Federal Circuit Courts Split on NLRB’s Expanded Remedies – Employment Law Worldview

Report on U.S. Circuit Court Rulings Regarding NLRB Remedial Powers and Sustainable Development Goal Implications

Executive Summary

Recent rulings from United States Courts of Appeals have created a judicial split concerning the remedial authority of the National Labor Relations Board (NLRB). The core issue is whether the NLRB can order employers to compensate unlawfully terminated employees for “direct or foreseeable pecuniary harms” beyond traditional backpay and reinstatement. These legal determinations have profound implications for the achievement of several United Nations Sustainable Development Goals (SDGs), particularly those concerning labor rights, economic stability, and institutional justice.

• SDG 8: Decent Work and Economic Growth: The scope of remedies directly impacts the financial security of workers and the protection of labor rights.
• SDG 10: Reduced Inequalities: Effective remedies for unfair labor practices are crucial for protecting vulnerable workers and reducing economic inequality.
• SDG 16: Peace, Justice and Strong Institutions: The conflict among judicial circuits highlights challenges in providing effective and consistent access to justice through national institutions.

Judicial Review of NLRB Remedial Authority under Thryv, Inc.

In its 2022 Thryv, Inc. ruling, the NLRB expanded its “make-whole” relief to include compensation for direct or foreseeable pecuniary harms, such as credit card fees or missed mortgage payments, resulting from unfair labor practices. This decision has been challenged in multiple federal circuits, leading to conflicting outcomes.

Decisions Limiting NLRB Authority: The Sixth and Fifth Circuits

Both the Sixth and Fifth Circuits concluded that the NLRB’s expanded remedies in Thryv constitute an overreach of its statutory authority. This interpretation curtails the financial relief available to workers, impacting the principles of decent work outlined in SDG 8.

1. NLRB v. Starbucks Corp. (Sixth Circuit): On November 5, 2025, the court ruled that while an employee was unlawfully terminated for union organizing, the NLRB could not award consequential damages. The court reasoned that Section 10(c) of the National Labor Relations Act (NLRA) limits the Board to equitable remedies (e.g., reinstatement) and does not permit legal remedies like monetary damages for pecuniary harm.
2. Hiran Management v. NLRB (Fifth Circuit): In a decision issued shortly before the Sixth Circuit’s, this court reached a similar conclusion. It found that ordering an employer to compensate for “any other direct or foreseeable pecuniary harms” was a form of legal, not equitable, relief and thus exceeded the Board’s authority under the NLRA.

Decision Upholding NLRB Authority: The Ninth Circuit

In contrast, the Ninth Circuit upheld the NLRB’s expanded remedial authority, aligning with a broader interpretation of worker protections that supports SDG 8 and SDG 10.

• IUOE, Local 39 v. NLRB: Earlier in 2025, this court affirmed the Board’s Thryv remedy. It reasoned that compensating for foreseeable pecuniary harms is analogous to a backpay order and is necessary to fully “effectuate the policies of the Act,” thereby making the wronged employee whole.

Implications for Sustainable Development Goals

SDG 8: Decent Work and Economic Growth

The judicial split directly affects Target 8.8, which aims to “protect labour rights and promote safe and secure working environments for all workers.”

• Worker Protection: Limiting remedies to backpay and reinstatement may not fully compensate workers for the financial devastation caused by unlawful termination, undermining the goal of decent work.
• Right to Organize: Insufficient remedies can create a chilling effect on union organizing activities, as workers may fear that the potential financial repercussions of an illegal firing outweigh the protections offered by law.

SDG 16: Peace, Justice and Strong Institutions

The conflicting appellate court decisions underscore a challenge to Target 16.3, which seeks to “promote the rule of law… and ensure equal access to justice for all.”

• Institutional Effectiveness: The disagreement over the NLRB’s authority raises questions about the effectiveness of national institutions designed to protect labor rights.
• Access to Justice: The lack of a uniform standard for remedies means that a worker’s ability to be made whole after an unfair labor practice depends on geographic location, creating an inconsistent application of justice.

Conclusion and Future Outlook

The current split in circuit authority over the NLRB’s Thryv remedies creates significant uncertainty for employers and employees. This legal ambiguity directly impacts the United States’ progress toward achieving key Sustainable Development Goals related to labor rights, economic equality, and institutional justice. A future resolution, either through a U.S. Supreme Court decision or a change in the NLRB’s composition, will be critical in defining the strength of labor protections and aligning national labor law with the principles of sustainable development.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article discusses legal challenges related to remedies for unlawfully terminated employees, which connects to several Sustainable Development Goals (SDGs) focused on labor rights, justice, and institutional effectiveness.

• SDG 8: Decent Work and Economic Growth: This is the most relevant SDG. The article’s core subject is the protection of workers’ rights, specifically the right to organize unions without fear of unlawful termination. The legal battles described directly concern the enforcement of fair labor practices and the provision of adequate remedies for violations, which are fundamental components of decent work.
• SDG 16: Peace, Justice and Strong Institutions: The article is centered on the functioning of legal and administrative institutions. It details the actions of the National Labor Relations Board (NLRB), an institution designed to protect labor rights, and the judicial review of its decisions by various U.S. Courts of Appeals. The differing opinions of the courts on the NLRB’s authority highlight the process of ensuring justice, interpreting laws (the NLRA), and maintaining the accountability of institutions.
• SDG 10: Reduced Inequalities: By addressing the protection of workers’ rights to organize, the article touches upon a key mechanism for reducing inequality. Labor unions and collective bargaining are tools that can help balance the power dynamic between employers and employees, potentially leading to fairer wages and working conditions. The legal protection of these activities is therefore relevant to achieving greater economic equality.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the issues discussed, the following specific SDG targets can be identified:

1. Target 8.8: Protect labour rights and promote safe and secure working environments for all workers.
   • The article directly relates to this target by focusing on cases where employees were unlawfully terminated for “union organizing activity” and for going on strike. These actions are protected labor rights under the National Labor Relations Act (NLRA). The entire legal debate is about the extent to which these rights are protected through remedial actions, such as compensating for “direct or foreseeable pecuniary harms.”
2. Target 16.3: Promote the rule of law at the national and international levels and ensure equal access to justice for all.
   • The article exemplifies this target in action. It describes how the NLRB and multiple federal courts are interpreting and applying the “rule of law” as laid out in Section 10(c) of the NLRA. The conflict between the Sixth, Fifth, and Ninth Circuits on whether the NLRB can award consequential damages shows the complexities of ensuring consistent justice. The process of employees seeking redress through the NLRB is a direct example of accessing a justice mechanism.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

The article does not mention official SDG indicators, but it provides information that can serve as qualitative or proxy indicators for the identified targets.

• For Target 8.8 (Protect labour rights):
  • Implied Indicator: Judicial decisions on the enforcement of labor laws. The opinions issued by the Sixth, Fifth, and Ninth Circuits serve as direct evidence of how labor rights are being interpreted and enforced. The split in judicial authority on the scope of remedies for unfair labor practices is a key qualitative indicator of the strength and consistency of legal protections for workers engaged in union activities.
  • Implied Indicator: Number and nature of unfair labor practice cases. The article references specific cases like NLRB v. Starbucks Corp. and Hiran Management v. NLRB, which involve unlawful terminations. The existence of such cases being litigated indicates that the system for reporting and adjudicating violations of labor rights is active.
• For Target 16.3 (Ensure equal access to justice):
  • Implied Indicator: The scope of remedies available through legal institutions. The central debate in the article over “make-whole” relief versus broader “direct or foreseeable pecuniary harms” is an indicator of the quality and effectiveness of justice available to wronged employees. A broader remedy could suggest a more robust form of justice, while a narrower one could be seen as a limitation. The fact that this is being contested up to a potential Supreme Court review indicates an ongoing effort to define the parameters of justice in this context.

4. Table of SDGs, Targets, and Indicators

Source: employmentlawworldview.com