*1 FOR PUBLICATION
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT INTERNATIONAL UNION OF No. 23-124 OPERATING ENGINEERS, NLRB No. STATIONARY ENGINEERS, 20-CA-270047 LOCAL 39,
OPINION Petitioner ,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent ,
---------------------------------------- MACY S INC.,
Intervenor . MACY’S INC. , No. 23-150 NLRB No. Petitioner , 20-CA-270047 v. NATIONAL LABOR RELATIONS BOARD,
Respondent
---------------------------------------- *2 INTERNATIONAL UNION OF OPERATING ENGINEERS,
STATIONARY ENGINEERS, LOCAL 39,
Intervenor . NATIONAL LABOR RELATIONS No. 23-188 BOARD, NLRB No. 20-CA-270047 Petitioner , v.
MACY’S INC. ,
Respondent
---------------------------------------- INTERNATIONAL UNION OF OPERATING ENGINEERS,
STATIONARY ENGINEERS, LOCAL 39,
Intervenor . On Petition for Review of an Order of the National Labor Relations Board Argued and Submitted March 28, 2024 San Francisco, California Filed January 21, 2025 Before: Evan J. Wallach, [*] Jacqueline H. Nguyen, and Patrick J. Bumatay, Circuit Judges. Opinion by Judge Wallach; Partial Dissent by Judge Bumatay
SUMMARY [**]
Labor Law
The panel denied petitions for review brought by the International Union of Operating Engineers, Stationary Engineers, Local 3 9 (the “Union”) and Macy’s Inc., and granted the National Labor Relations Board’s cross - application for enforcement of its final order in a case in which the Union charged Macy’s with unfair labor practices under the National Labor Relations Act (“NLRA”). *4 held that the Board did not clearly abuse its discretion in ordering make-whole relief pursuant to Thryv, Inc ., 372 N.L.R.B. No. 22 (Dec. 13. 2022).
Dissenting in part, Judge Bumatay would hold that the Board had no authority to order the type of monetary relief it did, requiring Macy’s to pay foreseeable or consequential damages — compensating Union members for ongoing harms accumulating to this day — more than four years since the lockout. The Board’s actions were arbitrary and capricious and unsupported by the record. While he agreed with the denial of the Union’s petition for review, he dissented from the denial of Macy’s petition for review and from th e grant of the Board’s application for enforcement.
COUNSEL
David A. Rosenfeld (argued) and Sara J. Zollner, Weinberg Roger & Rosenfeld, Emeryville, California; Gary P. Provencher, Weinberg Roger & Rosenfeld, Sacramento, California; for Petitioner.
Barbara A. Sheehy (argued), Attorney; Usha Dheenan, Supervisory Attorney; David Habenstreit, Assistant General Counsel; Ruth E. Burdick, Deputy Associate General Counsel; Peter S. Ohr, Deputy General Counsel; Jennifer A. Abruzzo, General Counsel; National Labor Relations Board, Washington, D.C.; for Respondent.
M. Christopher Moon (argued), Jackson Lewis PC, Salt Lake City, Utah; Dylan B. Carp and Laura A. Pierson- Scheinberg, Jackson Lewis PC, San Francisco, California; Daniel D. Schudroff, Jackson Lewis PC, New York, New York; for Intervenor.
6 I NT L U NION OF O PERATING E NGINEERS V . NLRB
OPINION
WALLACH, Circuit Judge:
When engaging in “collective bargaining” under the
National Labor Relations Act (“NLRA” or the “Act”),
“representatives of an employer and a union attempt to reach
an agreement by negotiation, and, failing agreement, are free
to settle their differences by resort to such economic
weapons as strikes and lockouts,
without any compulsion to
reach agreement
.”
NLRB v. Amax Coal Co.
,
The Union filed its Charge Against Employer (“Charge”) with the National Labor Relations Board (“NLRB” or the “Board”) , alleging that the Company’s lockout was an unfair labor practice under the NLRA. An Administrative Law Judge ( “ ALJ ” ) ultimately ruled in the Union ’s favor .
The Board adopted the conclusion of the ALJ, who found that Macy’s violated Section 8(a)(1) and (3) [1] of the Act, 29 U.S.C. § 158(a)(1), (3), when on December 7, 2020, Macy’s locked out its employees without presenting a timely, clear, and complete offer that set forth the conditions necessary to avoid a lockout. Macy’s, Inc. 372 N.L.R.B. No. 42 (Jan. 17, 2023) ( Decision and Order”) . The Board amended the ALJ’s recommended Order with respect to remedial provisions, modifying the *6 “make - whole remedy” to include direct or foreseeable pecuniary harms incurred due to the lockout. Before us are three prayers for relief: (1) the Union petitions for remand for the Board to reconsider its requested additional remedies; (2) Macy’s petitions for dismissal of the Union’s petition and transfer of the proceedings elsewhere, or alternatively, either remand or reversal on the merits in its favor; and (3) the Board applies for enforcement of its final Order. We have jurisdiction under 29 U.S.C. § 160(e) – (f). We deny the *7 After nearly a dozen bargaining sessions, they had yet to reach an agreement. On August 31, 2020 — the day the CBA would expire —Macy’s presented its Final Offer proposing terms relating to wages and pensions. On September 2, 2020, the Union members overwhelmingly voted to reject the Final Offer and the Union decided it would begin its strike in two days. From September 4, 2020, to December *8 10 I NT L U NION OF O PERATING E NGINEERS V . NLRB 2020, Ashmore answered that Macy’s would need to fully evaluate “several administrative, logistical, and economic issues” implicated by the Union’s “unexpected offer , ” and requested the courtesy of giving us until the close of business Monday to assess.” On December 6, 2020, Vega responded that “[u]nfortunately, we cannot accommodate your request. Unless you are locking them out, they will [be] showing up to work Monday morning.” Ashmore replied, repeating that “the team should not return to work on Monday, ” as well as stating that “[t]his is not a lockout but we won’t be ready for them.”
On Monday, December 7, 2020, some Union engineers started returning to work but were turned away. That same day, Ashmore emailed Vega, asserting “[w]e are not willing to reinstate bargaining [Union] employees until there is an agreement in place; this decision is being made in support of our bargaining position.”
On December 10, 2020, Macy’s and the Union engaged in subsequent negotiations. Ashmore emailed Vega the Company’s new bargaining proposal, which includes wage increases that were reduced from those within the Final Offer. The Union countered with an offer to cap wages at the rates originally proposed in the Final Offer. No deal was made. The next day, Macy’s presented another proposal, which was still worse than the Final Offer. The Union gave its additional proposal, deleting certain provisions from the contract. Once again , Macy’s and the Union failed to reach an agreement.
On December 9, 2020, and February 4, 2021, the Union respectively filed its original and first amended Charge forms with the NLRB, alleging that Macy’s committed an unfair labor practice by locking out the Union engineers after *9 they gave their unconditional offer to return to work. On February 11, 2021, the NLRB issued its Complaint and Notice of Hearing (“Complaint”), which alleges that Macy’s violated Section 8(a)(1) and (3) of the Act. In June 2021, the ALJ conducted a six-day hearing, and at that time, Macy’s and the Union “had still not reached an agreement on a new contract, and [the Company’s] lockout of the engineers continued. ”
In the ALJ’s Decision issued on April 6, 2022, the ALJ concluded that Macy’s violated Section 8(a)(1) and (3) of the NLRA, “ [b]y locking out its employees on December 7, 2020, without providing them with a timely, clear, or complete offer, which sets forth the conditions necessary to avoid the lockout[.] ” The ALJ recommended that Macy’s “ offer reinstatement to all employees who were unlawfully locked out and make them whole for any losses of pay and benefits that they may have suffered by reason of the lockout, ” including “ search-for-work and interim employment expenses, regardless of whether those expenses exceed interim earnings. ” With respect to the ALJ’s Decision, Macy’s filed its Exceptions and the Union filed its Cross-Exceptions.
On January 17, 2023, the Board in its Decision and Order affirmed the ALJ ’ s rulings, findings, and conclusions, and adopted the ALJ s recommended Order, making two modifications. The Board modified the ALJ’s recommended Order, first, “to conform to the violations found and to the Board’s standard remedial language, and in accordance with” prior NLRB decisions, and second, to amend the “ make-whole remedy ” to provide that Macy’s shall also compensate the employees for any other direct or foreseeable pecuniary harms incurred as a result of the unlawful lockout , including reasonable search-for-work and interim employment expenses, if any, regardless of whether these expenses exceed interim earnings.”
Macy’s petitioned for review over the Board’s Decision and Order in the Fifth Circuit, and the Union filed its petition in this Court. Pursuant to 28 U.S.C. § 2112, the Judicial Panel on Multidistrict Litigation transferred their Petitions for Review here, after this Court was randomly selected. The NLRB filed a Cross-Application for Enforcement of its final Order. These three petitions were consolidated here.
II. STANDARD OF REVIEW
We “must uphold a Board decision when substantial
evidence supports its findings of fact and when the agency
*10
applies the law correctly.”
United Nurses Ass’ns of Cal. v.
NLRB
,
Moreover, the Board’s “discretion in selecting remedies
is ‘ exceedingly broad, and we will enforce a remedy ‘ unless
it represents a clear abuse of discretion. ’”
NLRB v.
Ampersand Publ’g, LLC
,
“Because the Board adopted the ALJ’s analysis” by
affirming the ALJ’s rulings, findings, and conclusions, “we
treat the Board’s order and the adopted ALJ analysis as one
order.”
Kava Holdings, LLC v. NLRB
,
III. DISCUSSION
To address the inherent “inequality of bargaining power” between employers and “employees who do not possess full
freedom of association or actual liberty of contract ,”
29 U.S.C. § 151, the NLRA “‘ encourag[es] the practice and
procedure of collective bargaining ,’ between labor and
management to resolve ‘ industrial disputes arising out of
differences as to wages, hours, or other working
conditions, ’”
Glacier Northwest, Inc. v. Teamsters
The Board here found that the Company’s lockout constituted unfair labor practices under Section 8(a)(1) and (3) of the Act. W e deny both the Union’s and the Company’s Petitions for Review, and we grant the Board’s Cross-Application for Enforcement for the following reasons: (1) we have jurisdiction over this consolidated appeal; (2) substantial evidence supports the Board’s factual findings regarding the Company’s unlawful lockout ; (3) the Board ’s selection of remedies here is not a clear abuse of discretion; and (4) the Board’s final Order is enforceable under the circumstances here disclosed.
A. Jurisdiction
“A federal court of appeals may review the Board’s final
order, if an aggrieved party seeks judicial review or if the
Board seeks enforcement of its order.”
Starbucks Corp. v.
McKinney
,
I NT ’ L U NION OF O PERATING E NGINEERS V . NLRB
15
deny that the Board granted it all of the relief that it had
specifically sought
in
the
[C]harge
form[s] and
[C]omplaint. ”
[3]
Int’l Union of Operating Eng’r Loc. 501 v.
NLRB
,
A fter Macy’s filed its Exceptions to the ALJ’s Decision , the Union properly requested additional remedies not granted by the ALJ in its Cross-Exceptions. See 29 C.F.R. § 101.11(b) (“Whenever any party files exceptions, any other party . . . may file cross-exceptions relating to any portion of the administrative law judge’s decision.” (emphasis added)). Among other things, the ALJ’s recommended Order required that Macy’s, at “all locations *13 out of business or closed the facilit[ies] involved in these proceedings, . . . duplicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the [Company] at any time since December 7, 2020.” According to the Board, the Union requested “several extraordinary remedies, including multiple notice readings by upper-level managers involved in the lockout, notice posting on the [ Company’s ] public website, notice mailing to all of the [ Company’s ] employees who had worked at locations where employees were locked out, and notice posting for at least three years.”
The Board then denied “in part the relief sought,”
29 U.S.C. § 160(f), by expressly denying the Union’s
request for “ several extraordinary remedies . . . because the
Board’s traditional remedies are sufficient to effectuate the
policies of the Act in this matter. ”
See Textile Workers
Union of Am., AFL-CIO v. NLRB
,
Macy’s first argues that the Board legally erred by failing to apply the so- called “ Great Dane framework” to evaluate aggrieved, ” could also file its petition with “the circuit wherein” the alleged unlawful lockout occurred. Id. Thus, we deny the Company’s request, Case No. 23 - 188, Dkt. 16, for transfer.
the alleged Section 8(a)(3) violation. We have previously acknowledged that:
The Supreme Court has established a framework for determining whether employer conduct is unlawfully discriminatory. Some employer conduct is so “inherently discriminatory or destructive” of employee rights that anti-union motivation is inferred. NLRB v. Erie Resistor Corp. ,373 U.S. 221 , 227 – 28,83 S. Ct. 1139 ,10 L. Ed. 2d 308 (1963). If employer conduct is “inherently destructive,” the Board may find an improper motive regardless of evidence of a legitimate business justification. See NLRB v. Great Dane Trailers, Inc. ,388 U.S. 26 , 33,87 S. Ct. 1792 ,18 L. Ed. 2d 1027 (1967). If, on the other hand, “the adverse effect of the discriminatory conduct on employee rights is ‘comparatively slight,’” and the employer establishes a legitimate and substantial business justification for its actions, there is no violation of the Act without a finding of an actual anti-union motivation. Id. at 34,87 S. Ct. 1792 [.]
Fresh Fruit & Vegetable Workers Loc. 1096 v. NLRB
Upon de novo review, we conclude that the Board
applied the correct legal standard when it considered
Dayton
Newspapers, Inc.
,
For a lockout to be deemed lawful, “the union must be
informed on a timely basis of the employer’s demands so
that the union can evaluate whether to accept them and
prevent the lockout.”
Alden Leeds, Inc.
,
Reviewing the record as a whole, we find that substantial evidence supports the Board’s conclusion that Union employees were not clearly and fully informed of conditions they need to satisfy to be reinstated. As the ALJ found,
[a]t the time Macy ’ s locked out the [Union] engineers on December 7, neither the Union nor the strikers knew [the Company’s] bargaining position. All they knew was that Macy ’ s was refusing to allow the engineers to return to work until there was a contract in place. However, because the Final Offer had expired, and Macy s had not presented any other bargaining proposals to the Union, at the time of the lockout, neither the Union nor the employees were “clearly and fully informed of the conditions they must meet to be reinstated,” Dayton Newspapers , 339 [N.L.R.B.] at 656, nor did they have “a clear statement of the conditions that [the] employees must accept to avert the lockout.” Alden Leeds, Inc. , 357 [N.L.R.B.] at 95.
Nevertheless, Macy’s counters that its lockout was
justified. An employer must reinstate an economic striker
who offers unconditionally to return to work, unless the
employer has a substantial and legitimate business reason for
refusing to do so.”
Zapex Corp. v. NLRB
,
In
Dayton Newspapers
,
with the workers’ right to be reinstated,”
Dayton
Newspapers
, 402 F.3d at 663 (citing
Fleetwood Trailer
As the NLRB, Macy’ s, and the Union all agree here, at
the time of the lockout there was
no
offer at all on the table —
not a confusing or uncertain one or even a moving target.
See Alden Leeds, Inc. v. NLRB
,
Macy’s concedes that it withdrew its Final Offer, and substantial evidence supports the Board’s finding that Macy’s rejected the Union’s wage proposal without proffering any other bargaining proposals before the lockout. Although Macy’s argues that its co ndition was that it required an agreement in place to end the lockout, we conclude that substantial evidence supports the Board’s finding that such an indeterminate condition did not satisfy its obligations.
The Union ended its strike and gave Macy’s its unconditional offer to return to work on December 4, 2020. Two days later, on December 6, 2020, Vega sent an email to Ashmore, stating that the employees would show up to work the next morning unless they were being locked out. That afternoon, Ashmore replied that:
[The Union s] unexpected offer, coming on a Friday afternoon after a contentious strike of over three months, implicates several administrative, logistical, and economic issues that need to be fully evaluated on our end with the input of several company employees. For that reason, the team should not return to work on Monday. This is not a lockout . . . .
The next morning, on Monday, December 7, 2020, at least some of the Union members reported to work. On that day, Ashmore wrote to Vega:
We have carefully evaluated your offer to have bargaining [Union] members return to work. We are not willing to reinstate bargaining [Union] employees until there is an agreement in place; this decision is being made in support of our bargaining position.
Macy’s was “obligated to declare the lockout
before or
in immediate response
to the strikers’ unconditional offer[]
to return to work. ”
Eads Transfer
,
Macy’s alternatively argues that its lockout was not only
offensive, but also defensive. “[T]he Supreme Court’s
American Ship
decision has obliterated, as a matter of law,
the line previously drawn by the Board between offensive
and defensive
lockouts .”
Evening News Ass’n
,
*20
Before the ALJ, Macy’s argued that it had “good -faith
concerns” over misconduct and sabotage by the Union,
especially during the holiday shopping season, which it
claims justified the “defensive” lockout. The ALJ
systematically reviewed the Company’s submitted evidence,
including witness testimony, and ultimately concluded that
Macy’s provided those “post - hoc excuses” to bolster its
defense and that the Company’s true “motive” in locking out
its employees was to “gain economic leverage so the Union
would accept” its new wage proposal that it submitted to the
Union on December 10, 2020. Because the Board “carefully
examined the record and [found] no basis for reversing” the
ALJ’s credibil ity findings, we conc lude that the Board’s
“determinations are entitled to judicial deference [,] ” based
on its “‘special expertise in drawing’ inferences of
credibility and unlawful motive[.]”
Kava Holdings
In sum, on this record, substantial evidence supports the
Board’s finding that Macy’s violated the Act at the time of
the lockout, where Macy’s failed to inform the Union fully
and clearly on the conditions necessary for employees either
to be reinstated,
see Dayton Newspapers
, 339 N.L.R.B. at
656, or to avoid a lockout before one even occurred,
see
Alden Leeds
,
C. Remedies
“The function of the remedy in unfair labor cases is to
restore the situation, as nearly as possible, to that which
*21
would have occurred but for the violation.”
Kallmann
,
1. The Union ’s Requested Additional Remedies
The Board denied the Union’s request for several
extraordinary remedies” because it concluded
that
“traditional remedies are sufficient to effectuate the policies
of the Act” here. The Union petitions for review of that
determination, requesting four additional remedies: (1) a
notice reading in the presence of members of management
responsible for the lockout decision; (2) an extended notice
posting more than the standard sixty-day period; (3) a notice
mailing to all Union members, including those who were
locked out; and (4) a notice expressly explaining how
Macy’s violated the Act.
[6]
We conclude that the Board did
not clearly abuse its discretion in declining to award these
remedies.
See Wylie
,
With respect to the first three additional remedies (a
notice reading with management’s presence , an extended
notice posting, and a notice mailing), we observe that they
are typically reserved for “cases involving respondents who
have shown a proclivity to violate the Act or who have
engaged in egregious or widespread misconduct.”
Noah’s
Ark Processors, LLC
, 372 N.L.R.B. No. 80, slip op. at 4
(Apr. 20, 2023) (finding “egregious or widespread”
misconduct, where the respondent’s “violations seriously
affected the entire unit by undermining their chosen
bargaining representative, violating their right to have the
[u]nion negotiate on their behalf, and demonstrating to them
in no uncertain terms that the [r]espondent was willing to
ignore a court order in order to violate their rights”) ,
enforced
,
egregious or widespread misconduct that warrants these extraordinary remedies.
As to the fourth additional remedy, the Union argues that
the Board’s n otice does not “contain affirmative language
expressly explaining how Macy’s violated the Act ” For
example, t he Board’s notice that is required to be physically
posted at the Company’s facilities and electronically
distributed to employees, includes the statement, “ WE
WILL NOT lock you out without providing you with a
timely, clear, and complete offer, that sets forth the
conditions necessary to avoid the lockout.” Specifically, the
Union requests that the Board either substitute or supplement
“We will not” statements with those stating [w]e have done
or committed . . . . ”
[7]
We agree with the NLRB that the
*23
I NT ’ L U NION OF O PERATING E NGINEERS V . NLRB
29
Union fails to show how it clearly abused its discretion by
applying its “decades -old practice of including only ‘WE
WILL’ and ‘WE WILL NOT’ phrases in its notices . . . .”
See, e.g.
,
HTH Corp. v. NLRB
,
2. The Company’s Challenges to t he Board’s Make-Whole Relief
Macy’s argues that the Board erred in finding that it was
liable throughout the lockout and in awarding the Union ’s make-whole
relief
pursuant
to
Thryv,
Inc.
,
372 N.L.R.B. No. 22, slip op. at 1 (Dec. 13, 2022)
(clarifying that make-whole relief ” includes compensation
“for all direct or foreseeable pecuniary harms” to affected
employees),
order vacated in part on other grounds
,
i. The Company’s Liability During the
Entirety of the Lockout
Macy’s insists that it cured the taint of its lockout by
*24
tendering its December 10, 2020 wage proposal to the
Union, three days after the lockout began. We disagree.
“We review the Board’s finding of taint for substantial
evidence.”
Denton Cnty. Elec. Coop., Inc. v. NLRB
,
We recognize, however, that Macy’s may “avoid further
liability if it is able to
show affirmatively
that a failure to
restore the status quo ante did not adversely affect
subsequent bargaining.”
Alden Leeds
, 812 F.3d at 166
(emphasis added)
(quoting
Greensburg Coca-Cola
,
Macy’s counters that these erroneous findings “ignore[]
substantial evidence that the parties negotiated in good faith
after the lockout.” According to Macy’s, “[i]f the lockout
had adversely impacted the parties’ ongoing bargaining, then
the [r]ecord would show . . . the Union was
forced to accept
a substandard proposal
because of the lockout.” However,
*25
Macy’s misunderstands the standard. The fact that the
record does not show the Union’s acceptance of a
substandard proposal does not on its own satisfy the
Company’s burden of showing “
no
adverse impact on the
subsequent collective bargaining .”
Alden Leeds
,
ii. The Board’s Revised Make-Whole
Remedial Framework
In
Thryv
, the Board “standardiz [ed] [its] make-whole
relief to expressly include the direct or foreseeable pecuniary
harms
suffered by
affected
employees . . . .”
[9]
372 N.L.R.B. No. 22, slip op. at 7. The Board noted that
“‘direct harms’ are those in which an employee’s ‘loss was
the direct result of the [employer’s] illegal conduct,’”
id.
at
*26
“
Thryv
remedies. ” Macy’s failed to raise a Seventh Amendment
objection to the Board,
see
29 U.S.C. § 160(e), and it similarly failed to
raise any Seventh Amendment arguments in this Court until prompted to
do so by the Court’s order. We therefore decline to entertain this
argument.
See Greenwood v. FAA
,
“[V]esting in the Board the primary responsibility and
broad discretion to devise remedies . . . , subject only to
limited
judicial review,”
Sure-Tan, Inc. v. NLRB
After “careful consideration” of both its “ remedial
authority ” and “history of addressing the effects of unfair
labor practices, ” the Board in
Thryv
clarified and
standardized its definition of “make - whole relief” to
“ expressly include the direct or foreseeable pecuniary harms
suffered by affected employees ” to “more fully effectuate
the make- whole purposes of the Act.” 372 N.L.R.B. No. 22,
slip op. at 7. We agree that the make-whole relief provided
for in
Thryv
furthers the policy of the NLRA because it is
“directly targeted” at the Company’s unlawful lockout and
aimed at restor[ing] the economic strength that is necessary
to ensure a return to the status quo ante at the bargaining
table.”
Ampersand
,
According to Macy’s (and the partial dissent), the
Board ’s decision in
Thryv
improperly authorizes itself to
award full compensatory damages. Macy’s contends that
“the Board lacks the authority to award damages for
purportedly foreseeable financial harms.”
See, e.g.
,
UAW-CIO v. Russell
,
private persons does not detract from this public purpose. ”
Occidental Life
,
does restore to the employees in some measure what was taken from them because of the C ompany’s unfair labor practices. In this both these types of monetary awards somewhat resemble compensation for private injury , but it must be constantly remembered that both are remedies created by statute — the one explicitly and the other implicitly in the concept of effectuation of the policies of the Act — which are designed to aid in achieving the elimination of industrial conflict. They vindicate public, not private rights .
Va. Elec.
, 319 U.S. at 543 (emphases added) (first citing
Agwilines
87 F.2d at 150 – 51; then citing
Phelps Dodge
,
*31
River Dyeing & Finishing Corp. v. NLRB
,
Accordingly, compensation for “direct or foreseeable
pecuniary harms ,” as defined in
Thryv
, would allow for “a
restoration of the situation, as nearly as possible, to that
which would have obtained but for” the unlawful lockout
here.
Phelps Dodge
,
The Supreme Court in
Burke
distinguished between
make-whole relief and damages recoverable under tort law.
It considered this distinction in the context of determining
*33
economic status quo that would have obtained but for the
company’s wrongful refusal to reinstate . . . . ’” (quoting
NLRB v. J.H. Rutter-Rex Mfg. Co.
,
As the partial dissent points out, the Supreme Court in
Burke
also observed that Title VII “restor [es] victims,
through backpay awards and injunctive relief, to the wage
and employment positions they would have occupied absent
the unlawful discrimination[,] ” but not for
nonpecuniary
harms, including other traditional harms associated with
personal injury, such as pain and suffering, emotional
distress, harm to reputation, or
other
consequential damages
(
e.g.
, a ruined credit rating). ”
Burke
, 504 U.S. at 239
(emphasis added) (citation omitted). Macy’s argues that
these “express limitations in
Burke
apply with equal force to
Section 10(c) of the Act, ” because Title VII’s backpay
provision was expressly modeled on the NLRA ’s .
See
Pollard v. E.I. du Pont de Nemours & Co.
,
I NT L U NION OF O PERATING E NGINEERS V . NLRB
43
added);
see also Albemarle Paper
,
Moreover, the Board acknowledged that it “ will
not
issue
remedial orders for harms which are unquantifiable,
speculative, or nonspecific.”
Thryv
, 372 N.L.R.B. No. 22,
slip op. at 12 (emphasis added) (citing
Nortech Waste
,
Under the NLRA, Congress’s grant of remedial power
entrusts the Board to make workers whole for losses
suffered on account of an unfair labor practice . . . .”
Strong
Therefore, t o the extent that Macy’s challenges the Board’s revised make-whole remedial framework, we deny its Petition for Review.
D. The Circumstances Here Disclosed
The partial dissent contends that the Board’s “actions
were arbitrary and capricious and unsupported by the
record.” Partial Dissent at 50. However, applying the law
as it is, not as what the partial dissent wishes it to be, reveals
that they were simply not.
See Danielson v. Inslee
Similarly, while the partial dissent raises potentially
significant points about the scope of make-whole relief
under
Thryv
, Macy’s neither properly challenged the
application of
Thryv
or the Seventh Amendment to this case
nor showed “extraordinary circumstances” to warrant
consideration of these issues.
See supra
notes 9 – 10;
see also
29 U.S.C. § 160(e);
Legacy Health Sys.
,
It also bears repeating that “[i ]n fashioning an
appropriate remedy to address the substantial unfair labor
practices in this case, the Board was acting at the ‘zenith’ of
its discretion.”
Fallbrook Hosp. Corp. v. NLRB
In sum, we “decide[d] only the case before us and
sustain[ed] the power of the Board” to tailor remedies that
“effectuate the statutory purpose” behind the National Labor
Relations Act “
under the circumstances here disclosed
.”
Va. Elec.
,
IV. CONCLUSION
We have considered the Union’s and the Company’ s remaining arguments and find them unpersuasive. For the foregoing reasons, we DENY both the Union ’s and the *38 48 I NT L U NION OF O PERATING E NGINEERS V . NLRB Company’s Petitions for Review, and we GRANT the Board’s Cross-Application for Enforcement of its final Order.
PETITIONS FOR REVIEW DENIED; CROSS-APPLICATION FOR ENFORCEMENT GRANTED; ORDER ENFORCED.
BUMATAY, Circuit Judge, dissenting in part:
This case involves the fallout from a lengthy labor dispute between Macy’s and the International Union of Operating Engineers, Local 39 (“Union”), which represents some of the retailer’s engineers and craftsmen. After extensive negotiations over a new collective bargaining agreement, Macy’s gave the Union its best and final offer. The Union rejected that offer and went on strike. During the three-month strike, Macy’s accused Union members of harassing its customers and employees and sabotaging its facilities. The Union then made a surprise unconditional offer to return to work—shortly before the close of business on a Friday evening. Macy’s pleaded for time to respond to the offer, but the Union refused. So when the Union members showed up for work on Monday—the next workday—Macy’s did not let them start working and locked them out. Two days later, Macy’s gave the Union a new proposal to end the dispute and lockout. The Union again rejected Macy’s offer, and the two sides never reached an agreement.
Enter the National Labor Relations Board. The Board’s
in-house prosecutor charged Macy’s with an “unfair labor
practice.” After a hearing, a Board Administrative Law
Judge (“ALJ”) systematically rejected each of Macy’s
defenses and found that Macy’s violated the National Labor
Relations Act because it waited a whole
two days
before it
gave a new offer to the Union. As punishment, the ALJ
ordered Macy’s to make the Union members whole for any
losses of pay and benefits that they may have suffered
because of the lockout.
Macy’s, Inc.
,
But the Board has no authority to order this type of
monetary relief. Until two years ago, the Board had never
claimed the authority to award consequential damages, like
the ones ordered against Macy’s.
See Thryv, Inc.
, 372 NLRB
No. 22 (2022),
overruled on different grounds
,
Thryv, Inc. v.
NLRB
, 102 F.4th 727 (5th Cir. 2024). Indeed, the Act
restricts the Board to ordering only “back pay” and
“affirmative action . . . as will effectuate the policies of” the
Act.
See
29 U.S.C. § 160(c). Somehow, the Board has
transformed this limited statutory grant into something that
covers credit card debt, withdrawals from retirement
accounts, car
loans, mortgage payments, childcare,
immigration expenses, and medical expenses.
See, e.g.,
Thryv, Inc.
, 372 NLRB No. 22, at 9. Never mind that
granting the Board this authority would violate the Seventh
Amendment. We create a needless circuit split in affirming
the Board’s power grab.
See NLRB v. Starbucks Corp.
, ---
F.4th ---,
And we never should have gotten this far. The Board’s actions were arbitrary and capricious and unsupported by the record. See Valley Hosp. Med. Ctr., Inc. v. NLRB , 100 F.4th 994, 1002 (9th Cir. 2024) (noting the standard of review under 5 U.S.C. § 706(2)(A)). The Board wrongly concluded that Macy’s needed to have a detailed proposal on the table within one working day of the Union’s offer of return to justify its lockout. This rule is as novel as it is unrealistic. It contradicts both Ninth Circuit precedent and the Board’s own precedent. The Board also ignored evidence that the lockout could have been justified as defensive given Macy’s reasonable concerns of sabotage and misconduct.
While I agree with denying the Union’s petition for review, I respectfully dissent from the denial of Macy’s petition for review and from the grant of the Board’s *40 application for enforcement.
I.
The Board Lacks Authority to Order Foreseeable or
Consequential Damages
A.
The Board is a limited-authority agency with a limited
purpose and limited enforcement mechanisms. “The Board
is not a court; it is not even a labor court; it is an
administrative agency charged by Congress with the
enforcement and administration of the federal labor laws.”
Shepard v. NLRB
, 459 U.S. 344, 351 (1983). Simply, the
Board is not in the business of the “adjudication of private
rights.”
Phelps Dodge Corp. v. NLRB
,
Despite its limited authority, the Board has assumed
powers to award not only compensatory damages but all
foreseeable
damages—a species of consequential damages.
In
Thryv
, the Board concluded that a company violated the
Act by unilaterally laying off six union employees and
refusing to comply with the union’s information requests.
So what’s covered by “direct or foreseeable harm”? Quite a lot, it turns out. While the Board declined “to enumerate all the pecuniary harms that may be considered direct or foreseeable in the myriad of unfair labor practices that come before us[,]” they made clear it’s very expansive. Id. at 12. The Board explained that foreseeable harms include indirect costs, “such as out-of-pocket medical expenses, credit card debt, or other costs simply in order to make ends meet.” Id. at 9. The Board also made clear that “penalties” related to “early withdrawals from [a] retirement account,” “loan or mortgage payments,” and “transportation or childcare costs” could all be fair game. Id. And this list didn’t even represent the “limits of the Board’s statutory remedial authority,” it’s only the “ minimum ” for make-whole relief. Id. at 7 n.10 (emphasis added). The Board’s General Counsel added even more costs to the list: unreimbursed tuition payments, job search costs, day care costs, specialty tool costs, utility disconnection/reconnection fees, relocation/moving costs, legal representation costs in eviction proceedings, and expenses resulting from a change in immigration status. Office of the General Counsel Memorandum GC 24-04, Securing Full Remedies for All Victims of Unlawful Conduct (Apr. 8, 2024). [1] So now *42 everything is on the table under the Board’s newly claimed authority—the only limit is the Board’s imagination.
Of course, the Board denied that these broad remedies
make up “consequential damages.” But that’s hard to
believe given that the Board specifically invited briefing on
whether it should adopt consequential damages as part of its
make-whole remedy in that very case.
Thryv, Inc.
, 372
NLRB No. 22, at 6 n.8, 8. Indeed, the Board’s Chairman has
labeled as “consequential damages” harms such as late fees
on credit cards, penalties for early withdrawals from
retirement accounts, and the loss of a vehicle or home if an
employee is unable to make loan or mortgage payments.
See
Voorhees Care & Rehab. Ctr
., 371 NLRB No. 22, 4 n.14
(2021). Perhaps recognizing its overreach, the Board
pretends its adoption of a “foreseeable damages” standard is
something different than consequential damages. Yet the
only distinction the Board draws between the two is
observing that “consequential damages” is “a term of art
used to refer to a specific type of legal damages awarded in
other areas of the law.”
Thryv, Inc.
,
The Board’s remedy proved to be too much for its entire membership to stomach. Two members dissented. They explained that the Board’s new remedial standard “would permit recovery for any losses indirectly caused by an unfair labor practice, regardless of how long the chain of causation may stretch from unfair labor practice to loss, whenever the loss is found to be foreseeable.” Id. at 16 (Kaplan & Ring, dissenting in part). They warned that “this standard opens the door to awards of speculative damages that go beyond the Board’s remedial authority.” Id . First, they noted that “‘foreseeability’ is a central element of tort law” and that “[a]ny attempt to address tort claims in a Board proceeding obviously runs headlong into the Seventh Amendment’s guarantee of the right to have such claims tried before a jury.” Id. at 18–19. Second, the dissent observed that the Board’s foreseeable damages remedy “go[es] well beyond tort law,” because the remedy wasn’t even limited by proximate cause. Id. at 19. So, to the dissenting members, *43 the Board’s newly minted power is even greater than the power to award consequential damages.
B.
The Board exceeded its authority in ordering Macy’s to pay foreseeable or consequential damages. First, nothing in the text of the Act authorizes such expansive authority for the Board. Second, reading the Act to grant these broad remedies, as the dissenting Board members noted, puts the Board in conflict with the Seventh Amendment.
1.
Let’s start with the Board’s statutory authority to fashion remedies for unfair labor practices. To remedy an unfair labor practice, Congress granted the Board authority to:
[I]ssue and cause to be served on . . . [a] person [who committed the unfair labor practice] an order requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this subchapter.
29 U.S.C. § 160(c). Thus, in all cases, the Board’s remedial authority must further the policies of the Act, which are to:
[E]liminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.
29 U.S.C. § 151.
While an admittedly broad policy statement, it only
provides for vindication of public rights—not of private
rights, which consequential damages are designed to
remedy. Consistent with that understanding, the Supreme
Court recognized long ago that the Board’s functions are
*44
“narrowly restricted to the protection and enforcement of
public rights” and that it thus has no role to play in the
“adjudication of private rights.”
Nat’l Licorice Co. v. NLRB
309 U.S. 350, 362–63 (1940). So even with the Board’s
power to fashion affirmative acts to carry out federal labor
policies, it can’t order relief that is “a patent attempt to
achieve ends other than those which can fairly be said to
effectuate the policies of the Act.”
Va. Elec. & Power Co. v.
NLRB
,
Even so, the Board expressly sought to vindicate private
rights in its
Thryv
decision. In adopting its consequential
damages or foreseeable harm regime, its goal was to
“rectify[] the harms actually incurred by the victims of unfair
labor practices.”
Thryv, Inc.
,
The Board also acknowledged its new remedy has a compensatory—rather than restitutionary—purpose: “making employees whole should include, at least, compensating them for direct or foreseeable pecuniary harms resulting from the [employer’s] unfair labor practice.” Id. at 8 (emphasis added). And the Board reads “foreseeable harms” as broadly as possible—it includes medical
I NT L U NION OF O PERATING E NGINEERS V . NLRB
57
expenses, credit card debts and fees, car payments, mortgage
payments, childcare costs, and transportation costs.
See id.
at 9. These rectify
individualized
private harms at law. As
the Court has said, “one of the hallmarks of traditional tort
liability is the availability of a broad range of damages to
compensate the plaintiff ‘fairly for injuries caused by the
violation of his legal rights.’”
United States v. Burke
, 504
U.S. 229, 235 (1992) (simplified). All this shows that the
Board’s make-whole remedy goes far beyond “effectuat[ing]
the policies” of the Act.
See
29 U.S.C. § 160(c). Instead, it
vindicates private rights. And the Act “limits the Board’s
remedial authority to equitable, not legal, relief.”
Starbucks
Corp.
,
Besides violating the policies of the Act, the Board’s new
remedy also violates the text of the Act. The Board can issue
a “cease and desist” order and instruct the “reinstatement of
employees with or without back pay.” 29 U.S.C. § 160(c).
None of these express grants of power encompass the award
of foreseeable or consequential damages. Under the Board’s
“cease and desist” authority, it may enjoin “future conduct”
that would violate the Act.
See NLRB v. C.E. Wylie Const.
Co.
,
However broadly it’s possible to read the Board’s remedial authority, Congress confirmed its narrow powers through its Taft–Hartley amendments. See Labor Management Relations Act of 1947, Pub. L. No. 80-101, 101, 61 Stat. 136, 147. In 1947, Congress amended § 160(c) and precluded the Board from awarding remedies to an employee “who had been discharged because of misconduct.” See Fibreboard Paper Products Corp. v. NLRB , 379 U.S. 203, 217 (1964). After the amendment, § 160(c) then said,
No order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay , if such individual was suspended or discharged for cause.
29 U.S.C. § 160(c) (emphasis added). Through this
amendment, Congress expressly set the universe of the
Board’s remedial power to grant monetary relief for
aggrieved employees—it’s limited to reinstatement and back
pay. If Congress intended the Board to have broader power
to direct monetary relief, such as ordering foreseeable or
consequential damages, it would have said so in this
provision. Otherwise, the Board would be precluded from
awarding back pay when the employee commits misconduct,
but it may still grant the same employee foreseeable or
consequential damages. This reading makes little sense.
Our duty is to interpret the law “as a symmetrical and
coherent regulatory scheme” and “fit, if possible, all parts
into an harmonious whole.”
FDA v. Brown & Williamson
Tobacco Corp
.,
The Board dismisses this textual restraint on its powers.
It does so by misreading
Fibreboard Paper Products.
In that
case, the Board ordered a company to resume certain
business operations, to reinstate terminated employees with
back pay, and to bargain with the union.
If there were any doubts as to the limits of the Board’s
authority, the Court laid them to rest in
Burke
. In that case,
the Supreme Court analyzed the remedies available under
Title VII—an employee anti-discrimination statute.
See Burke
,
[T]he court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay . . . or any other equitable relief as the court deems appropriate.
42 U.S.C. § 2000e–5(g)(1).
Given their ties and similar language, we should follow the Court’s reading of Title VII. The Court said, “Title VII does not allow awards for compensatory or punitive damages; instead, it limits available remedies to backpay, injunctions, and other equitable relief.” Burke , 504 U.S. at *48 238. We should also follow how the Court defined the scope of Title VII’s remedy: it “consists of restoring victims, through backpay awards and injunctive relief, to the wage and employment positions they would have occupied absent the unlawful discrimination.” Id. at 239. Title VII doesn’t permit the compensation of a “plaintiff for any of the other traditional harms associated with personal injury, such as pain and suffering, emotional distress, harm to reputation, or other consequential damages ( e.g., a ruined credit rating).” Id. Indeed, “[n]othing in this remedial scheme purports to” do so. Id. In the Court’s view, Title VII’s limited remedies stood in contrast “to those available under traditional tort law.” Id. at 240.
So let’s recap. Title VII and the Act have similar purposes (the protection of employees), a similar remedial design, and similar textual language. And the Supreme Court has definitively established the remedies available under Title VII. The obvious response is to give the Act a similar reading. It’s baffling that the Board argues otherwise.
But there’s more evidence of this commonsense reading. In the Civil Rights Act of 1991, Congress amended Title VII to expressly add “compensatory and punitive damages” to its remedial scheme. See Pub. L. No. 102-166, 105 Stat. 1071; 42 U.S.C. § 1981a. If such damages were already available under the Title VII’s original language, then Congress wouldn’t have needed to act. Given their similarities, if Title VII required amendment to allow compensatory and punitive damages, logic dictates that the Act likewise would need amendment before granting the Board authority to order consequential or foreseeable damages.
* * *
Thus, the Board exceeded its authority under § 160(c) in devising its newfound foreseeable-damages remedy. *49 62 I NT L U NION OF O PERATING E NGINEERS V . NLRB
2.
Even though § 160(c) is clear on its face, the Seventh
Amendment commands that we resolve any ambiguity by
rejecting the Board’s claim of broad authority to order
consequential or foreseeable damages. The Seventh
Amendment guarantees the right to trial by jury “[i]n Suits
at common law.” U.S. Const. amend. VII. If administrative
agencies, like the Board, seek to impose damages on a party
that resemble those available in “Suits at common law,” then
the party must receive a jury trial. Issuing broad
consequential damages—a tort remedy—thus implicates the
Seventh Amendment. The dissenting Board members saw
this danger clearly in opposing the Board’s power grab.
See Thryv, Inc.
,
The Supreme Court recently explained the scope of the Seventh Amendment. See SEC v. Jarkesy , 603 U.S. 109 (2024). The Court first reiterated that the right to a jury trial is “of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right has always been and should be scrutinized with the utmost care.” Id . at 121 (simplified). The Court then concluded that the term, “Suits at common law,” contrasted with cases in equity and admiralty. Id. at 122. The right to jury trial, then, applies to all suits “which are not of equity or admiralty jurisdiction, whatever may be the peculiar form which they may assume.” Id. (simplified). And it doesn’t matter whether the claim is born of statute. The constitutional guarantee also encompasses statutory claims that are “legal in nature.” Id . (simplified). And to determine whether a claim is “legal in nature,” the Court directed that we consider both “the cause of action and the remedy it provides.” Id. at 122–23. In the end, however, the remedy *50 is the “more important consideration” in determining whether the Seventh Amendment applies. Id. at 123 (simplified). Indeed, in many cases, consideration of the remedy should be “all but dispositive.” Id. But even when the Seventh Amendment applies, an exception exists. Id. at 127. Under the “public rights” exception, “Congress may assign [a] matter for decision to an agency without a jury, consistent with the Seventh Amendment.” Id.
Jarkesy gives us some takeaways. First, it doesn’t matter who brings the claims or how they are labeled. The Seventh Amendment applies even to administrative agencies and even if they call the claim something other than a “legal claim.” See id. at 121–24. Second, we look at both the nature of the claim and the remedies the agency seeks. And the remedy alone may be enough to invoke the Seventh Amendment. See id. at 123–24. Third, we must consider if the “public rights exception” would still allow the administrative adjudication to go forward. See id. at 127.
Given these principles, reading § 160(c) to authorize the Board to award consequential or foreseeable damages would raise serious constitutional doubt under the Seventh Amendment.
First, consider the remedies the Board seeks to impose— arguably the most important concern. Recall, under its make-whole authority, the Board believes that it may make employers pay for any foreseeable pecuniary harm that employees experience because of an unfair labor practice. This includes such attenuated harms as babysitting fees, credit card late fees, car payments, and attorneys’ fees to sue landlords. But all this exceeds the purely equitable remedies that the Board may order.
Without question, the Board has the equitable powers to
restore employees to the status quo through monetary relief.
See NLRB v. Jones & Laughlin Steel Corp
.,
To be sure, sometimes equitable restitution and money damages can look the same. In some cases, they can even lead to the same dollar award against a party. See Dan B. Dobbs, 1 Dobbs Law of Remedies 280 (2d. ed. 1993). Even so, they are distinct. And this distinction is significant:
[T]hey are often triggered by different situations and always measured by a different yardstick. Damages always begins with the aim of compensation for the plaintiff . . . . Restitution, in contrast, begins with the aim of preventing unjust enrichment of the defendant. To measure damages, courts look at the plaintiff’s loss or injury. To measure restitution, courts look at the defendant’s gain or benefit.
Id. In other words, when distinguishing ordinary money damages at law from “equitable restitution and other monetary remedies available in equity,” “the question is what has the owner lost, not what has the taker gained.” City of Monterey v. Del Monte Dunes at Monterey, Ltd. , 526 U.S. 687, 710 (1999) (simplified). And so, as a corollary, the question for equitable remedies is only the unjust gain of the taker or employer—not the loss to the owner or employee.
Explaining the difference between equitable monetary relief and monetary damages should illuminate the problem here. The Board wants to measure monetary relief from the perspective of the employee’s loss—not the employer’s gain. The Board’s foreseeable-damages regime asks: What did the employee lose? What fees did the employee incur because of the unfair labor practice? What opportunities did the employee forgo because of the proscribed conduct? But this would be inappropriate under equity. Equitable relief should ask only what the employer has unjustly gained. When employers withhold pay from employees based on unlawful employment actions, employers unjustly keep the employees’ wages and so equitable relief equates to back pay—exactly as contemplated by § 160(c). On the other hand, the award of broad foreseeable damages goes beyond equitable restitution and crosses into the tort remedy of money damages.
Indeed, given how far-reaching the Board views foreseeable damages—encompassing any indirect harm no matter how remote from the unfair labor practice—these awards are nearly indistinguishable from punitive damages, *52 which only courts of law may impose. See Jarkesy , 603 U.S. 66 I NT L U NION OF O PERATING E NGINEERS V . NLRB at 123–25. As the dissenting members noted, the Board’s new consequential-damages regime isn’t even limited by the requirement of “proximate cause”—which makes the Board’s remedy “go well beyond tort law.” Thryv, Inc. , 372 NLRB No. 22, at 19 (Kaplan and Ring, dissenting in part). By awarding damages for harms that are not directly or proximately caused by unfair labor practices, we move from mere compensation to granting a windfall to aggrieved employees. And when “compensatory damages exceed pure compensation,” they may become “punitive.” See Dobbs, Law of Remedies 455.
True, the Board tries to get around this conclusion by denying any punitive motive for its new remedy. But let’s look at what the Board said. The Board claimed the remedy wouldn’t be punitive because it applied to all cases, rather than just to extraordinary ones. Thryv, Inc. , 372 NLRB No. 22, at 17. Yet the Board conceded that “if we were to issue this make-whole relief only to address the most deplorable or flagrant violations of the Act, these remedies run the risk of becoming punitive rather than restorative.” Id. In other words, the Board acknowledges the punitive nature of its expansive foreseeable-harm remedy but understands that applying it selectively would make it blatantly punitive, which it knows it can’t do. But a punitive measure is still punitive even if it applies across the board.
Thus, based on the remedies alone , the Board’s imposition of foreseeable damages would implicate the Seventh Amendment—giving us every reason to avoid reading § 160(c) so broadly.
Second, the “close relationship” between the Board’s efforts to block unfair labor practices and the common-law tort of wrongful termination supports reading the Board’s *53 remedial powers narrowly. See Jarkesy , 603 U.S. at 125. Take this case. The Board asserts that Macy’s violated the Act by locking out employees without clearly and fully informing them of the conditions for their reinstatement— effectively terminating them. See Macy’s, Inc. , 372 NLRB No. 42, at 20. But California, where most of the Macy’s stores were located, recognizes a tort cause of action for wrongful terminations that violate public policy. See Freund v. Nycomed Amersham , 347 F.3d 752, 758 (9th Cir. 2003) (requiring that the public policy “inures to the benefit of the public rather than serving merely the interests of the individual” (simplified)); see also American Law of Torts § 34:83 (2024) (observing that the tort of wrongful termination exists when an (1) “employee was discharged by his or her employer” and (2) “the employer breached a contract or committed a tort in connection with the employee’s termination.”). And the wrongful-termination tort has a historical pedigree tracing back to the English common law. See American Law of Torts § 34.85; see also 1 William Blackstone, Commentaries *413 (“[N]o master can put away his servant, or servant leave his master, either before or at the end of his term, without a quarter’s warning; unless upon reasonable cause to be allowed by a justice of the peace[.]”).
Consider the individualized assessments necessary to
prove the foreseeable harms for each employee. As the
Board admitted, “aggrieved employees will . . . have to
submit evidence to substantiate pecuniary harms for which
they seek reimbursement” before the Board’s ALJs.
Thryv,
Inc.
,
Thus, both the Board’s actions and wrongful-termination
tort “target the same basic conduct,”
Jarkesy
603 U.S. at
125,— preventing wrongdoing in the employment context.
See also Lewis v. Whirlpool Corp.
, 630 F.3d 484, 487–89
(6th Cir. 2011) (noting the overlap between wrongful-
termination claims and the Board’s jurisdiction). Indeed, the
Board’s jurisdiction so overlaps with the wrongful-
termination tort that it may preempt federal or state tort
actions.
See San Diego Bldg. Trades Council v. Garmon
,
Finally, the public rights exception doesn’t justify the
Board’s broad assertion of remedial powers. The Court has
reminded us that this exception is
only
an exception.
Jarkesy
,
And the Court has made clear that the public rights exception must remain a narrow one. When the Court has recognized a “public rights” exception, it is based on “centuries-old,” “background legal principles.” Id. at 131. Indeed, the Court has only recognized a few categories of administrative adjudications that fall within the exception: the collection of revenue; customs law; immigration law; relations with Indian tribes; the administration of public lands; and the granting of public benefits, such as payments to veterans, pensions, and patent rights. Id. at 129–30. On their face, these categories have little resemblance to traditional legal claims—they all involve interests that would not exist without the federal government. In contrast, in Jarkesy , the Court refused to expand the list to include administrative adjudications over conduct that resembles “common law fraud.” Id. at 134. Thus, courts should be reluctant to expand the exception beyond the enumerated historical categories.
The Board’s new make-whole remedy is identical to
traditional legal-claim remedies vindicating private rights
and doesn’t fit within the public-rights exception. The
Board’s remedy goes beyond defending the public interest in
federal labor policy and instead targets “the wrong done the
individual employee,” which falls outside the Board’s
*55
authority when fashioning unfair labor practice remedies.
Vaca v. Sipes
,
And the Board is wrong to contend that the Court settled
the Seventh Amendment question back in the 1930s. In
Jones & Laughlin Steel Corporation
, the Court concluded
that the Seventh Amendment didn’t preclude the Board from
ordering the “payment of wages for the time lost by the
discharge”—in other words, back pay.
To be clear, the Seventh Amendment doesn’t invalidate all Board remedial authorities to direct monetary relief. As limited by § 160(c)’s express authority to order “back pay,” the Board may act consistently with the Seventh Amendment. But when the Board strays from the text and seeks extra-statutory authorities, like the power to direct
I NT L U NION OF O PERATING E NGINEERS V . NLRB
71
consequential or foreseeable damages, then the Seventh
Amendment has something to say. We thus must read
§ 160(c) as precluding the type of monetary relief the Board
seeks here.
See Jennings
,
II.
The Board’s Merits Decision Was Wrong
Even worse, we didn’t need to reach the remedy issue at
all. Instead, the Board’s decision to conclude that Macy’s
committed an unfair labor practice was arbitrary and
capricious and unsupported by the evidence. The Board
concluded that Macy’s committed an unfair labor practice
under § 8(a)(1) and (3) of the Act by not reinstating the
Union members after their offer to return to work and by
locking them out without informing them of the terms to end
the lockout.
Macy’s, Inc.
,
Section 8(a)(1) and (3) of the Act “make it an unfair labor
practice for an employer ‘by discrimination in regard to hire
or tenure of employment or any term or condition of
employment to encourage or discourage membership in any
labor organization.’”
Fresh Fruit & Vegetable Workers Loc.
1096 v. NLRB
,
We’ve described the framework for analyzing “inherently destructive” conduct as this:
If employer conduct is “inherently destructive,” the Board may find an improper motive regardless of evidence of a legitimate business justification. . . . If, on the other hand, “the adverse effect of the discriminatory conduct on employee rights is ‘comparatively slight,’” and the employer establishes a legitimate and substantial business justification for its actions, there is no violation of the Act without a finding of an actual anti-union motivation.
Id.
(citing
NLRB v. Great Dane Trailers, Inc.
,
Establishing “inherently destructive” conduct is a high
bar. It requires conduct that “carries with it an inference of
unlawful intention
so compelling
that it is justifiable to
disbelieve
the employer’s protestations of
innocent
purpose.”
Am. Ship Bldg. Co. v. NLRB
,
The Board hasn’t met that standard here.
A.
There’s nothing inherently problematic with the use of
lockouts.
Am. Ship Bldg.,
380 U.S. at 308–313. Proper
offensive lockouts may occur when an employer locks out
employees “in support of legitimate bargaining demands.”
*58
Boehringer Ingelheim Vetmedica, Inc.
,
Let’s recap the facts from 2020: • On August 31, Macy’s gives its best and final offer to
the Union. • On September 4, the Union’s members begin to strike. • On October 8, Macy’s informs the Union that its best
and final offer will expire on October 15. • On October 15, Macy’s best and final offer expires. • On November 25, the Union presents a counter
proposal to Macy’s. • On December 4, Macy’s rejects the Union’s counter
proposal. That Friday evening, the Union unconditionally offers to return to work “immediately” in an email sent after hours on the East Coast. Macy’s asks the Union to hold off on returning to work and promises to respond by the close of business on Monday. The Union asks if “this mean[s] you are locking them out till Monday?” • On December 5–6, Macy’s reiterates its request for
time to respond, noting the “administrative, logistical, and economic” challenges of reinstating employees on short notice. The Union refuses to accommodate Macy’s and declares that its members will return to work unless they’re locked out. Macy’s again asks for time because “[t]hey have been out for 90+ days, and to think you can just flip a switch and have them back is not possible.”
• On December 7, Macy’s notifies the Union it will not
reinstate its members “until there is an agreement in place,” which is “in support of [its] bargaining position.” Macy’s proposes dates for new bargaining sessions, including a date on December 10.
• On December 10, Macy’s presents a new collective
bargaining agreement proposal to the Union. So the Union demanded to return to work within one
business day on a Friday evening. Macy’s reasonably asked
the Union to hold off on returning to work while it figured
out its position over the weekend. On Monday, Macy’s told
the Union that it was locking out the Union members in
support of its bargaining position and notes that a new
bargaining agreement must be reached before reinstatement.
Two days later, Macy’s and the Union were back at the
bargaining table with Macy’s presenting a new proposal.
The Board decided that this
two-day delay
in informing the
Union of its latest offer was an unfair labor practice. Indeed,
the Board held that Macy’s failure to communicate a new
offer by Monday morning (one business day) was an unfair
labor practice.
See Macy’s, Inc.
,
We’ve already been skeptical of the need to immediately reinstate employees after an offer to return to work. In Fresh Fruit & Vegetable Workers Local , after a strike and 14-year long lockout, an employer offered to reinstate striking Union workers but delayed reinstatement for one month. 539 F.3d at 1093–94. The employer justified the delay by the need for the employees to give notice to their existing employers and to allow for a particular manager to train the returning employees. Id. at 1094. The Board thought that this delay was inherently destructive and ordered back pay. Id. at 1094–95. We rejected the Board’s conclusion. Id. at 1096. We explained that the one-month delay after a 14-year lockout did not meet the high bar for “inherently destructive” conduct. Id. at 1097. Given the “short” reinstatement delay “relative to the lockout period,” we concluded the delay couldn’t be viewed as “punishment for a protected activity.” Id. “After a fourteen-year lockout,” we said, “a delay of a few more weeks prior to reinstatement does not necessarily express anti - union animus beyond that expressed by the *60 76 I NT L U NION OF O PERATING E NGINEERS V . NLRB lockout itself.” Id. (emphasis added). Rather, the delay would be understood as the time “necessary and normal to accomplish reinstatement,” not as an attempt to “obstruct or discourage employees from exercising their statutory rights.” Id. Thus, we reversed the Board’s conclusion of a violation of the Act. See id. at 1100.
As in Fresh Fruit , the Board didn’t consider the totality of the circumstances before concluding that Macy’s committed an unfair labor practice. The Board ruled that the lack of an immediate, clear, and complete proposal to the Union within one business day of the offer to return constituted “inherently destructive” conduct. But that’s wrong. After the Union engaged in a three-month strike, rejected Macy’s final offer, and then sought to jam Macy’s with a Friday night return-to-work offer, Macy’s taking a mere two business days to formulate and communicate a new, detailed offer can’t be viewed as anti-union animus. Given the relatively short period in which Macy’s developed a new offer after the months-long strike, nothing shows that the minor delay in communicating its latest offer after the lockout was necessarily made to punish the Union for its protected activity or was necessarily an attempt to obstruct or discourage the employees’ union activity. Instead, the 48- hour delay could be viewed as the “necessary and normal” time to figure out Macy’s response to the Union’s unexpected return-to-work offer and to draw up a new proposal. See id. at 1097. Without any evidence of anti- union animus, the Board hasn’t shown how the short delay here had more than a “comparatively slight” impact on the Union under Great Dane Trailers , 388 U.S. at 33. Establishing a hard-and-fast rule that an employer must provide a “timely, clear, and complete offer” before engaging in an offensive lockout within one-business day was arbitrary and capricious. See Macy’s, Inc. , 372 NLRB No. 42, at 1.
Indeed, labor disputes often involve complex circumstances that can’t be resolved on the short fuse that the Board requires here. Under the Board’s arbitrary rule, Macy’s could have only responded two ways to the Union’s *61 Friday-night offer: (1) immediately reinstate the workers and lose its bargaining position after the three-month strike, or (2) institute the offensive lockout but come up with a new offer essentially overnight . Nothing in the Act requires these grim choices.
Well, couldn’t Macy’s have immediately revived its final offer to comply with these rules? Yes, but that would defeat the purpose of the “best and final” offer as a bargaining tactic. Now, a union can decide whether an offer is a best and final one or not. All a union must do to resurrect an expired offer is make an unconditional offer to return to work on short notice before a weekend.
But, what’s wrong with forcing Macy’s to reinstate the employees by Monday morning? First, this ignores the enormous logistical difficulties with returning dozens of striking employees to work over a weekend. Second, this would also weaken Macy’s bargaining position by decreasing the need for an agreement. Unless an employer shows anti-union animus, the Act doesn’t permit the Board to force a one-sided solution in a labor dispute.
And nothing in the Board’s precedent supports its draconian ruling here. Start with Dayton Newspapers . In that case, an employer locked out several delivery drivers after a one-day strike. In re Dayton Newspapers, Inc. , 339 NLRB 650, 650 (2003). Negotiations and the lockout continued for months. But, on December 23, the union made an unconditional offer to return to work. Id. at 651. Four days later, the employer rejected the offer and communicated that the union had to accept several “changed circumstances,” including unspecified “operational changes.” Id. The next day, the union agreed to the “changed circumstances,” although it noted that the “operational changes” condition may need further negotiations. Id. More than a month later, on February 4, the employer nonetheless rejected the union’s offer, suggesting that the union hadn’t accepted all the conditions of reinstatement. Id. at 652. The Board concluded that the employer engaged in an unfair labor practice in not reinstating the locked-out drivers because the employer failed to “clearly and fully set forth” the conditions of reinstatement. Id. at 656. In particular, the demand for acceptance of “operational changes” was “unclear and changing” and became a “moving target.” Id. Under these conditions, the union couldn’t “intelligently evaluate its position and obtain reinstatement.” Id.
The differences between Dayton Newspapers and this case are glaring. First off, notice that the negotiations over reinstating the drivers took place over weeks—not days or hours, as here. The Board never criticized the employer for taking too long to communicate its condition of reinstatement—it criticized the employer for not being clear on the conditions themselves. See id. at 656–58. In contrast, the Board here held that Macy’s failure to communicate a new offer by Monday morning—one business day later— was an unfair labor practice. See Macy’s, Inc. , 372 NLRB No. 42, at 20. So the Board is punishing Macy’s for taking a total of 48 hours more to communicate its newest offer to end the lockout.
Indeed, Board precedent requires parties to afford each other fair time to evaluate and respond to offers. In Alden Leeds, the Board concluded that giving a union “only one working day’s notice, in which to evaluate and understand [employer’s] uncertain, ambiguous, and confusing offer, vote on it and accept it, is clearly insufficient and not the ‘timely’ notice required by Board precedent.” 357 NLRB 84, 95 (2011). So the Board violates its own precedent to reach its desired outcome. If that’s not arbitrary and capricious, nothing is. We then just give the Board a blank check to do what it wants in the labor context.
B.
As if it weren’t enough, the Board gives us one final
reason to deny the Board’s petition. Macy’s argues that it
had good-faith concerns about the Union’s actions during the
strike that justified a defensive lockout. According to
Macy’s, strikers orally abused its employees, attacked its
customers, flouted COVID safety protocols, caused a
sewage backup by blocking a drain outside its San Francisco
store, and sabotaged its facilities. It was especially
concerned about having the employees return to work given
the upcoming holiday season, which accounts for much of
the company’s profits.
See Macy’s, Inc.
,
To justify a defensive lockout, an employer need only be
reasonably concerned
” about the employees’ actions.
See Sociedad Espanola de Auxilio Mutuo y Beneficiencia
, 342
*63
NLRB 458, 462 (2004). This is a relatively low bar. While
we must defer to the Board’s factual findings if they are
supported by substantial evidence, we have a duty to correct
when the “administrative agency has made an error of law.”
NLRB v. Enter. Ass’n of Steam, Hot Water, Hydraulic
Sprinkler, Pneumatic Tube, Ice Mach. and Gen. Pipefitters
of N.Y.
,
Moreover, as Macy’s raised to the Board, the ALJ glossed over all the evidence of Macy’s “good faith” belief that the striking employees engaged in misconduct or sabotage. Despite our deference to factual findings, the ALJ and the Board can’t ignore significant evidence contrary to its position. See Universal Camera Corp. v. NLRB , 340 U.S. 474, 488 (1951) (“The substantiality of evidence must take into account whatever in the record fairly detracts from its weight.”); Lakeland Health Care Assocs., LLC v. NLRB , 696 F.3d 1332, 1335 (11th Cir. 2012) (noting the Board “cannot ignore relevant evidence that detracts from its findings” (simplified)).
Neither the ALJ nor the Board considered the fact that, before the lockout, Macy’s twice sought injunctive relief in state court against the Union. On November 20, Macy’s filed a motion for a preliminary injunction alleging causes of action against the Union for nuisance, trespass, false imprisonment, assault, battery, and intentional interference with prospective economic relations. Before the lockout, the state court denied the request without prejudice because
I NT L U NION OF O PERATING E NGINEERS V . NLRB 81 Macy’s had not yet proven irreparable harm. But the state court did not appear to rule on the facts of Macy’s allegation. By going to state court on the very same concerns as raised for the defensive lockout, Macy’s showed it was “reasonably concerned” with the Union members’ actions. Indeed, filing for a false or bad-faith injunction would have subjected Macy’s to judicial sanctions. Yet the ALJ and the Board never said why this evidence wasn’t sufficient to prove Macy’s defensive reasons. By not accounting for these significant facts, the ALJ and the Board acted arbitrarily, capriciously, and without support.
III.
Let’s recap the Board’s extraordinary actions here. After a lengthy and acrimonious strike, the Union made an unconditional offer to return to work—expecting to be accommodated within one business day. On the next workday, Macy’s responded that it was locking out the striking employees in support of its bargaining position. True, Macy’s didn’t have an offer on the table then, but that’s not unexpected given that the Union had rejected its best and final offer. In any case, Macy’s put together a new offer two days later. Despite these efforts, the Board determined that Macy’s committed an unfair labor practice. If this wasn’t unusual enough, the Board then imposed extraordinary damages—making Macy’s pay for “all direct or foreseeable harms” that occurred to the employees since the lockout. Until recently, the Board never claimed the authority to order consequential damages as here. And the Board ignores the obvious statutory and constitutional roadblocks to this newly claimed authority. The majority largely ignores these concerns and just proclaims that we must defer to the Board because it is at the “zenith” of its discretion. That’s incorrect. The law and the Constitution are supreme here—not the bureaucrats of the Board. We should not have condoned this government overreach.
I respectfully dissent.
Notes
[*] The Honorable Evan J. Wallach, United States Circuit Judge for the Federal Circuit, sitting by designation.
[**] This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
During negotiations over a successor collective
bargaining agreement, Union members voted to reject
Macy’s Final Offer and began a strike. After three months,
the Union ended its strike and unconditionally offered to
return to work. Macy’s locked out the U nion members who
reported for work. The Union charged that Macy’s lockout
was an unfair labor practice. The Board adopted the
conclusion of the ALJ, and found that Macy’s violated the
NLRA.
The panel held that it had jurisdiction because the Union
is a “person aggrieved.” The panel rejected Macy’s contention that it could
lawfully lock out the employees under Section 8(a)(1) and
(3) of the NLRA because it could not show legitimate and
substantial business justifications for the lockout. The Board
applied the correct legal standard when it considered
Dayton
Newspapers, Inc.,
[1] Under Section 8(a)(1) and (3) of the NLRA:
It shall be an unfair labor practice for an employer — (1) to interfere with, restrain, or coerce employees in
the exercise of the rights guaranteed in section 157 of
this title;
***
(3) by discrimination in regard to hire or tenure of
employment or any term or condition of employment
to encourage or discourage membership in any labor
organization . . . .
29 U.S.C. § 158(a)(1), (3);
see also Metro. Edison Co. v. NLRB
[2] Macy’s is a retail business with more than 700 stores and 75,000 employees nationwide. The Union represents building engineers and craftsmen who perform carpentry, painting, as well as maintenance and repair work, especially on heating, ventilation, and air conditioning (HVAC) and electrical systems, at two Macy’s stores in Reno, Nevada, and approximately forty other stores across Northern California and the San Francisco Bay Area. On April 1, 2020 , Macy’s laid off about sixty Union engineers, after closing its stores and furloughing most of its employees in response to the COVID-19 pandemic. Later that year, Macy’s started to reopen its stores, and by mid-August, it recalled forty-three Union engineers back to work. For over twenty years, Macy’s and the Union maintained a collective-bargaining relationship. In July 2020, Macy’s and the Union began bargaining for a successor CBA since the CBA then in place, covering between sixty to seventy Union employees, was set to expire on August 31, 2020.
[2] Only the factual assertions pertinent to resolving the matter before us are presented here, and they are primarily drawn from the findings within the April 6, 2022 ALJ’s Decision (“ALJ’s Decision”) , which the Board affirmed in its January 17, 2023 Decision and Order. . 4, 2020, the Union staged its strike, picketing every day during business hours at Macy’s Union Square store in San Francisco. Macy’s argued before the ALJ that during the strike, the Union employees engaged in a variety of misconduct and sabotage. On October 8, 2020, Rose Ashmore (“Ashmore”) , the Company’s lead negotiator, told Jay Vega (“Vega”) , the Union’s lead negotiator, over the phone that the Final Offer would expire in a week; Ashmore confirmed this once more in an email to Vega four days later. On October 15, 2020, the Final Offer expired. Vega called Ashmore on November 9, 2020, and asked if Macy’s would present another offer. Ashmore said no, but asked whether the Union would like to resume bargaining; Vega said he would get back to her. On November 25, 2020, the day before Thanksgiving, Vega sent an email to Ashmore including the Union’s proposal on wages and pensions. Ashmore replied to Vega over text, notifying her receipt of the email and her inability to speak with her team at Macy’s about the offer until after the holiday. On December 4, 2020, Ashmore emailed Vega rejecting the Union’s wage proposal. That same day, Vega replied that the Union no longer wished the dispute to continue, so it was making “an unconditional offer to return our members to work immediately.” After Vega sent this email, the Union ended its strike and stopped picketing. Later that evening, Ashmore replied to Vega, stating that she would respond to the Union’s unconditional offer by the end of business on Monday, December 7, 2020, because she needed to discuss the offer “with all necessary partners ” In the reply, Ashmore told Vega “please do not have the members report to work yet.” Vega asked her over email, “[d]oes this mean you are locking them out till Monday?” On December 5,
[3] The NLRB’s “‘ authority kicks in when a person files a charge with the
agency alleging that an employer or labor union has engaged in an unfair
labor practice. ”
McKinney
,
[4] Although Macy’s does not challenge our “jurisdiction to resolve the
Board’s application for enforcement under 29 U.S.C. § 160(e), ” we must
assure ourselves of our own
jurisdiction over
the Board’s
Cross-Application for Enforcement.
NLRB v. Siren Retail Corp.
[5] By random selection for multidistrict litigation,
see
28 U.S.C.
§ 2112(a)(1), (3), the Union’s and the Company’s Petitions for Review
were first transferred and then consolidated here. As the alleged
truly
aggrieved party,” Macy’s asserts that any remaining proceedings should
be transferred to the Fifth Circuit, “wherein” Macy’s “resides or transacts
business[.] ” 29 U.S.C. § 160(f). However, the Union as a “person
B. The Lockout
Under
American Ship Building Co. v. NLRB
[7] T he Board’s notice also includes the following “We will” statements: WE WILL make the locked-out employees whole for any loss of earnings and other benefits resulting from the unlawful lockout, less any net interim earnings, plus interest, and WE WILL also make them whole for any other direct or foreseeable pecuniary harms suffered as a result of the unlawful lockout, including reasonable search-for-work and interim employment expenses, plus interest. To further clarify the Company’s actions to employees, however, the Union proposes the following amended language to the Board’s notice : We were found by the National Labor Relations Board to have violated federal law by refusing to allow members of [the Union] to return to work and unlawfully locked them out. We have agreed to remedy this violation by reinstating all locked out employees who wish to return and by making them whole for our conduct.
[8] Under the NLRA, when negotiations fail, there is no “compulsion to
reach agreement.”
Amax
,
[9] In response to the Court’s order requesting supplemental briefing,
Macy’s argues that under the Supreme Court’s recent opinion in
SEC v.
Jarkesy
,
[10] Macy’s also argues that the Board erred by retroactively applying
Thryv
to award the Union’s make -whole remedy. On appeal, this
argument is barred because Macy’s neither raised it first in a motion for
reconsideration before the Board nor showed any extraordinary
circumstances here.
See
29 U.S.C. § 160(e) (“No objection that has not
been urged before the Board, its member, agent, or agency, shall be
considered by the court, unless the failure or neglect to urge such
objection shall be excused because of extraordinary circumstances.”);
see also NLRB v. Legacy Health Sys.
,
[11] Even when 29 U.S.C. § 160(e) “bars our consideration of a party’s
objection . . . the Board is entitled to enforcement unless the Board has
‘patently traveled outside the orbit of its authority.’”
Valley Hosp. Med.
Ctr., Inc. v. NLRB
,
[12] On December 27, 2024, the Third Circuit issued its opinion in
v. Starbucks Corp.
, --- F.4th ----, No. 23-1953,
[13] To the extent that Macy’s argues that “
Thryv
grants the Board
unfettered discretion to determine whether a pecuniary loss is direct or
foreseeable,” we disagree because the Supreme Court has previously
acknowledged that “Section 10(c) . . . was
intended
to give the National
Labor Relations Board broad authority to formulate appropriate
remedies[,] ”
Loc. 28 of Sheet Metal Workers’ Int’l Ass’n v. EEOC
,
[14]
Macy’s also contends that the pecuniary damages that
[the Board] seeks to award are the wolf of consequential
damages in the sheep’s clothing of ‘make - whole’ relief.”
Macy’s asserts that this kind of relief here would be
prohibited consequential damages under
United States v.
Burke
,
[14] This is not
Chevron
deference.
See Chevron, U.S.A., Inc. v. Nat. Res.
Def. Council, Inc.
,
[1] Available at https://perma.cc/P8CN-HZBS.