As we previously reported, National Labor Relations Board (“NLRB” or “Board”) General Counsel Jennifer Abruzzo is committed to expanding the remedies utilized by the Board to make employees harmed by an employer’s unfair labor practice whole. As part of this commitment, GC Abruzzo has encouraged Regional Offices to consider consequential damages as a possible make-whole remedy to cover the costs of downstream economic losses experienced by workers as a result of an unfair labor practice. As such, the General Counsel’s Office has moved forward with seeking consequential damages as part of negotiated settlement agreements.

With respect to one such settlement agreement, the United Mine Workers of America (“UMWA”) announced last week that it will challenge the NLRB’s $13.3 million damages estimate that the union may be required to pay an Alabama coal company pursuant to an agreement intended to resolve several strike-related unfair labor practice charges. As this case illustrates, the Board’s consequential damages initiative is not limited to remedying damages caused by an employer’s unfair labor practice—this remedy can also be implemented against a union for damages caused to an employer.

Background

UMWA-represented mine workers at the employer coal company have been on strike for over a year in protest against what the workers deem to be unsatisfactory negotiations for higher wages and improved benefits. Over the course of the year-long strike, the workers have picketed outside of the employer’s Alabama coal mines and offices. During this time, UMWA and the employer have filed a number of unfair labor practice charges against each other, including charges alleging that UMWA has engaged in strike misconduct by placing devices like jackrocks in the roads leading into and out of the employer’s facilities, blocking the ingress and egress to the mines, threatening security guards at the employer’s facilities, and engaging in vandalism of the employer’s and replacement worker’s property at the employer’s worksite.

The UMWA, the employer, and General Counsel’s Office negotiated a formal settlement agreement to resolve the strike misconduct ULPs, which the Board approved in June 2022. As stipulated in the settlement agreement, the NLRB Regional Office later issued calculations for the damages UMWA owed to the employer and to the individuals injured by the alleged strike misconduct, totaling over $13 million. Part of the NLRB’s calculations included consequential damages for economic losses suffered by the employer, including the costs incurred by the employer to increase security at its facilities as well as the lost revenues to the employer for the unmined coal.

In response to the Regional Office’s multi-million dollar projection, the UMWA announced in the first week of August that it would challenge the Board’s damages calculations. While the Regional Office has said that its cost assessments are ongoing, assuming the UMWA continues to object to the Regional Office’s final damages determination, the parties may litigate the issue of appropriate damages before an administrative law judge.

Takeaways

Although GC Abruzzo’s pronouncements concerning consequential damages have centered on her goal of improving the make-whole remedies available to employees harmed by an employer’s unfair labor practice, this settlement agreement orchestrated by the General Counsel’s Office between the UMWA and the coal company indicate that the remedy of consequential damages is intended to make employers whole, too.

Moreover, the Board’s consequential damages calculations under the negotiated formal settlement agreement illustrate the potentially extreme and costly ramifications of awarding consequential damages. The Board included both direct and indirect economic losses in its calculations, ranging from damages from acts of vandalism to the costs of needing to beef up security at the worksite to the costs associated with lost revenues. This case suggests that the Board is prepared to take an exceptionally broad approach to identifying and remedying downstream economic losses, both to the benefit and detriment of employers and unions alike. As always, we will keep you apprised of the latest updates from the NLRB.

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Photo of Paul Salvatore Paul Salvatore

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

Paul negotiates major collective bargaining agreements…

Paul Salvatore provides strategic labor and employment law advice to companies, boards of directors/trustees, senior executives and general counsel in such areas as labor-management relations, litigation, alternative dispute resolution, international labor and employment issues, and corporate transactions.

Paul negotiates major collective bargaining agreements in several industries, including real estate and construction. He represents the NYC real estate industry’s multi-employer organization, the Realty Advisory Board on Labor Relations (RAB), and its principal trade organization, the Real Estate Board of New York (REBNY). In 2022, he helped the RAB reach a new collective bargaining agreement with SEIU Local 32BJ, covering more than 30,000 residential building employees. Paul also represented the Cement League, a multiemployer group of NYC area superstructure contractors, in halting an illegal strike by the Carpenters Union and negotiating a significant new, more competitive, collective bargaining agreement. He previously negotiated, on behalf of The Related Companies with 18 New York City construction unions, a landmark project labor agreement (PLA) for Hudson Yards on Manhattan’s West Side, the largest private real estate development in U.S. history. In 2019, he assisted Related in resolving the very public labor disputes at Hudson Yards in time for its grand opening. He also represented REBNY in negotiating its 2019 landmark “Statement of Principles” with NYC’s construction unions. For his work in this sector, City & State magazine has named him one of the most powerful lawyers in New York.

Paul tries arbitrations and litigations, and argues appeals, arising from labor-management relationships. Paul argued and won before the U.S. Supreme Court 14 Penn Plaza LLC v. Pyett. In a 5-4 decision of importance to employers, the Court held a collective bargaining agreement that explicitly requires unionized employees to arbitrate employment discrimination claims is enforceable, modifying 35 years of labor law. In 2016, he argued and won NBC Universal Media, LLC v. NLRB, where the D.C. Circuit — rejecting the National Labor Relations Board’s (NLRB) analysis — found “the reasoning supporting the [NLRB’s] judgment … incomprehensible.” In 2017, Paul argued and won T-Mobile v. NLRB where the Fifth Circuit refused to enforce the NLRB’s ban on certain common sense employee handbook policy provisions, finding the NLRB’s analysis to be unreasonable.

Paul represents universities and colleges in their labor and employment relations, including in the currently active areas of graduate student and adjunct faculty union organizing. He represented Yale, Duke, Chicago, Washington University in St. Louis and other universities in their response to graduate student unionization after the NLRB’s controversial 2016 decision finding graduate teaching/research assistants to be employees under the labor law. He has negotiated innovative non-NLRB election agreements at Cornell and Brown Universities.

An honors graduate of Cornell’s School of Industrial and Labor Relations (ILR) and the Cornell Law School, Paul served eight years on Cornell’s Board of Trustees, including on its Executive Committee. Upon completion of his terms, he was elected Trustee Emeritus and Presidential Councilor. Paul presently serves as a Trustee Member of the Board of Fellows of Weill Cornell Medicine, as well as on the Law School and ILR Deans’ Advisory Councils. In 2002, ILR awarded him the Judge William B. Groat prize, the school’s highest honor.

At Proskauer, Paul was elected to its Executive Committee and served as co-chair of its global Labor & Employment Law Department, named by The American Lawyer and Chambers USA as one of the premier U.S. practices. He is widely recognized as a leading U.S. labor and employment lawyer in such publications as Chambers Global and USA (Band 1), and Legal 500 (“Hall of Fame”). The National Law Journal selected Paul as one of “The Decade’s Most Influential Lawyers” – one of only three in the labor and employment law field. His peers elected him to the College of Labor and Employment Lawyers.

Paul counsels business groups, including the U.S. Chamber of Commerce and its Litigation Center. An active speaker and writer on labor and employment law issues, his publications include “One Dozen Years of Pyett:  A Win for Unionized Workplace Dispute Resolution” in the American Bar Association Labor & Employment Law Journal, Volume 36, Number 2 at 257. He is an Adjunct Professor at the Cornell Law School.

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.

Photo of Elizabeth Dailey Elizabeth Dailey

Elizabeth Ann Dailey is an associate in the Labor & Employment Law Department. Elizabeth assists clients in a variety of labor and employment matters, including motion practice, administrative proceedings, internal investigations, labor-management relations, and claims of employment discrimination. As part of her labor-management…

Elizabeth Ann Dailey is an associate in the Labor & Employment Law Department. Elizabeth assists clients in a variety of labor and employment matters, including motion practice, administrative proceedings, internal investigations, labor-management relations, and claims of employment discrimination. As part of her labor-management relations practice, Elizabeth has assisted in representation proceedings before the NLRB and has experience responding to unfair labor practice charges, conducting labor-related business risk assessments, and assisting with collective bargaining negotiations.

Elizabeth frequently represents clients across a variety of industries and sectors, including educational institutions, sports entities, news and media organizations, entertainment companies, healthcare institutions, and real estate companies.

Elizabeth earned her J.D. from the University of Pennsylvania Law School, where she completed a certificate program in business management from The Wharton School. While attending Penn Law, Elizabeth interned with the National Labor Relations Board Region 2 where she conducted investigations into unfair labor practices and recommended case dispositions to the Regional Director.