A panel of the 3rd U.S. Circuit Court of Appeals struggled to define the limits of the National Labor Relations Board's (NLRB) remedial powers during a hearing on Wednesday. The case concerns Starbucks' appeal of an NLRB ruling that found the coffee chain unlawfully terminated two pro-union baristas in Philadelphia.
The court, comprising Judges Kent Jordan, Theodore McKee, and Thomas Ambro, expressed confusion over whether the NLRB has the authority to require employers to reimburse workers for indirect expenses arising from wrongful termination, such as credit card debt and out-of-pocket medical costs. This issue arises from a 2022 NLRB decision extending remedies beyond traditional back pay and reinstatement.
The judges questioned whether these new remedies align with the legal principles established in the Supreme Court's June decision in Jarkesy v. U.S. Securities and Exchange Commission. In Jarkesy, the Court deemed the SEC’s imposition of civil penalties in administrative proceedings unconstitutional. The judges debated whether NLRB remedies are "legal remedies" akin to those in Jarkesy or "equitable remedies" aimed at making workers whole.
Judge Jordan expressed frustration over the unclear boundaries between legal and equitable remedies. Judge McKee appeared inclined to view NLRB remedies as equitable but was puzzled by arguments suggesting that some remedies might be legal in nature.
Starbucks is supported by the U.S. Chamber of Commerce and other business groups, which argue that broadening NLRB remedies infringes on employers' constitutional rights to a jury trial. Michael Kenneally of Morgan, Lewis & Bockius, representing these groups, contended that extending damages beyond backpay would violate constitutional protections.
The court has directed the West Bengal government to review whether it will seek the cancellation of anticipatory bail granted to four accused in the case, with a decision expected by September 25.
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