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NLRB Requires Employer To Pay Litigation Costs

In the United States, each party to court or agency proceedings typically pays its own litigation costs. Courts occasionally order one side to pay such costs, but usually only when that party acts in bad faith. However, the Supreme Court has said administrative agencies, such as the National Labor Relations Board (the “NLRB”), cannot order a party to pay another’s litigation costs unless Congress has specifically authorized the agency to do so, but the NLRB has its own opinion.

In Camelot Terrace, the NLRB upheld an administrative law judge’s order requiring an employer to pay litigation costs to both the union and the NLRB because the litigation resulted from the employer’s bad faith in refusing to bargain with the union. The employer was also ordered to pay the costs the union incurred in the collective bargaining process. This is not the first time the NLRB has ordered an employer to pay litigation costs, but it is very rare and appears to be unjustifiable under the law. There is no word yet on whether the employer will appeal.

The employer in Camelot Terrace engaged in what the NLRB described as a “cat-and-mouse game” by restricting the dates and length of bargaining sessions, repeatedly canceling or shortening sessions, reneging on or withdrawing from tentative agreements without good cause, and refusing to bargain on economic subjects. The employer also acted in bad faith during the litigation by reneging on a settlement agreement and committing perjury.

Even though the NLRB’s action likely exceeded its authority, this is a sign of our contradictory times. The populace (including legislatures like Indiana’s, which just passed a right-to-work law) is becoming more conservative toward unions while the NLRB is bending over backward to support unionization. Until the Supreme Court weighs in on the NLRB’s actions, employers need to remember that toying with unions or the NLRB is inviting a harsh reply from the NLRB. Union-free employers can adopt strategies to remain union-free without going to the extremes that we saw in Camelot Terrace.

Brody and Associates regularly advises its clients on union-related matters and provides union-free training. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.