Top Five Labor Law Developments For October 2025

1. The Senate Health, Education, Labor and Pensions Committee approved two Trump Administration nominees — James Murphy and Crystal Carey — for the National Labor Relations Board and its general counsel role, respectively. The panel did not vote on Scott Mayer, a corporate chief labor counsel, nominated alongside Murphy. The Board has been operating with only one member, Democrat David Prouty, following the departure of former Chairman Marvin Kaplan (whose term expired in August 2025) and President Donald Trump's firing of former Board Member Gwynne Wilcox in January 2025. The lack of a full quorum continues to hinder the Board's functionality, as the Board cannot issue decisions unless it has at least three members.
   
2. The U.S. Court of Appeals for the Ninth Circuit upheld a Board decision finding North American Foothills Apartments violated the National Labor Relations Act, despite the company's constitutional challenges to the Board's structure. NLRB v. North Mountain Foothills Apartments, No. 24-2223 (9th Cir. Oct. 28, 2025). The company argued that the statutory provision protecting administrative law judges (ALJs) from removal except for "just cause" violated Article II of the U.S. Constitution by infringing on the president's removal power. The court held that it had jurisdiction to consider these unexhausted constitutional claims but found no compensable harm from the removal protections, as the president had not attempted to remove the ALJ in question. Because the company did not contest the ALJ's appointment and failed to show harm, the court denied retrospective relief. The issue of the constitutionality of the Board's structure is the subject of much pending litigation.
   
3. The U.S. Court of Appeals for the Fifth Circuit rejected the Board's 2023 Thryv decision, which authorized compensatory damages for "foreseeable pecuniary harms" resulting from unfair labor practices. Hiran Management, Inc. v. NLRB, No. 24-60608 (5th Cir. Oct. 31, 2025). The court held that the Board lacked statutory authority to award full compensatory damages. It emphasized that the Act permits only equitable remedies, such as reinstatement and backpay, not legal damages for all foreseeable harm. As a result, the court held that Thryv improperly expanded the Board's remedial powers beyond those permitted by the Act. The court's decision aligns with the Third Circuit in rejecting the Board's expanded remedial framework, thereby creating a split with the Ninth Circuit, which endorsed Thryv.
   
4. A California federal district court issued a preliminary injunction halting shutdown-related reductions in force (RIFs) across federal agencies. AFSCME v. U.S. Office of Management and Budget et al., No. 3:25-cv-08302 (N.D. Cal. Oct. 28, 2025). The court found that the layoffs, which were initiated in October 2025 during the government shutdown, were likely unlawful under the Administrative Procedure Act and exceeded the agencies' statutory authority. The judge cited widespread procedural failures, including erroneous RIF notices, lack of access to personnel records, and severe emotional and financial harm to affected employees. The injunction pauses the termination clock on issued RIFs and prohibits further implementation until the case is resolved. The court emphasized that the agencies' actions appeared politically motivated and lacked reasoned decision-making, thus violating both legal and constitutional norms. Despite the U.S. Supreme Court's previous decision finding district courts can only issue nationwide injunctions in specific cases, the district court noted the Supreme Court's decision did not apply in cases falling under the Administrative Procedure Act. The Administrative Procedure Act states a court must "hold unlawful and set aside agency action, findings, and conclusions" that are arbitrary and capricious or contrary to law. Agencies must now report on all RIFs issued or planned during the shutdown to the court and demonstrate compliance with the injunction.
   
5. The Board sued California to block Assembly Bill 288, which expands the authority of the California Public Employment Relations Board (PERB) to adjudicate areas traditionally overseen by the Board. The Board argues that AB 288 violates the Act by infringing on its exclusive jurisdiction over private-sector labor relations. The Board warns that the law could lead to conflicting rulings and a fragmented national labor policy. California's move follows similar efforts in New York, raising concerns about a trend toward state-level labor regulation. The Board is seeking an injunction to halt the law's implementation, leaving AB 288's future uncertain. The Board previously filed a similar lawsuit against New York's attempt to expand its own PERB authorities in the absence of a Board quorum.

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