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Friday, October 16, 2026

NLRB Exceeded Its Authority by Imposing Penalties for Technical Violation - SHRM

Takeaway: While the appeals court ruled in favor of the employer in this case, you should not interpret this decision to mean that a failure to follow an NLRB settlement agreement to the letter will not lead to adverse consequences. Always carefully review the terms of a settlement agreement and obtain the input of counsel, then execute each item in the settlement as written. If you deviate from those terms, there is a chance that a favorable settlement may collapse and lead to expensive, protracted litigation against a government agency with significant resources.

The National Labor Relations Board (NLRB) exceeded its statutory authority by imposing punitive measures against a company for an insignificant deviation from the terms of a settlement agreement resolving several unfair labor practice charges. The board sought a default judgment and imposition of penalties against the East Brunswick European Wax Center (EBEWC) because it had distributed a notice of settlement to its employees by e-mail instead of by text message. The 3rd U.S. Circuit Court of Appeals found in favor of the EBEWC, deciding the board had overreached by acting in a punitive fashion.

The EBEWC is a beauty and waxing salon in New Jersey. One of its former employees filed unfair labor practice charges against the salon. The board's Region 22 later filed a complaint alleging, among other things, that the salon had threatened to fire employees if they engaged in union or protected concerted activity and...



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