HR Policy Weighs in on Consequential Damages for Labor Law Violations, Labor Law Preemption

January 14, 2022

The Association argued the National Labor Relations Board does not have the authority to award damages beyond lost wages, and that state law unlawful retaliation claims are preempted by federal labor law in amicus briefs recently filed with the NLRB and the New York State Supreme Court.

The NLRB’s traditional remedies are mainly limited to back pay. The NLRB requested amici on whether it should expand its traditional remedies to include consequential damages, which would empower the Board to reach deeper into employer pockets for employee losses beyond wages such as missed mortgage payments and medical expenses.

The coalition brief argued that allowing for consequential damages would lead to more protracted litigation, since proving expenses such as missed mortgages are connected to a lost job can be exceedingly difficult. Moreover, the National Labor Relations Act does not give the Board the authority to award consequential damages, which only Congress can provide by amending the statute.

Expanding available remedies for unfair labor practices is a priority of the NLRB and its General Counsel, Jennifer Abruzzo, who in her own brief argued that the Board should be able to award damages for emotional damages as well. Employers can expect the Board to rule on the issue of expanded remedies and damages in the coming weeks. 

Meanwhile, HR Policy also filed an amicus brief in New York State Supreme Court, arguing that state law claims of unlawful retaliation for concerted activity are preempted by the National Labor Relations Act. The Association argued it is essential that larger companies operating in a multiplicity of jurisdictions have a consistently applied, uniform body of labor law—otherwise many companies be forced to defend against multiple state and federal claims for the same alleged unlawful labor practice. 

More amicus activity ahead: The amicus brief on consequential damages is just the first of many the Association is planning to file with the NLRB in the coming weeks and months in response to a slew of requests from the Board, on issues including independent contractor status, appropriate bargaining unit size, and employer workplace rules and policies.