Discussion

The Fifth and Sixth Circuit Courts of Appeals each recently addressed the type of damages the National Labor Relations Board (NLRB) has authority to dispense under the National Labor Relations Act (NLRA). Specifically, the NLRA says violations may result in the equitable remedies of reinstatement and back pay. The previous Board took the position that it could impose a broad range of consequential damages for NLRA violations. The Third and Ninth Circuits previously created a split on this issue. Recent decisions have widened that split.

Fifth Circuit Ruling

On October 31, 2025, in Hiran Management v. NLRB, the Fifth Circuit Court of Appeals said the NLRB “lacks statutory authority to award full compensatory damages.” There, employees were terminated after going on strike in violation of the employees’ right to engage in “concerted activities for the purpose of collective bargaining.” The Board ordered the employer to make the employees whole “for any loss of earnings and other benefits, and for any other direct or foreseeable pecuniary harms suffered as a result” of the unfair labor practices. The Fifth Circuit followed a strict interpretation of the NLRA and rejected the Board’s award of damages.

Sixth Circuit Ruling

On November 5, 2025, in NLRB v. Starbucks, the Sixth Circuit Court of Appeals said that the NLRB lacked authority to award “direct or foreseeable pecuniary harms.” There, an employee led a unionizing movement and was subsequently terminated for allegedly leaving an employee alone for 30 minutes. The Board ordered the employer to compensate the employee as a result of the NLRA violation. The Sixth Circuit said that the NLRA’s authority to take “affirmative action” was intended as a “phrase of art,” rather than a “literal phrase encompassing all types of relief.”

The split in Circuits is likely to lead to review by the U.S. Supreme Court. The NLRB may also choose to change position on its authority to award remedies once the NLRB achieves a quorum status. Continue to look for updates on this issue.

Action Items

1. Review NLRB claims and awards with legal counsel for compliance with these rulings.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase

Discussion

On October 16, 2025, in Galarza v. One Call Claims, LLC, the Eleventh Circuit Court of Appeals ruled a business classifying workers as independent contractors does not matter where the economic reality clearly demonstrates an employment relationship. Here, three insurance adjusters worked for the defendant company after Hurricane Harvey. While there was an independent contractor agreement with each of the adjusters, they worked full-time for nearly two years with tight schedules and oversight from the defendant. The adjusters sued the defendant alleging that they were really misclassified employees who were owed overtime wages. The court agreed.

In reaching its ruling, the court applied the Fair Labor Standards Act’s (FLSA) economic reality test. The court applied the factors to the adjusters’ arguments as shown below:

1. The nature and degree of the alleged employer’s control over the manner in which work is performed. The defendant controlled the adjusters’ schedules and hours by setting work schedules and reviewing timesheets. They were threatened with discharge if they worked outside set hours. They were not free to perform other work.
2. The worker’s opportunity for profit or loss depending on managerial skill. They were paid non-negotiable, fixed day wages. The adjusters paid their own expense, but this was a cost-cutting measure that benefitted the defendant.
3. The worker’s investment in materials or hiring additional workers as necessary to complete their task. The adjusters had no authority to hire others. The defendant supplied computers, telephones, email accounts, and ID badges that they were required to use while working in-person.
4. Whether the worker’s job requires a special skill. This factor weighed in favor of the defendant since the adjusters acquired their skills and licenses prior to their assignment with the defendant.
5. The permanency and duration of the relationship between the worker and alleged employer. The defendant retained the adjusters for an indefinite and extendable period of time during which the workers did not service any other companies, similar to at-will employment, supporting employee status.
6. The extent to which the worker’s services are an integral part of the alleged employer’s business. Without the adjusters’ services, the defendant had no service or product to sell.

Five of the six factors in the economic realities test favored the adjusters. The court reversed the grant of summary judgment favoring the defendant and found that a jury should decide whether the adjusters were employees. This case reiterated the interpretation under the FLSA that it is the relationship between the parties that controls the classification of employees and independent contractors and not a business’ label of that relationship.

Action Items

1. Review independent contractor status with legal counsel.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase

Discussion

On October 22, 2025, in Nunez v. Syncsort Incorporated, the Massachusetts Supreme Judicial Court held that retention bonuses are not considered “wages” under the Massachusetts Wage Act. The case involved a senior employee who received a retention bonus agreement contingent on remaining employed through specific dates and maintaining good standing. Although the employee ultimately received the full bonus, he sued under the Wage Act, claiming the second installment was paid late (eight days after his termination) and sought mandatory treble damages.

The Court unanimously affirmed the lower courts’ dismissal of the Wage Act claim, emphasizing that not all forms of compensation qualify as wages under the statute. While the Wage Act covers compensation paid solely in exchange for labor or services (e.g., salaries, hourly wages, and earned commissions), it does not extend to contingent payments like retention bonuses. The Court clarified that retention bonuses are additional compensation tied to an employee’s agreement to remain employed through a future date, and therefore fall outside the scope of the Wage Act’s protections.

While this decision provides some relief for employers, it emphasizes the importance of clearly documenting the terms of such bonuses, including the conditions for earning and payment. Employers are encouraged to consult with legal counsel when designing compensation agreements or evaluating potential liability exposure under the Wage Act.

Action Items

1. Review compensation agreements, including retention bonuses, with legal counsel.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase

Discussion

Columbus Ordinance No. 2898-2025 will implement new pay transparency requirements for employers as of December 5, 2025, but enforcement will be delayed until January 1, 2027. Specifically, employers must include a reasonable salary range or scale in job postings.

“Employment posting” includes any written or electronic posting intended to recruit applications for a specific available position that includes a description of the position and/or qualifications of desired applications. Importantly, this does not include job postings that are duplicated and published without an employer’s consent. It also does not apply to job postings for internal transfer or promotion within an organization.

The salary range means “financial compensation in exchange for labor,” which includes things like wages, commissions, hourly earnings, and other monetary earnings. The reasonableness of the salary range must be based on factors specific to the position, such as: the flexibility of the employer’s budget; the anticipated range of experience job applicants may have; the potential variation in the responsibilities of the position; the opportunities for growth in and beyond the position; the cost of living for the various locations in which an applicant may work; and market research on comparable positions and salaries.

Job applicants may file complaints alleging violations of the ordinance with the Columbus Community Relations Commission, which may issue civil penalties and order other remedies. Although the Ordinance will not be enforced for a year, employers are encouraged to begin preparing for compliance.

Action Items

1. Update job descriptions.
2. Conduct an equal pay audit.
3. Implement wage ranges for appropriate positions.
4. Update job posting procedures.
5. Have appropriate personnel trained on the requirements.

Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase