted. The court said Thryv had followed the procedures for conducting layoffs established in a collective bargaining agreement.
The panel included Oldham and Circuit Judges Carolyn King, an appointee of Democratic former President Jimmy Carter, and Edith Jones, who was appointed by Republican former President Ronald Reagan.
The case is Thryv Inc v. NLRB, 5th U.S. Circuit Court of Appeals, No. 23-60132.
For Thryv: Arthur Telegen and Robert Fisher of Seyfarth Shaw
For the NLRB: Eric Weitz
For the union: Lucas Aubrey of Sherman Dunn
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