On October 31, 2025, the Fifth Circuit held that the National Labor Relations Board (“NLRB” or “Board”) impermissibly awarded compensatory damages to striking employees who were fired. As we reported here, the court’s ruling widens a circuit split between the Third and Ninth Circuits on available remedies under the National Labor Relations Act (“NLRA” or the “Act”) and increases the likelihood of U.S. Supreme Court review to settle this issue.
Background and Thryv Decision
In September 2022, eight employees working at a Texas-based karaoke-themed bar staged a walkout and then went on strike after a heated meeting with a supervisor to address pay, treatment, scheduling, and duties. The strikers presented economic and non-economic demands to the employer, which fired them for alleged insubordination.
The Board administrative law judge (“ALJ”) rejected that rationale, finding the employer failed to present evidence that the employees saw the employee handbook and training manual listing rules against absenteeism, no-call/no-show, bullying, and insubordination. The ALJ also found that the employer failed to show its manager instructed employees on these policies. As a result, the ALJ ruled that the employer violated the NLRA in firing the strikers and ordered it issue them backpay, reinstatement, and post a remedial notice that it would not violate the Act again.
Importantly, the ALJ also held, pursuant to Thryv, Inc., 372 NLRB No. 22 (2022), that the employer had to compensate the employees for “any other direct or foreseeable pecuniary harms incurred as a result of the unlawful discharges, including reasonable search-for-work and interim employment expenses, if any, regardless of whether these expenses exceed interim earnings.”
As we reported here, under Thryv, in NLRB cases involving remedies of make-whole relief, employers must compensate employees for “all direct or foreseeable pecuniary harms” resulting from unfair labor practices (“ULPs”). This includes—but is not limited to—out of pocket medical expenses, credit card debt, and retirement account withdrawals that an employee incurs because of employer ULPs. The NLRB adopted the ALJ’s conclusions.
Fifth Circuit Ruling
In Hiran Management, Inc., v. National Labor Relations Board, No. 24-60608, 2025 WL 3041862 (5th Cir. Oct. 31, 2025), the Fifth Circuit rejected the Board’s decision, holding that “the Thryv remedy goes beyond the text of the NLRA.”
Specifically, the Fifth Circuit held that Section 10(c) of the Act forbids Thryv remedies because it only permits the Board to require employers “to cease and desist from [an] 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).
The Fifth Circuit reasoned that Section 10(c)’s language—employers must “cease and desist” and “take such affirmative action”—amounts to Board “permission to grant equitable remedies” (e.g., injunctions and restitution), not legal remedies (e.g., compensatory or consequential damages). The Fifth Circuit further reasoned that the list of expanded remedies under Thryv were impermissible legal remedies because they were “full compensatory damages.”
The Thryv remedies, the Fifth Circuit concluded, exceeded the Board’s authority under the Act and contradicted longstanding Supreme Court precedent holding that the NLRB’s “power to order affirmative relief” does not include a “general scheme authorizing the Board to award full compensatory damages for injuries caused by wrongful conduct.” Int’l Union, United Auto., Aircraft & Agr. Implement Workers of Am. (UAW-CIO) v. Russell, 356 U.S. 634, 642-43 (1958).
Circuit Split
The Fifth Circuit now joins the Third Circuit in holding that the Board exceeded its authority under the NLRA by awarding Thryv remedies. The Third Circuit also held that Thryv remedies exceeded the authority granted to the Board under Section 10(c), as we reported here.
In contrast, the Ninth Circuit upheld Thryv remedies, as we reported here, because they “further the policy of the NLRA” since they are “directly targeted” at unlawful conduct and “aimed at restoring the economic strength that is necessary to ensure a return to the status quo ante.”
Conclusion
The Fifth Circuit’s rejection of Thryv remedies increases the likelihood that the Supreme Court will ultimately resolve the issue of whether they are permitted under the NLRA. Indeed, the Board’s remedies may not be the only issue that the Supreme Court decides soon as the constitutionality of Board job protections remain unresolved, as we reported here.
We will continue to monitor the status of available remedies under the NLRA under various jurisdictions and whether the Supreme Court ultimately resolves the issue.