Federal circuit court tosses added payments to illegally fired Starbucks workers

Pro-union badges sit on a table at a meeting of Starbucks workers. A ruling by the Federal Appeals Court is a blow both to efforts by many of them who were illegally fired to be made whole and a blow to the NLRB which said they were entitled to compensation for more than just lost wages due to the firings. | Joshua Bessex/AP

PHILADELPHIA —In a setback for the National Labor Relations Board, particularly for making illegally fired workers whole, the Third U.S. Circuit Court of Appeals tossed out added payments the board OK’d for Starbucks workers financially harmed by company labor law-breaking.

The case involved two Starbucks baristas In Philadelphia, whom the firm illegally fired for their pro-union activities. A three-judge panel of the appellate court backed the workers, saying Starbucks broke labor law, formally called unfair labor practices.

The court ordered Starbucks to rehire Echo Nowakowska and Tristan Bussiere with net back pay, i.e., what they would have earned after being fired, minus earnings they gained while awaiting justice.

Senior Appellate Judge Thomas Ambro, a Bill Clinton appointee who wrote the ruling, said added reimbursement for illegally fired workers “exceeded the board’s authority.” The added money covers not just net back pay but their medical bills and credit card expenses they use to live on while awaiting vindication, among other costs.

Subtracting the added money weakens workers financially, and the NLRB’s clout.

Starbucks challenged that wide-ranging back pay the NLRB ordered, an initiative of current NLRB General Counsel Jennifer Abruzzo, a longtime board attorney who later became a top counsel for the Communications Workers before taking the NLRB’s top enforcement job.

Hitting lawbreakers harder in the pocketbook makes them more likely to obey labor law—a point that decades of evidence in the other direction, about the weakness of NLRB’s sanctions, backs.

Judge Ambro wrote the National Labor Relations Act mandates net back pay. Juries, not the board, can award more, he added.

“The order that Starbucks must ‘compensate Bussiere and Nowakowska for any direct or foreseeable harms incurred as a result of the unlawful adverse actions against them, including reasonable search-for-work and interim employment expenses, regardless of whether these expenses exceed interim earnings,’ exceeds the board’s authority under the NLRA,” his decision says.

“The NLRA does not allow monetary damages beyond back pay and benefits,” the judge added.

Starbucks “described the Thryv remedy”—the case where the board adopted Abruzzo’s recommendation—“as granting ‘consequential damages.’ It argued such a remedy was ‘not an equitable concept but instead, a legal principle typically preserved for juries in court.’”

The board had no immediate comment on the ruling, which covers firms in Pennsylvania, New Jersey, Delaware, and the U.S. Virgin Islands. But corporate lawyers can cite it in other challenges to the board’s policy.

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CONTRIBUTOR

Mark Gruenberg

Award-winning journalist Mark Gruenberg is head of the Washington, D.C., bureau of People's World. He is also the editor of the union news service Press Associates Inc. (PAI). Known for his reporting skills, sharp wit, and voluminous knowledge of history, Mark is a compassionate interviewer but tough when going after big corporations and their billionaire owners.