In today’s News & Commentary, Starbucks attacks the NLRB’s expanded economic make-whole remedies, Eric Blanc argues the NLRB has been a key factor in the current labor surge, and a study finds large, low-wage corporations are investing in stock buybacks rather than capital improvements or workers’ wages.

In oral argument before the US Court of Appeals for the Third Circuit this week, Starbucks argued that the National Labor Relations Board does not have the power to order employers to pay for the downstream economic consequences of the employer’s unfair labor practices. That power was established in the Board’s Thryv, Inc. decision, which clarified that make-whole remedies for employees include all “direct or foreseeable pecuniary harm,” such as out-of-pocket medical expenses or credit card debt. The Board itself also split along partisan lines on this question, with its sole Republican arguing a Fifth Circuit decision vacating (on other grounds) the 2022 ruling in Thryv, Inc. took away the Board’s power to order such remedies. The Thryv, Inc. decision strengthened the Board’s remedial options but, as this week showed, it remains contested.

Eric Blanc argues that President Joe Biden’s National Labor Relations Board has been a central factor in labor’s recent surge in activity. Blanc points to the specific roles the Board played in catalyzing the Starbucks and Amazon unionization drives, such as by siding with the Buffalo Starbucks organizing drive to allow store-by-store elections rather than one city-wide. Further, a survey of worker leaders found that federal protection of the right to organize is a key point in convincing hesitant workers to support unionization. Still, Blanc calls for more funding and stronger enforcement tools so that the Board can best fulfill its mission. 

The Institute for Policy Studies’ recently published their “Executive Excess 2024” report.  They found that the CEO-worker pay ration narrowed slightly from 2022 to 2023, but still remains very high at 538 to 1. Author Sarah Anderson argues that many of the largest corporations in the US are choosing to spend on stock buybacks, and thus inflate CEO compensation, in lieu of raising wages. The study shows nearly half of the lowest-paying large corporations have spent more on stock buyback in the past five years than they have on making long-term investments like technology upgrades. “This is a scam to inflate CEO pay, pure and simple,” she argues, as stock buybacks artificially boost share prices, which are often the primary component of CEO compensation.