Fired an employee for violating a social media policy, did you? You may have to pay their credit card debt and mortgage payments.

On Friday’s edition of The Employer Handbook Zoom Office Happy Hour — catch the replay here if you missed it —  we talked about 2022 changes in the law that could impact 2023 updates to your employee handbook. One talked briefly about how the pendulum at the National Labor Relations Board is swinging back toward employee rights.

What I failed to mention was that, with that shift, the Board is taking an aggressive position on how employers — union or not — may have to make employees whole for violations of the National Labor Relations Act (the “Act”).

Earlier this month, the Board issued this decision in a case involving an employer that unilaterally laid off six employees without bargaining properly with a union. The facts of the case are largely immaterial, and I won’t bore you with them. Instead, I want to focus on two key points:

First, the Board concluded that the employer violated Section 8(a)(1) of the Act by firing six employees. Section 8(a)(1) applies to union and non-union workplaces. It protects employees’ rights to unionize, join together to advance their interests as employees, and refrain from such activity.

How does this work in the real world? Suppose you have a social media policy or a confidentiality or nondisparagement policy. If that policy impedes employees from discussing working conditions with one another (ostensibly to improve them), and you use that policy as the basis for terminating a group of employees who gripe about their manager, you may have violated the Act.

Second, the Board revised and expanded the scope of “make-whole relief.” Traditionally, when an employer violated Section 8(a)(1) by firing someone, the Board would order it to reinstate the employee and compensate them with full back pay.

So, what might you have to pay these employees whom you fired? According to the Board, the relief would include “all direct and foreseeable pecuniary harms” that the employees suffer due to your unlawful actions. For example:

• The missing contributions that the employees would have made to their 401(k) accounts, plus the investment growth the amounts would have experienced during that period;
• Substitute health insurance premiums and out-of-pocket medical expenses;
• Interest and late fees on credit cards;
• Penalties for early withdrawals from a retirement account;
• Harm resulting from missed loan or mortgage payments; or
• Increased transportation or childcare costs.

Again, these are just examples and not an exhaustive list — as long as the injury that the employee factor is a direct and foreseeable result of the employer’s unlawful action.

Now, the employees must present evidence of the damages they seek. The employer can then attempt to refute the amount(s) claimed and whether the damages flow as a direct and foreseeable result of the employer’s unlawful action.

The takeaway here is that all employers within the Board’s jurisdiction should tread carefully in 2023 and review their policies and procedures to ensure that they don’t unwittingly have rules that could facilitate an unlawful termination and “make-whole” relief.