NLRB Awards Bargaining Expenses to Union

By Gerard Morales

In a recent case, the Court of Appeals for the 9^th Circuit (Court) enforced an order of the National Labor Relations Board (NLRB or Board) requiring an employer to reimburse the union for the expenses that the union incurred during collective bargaining negotiations. NLRB v. Ampersand Publishing, 9^th Cir., No. 21-71060, 8/11/22.  The bargaining negotiations expenses included the legal fees the union had paid to outside counsel for consultation during the negotiations.

The NLRB had found that the employer had engaged in bad faith bargaining during the negotiations by, inter alia, making unilateral changes in the terms and conditions of employment of the employees subject of the negotiations and by transferring bargaining unit work out of the unit without notice to the union. The Board found that such conduct constituted aggravated misconduct that justified more than the traditional cease and desist remedy. Accordingly, the Board ordered the employer to reimburse the union for the bargaining expenses it had incurred.

Recognizing that under the Act (Labor Management Relations Act, see 29 U.S.C. Sec. 160 et seq.) the NLRB has “exceedingly broad” discretion in selecting remedies for unfair labor practices, the Court rejected the employer’s defense that the NLRB lacked authority to award the union reimbursement for its bargaining expenses. The Court noted that while the NLRB does not have the authority to require reimbursement of litigation costs, as such remedy would be punitive in nature and “thus beyond the Board’s remedial power,” the reimbursement award here was not for litigation expenses. Rather, the reimbursement ordered by the Board was for expenses, including legal fees, incurred during the bargaining process. Therefore, such expenses incurred by the union were primarily compensatory.

In a prior Alert, we discussed the NLRB General Counsel’s (GC) announcement that she would seek to expand remedies beyond those that have been traditionally imposed in unfair labor practice cases. In furtherance of that objective, the GC has instructed the Regional Directors to seek “consequential damages” in unfair labor practice cases. Such damages would include items, such as reimbursement for late car, mortgage and rent fees, reimbursement for interest payments on loans taken by unlawfully terminated workers to cover living expenses, etc.