By Ronald Miller, J.D.

The Fifth Circuit agreed with the employer that the most important issue raised by this appeal was that the NLRB lacked statutory authority to order direct or foreseeable compensatory damages.

The NLRB violated the NLRA by ordering that an employer reimburse all foreseeable costs incurred by discharged employees, ruled the Fifth Circuit. The employer had discharged the employees after they went on strike. Thereafter, the Board determined that the employer violated Section 8(a)(1) and awarded the eight employees full compensatory damages. Section 10(c) of the NLRA authorizes the Board to issue orders, but this provision limits it to awarding only equitable remedies, not legal damages. Agreeing with the Third Circuit’s analysis in NLRB v. Starbucks Corp., which concluded that the remedy in Thryv, Inc., goes beyond the text of the NLRA, the Fifth Circuit held that the NLRB lacked statutory authority to award full compensatory damages. The appeals court concluded, however, that because the employer did not timely raise its supervisory status defense, it waived that affirmative defense (Hiran Management, Inc. dba Hungry Like the Wolf v. NLRB, No. 24-60608 (5th Cir. Oct. 31, 2025)).

In July 2022, the employer purchased a struggling restaurant. It operated as a small nonunion business that employed about 20 workers. A manager was hired to oversee its eight “front of house” employees, who served as hosts, bartenders, servers, and bussers.

Employee strike....

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