Circuit Split Deepens as Fifth and Sixth Circuits Deny Enforcement of NLRB’s Enhanced Remedies in Labor Cases

Quick Hits

• The Fifth and Sixth Circuits recently rejected the NLRB’s Thryv remedial framework that had enabled the Board to order employers to pay damages for “all direct or foreseeable pecuniary harms” to aggrieved employees in unfair labor practice cases.
• The rulings affirm that the NLRB lacks statutory authority for the Thryv remedies and is limited to equitable remedies, such as reinstatement and backpay.
• The rulings also deepen a circuit split, as the Sixth, Fifth, and Third Circuits have all issued decisions opposing the NLRB’s interpretation of the NLRA, while the Ninth Circuit has permitted a broader interpretation that includes foreseeable damages.

Circuit Split

In Thryv, the NLRB announced that employers that engage in unfair labor practices—such as discriminatory firings—are liable for “all direct or foreseeable pecuniary harms” resulting from those practices. This new remedy represented a significant expansion of the standard make-whole relief that the NLRB typically awards, pursuant to its statutory authority to “take such affirmative action including reinstatement of employees with or without backpay.” Instead of just providing for lost wages in the form of backpay, Thryv enabled the NLRB to hold employers liable for paying for discharged employees’ out-of-pocket medical expenses, childcare costs, transportation expenses, credit card fees, penalties on early withdrawals from retirement accounts, and a wide variety of other costs when those costs were arguably attributable to the unlawful firing.

Since Thryv was issued, four circuit courts have considered the NLRB’s authority to award these expanded remedies, and a clear circuit split has emerged. The Fifth and Sixth Circuits recently joined the Third Circuit in rejecting the NLRB’s Thryv remedies, making the split lopsided toward rejecting Thryv remedies.

On November 5, 2025, the Sixth Circuit, in NLRB v. Starbucks Corporation, vacated the Thryv remedy, rejecting the NLRB’s categorical approach to “all direct or foreseeable pecuniary harms,” reasoning that such awards mirror compensatory and consequential damages in tort and contract and thus exceed the statute. That decision followed closely on the heels of the Fifth Circuit’s ruling on October 31, 2025, in Hiran v. NLRB, that the NLRB was limited to providing equitable remedies—such as reinstatement and backpay—and lacked statutory authority to impose penalties requiring employers to compensate employees for all foreseeable harms resulting from unfair labor practices.

Both rulings contrast with the Ninth Circuit’s decision upholding Thryv remedies in January 2025, in International Union of Operating Engineers, Stationary Engineers, Local 39 v. NLRB. In the Ninth Circuit’s view, Thryv remedies are consistent with the purposes of the NLRA to make workers whole for losses suffered due to unfair labor practices and are akin to backpay and restitution, which “restore the economic strength that is necessary to ensure a return to the status quo ante at the bargaining table.” The Ninth Circuit reaffirmed that holding on October 20, 2025, in an amended opinion that included a lengthy dissent arguing that the NLRB “has no authority to order this type of monetary relief,” as it is “unauthorized by statute and forbidden by the Seventh Amendment.”

Compensatory vs. Equitable Damages

In its recent ruling, the Fifth Circuit observed a distinction in the types of remedies available to the NLRB, finding that the NLRA only allows the NLRB to issue equitable remedies, such as backpay, and not legal consequential remedies. The court said the NLRB “broke new ground” with the Thryv decision in asserting that it could order damages for direct and foreseeable remedies. The court rejected the NLRB’s attempts to characterize the foreseeable remedies as equitable because they were designed to restore the status quo, stating “that feature alone does not render the ordered relief equitable.”

“In demonstrating no principled distinction between legal and equitable relief, the Board’s result diverges sharply from the well-established principle that compensatory damages are a form of legal relief,” the Fifth Circuit wrote. “The Board is not entitled to re-create established distinctions in the law, or in its governing statute, to serve parochial purposes.”

Similarly, the Sixth Circuit said the NLRB in Thryv had “located newfound, categorical authority to ‘order respondents to compensate affected employees for all direct or foreseeable pecuniary harms.’” While the NLRA grants the NLRB a remedial power to take “affirmative action” to effectuate the policies of the NLRA, the court held that power only encompasses equitable remedies. The court explained that Thryv remedies are not equitable but legal in nature, and the substance—paying money for losses incurred “as a result” of an unfair labor practice—tracks compensatory and consequential damages in tort and contract. While equitable remedies often restore the status quo, legal damages frequently do too. Simply asserting that a remedy “restores” the status quo, as the NLRB urged in defending Thryv, does not transform legal damages into equitable relief.

The Sixth Circuit noted the structure of the NLRA suggests that the NLRB has limited remedial power, stating, “That the NLRA nowhere specifies monetary relief is thus a strong indicator that Congress did not design the Act to empower the Board with such legal remedial power.”

The Sixth Circuit further cited the Supreme Court of the United States’ 2024 decision in SEC v. Jarkesy, which called into question whether federal agencies can seek civil penalties in administrative enforcement actions, as such penalties implicate the Seventh Amendment right to a jury trial.

Next Steps

The NLRB’s Thryv decision, which allows the Board to redress “direct or foreseeable pecuniary harms,” has exposed employers to increased liability in unfair labor practice cases and has made them more challenging to settle.

However, the recent Sixth and Fifth Circuit rulings reinforce the argument that the power to award broad monetary relief exceeds the statutory authority of the NLRB, which is limited to equitable remedies, such as backpay. While the Ninth Circuit’s affirmance of the Thryv framework supports the Biden-era NLRB’s approach in this area, it is currently the only circuit to recognize the Thryv remedies. The growing circuit split squarely tees up the issue for Supreme Court review.

Notably, the split has widened against a backdrop of an NLRB that lacks a quorum to issue new decisions. The current Board’s composition indicates that policy shifts at the agency level are not imminent, leaving administrative law judges (ALJs) and regional offices to interpret and apply existing precedent.

For now, federal court approval of remedies under Thryv hinge on geography:

• In the Third, Fifth, and Sixth Circuits, employers can seek to confine monetary exposure for unfair labor practices to equitable remedies such as backpay through appellate enforcement proceedings.
• In the Ninth Circuit, employers should be prepared to litigate causation and quantification of “direct or foreseeable” pecuniary harms, while preserving challenges to awards of such remedies on appeal for potential Supreme Court review.

Ogletree Deakins’ Traditional Labor Relations Practice Group will continue to monitor developments and will provide updates on the Traditional Labor Relations blog as additional information becomes available.

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