October 25, 2021

Volume XI, Number 298

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October 25, 2021

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Goodbye, Settlements: NLRB to Insist on Total Capitulation Conditions

We previously detailed National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo’s notice that her office intended to greatly expand the remedies available in unfair labor practice cases. However, we now know that was only the tip of the iceberg.

On Sept. 15, 2021, Abruzzo issued another memorandum to all Regional Offices instructing them to include those same remedies as a condition of entering into all formal and informal settlement agreements with charged parties. In doing so, Abruzzo instructed regions to “skillfully” craft settlement agreements to ensure they include the most full and effective relief possible, including all of the expanded remedies described in her prior memorandum.

Abruzzo’s directives are a seismic shift and immense expansion of the Board’s traditional remedies. The impact of the directive will likely be far fewer settlements and much more litigation. The memo also instructs regions to submit any potential settlement to the Board’s Division of Advice before accepting a settlement over the objection of the charging party. This, too, will result in employers facing significantly greater obstacles when seeking to resolve disputes short of litigation.

In fact, the memo instructs regions to seek “no less than 100 percent of the back pay and benefits owed” in addition to other direct and consequential damages attributable to an unfair labor practice. For instance, Abruzzo indicates that regions should determine if they need to include damages to an individual’s credit rating or for the loss of a home caused by the inability to keep up with loan payments in the damages required to settle claims of unlawful termination going forward. In addition, the memo instructs regions to include front pay as part of any settlement agreement where the allegedly unlawfully terminated individual no longer desires reinstatement.

Additional requirements such as letters of apology and the expanded distribution of notices are also outlined in the memo. The potential conditions to a settlement agreement could even require an employer to sponsor an individual whose work authorization expired as a result of the conduct in dispute.

Abruzzo’s memo also reinstates the requirement that regions include default language in all future settlement agreements, which essentially requires a charged party to agree that the allegations in the underlying dispute are admitted should it be found to have violated the terms of the settlement agreement. Without any cited authority and in contradiction of long standing practices, the memo instructs regions to specifically oppose the inclusion of non-admission clauses in informal settlement agreements. And thus, it appears employers will be required to essentially agree to the allegations contained in an unfair labor practice charge if they hope to resolve the disputes short of litigation.

The memo sends a clear message: the NLRB will now take a total capitulation approach to settlement agreements. Settlement will no longer be an option unless the charged party agrees to liability and all expanded remedies. As a result, employers need to prepare for the likelihood that settlement may not be a palatable option for disputes before the NLRB. Rather, litigation will likely become the norm.

© 2021 BARNES & THORNBURG LLPNational Law Review, Volume XI, Number 263
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About this Author

Keith Brodie Labor & Employment Attorney
Partner

Traditional labor lawyer and employment law counselor Keith Brodie represents the interests of employers in Michigan and across the country. Personable, detail- and business-oriented when rendering critical legal advice, Keith’s willingness to listen, combined with his strategic legal thinking, allows him to serve client interests while building rapport and consensus.

Keith advises on traditional labor law matters under the National Labor Relations Act (NLRA). His experience includes collective bargaining negotiations, administration of collective bargaining agreements, and...

616-742-3958
Partner

Leaning on more than 20 years of knowledge and experience in reading a table, Grant seeks out common ground to reach his client’s objectives. The majority of his practice focuses on consulting and representing private sector entities – including several large healthcare providers and several well-known mass transit systems – in traditional labor relations and general personnel matters. Grant’s goal is to help his clients avoid unnecessary employer-employee challenges by identifying issues before problems arise, skillfully negotiating resolutions, or vigorously defending actions to the...

616-742-3911
David G. Weldon Labor & Employment Attorney Barnes & Thornburg Chicago, IL
Of Counsel

Business owners, in-house counsel and human tesources professionals turn to David Weldon for pragmatic, strategic advice regarding labor and employment law matters that takes into account legal risk and their ultimate business objectives. David advises and partners with employers of all sizes, assesses and helps to minimize liability, resolves disputes, and finds solutions for day-to-day issues involving employees and unions.

David defends employers in state and federal courts across the country in single-plaintiff and class and collective action litigation involving trade secrets,...

312-214-4815
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