Supreme Court Declines Macy's Appeal, Leaving Expanded NLRB Penalties Intact

The U.S. Supreme Court declined on Monday to hear a challenge by retail giant Macy's against a National Labor Relations Board (NLRB) decision that forces the company to compensate illegally fired workers for a broad range of financial losses. By denying certiorari, the justices effectively let stand a lower court ruling that upholds the labor board's expanded power to penalize companies for union-busting and retaliatory terminations.[1][2][3]

At the center of the dispute is a controversial 2022 NLRB precedent known as the Thryv decision. For decades, the board's monetary remedies for unlawful labor practices were strictly limited to back pay and the restoration of lost benefits. Under the Thryv standard, however, a Democratic-led board majority ruled that employers must also reimburse workers for any "direct and foreseeable" pecuniary harms caused by an illegal firing. This can include credit card late fees, out-of-pocket medical expenses, mortgage interest, and the costs associated with searching for a new job.[1][2][5]

The specific case involves roughly 60 unionized building engineers employed by Macy's in California and Nevada. According to the NLRB, the retailer acted unlawfully in 2023 when it locked out and fired the workers after they ended a strike over stalled contract negotiations. The board ordered Macy's to reimburse the engineers for any cascading monetary harms resulting from their sudden loss of employment, prompting the company to take the matter to federal court.[1][2][3]

Labor advocates and the NLRB argue that the expanded remedies are essential for making workers truly whole. They contend that the traditional standard of merely awarding back pay severely shortchanged employees, whose lives and credit scores can be devastated by the downstream effects of an unlawful termination. Without the threat of covering these broader financial damages, advocates argue, companies face little deterrent against illegally firing organizers during a union drive.[1][4][5]

Business groups have fiercely opposed the new standard. Macy's, backed by an amicus brief from the U.S. Chamber of Commerce, argued that the NLRB is overstepping its congressional mandate. The retailer claimed that the board's expanded remedies are indistinguishable from the compensatory damages typically awarded in private civil lawsuits, and that allowing a government agency to mandate them violates the constitutional right to a jury trial.[1][6]

The Supreme Court's refusal to intervene leaves a fractured legal landscape across the country. The San Francisco-based 9th U.S. Circuit Court of Appeals ruled against Macy's, deciding that the NLRB has the equitable discretion to award remedies that restore the status quo. However, the 3rd, 5th, and 6th Circuits have all rejected the Thryv standard, ruling that Congress intentionally limited the board's authority to matters directly involving lost wages.[1][4][5]

Because the Supreme Court sidestepped the opportunity to resolve this circuit split, the NLRB is expected to rely on its doctrine of "non-acquiescence." This means the labor board will likely continue to seek and enforce Thryv remedies nationwide, forcing employers in hostile circuits to continuously litigate the issue upon appeal. Legal experts warn that this creates a highly unpredictable environment for corporate legal departments trying to assess the financial risks of labor disputes.[4][5]

The Macy's case arrives as the NLRB faces an unprecedented wave of litigation challenging its fundamental structure and in-house enforcement proceedings. Dozens of businesses are currently suing the agency, arguing that its longstanding protections against presidential interference and its use of administrative law judges are unconstitutional.[1]

The ultimate fate of the Thryv remedies may be decided by politics rather than the courts. The NLRB's policies are notoriously sensitive to changes in presidential administrations, and the five-member board currently holds a 2-1 Republican majority with two vacancies. The newly confirmed conservative members have already expressed interest in reconsidering the Thryv precedent, meaning the board could voluntarily overturn the expanded remedies once it secures a full voting quorum.[1][3]

For the immediate future, however, the Supreme Court's inaction cements a high-stakes reality for American employers. Companies navigating unionization efforts, contract negotiations, and strikes now face significantly higher financial exposure if they are found to have crossed the line into illegal retaliation, while workers retain a powerful shield against the economic ruin of a wrongful termination.[2][5]