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NLRB Can't Order Reimbursement of Court Costs

The National Labor and Relations Board has no unilateral power to order the reimbursement of attorneys and litigation expenses incurred during an NLRB meeting, according to the DC Circuit.

Although the power of the board is wide and expansive, the power to issue a "pay up, or else" order does not exist -- even in the face of repeated bad faith instances of NLRB violations.

Repeat Offenders

It was in 2014 when the NLRB found that the owner company of Pacific Beach Hotel, HTH Corp., had engaged in "egregious and pervasive" violations of the NRLA that required extraordinary remedies. When the NLRB handed down its list of remedies, however, few expected that the NLRB had the power to force the Hawaii hotel chain into reimbursing it and the labor union for attorneys' fees and costs. It turns out that crying foul was right.

NLRB Can't Order Reimbursement

In the view of the overturning DC Circuit, the court stepped well beyond its bounds when the board construed the NLRA as giving it the power to force bad-faith litigants to pay for the board's and opposing litigant's litigation costs under the Act's Section 10(c).

The issue essentially boiled down to whether or not the board had the authority in the style of courts to impose costs and fees for bad faith litigation or conduct by the other side -- in contradiction to the normal application of the "American Rule."

But circuit judge Stephen F. Williams felt that the board went too far. "As a creature of statute," he wrote, "the Board has only those powers conferred on it by Congress." Under the view of the court, only another similar statute could confer such authority on the board. "Nothing in sec. 10(c) grants the Board punitive powers."

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