5th, 6th Circuit Decisions Deepen Circuit Split of NLRB Authority

The NLRB’s Remedy Makeover: From “Backpay” to “Backpay Plus Everything in the Cart”

The National Labor Relations Act (NLRA) gives the NLRB power to order an employer to “cease and desist”
and to take “affirmative action,” including reinstatement “with or without back pay,” to effectuate
the Act’s policies. Historically, that meant remedies that look a lot like equity: restoring the
status quo, undoing the unfair labor practice’s effects, and nudging labor relations back toward
something resembling “industrial peace” (or at least “no one throwing chairs at the bargaining table”).

In late 2022, the Board decided those traditional remedies weren’t always enough to truly make employees whole.
In Thryv, Inc., the NLRB announced that its standard make-whole language should expressly
include compensation for “all direct or foreseeable pecuniary harms” caused by the unlawful conduct.
Translation: if the unfair labor practice caused a cascade of real-world bills and fees, the Board wanted the
employernot the employeeto eat the financial fallout.

What Counts as “Direct or Foreseeable Pecuniary Harms”?

The phrase is doing a lot of work. In practice, it can reach beyond wages and benefits into items that sound like
they came straight from a “my life fell apart after I lost my job” diary:

• credit card interest and late fees
• penalties for early retirement withdrawals
• loan or mortgage-related costs
• transportation and childcare costs
• job-search expenses and relocation/moving expenses
• utility disconnection/reconnection fees
• legal fees related to eviction proceedings (in some Board/GC discussions)

The Board’s defenders call this “make-whole relief.” Critics call it “consequential damages,” which is basically
legal-speak for “money you owe because your wrongdoing set off a chain reaction.”

How a Circuit Split Happens: The Third Says “No,” the Ninth Says “Yes,” and the Plot Thickens

The Third Circuit Pumps the Brakes (Starbucks, 2024)

The modern split’s headline moment arrived when the Third Circuit reviewed an NLRB order against Starbucks.
The court upheld the unfair labor practice findings but rejected the Board’s attempt to require Starbucks to
compensate employees for “direct or foreseeable pecuniary harms.” The Third Circuit essentially viewed that
portion of the order as an instruction to pay damagessomething beyond what the NLRA authorizes.

The Ninth Circuit Gives the Board a Thumbs-Up (Macy’s / IUOE Local 39, 2025)

Then the Ninth Circuit took a different approach in a consolidated set of cases involving Macy’s and a union
dispute over a lockout. The Ninth Circuit enforced the Board’s order and accepted the enhanced make-whole framework.
There were strong dissents criticizing the Board’s move as a power grab, but the majority treated the remedy as
within the Board’s authorityespecially where the specifics would be hammered out in compliance proceedings.

At that point, the map looked like this: Third Circuit = no, Ninth Circuit = yes.
That’s a split. But it wasn’t yet the kind that makes Supreme Court clerks reach for their highlighters.

The Fifth Circuit: “Nice Try, But That’s Damages” (Hiran Management, Oct. 31, 2025)

Enter the Fifth Circuit, in a case with facts that sound like a Netflix workplace drama:
a Houston karaoke restaurant named Hungry Like the Wolf, a strike, discharges, and an NLRB order
that went beyond reinstatement/backpay into the “foreseeable pecuniary harms” universe.

What the Fifth Circuit Did

The Fifth Circuit granted the employer’s petition in part, denied enforcement in part,
and remanded. The key holding: the NLRB’s Thryv-style remedy is best understood as
legal damagesnot equitable reliefand therefore exceeds the Board’s authority under NLRA Section 10(c).

The Fifth Circuit’s Core Logic (In Plain English)

The NLRA talks about “affirmative action,” and historically that language tracks equitable remedies:
injunction-like orders, reinstatement, restitution-style backpay. Compensatory and consequential damages, by contrast,
are classic legal remedies. The Fifth Circuit emphasized that you can’t convert legal damages into “equity”
just by calling them “make-whole” and promising you won’t get too imaginative (while simultaneously listing
a buffet of credit card fees, moving expenses, and childcare costs).

The opinion also leans on the long history of the Board’s remedial scheme and Supreme Court precedent describing
the Board’s role as remedial rather than punitive. The subtext is unmistakable: if Congress wanted the NLRB to award
broad compensatory damages, Congress could have said soexplicitly.

The Sixth Circuit: “Also No” (NLRB v. Starbucks, Nov. 5, 2025)

A few days after the Fifth Circuit spoke, the Sixth Circuit added weight to the “no” side of the scaleagain in a
Starbucks case, but a different one. The Sixth Circuit enforced the Board’s unfair labor practice finding, but it
vacated the enhanced monetary remedy and sent the case back.

What the Case Looked Like

The employee at issue was a barista (later shift supervisor) in Ann Arbor, Michigan, and the Board concluded Starbucks
unlawfully discriminated against her based on union activity. The Board’s remedy included the directive to make her
whole for “loss of earnings and other benefits” and “any other direct or foreseeable pecuniary harms.”

Why the Sixth Circuit Rejected the Thryv-Style Remedy

The Sixth Circuit’s statutory analysis turns on a deceptively simple question: what does “affirmative action” mean
in Section 10(c)? The court treated it as a term associated with equitable remedies, not a blank check
for monetary damages. And in an analogy that belongs in the “judges can be funny too” hall of fame, the court noted
that reading “affirmative action” to include legal damages would make some statutory patterns read like a grocery list
that says: “apples, bananas, or any other vegetable.”

The Sixth Circuit also pointed to the uncomfortable constitutional shadows that follow when an agency starts awarding
damages-like reliefraising questions about the law/equity line and, potentially, the Seventh Amendment right to a jury trial.
Even if you think those constitutional issues are ultimately resolvable, courts don’t love statutory interpretations that
invite that kind of fireworks show.

So What’s the Split Now?

With the Fifth and Sixth Circuits rejecting the enhanced remedy, the divide is no longer a two-circuit curiosity.
It’s a real, practical, litigant-affecting circuit split over NLRB authority:

• Against Thryv-style “foreseeable harms” remedies: Third, Fifth, Sixth
• In favor (at least in the Macy’s/IUOE framework): Ninth

Why This Split Matters More Than People Think

The NLRB’s orders are not self-enforcing. Employers can petition for review, and the Board can seek enforcement
in federal court. Where a case lands can shape outcomes, and that means:

• Forum pressure: Parties care deeply about which circuit’s law will control enforcement.
• Settlement leverage: Remedy uncertainty changes bargaining power in unfair labor practice settlements.
• Compliance complexity: Even if liability is clear, the remedy fight can turn into a second, expensive sequel.

What Happens Next: Supreme Court Gravity and the Macy’s Petition

Circuit splits are the Supreme Court’s love language. And this one comes with an extra twist: a pending petition
tied to the Ninth Circuit’s Macy’s decision. Macy’s has asked the Supreme Court to weigh in on whether the NLRA
allows the Board to order payment for “direct or foreseeable pecuniary harms” as part of make-whole relief.

As of mid-February 2026, the Supreme Court docket in Macy’s Inc. v. NLRB shows the
government’s response deadline extended to March 4, 2026. That means the case is very much alive,
and the justices could decide whether to take it up once the briefing posture matures.

Three Plausible Endgames

• Supreme Court resolves it: The Court could adopt a limiting view (equity only) or a broader one (enhanced make-whole relief allowed).
• The Board changes course: A future Board could narrow or abandon Thryv remedies, which would reduce the conflict (or at least change its shape).
• Congress steps in: Congress could amend the NLRA to clearly permit (or clearly bar) compensatory-style monetary reliefthough that’s easier said than legislated.

Practical Takeaways for Employers, Unions, and Workers

If You’re an Employer

The remedy landscape is now jurisdiction-dependent in a way that can affect risk assessments. Even if you’re confident
on liability, the remedy exposure can vary dramatically depending on where enforcement occurs. That reality can shape:
litigation strategy, compliance planning, and how aggressively you negotiate early resolution.

If You’re a Union or Employee

Expanded remedies are appealing because unfair labor practices don’t just cost wagesthey can trigger a domino effect.
But the courts are drawing lines. Expect more fights about what’s “direct,” what’s “foreseeable,” and whether that entire
concept is legally available under the NLRA in your circuit.

If You’re Anyone Who Likes Predictability

I have bad news: you picked the wrong decade. (Kidding. Mostly.) Until the Supreme Court or Congress clarifies the rules,
the country is living with a patchworkone that encourages litigants to argue not just about facts and law, but also about
where the argument should happen.

Conclusion: One Agency, Four Circuits, and a Remedy Fight That Won’t Stay Quiet

The Fifth Circuit’s Hiran Management decision and the Sixth Circuit’s Starbucks decision didn’t just
add noisethey made the circuit split over NLRB remedial authority louder, clearer, and harder to ignore.
The core disagreement is simple to state and hard to settle: is the Board’s “direct or foreseeable pecuniary harms” remedy
equitable make-whole reliefor legal damages beyond what Congress authorized in 1935?

With a Supreme Court petition already in the pipeline and the stakes high for both workers and employers, this is one of
those labor-law disputes that can move from “inside baseball” to “national rulebook” surprisingly fast.

Field Notes: What This Split Feels Like in Real Life (and Why Everyone’s Checking the Map)

You don’t have to be a labor lawyer to feel the practical ripples of these decisions. When courts disagree about NLRB authority,
everyday workplace disputes start carrying an extra layer of uncertainty: not just “did someone violate the NLRA?” but
“what does the bill look like if they did?”

One of the biggest real-world changes is how much attention people pay to venue. In the old days,
remedy exposure was more predictable: reinstatement, backpay, notices, maybe bargaining orders, maybe a few tailored extras.
Now, because enhanced remedies live or die by circuit precedent, parties treat geography like strategy. Employers scrutinize where
the alleged unfair labor practice occurred. Unions and counsel consider where enforcement is most likely. And everyone learns the
federal map the way sports fans learn division standings.

The second “felt” impact is on settlement dynamics. When the Board’s expanded make-whole relief is on the table,
cases can feel more like high-stakes civil litigationwhere damages calculations become a centerpiecerather than a streamlined
administrative remedy process. That changes negotiation posture. If you’re an employer in a circuit hostile to Thryv remedies,
you might push harder to narrow any settlement language that gestures toward consequential-style losses. If you’re in a circuit
more receptive, you might hold out for broader monetary relief. The result: the remedy fight sometimes becomes its own case within the case.

Third, there’s the “compliance sequel” problem. The enhanced remedy framework often tees up future proceedings about what harms are
“specific,” “not speculative,” and “easily ascertainable.” In the real world, that means gathering documents that weren’t previously
central to NLRA casesreceipts, bank statements, credit card records, childcare invoices, utility notices, job-search logs. For workers,
that can feel intrusive or exhausting (your financial life, now starring in a legal drama). For employers, it can feel like open-ended
exposure. For everyone, it can feel expensive.

Fourth, the split changes internal decision-making at workplaces. HR and labor relations teams don’t just ask, “Is this discipline lawful?”
They also ask, “If it’s challenged, what’s the worst-case remedy?” In some jurisdictions, the worst-case scenario expands from backpay to a
broader set of financial harms that might be argued as foreseeable. That can influence how quickly a company investigates, how carefully it documents,
and how urgently it trains supervisors to avoid conduct that could later be characterized as retaliation or anti-union animus.

Finally, there’s a quiet but important cultural shift: these cases reflect a broader debate about administrative agencies and the boundaries
of their power. Whether you’re rooting for stronger worker protections or tighter statutory limits, the remedy fight is a proxy for a bigger question:
how much can an agency reshape its enforcement toolkit without Congress rewriting the statute? Until that question is answered with national finality,
people in the trenches will keep doing what they’re doing nowwatching the circuits, tracking Supreme Court signals, and adjusting strategy accordingly.

None of this is legal advice (please don’t cite a blog post as your battle plan), but it is the lived reality of a split: it doesn’t stay
in appellate opinions. It changes how disputes are valued, how quickly they resolve, and how much uncertainty everyone has to price in.