The NLRB Still Hasn’t Overturned Ex-Cell-O?

Jason Vazquez

Jason Vazquez is a staff attorney at the International Brotherhood of Teamsters. He graduated from Harvard Law School in 2023. His writing on this blog reflects his personal views and should not be attributed to the IBT.

In July of 2022, the General Counsel of the NLRB filed a motion urging the Board to fashion a monetary remedy to compensate employees when their employer refuses to bargain with their freshly formed union, something firms are legally obligated to do under § 8(a)(5) of the NLRA. As I wrote at the time, Abruzzo’s motion signaled the possibility of a considerable expansion of the Board’s remedial arsenal, one that would enable the agency “to more meaningfully redress and deter unlawful employer practices that fundamentally inhibit the collective bargaining process.” Abruzzo’s motion was filed fifteen months ago, yet the Board’s Democratic majority has yet to adopt the remedy which she has now been promoting for more than two years. The Board has, however, indicated that it is likely to move on this issue in the near future.

Let’s begin with a word of background (which I reviewed more extensively here). To a considerable extent, the NLRB’s inability to effectuate the policies underlying federal labor law—namely, to facilitate unionization and collective bargaining (and, more broadly, to democratize the political economy and redistribute wealth and power to the working class)—is ascribable to the severe deficiencies of the statute’s remedial scheme, as presently interpreted, which generations of progressive scholars and labor lawyers have decried. Section 8(a)(5) of the Act mandates that an employer must “bargain collectively with the representative of his employees,” which is further elaborated in § 8(d) as a duty to “confer in good faith with respect to wages, hours, and other terms and conditions of employment.” Although that concept of good faith bargaining is central to the entire statutory framework, the Board’s conventional remedy for transgressions of it is a largely empty one: an administrative order instructing the employer to bargain, or, in other words, to do what it was already statutorily required to do. This “counter-productive” approach, as the U.S. Court of Appeals for the D.C. Circuit observed in 1970, effectively operates “to reward an employer’s refusal to bargain.” Yet despite the D.C. Circuit’s admonition, only a few months later, in the now-infamous Ex-Cell-O Corp., the Nixon NLRB held that it was not statutorily authorized to impose the augmented 8(a)(5) remedy suggested by the appellate court, to monetarily compensate employees in the amount of additional wages or benefits they would have secured had the employer engaged in the good-faith bargaining contemplated by the Act—a so-called “make-whole” remedy for § 8(a)(5) transgressions. That holding, despite waves of criticism, has persisted for decades. But, in a memo issued in September 2021, GC Abruzzo expressed her commitment to induce the Board to dethrone the Ex-Cell-O regime and supplant its weak bargaining order with the more expansive make-whole remedy recommended by the D.C. Circuit more than fifty years ago. And this is precisely the relief she sought in her July 2022 motion.

The proceeding in which Abruzzo filed her original motion, Thrive Pet Healthcare, settled before it reached the Board. But in the following months, the General Counsel renewed her request with filings in nearly a dozen cases that the Board has since adjudicated. In each such decision, however, the Board deployed a strategy devised to avoid directly confronting the GC’s proposed make-whole remedy: “sever[ing]” the issue and reserving it “for further consideration.” Indeed, the Board managed to sidestep the GC’s Ex-Cell-O request in at least ten cases, spanning from September 2022 to September 2023, by deploying, verbatim, the following four sentences:

In addition, the General Counsel requests that we adopt a compensatory remedy requiring the Respondent to make its employees whole for the lost opportunity to bargain at the time and in the manner contemplated by the Act. To do so would require overruling Ex-Cell-O Corp., and outlining a methodological framework for calculating such a remedy. The Board has decided to sever this issue and retain it for further consideration to expedite the issuance of this decision regarding the remaining issues in this case. The Board will issue a supplemental decision regarding a make-whole remedy at a later date.

The Board has not yet released a supplemental decision in any of these cases, all of which are currently in the federal courts embroiled in enforcement litigation. Some of the reviewing circuit courts have expressly acknowledged that the General Counsel “asked the Board to order a make-whole remedy whereby [the employer] would compensate the Union for its lost opportunity to bargain.” But since the Board declined to rule on that issue, the appellate courts have correspondingly found themselves foreclosed from doing so.

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It is disappointing that the Board has, so far, displayed reluctance, or at least a limited sense of urgency, to adopt the § 8(a)(5) monetary remedy that the General Counsel has repeatedly placed before it. As Starbucks’ relentless intransigence over the past two years has demonstrated, an employer’s unlawful refusal to negotiate an initial collective bargaining agreement often severely undermines—in fact, can devastate—a new union. Indeed, such conduct potently subverts the very purpose and vision animating federal labor law. Articulating the precise contours of a § 8(a)(5) compensatory remedy, not to mention formulating a methodological framework to calculate one, admittedly presents a somewhat complex undertaking. It is possible, to be sure, that the Board’s delay reflects nothing more than its meticulous efforts to fashion the order so as to maximize its capacity to survive the judicial scrutiny, and hostility, it will inevitably encounter in the federal courts. Moreover, the agency has been busy with other useful work in recent weeks. Regardless, time, at present, is not an abundant asset—the Board’s pro-labor majority is guaranteed only until December 16th of next year.

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