NLRA Continues to Pack a Punch: $41 Million Back Pay Settlement Finalized

The National Labor Relations Board (NLRB) recently issued a strong reminder that the laws protecting employees’ rights to engage in collective action are still relevant in today’s modern workplace – and the laws carry stiff penalties for employers who run afoul of the applicable legal requirements.

In one of the largest back pay awards in the NLRB’s history, the agency recently concluded a settlement with five Michigan beer distributors that required the companies to pay $41 million to employees and the Teamsters union. The five employers were asserted to have violated the venerable National Labor Relations Act (NLRA) by conspiring to declare an impasse after a period of fruitless bargaining in order to impose a new contract that provided employees with substantially lower wages and reduced benefits. 

All the distributors – but one – agreed to settlement terms six years ago, and the remaining distributor’s appeal failed in 2006. In the intervening years, much of the $41 million has been paid to workers affected by the illegal practices. The NLRB recently concluded an exhaustive search for any remaining workers who were entitled to a share of the settlement. In total, some 2,000 employees will have shared in the award, with individuals receiving between $1.50 and $282,000.

In its announcement describing the finalizing of the settlement, the NLRB wrote, "We hope this sends a message that the NLRB takes violations of the National Labor Relations Act seriously, and we will pursue justice no matter how long it takes." For employers, the settlement should also send a message about the very real implications of violating the NLRA. Unionized employers, and those facing unionization efforts, must remain vigilant of the laws, regulations, and rules governing labor/management relations.

If you would like more information about the impact of the National Labor Relations Act on employers, please contact Daniel S. Tarlow at 617 456 8013 or dtarlow@princelobel.com.