Acting General Counsel Cowen Issues Memorandum Altering Guidance on Settlement Agreements

On May 16, 2025, Acting General Counsel (GC) William B. Cowen issued a memorandum addressing settlement agreements under the NLRA in a manner expected to remove material hurdles to negotiated resolutions. Acting GC Cowen’s memorandum followed his previous recission of several of former GC Jennifer Abruzzo’s memoranda that specified certain broad remedies Regional Offices should seek to include in settlement agreements.

The newly published memorandum notes that while Regional Offices retain discretion over remedial relief, non-monetary remedies should be reserved for “widespread, egregious, or severe misconduct.” Likewise, it states Regional Offices should not allow their enthusiasm surrounding make-whole relief to disrupt the “prompt and fair” resolution of matters. Because settlement agreements are the primary means of remedying unfair labor practices (ULPs) and providing relief to affected employees, agreements should: (1) be consistent with what the Board might order in a similar case, and (2) avoid novel remedies without clearance from higher authority within the Board.

The Memorandum highlights multiple items impacted by this change in approaches to settlement.

• Default language (which helps ensure settlements get paid, as the consequence for non-compliance is a default judgment). Acting GC Cowen notes this language is effective in ensuring compliance, especially for repeat offenders, installment arrangements, liquidated damages, and similar circumstances. This language, however, should not hold up settlement agreements if the parties are resistant to it. As a result, employers may see Regional Offices to be less insistent on default language going forward.
• Non-admissions clauses. In contrast to default language, the memorandum encourages clauses that specify non-admission, especially early in an investigation or immediately following a regional determination. The memorandum clarifies these make less sense for repeat offenders and Board notices. These clauses were previously disfavored under former GC Abruzzo, so employers may see an increase Regional Offices’ willingness to include non-admission clauses going forward.
• Unilateral settlement agreements. The memorandum clarifies that Regional Directors have discretion to accept such agreements without specific authorization from the GC and Board.
• Make-whole relief. Acting GC Cowen encourages settlements that provide full, effective relief, but noted circumstances may sometimes warrant settlements that provide less than 100 percent of the total amount that could possibly be recovered if the case is fully litigated and the Regional Office prevails on all matters in dispute. Relevant factors include: (1) the nature of the violations, (2) the weight of the evidence, (3) litigation risks, and (4) the promotion of labor peace. If considering a settlement below 80 percent of the reasonably anticipated recoverable relief, however, there should be compelling circumstances or prior authorization.

The memorandum also discusses the Board’s 2022 Thryv, Inc. decision (372 NLRB No. 22). That decision expanded make-whole relief to include “all direct or foreseeable pecuniary harms” resulting from the unfair labor practice. Acting GC Cowen notes that Thryv, Inc. failed to provide a clear standard for the scope of “foreseeability.” In the absence of a clear standard, GC Cowen turns to Thryv, Inc.’s dissent, which argues that the foreseeability of pecuniary harm rests on whether a causal link exists between the losses incurred and the unfair labor practice. Thus, according to GC Cowen, Regional Offices pursuing make-whole relief through settlement “should focus on addressing foreseeable harms that are clearly caused by the unfair labor practice.”

Together the above changes suggest Regional Offices will be more flexible in constructing achievable settlement agreements, rather than pushing for certain remedies that former GC Abruzzo had championed. Acting GC Cowen’s hope may be that this flexibility can help alleviate the Board’s backlog of cases and expedite the process for future cases. Labor professionals should stay tuned for more updates on how the Trump Board continues to define its policy efforts and distinguish itself from the prior Board.

Authors: Matt Schmitz, Becca Hill and Michael Shoenfelt