Published
January 23, 2025
When the National Labor Relations Board (NLRB) finds that an employer has discharged an employee unlawfully, one of its remedies is to order the employer to re-hire the employee, and it also may order the employer to provide back-pay for the employee.
These remedies have generally been accepted as within the NLRB’s authority, but the current majority has been known to push the boundaries of its legal stances in a number of ways.
One of those ways came in the form of a 2022 decision called Thryv, Inc. in which the Board decreed that “our make whole-whole remedy shall expressly order respondents to compensate affected employees for all direct or foreseeable pecuniary harms that these employees suffer as a result of the respondent’s unfair labor practice.”
To put it more plainly, the Thryv decision declared that employers deemed to have violated the law by dismissing an employee could not only be forced to pay an individual back-pay, but also for any myriad of other expenses that the individual may have incurred as a result of having been dismissed. Some examples of these expenses might include “out-of-pocket medical expenses, credit card debt, or other costs simply in order to make ends meet.” In other words, just about anything.
Thankfully, the U.S. Court of Appeals for the Third Circuit issued a ruling recently that said in effect “not so fast” to the NLRB’s sweeping declaration.
The case, NLRB v. Starbucks Corporation, involved two baristas who were dismissed from a Philadelphia Starbucks store for a variety of alleged violations of corporate policies. The dismissals prompted a complaint to the NLRB alleging that the company had engaged in an unfair labor practice based on the employee’s participation in a union organizing campaign.
An NLRB administrative law judge (ALJ) upheld the complaint, and a three-member panel of the NLRB adopted the judge’s findings and conclusions. The panel further ordered the company to reimburse the employees for any “for any direct or foreseeable pecuniary harms incurred as a result of the unlawful adverse actions against them, including reasonable search-for-work and interim employment expenses, if any, regardless of whether these expenses exceed interim earnings.” as contemplated by the Thryv precedent.
In its decision, the Third Circuit ultimately upheld the NLRB’s finding that Starbucks unlawfully dismissed the employees in question, and it sidestepped Starbucks’ challenge to the constitutionality of the ALJs. However, the court rejected the NLRB’s attempt to order expanded compensation under Thryv, saying it exceeded the Board’s authority. While not a total victory for Starbucks, it was a good judicial repudiation of the current NLRB’s continual overreach.
About the authors

Sean P. Redmond
Sean P. Redmond is Vice President, Labor Policy at the U.S. Chamber of Commerce.