Friday, October 24, 2014

NLRB Issues Landmark Decision Applying Fee Shifting for Violations of NLRA

In a split decision (3-2), the NLRB today issued a ruling which -- if not reversed on appeal -- would fundamentally change the long-established framework of available remedies for violations of federal labor law, by requiring employers in some cases to pay the attorney's fees incurred by the government and unions in litigating violations of the NLRA.

"Fee-shifting" provisions are the rule under most employment law statutes (Title VII, ADA, FMLA, and most others), and are the single-largest driver in the filing, handling, and resolution of those cases.  Because the potential liability for attorney's fees often far exceeds an employer's potential base liability in such cases, and because employers almost never recover their attorney fees when they prevail, employers often feel no choice but to settle such cases even where they believe allegations of discrimination, etc. have no merit.

During the 1990s, the NLRB previously attempted to apply a fee-shifting remedy to the NLRA, but that ruling was swiftly rejected by the U.S. Court of Appeals for the DC Circuit.  The NLRB now is trying again, in a case that involves allegations of repeated refusals to adhere to prior orders and federal court injunctions.

While the DC Circuit may well again reject the Board's attempt to expand its powers, in the meantime the Board may continue to apply fee-shifting penalty in other cases it deems egregious.

--Jonathan Nadler

--Jon Nadler

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