Summer Clerk Teddy Fronczak authored this blog post.
When the Supreme Court stays silent, circuit splits grow louder. On June 15, the Supreme Court denied certiorari in Macy’s Inc. v. NLRB, leaving in place a Ninth Circuit decision endorsing the National Labor Relations Board’s (NLRB or Board) expanded “make-whole” framework established in its 2022 Thryv, Inc. decision. That denial, issued without explanation as is customary, leaves unresolved a growing circuit split over the scope of the Board’s remedial authority.
In Thryv, Inc., the NLRB held that employers must compensate employees for all “direct or foreseeable pecuniary harms” resulting from an unfair labor practice. This expansion introduced significant uncertainty regarding how far an employer’s liability extends beyond the underlying violation. Since the Board’s decision, several circuits have considered whether the holding complied with the National Labor Relations Act (NLRA or Act). The first court to consider the issue was the Fifth Circuit, which, while considering Thryv’s petition for review of the Board’s decision, declined to directly address the merits of the Board’s make-whole relief. The court nevertheless characterized such an approach as a “novel, consequential-damages-like labor law remedy” and “draconian.” In December 2024, however, the Third Circuit in NLRB v. Starbucks Corp. squarely rejected the Board’s Thryv remedies on statutory grounds, holding that Section 10(c) of the NLRA limits the Board’s remedial authority to equitable relief, so that it doesn’t extend to legal damages. While the Board may award monetary relief tied to what the employer unlawfully withheld, such as back pay, the Third Circuit held that damages designed to compensate employees more broadly are beyond the Board’s statutory authority. The Fifth Circuit ultimately agreed with this view in Hiran v. NLRB, followed by the Sixth Circuit in a case also named NLRB v. Starbucks Corp. Meanwhile, the Ninth Circuit reached the opposite conclusion.
In Macy’s Inc., the Ninth Circuit upheld a Thryv-based NLRB order. In doing so, the court required Macy’s to compensate striking employees for all “direct or foreseeable pecuniary harms” resulting from its unlawful lockout following the employees’ offer to return to work.
The “make-whole” framework of Thryv now presents a clear circuit split, which the Supreme Court has, for now, declined to resolve. That said, the NLRB may revisit Thryv in light of the Board’s change from a Democratic to a Republican majority. Indeed, in its opposition to Macy’s petition, the NLRB urged the Supreme Court to vacate the Ninth Circuit’s decision and remand the case to the Board, signaling that the agency anticipates further consideration of the issue. That possibility is reinforced by a shift in enforcement at the general counsel level. Former Acting General Counsel William B. Cowen reversed prior guidance that encouraged the routine pursuit of expansive remedies, instructing instead that such remedies should be reserved for conduct that is “widespread, egregious, or severe.” Current General Counsel Crystal S. Carey, in Memorandum GC 26-03, confirmed that Cowen’s guidance remains in effect, indicating continued restraint in the pursuit of remedies.
Bottom line
The growing circuit split over Thryv leaves the scope of the NLRB’s remedial authority unsettled, with meaningful consequences for both employers and employees. Absent Supreme Court intervention, the Board’s shifting policy direction and current composition suggest the next chapter in Thryv might be written by the NLRB itself.
