Labor & Employment Law Daily Wrap Up, LABOR—UNFAIR LABOR PRACTICES—9th Cir.: Ninth Circuit enforces broad ‘Thryv’ remedy for locked-out Macy’s employees, (Jan 22, 2025)

By Jason Albright, J.D.

The Board ordered Macy’s to compensate the employees for direct or foreseeable pecuniary harms from the unlawful lockout.

Enforcing an NLRB order finding that Macy’s unlawfully locked out union members who unconditionally offered to return to work following a strike, the Ninth Circuit held that the Board did not err in providing the employees with broad make-whole relief pursuant to its 2022 precedent in Thryv, Inc. Finding that Macy’s could not show a legitimate and substantial business justification for the lockout, and that the employees were not clearly and fully informed of conditions they needed to satisfy to be reinstated, the appeals court nonetheless also found no abuse of discretion in the Board’s decision not to award additional extraordinary remedies requested by the union. Judge Bumatay, dissenting in part, questioned the authority of the Board to issue Thryv remedies (International Union of Operating Engineers, Local 39 v. NLRB, Nos. 23-124, 23-150, and 23-188 (9th Cir. Jan. 21, 2025)).

Macy’s and Local 39. Macy’s, as the court described, is a “retail business with more than 700 stores and 75,000 employees nationwide,” and Local 39 represents building engineers and craftsmen who perform carpentry, painting, and maintenance and repair work, especially on HVAC and electrical systems, at two Macy’s stores in Reno, Nevada, and approximately 40 other stores across Northern California and the Bay Area.

Layoffs and recalls. On April 1, 2020, Macy’s laid off about 60 union engineers, after closing its stores and furloughing most of its employees in response to the COVID-19 pandemic. Later that year, Macy’s started to reopen its stores, and by mid-August, it recalled 43 union engineers.

Labor contract and bargaining. For over 20 years, Macy’s and the union maintained a labor contract, and in July 2020, they began bargaining for a successor contract since the one then in place, covering 60 to 70 employees, was set to expire on August 31. After nearly a dozen bargaining sessions, they had yet to reach an agreement. Then, on August 31, Macy’s presented its “Final Offer,” proposing terms relating to wages and pensions.

Strike and picketing at Union Square. On September 2, union members overwhelmingly voted to reject the offer, and the union decided it would begin its strike in two days. From September 4 to December 4, the union staged its strike, picketing every day during business hours at Macy’s Union Square store in San Francisco. Macy’s additionally alleged before the ALJ that, during the strike, the union employees engaged in a variety of misconduct and sabotage.

Expiration of final offer. On October 8, the company’s lead negotiator told the union’s lead negotiator that the final offer would expire in a week. He confirmed this once more in an email to the union’s lead four days later. On October 15, the final offer expired. On November 9, 2020, the union’s lead asked if Macy’s would present another offer, and the Macy’s lead said no but asked whether the union would like to resume bargaining. The union’s lead, in turn said he would get back to her. Then, on November 25, the day before Thanksgiving, the union’s lead sent an email to her including the union’s proposal on wages and pensions. She replied by text, notifying her receipt of the email and her inability to speak with her team at Macy’s about the offer until after the holiday.

Union’s offer to return to work. On December 4, the company’s lead emailed the union’s lead rejecting the union’s wage proposal. That same day, the latter replied that the union no longer wished the dispute to continue, so it was making “an unconditional offer to return our members to work immediately.” After he sent this email, the union ended its strike and stopped picketing. Later that evening, she replied to him, stating that she would respond to the union’s unconditional offer by the end of business on Monday, December 7, because she needed to discuss the offer “with all necessary partners.” In the reply, she told him “please do not have the members report to work yet.” He asked her over email, “[d]oes this mean you are locking them out till Monday?”

The next day, she answered that Macy’s would need to fully evaluate “several administrative, logistical, and economic issues” implicated by the union’s “unexpected offer,” and requested “the courtesy of giving us until the close of business Monday to assess.”

Showing up on Monday... Then, on December 6, the union’s lead responded that “[u]nfortunately, we cannot accommodate your request. Unless you are locking them out, they will [be] showing up to work Monday morning.” She replied, repeating that “the team should not return to work on Monday,” also stating that “[t]his is not a lockout but we won’t be ready for them.”

Turned away. On Monday, December 7, some union engineers started returning to work but were turned away. That same day, the company’s lead negotiator emailed the union’s lead, asserting “[w]e are not willing to reinstate bargaining [Union] employees until there is an agreement in place; this decision is being made in support of our bargaining position.”

Subsequent bargaining. On December 10, Macy’s and the union engaged in subsequent negotiations. The company’s lead emailed the union’s lead the company’s new proposal, which included wage increases that were reduced from those within the final offer. The union countered with an offer to cap wages at the rates originally proposed in the final offer. No deal was reached, and the next day, Macy’s presented another proposal, which was still worse than the final offer. The union gave its additional proposal, deleting certain provisions from the contract, and once again, the parties failed to reach an agreement.

ULP charges. On December 9, 2020, and February 4, 2021, the union respectively filed its original and first amended charge forms with the NLRB, alleging that Macy’s committed an unfair labor practice by locking out the union engineers after they gave their unconditional offer to return to work.

ALJ’s decision. In an ALJ’s decision, issued on April 6, 2022, the ALJ concluded that Macy’s violated Sections 8(a)(1) and (3) of the NLRA “[b]y locking out its employees on December 7, 2020, without providing them with a timely, clear, or complete offer, which sets forth the conditions necessary to avoid the lockout[.]” The ALJ recommended that Macy’s “offer reinstatement to all employees who were unlawfully locked out and make them whole for any losses of pay and benefits that they may have suffered by reason of the lockout,” including “search-for-work and interim employment expenses, regardless of whether those expenses exceed interim earnings.”

Board’s order and additional make-whole remedy. On January 17, 2023, the Board affirmed the ALJ’s rulings and recommended order with two modifications. It modified the order, however, to provide that Macy’s “shall also compensate the employees for any other direct or foreseeable pecuniary harms incurred as a result of the unlawful lockout, including reasonable search-for-work and interim employment expenses, if any, regardless of whether these expenses exceed interim earnings.”

Travel to Ninth Circuit. Macy’s petitioned for review of the Board’s Decision and Order in the Fifth Circuit, and the union filed its petition in the Ninth Circuit. Pursuant to 28 U.S.C. § 2112, the Judicial Panel on Multidistrict Litigation transferred their petitions to the Ninth Circuit by random selection. The NLRB then filed a cross-application for enforcement of its final order, and the three petitions were consolidated in the Ninth Circuit.

Dayton Newspapers and Alden Leeds. The federal appeals court found that the Board applied the correct legal standard based on its precedent in Dayton Newspapers, Inc., 339 N.L.R.B. 650 (2003), under which “[a]n employer’s unlawful refusal to reinstate economic strikers is conduct so inherently destructive of employee rights that evidence of specific antiunion motivation is not necessary to establish a violation of the Act.” For such a lockout to be deemed lawful, “the union must be informed on a timely basis of the employer’s demands so that the union can evaluate whether to accept them and prevent the lockout.” Alden Leeds, Inc., 357 N.L.R.B. 84, 93 (2011). Relying on Alden Leeds and Dayton Newspapers, the Board had concluded that Macy’s violated Sections 8(a)(1) and (3) “by locking out employees, while at the same time never clearly and fully informing them of the conditions that must be met in order to be reinstated.”

Unlawful lockout. Reviewing the record as a whole, the appeals court found that substantial evidence supported the Board’s conclusion that Macy’s did not “timely, clearly, and fully inform the union of the conditions necessary (e.g., new contract offers or other bargaining proposals) to prevent a lockout or to be reinstated, when the Final Offer expired on October 15, 2020.” Macy’s also rejected the union’s November 25, 2020 wage proposal without providing “any type of counter offer” before the lockout on December 7. It thus failed to meet its “burden of showing such a legitimate justification.”

Additional remedies. The Ninth Circuit also found that the Board did not err in denying the union’s request for additional remedies, including (1) a notice reading in the presence of members of management responsible for the lockout decision; (2) an extended notice posting more than the standard 60-day period; (3) a notice mailing to all union members, including those who were locked out; and (4) a notice expressly explaining how Macy’s violated the Act. Among other things, the appeals court observed that the record did not contain evidence that Macy’s is a repeat offender of the Act or engaged in egregious or widespread conduct.

Make-whole relief. Finally, the Ninth Circuit found that the Board did not err in providing the employees with broad make-whole relief pursuant to its precedent in Thryv, Inc., 372 N.L.R.B. No. 22 (Dec. 13, 2022), in which the Board “standardiz[ed] [its] make-whole relief to expressly include the direct or foreseeable pecuniary harms suffered by affected employees....”

Macy’s argued that compensation for “direct or foreseeable pecuniary harms” as contemplated by Thryv would be improper “compensatory damages,” “consequential damages,” or “make-whole relief,” but the appeals court was unpersuaded. Instead, according to the Ninth Circuit, “the make-whole relief provided for in Thryv furthers the policy of the NLRA because it is ‘directly targeted’ at the Company’s unlawful lockout and aimed at ‘restor[ing] the economic strength that is necessary to ensure a return to the status quo ante at the bargaining table.’”

Partial dissent. In his partial dissent, Judge Bumatay questioned the authority of the Board to issue Thryv remedies. According to Bumatay, “the Board has no authority to order this type of monetary relief,” and “[u]ntil two years ago, the Board had never claimed the authority to award consequential damages, like the ones ordered against Macy’s.”

The cases are Nos. 23-124, 23-150, and 23-188.

Judge: Wallach, E.

Attorneys: Gary P. Provencher (Weinberg Roger & Rosenfeld) for International Union of Operating Engineers, Stationary Engineers, Local 39. Usha Dheenan for the NLRB.

Companies: International Union of Operating Engineers, Stationary Engineers, Local 39

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