United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 9, 2016 Decided June 10, 2016

No. 12-1071

CAMELOT TERRACE, INC. AND GALESBURG TERRACE, INC.,

PETITIONERS

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

SERVICE EMPLOYEES INTERNATIONAL UNION,

HEALTHCARE ILLINOIS INDIANA (PREVIOUSLY SEIU LOCAL 4),

INTERVENOR

Consolidated with 12-1218

On Petition for Review and Cross-Application 

for Enforcement of an Order

of the National Labor Relations Board

Christopher Landau argued the cause for the petitioners. 

John S. Irving, Jr. was with him on brief.

Barbara A. Sheehy, Attorney, National Labor Relations 

Board, argued the cause for the respondent. Richard F. 

Griffin, Jr., General Counsel, John H. Ferguson, Associate 

General Counsel, Linda Dreeben, Deputy Associate General 
2

Counsel, and Usha Dheehan, Supervisory Attorney, were with 

her on brief.

Margaret Angelucci was on brief for the intervenor,

Service Employees International Union, Healthcare Illinois 

Indiana (previously SEIU Local 4) in support of the 

respondent.

Before: HENDERSON and ROGERS, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: Camelot 

Terrace, Inc. (Camelot) and Galesburg Terrace, Inc. 

(Galesburg) (collectively, Companies) petition for review of a 

decision and order of the National Labor Relations Board 

(Board) determining that the Companies violated the National 

Labor Relations Act (Act), 29 U.S.C. §§ 151 et seq., by 

engaging in bad-faith bargaining with the Service Employees 

International Union (Union). The Companies do not contest 

the Board’s conclusion that they violated the Act; rather, they 

challenge two of the remedies the Board imposed: (1) 

reimbursement of litigation costs incurred by both the Board 

and the Union during Board proceedings and (2) 

reimbursement of “all” of the negotiation expenses the Union 

incurred during its bargaining sessions with the Companies. 

See Camelot Terrace, 357 N.L.R.B. No. 161, 2011 WL 

7121892, at *13, *15 (Dec. 30, 2011). The Companies assert 

that the Board is without authority to impose either remedy. 

Alternatively, they argue that the amount of the 

bargaining-costs remedy—“all” of the Union’s bargaining 

expenses—exceeds the amount necessary to remedy the harm 

caused by the Companies’ conduct and is improperly punitive.
3

We agree that the Board lacks authority to require the 

reimbursement of litigation costs incurred during Board 

proceedings, see HTH Corp. v. NLRB, No. 14-1222, 2016 WL 

2941936, at *9–11 (D.C. Cir. May 20, 2016), but hold that the 

Board may require an employer to reimburse a union’s 

bargaining expenses pursuant to its remedial authority under 

section 10(c) of the Act. We also conclude that we lack 

jurisdiction to entertain the Companies’ alternative challenge 

to the amount of the bargaining-costs award because they 

failed to raise it before the Board. Accordingly, we grant the 

Companies’ joint petition in part and grant the Board’s 

cross-application for enforcement in part.

I.

Camelot and Galesburg both operate nursing homes in 

Illinois. In 2007, the Union was certified as the exclusive 

representative of employees at both facilities. Over the course 

of 2008 and 2009, the Companies—primarily through the 

conduct of their common owner, Michael Lerner—repeatedly 

bargained with the Union in bad faith.1

 The Board’s Office of 

the General Counsel (OGC) got involved, leading to a 

 1

 Because the Companies do not contest their underlying 

violations of the Act, there is no need to describe their bad-faith 

conduct in great detail. Their conduct included “restricting the 

dates and length of bargaining sessions, repeatedly canceling and 

shortening sessions, reneging on or withdrawing from tentative 

agreements without good cause, refusing to bargain on economic 

subjects, and refusing to make economic proposals.” Camelot 

Terrace, 357 N.L.R.B. No. 161, 2011 WL 7121892, at *1. The 

Companies violated the Act in other ways as well, including dealing 

directly with Union-represented employees, unilaterally changing 

the terms and conditions of employment without providing notice or 

bargaining opportunity to the Union and firing an employee under a 

unilaterally-implemented attendance policy.
4

settlement agreement detailing specific bargaining 

requirements the Companies were to satisfy. When the 

Companies failed to abide by the terms of the agreement and 

continued to bargain in bad faith, the OGC issued a complaint 

charging the Companies with numerous violations of the Act. 

After holding a hearing and concluding that the Companies had 

indeed violated the Act, an Administrative Law Judge (ALJ) 

ordered, inter alia, that the Companies “[r]eimburse the 

[Board] . . . and the Union for all costs and expenses incurred 

in the investigation, preparation and conduct of [the case] 

before the Board and the courts.” Camelot Terrace, 357 

N.L.R.B. No. 161, 2011 WL 7121892, at *125. The ALJ also 

ordered the Companies to “[r]eimburse the Union for all costs 

and expenses incurred in collective-bargaining negotiations

from January 2008 to the [parties’] last bargaining session.” 

Id.

The Companies filed exceptions with the Board, 

challenging the imposition of these two remedies. In a 

two-to-one decision, the Board held that it was authorized to 

impose both remedies and did so with one modification.2

 The 

bargaining-costs remedy, the Board concluded, was a 

necessary exercise of its general remedial power: “[o]nly by 

ordering the reimbursement of the Union’s negotiating 

expenses [could] the Board reasonably restore the Union’s 

previous financial strength and consequent ability to carry out 

effectively its responsibilities as the employees’ 

representative.” Id. at *6. As for the litigation-costs remedy, 

the Board concluded that it “has inherent authority to control 

 2 The Board modified the litigation-costs remedy by 

eliminating the award for costs incurred in court proceedings, 

“leav[ing] that determination to the discretion of the court [of 

appeals].” Camelot Terrace, 357 N.L.R.B. No. 161, 2011 WL 

7121892, at *6 n.8.
5

its own proceedings, including the authority to award litigation 

expenses through the application of the ‘bad-faith’ exception to 

the American Rule.” Id. The Board declared that its 

“inherent authority” was sufficient to support the remedy and 

therefore found it “unnecessary to pass on the [Companies’] 

argument that the Board’s remedial authority under [section] 

10(c) of the Act does not encompass the award of litigation 

expenses.” Id. at *6 n.10. Member Hayes dissented from the 

Board’s decision on the litigation-costs remedy, explaining 

that the Board is “not free to invoke principles of ‘inherent 

authority’ in order to unilaterally vest the Board with powers 

beyond those contemplated by the legislature.” Id. at *17 

(Member Hayes, dissenting). The Companies petitioned for 

review, challenging the Board’s authority to impose the two 

remedies. The Board cross-applied for enforcement.

II.

At the outset, because “the Board is entitled to 

enforcement of all unchallenged portions of its order,” we 

summarily enforce all such provisions of the Board’s decision. 

United Food & Commercial Workers Union Local 204 v. 

NLRB, 447 F.3d 821, 824 (D.C. Cir. 2006) (per curiam). As 

for the two reimbursement orders the Companies do challenge, 

although we generally afford the Board deference in reviewing 

its chosen remedies, see Great Lakes Chem. Corp. v. NLRB, 

967 F.2d 624, 629 (D.C. Cir. 1992) (“The Board has broad 

authority in devising remedies to effectuate the policies of the 

Act, subject only to limited judicial review.” (citation and 

internal quotation marks omitted)), deference is limited if a 

party challenges the Board’s authority to order a particular 

remedy under any circumstance. In that case, to the extent the 

Board claims its remedial authority arises from the Act, we 

defer to the Board “only so far as ‘[its] interpretation is rational 

and consistent with the statute.’ ” Unbelievable, Inc. v. 
6

NLRB, 118 F.3d 795, 804 (D.C. Cir. 1997) (quoting NLRB v. 

United Food & Commercial Workers, 484 U.S. 112, 123 

(1987)). To the extent the Board relies on extra-statutory 

authority, we afford no deference at all. See HTH Corp., 2016 

WL 2941936, at *9–11 (evaluating Board’s “inherent 

authority” to award litigation costs without deference); see also 

Local 777, Democratic Union Org. Comm. v. NLRB, 603 F.2d 

862, 869 n.17 (D.C. Cir. 1978) (“Ordinarily, we show 

considerable deference to the judgment of the [Board] . . . [but] 

where the issues involved are purely legal . . . , the Board’s 

interpretation is entitled to no particular deference.”). 

Here, the Companies have abandoned (or forfeited, see 

infra at 10–11) any claim that reimbursement of litigation or 

bargaining expenses was inappropriate in their particular case; 

rather, they attack the Board’s authority to award bargaining 

and litigation costs in all cases. Accordingly, we defer to the 

Board’s view of the matter only insofar as its interpretation of 

its statutory power is “rational” and “consistent” with the Act. 

See Unbelievable, Inc., 118 F.3d at 804.

A. Litigation Costs

The Companies first claim that “the Board has neither 

statutory nor inherent authority to award litigation expenses, 

including attorney’s fees, as a remedy for an unfair labor 

practice.” Pet’rs’ Br. 12. For the reasons discussed in HTH 

Corp. v. NLRB, we agree. There, as here, the Board “claimed 

that, like a federal court, it has inherent authority to control and 

maintain the integrity of its own proceedings through an 

application of the bad-faith exception to the American Rule” 

and ordered an employer to pay the litigation expenses of a 

union and of the OGC. HTH Corp., 2016 WL 2941936, at *9 

(internal quotation marks omitted). We declined to enforce 

the order. See id. at *11. Recognizing that “[a]s a creature of 
7

statute the Board has only those powers conferred upon it by 

Congress,” we held that “the Board may apply the bad-faith 

exception to the American rule only if some provision or 

provisions of the Act explicitly or implicitly grant it power to 

do so.” Id. at *9. Although the Board “relied solely on its 

inherent authority to control and maintain the integrity of its 

own proceedings,” and the court recognized “that it is wrong to 

speak of agencies as having any inherent authority,” the 

majority—perhaps in an effort to give the Board the benefit of 

the doubt—went on to consider whether the Act’s general 

endowment of remedial authority under section 10(c) 

“implicitly authorizes fee shifting based on bad faith.” See id.

at *9–10 (emphasis in original) (internal quotation marks 

omitted). The majority ultimately concluded that section 

10(c) did not do so, primarily because “the Supreme Court has 

consistently classified application of the bad-faith exception to 

the American rule as punitive,” id. at *10 (citing Hall v. Cole, 

412 U.S. 1, 5 (1973)), and a “[section] 10(c) remedy . . . ‘must 

be truly remedial and not punitive,’ ” id. (quoting Capital 

Cleaning Contractors, Inc. v. NLRB, 147 F.3d 999, 1009 (D.C. 

Cir. 1998)). 

Our decision in HTH controls. As in HTH, the Board in 

this case claims the power to require the Companies to pay the 

Board’s litigation costs and those of the Union solely on the 

basis of its “inherent authority.” Camelot Terrace, 357 

N.L.R.B. No. 161, 2011 WL 7121892, at *6 & n.10. But as 

HTH makes plain, the Board possesses no extra-statutory 

“inherent authority.” HTH Corp., 2016 WL 2941936, at *9. 

Moreover, to the extent the Board meant “implicit in section 

10(c)” when it said “inherent,” see id. at *10, it loses on that 

score as well—section 10(c) neither explicitly nor by 

implication authorizes the Board to award litigation costs, see 

id. at *10–11. Accordingly, we deny enforcement of the 

litigation-costs order. See id. at *11.
8

B. Bargaining Costs

The Companies also challenge the Board’s general 

authority to require one party to reimburse another’s 

bargaining costs; in the alternative, the Companies claim that 

the Board may not award the Union “all” of its bargaining costs 

because the Union would have incurred at least some of those 

costs had the Companies bargained in good faith.

1.

As a threshold matter, the Board contends that we lack 

jurisdiction to entertain these two claims because the 

Companies failed to raise them with the Board. It is well 

settled that, absent “extraordinary circumstances,” if a party 

fails to “urge[]” an objection before the Board, we lack 

jurisdiction to consider it for the first time on appeal. 29 

U.S.C. § 160(e); see also Woelke & Romero Framing, Inc. v. 

NLRB, 456 U.S. 645, 665–66 (1982); HTH Corp., 2016 WL 

2941936, at *3. In assessing forfeiture under section 10(e) of 

the Act, “the critical question” is “whether the Board received 

adequate notice of the basis for the objection.” Alwin Mfg. 

Co. v. NLRB, 192 F.3d 133, 143 (D.C. Cir. 1999); see also 

DHL Express, Inc. v. NLRB, 813 F.3d 365, 372 (D.C. Cir. 

2016) (considering whether “petitioner’s brief in support of its 

exceptions adequately put the Board on notice of the grounds 

on which the petitioner is objecting” (internal quotation marks 

omitted)). “While we have not required that the ground for 

the exception be stated explicitly in the written exceptions filed 

with the Board, we have required, at a minimum, that the 

ground for the exception be ‘evident by the context in which 

[the exception] is raised.’ ” Parsippany Hotel Mgmt. Co. v. 

NLRB, 99 F.3d 413, 417 (D.C. Cir. 1996) (alteration in 

original) (quoting Consol. Freightways v. NLRB, 669 F.2d 790, 

794 (D.C. Cir. 1981)).
9

Here, the Companies’ written exceptions and supporting 

briefs together preserved their argument that the Board 

generally lacks authority to require reimbursement of 

bargaining costs—but just barely. The Companies’ exception 

to the bargaining-costs remedy was indeed “vague,” see DHL 

Express, 813 F.3d at 372, but nonetheless charged that the 

bargaining-costs remedy violated “established Board law and 

policy,” Resp’ts’ Exceptions to the A.L.J.’s Decision 2 (Mar. 

10, 2010). Similarly, although their supporting brief was “no 

paragon of precision or detail,” it included several statements 

“adequate to apprise the Board that the Compan[ies] intended 

to press the question now presented”—that the Board lacked 

the power to require reimbursement of bargaining costs. See 

NLRB v. Blake Constr. Co., 663 F.2d 272, 284 (D.C. Cir. 

1981). 

The best example is an express statement to that effect in 

one of the brief’s headings, which read, “The Board Lacks 

Authority to Award Litigation Expenses and Bargaining 

Costs.” Resp’ts’ Br. in Supp. of Exceptions to the A.L.J.’s 

Decision 4 (emphasis added). Other parts of the brief also 

apprised the Board that its authority was being questioned. 

The Companies averred that the ALJ “made erroneous legal 

conclusions with regard to the [bargaining-costs] remedy,” id.

at 2, and in a different subheading stated, “The Board Lacks the 

Inherent Authority to Award Costs,” id. at 6 (emphasis added). 

And notwithstanding these sections of the brief primarily 

addressed litigation costs, the brief transitioned into a new 

section with the statement, “[e]ven if the Board has the 

authority to order a respondent to pay litigation and bargaining 

costs,” id. at 6 (emphasis added), indicating to the Board that 

the brief’s discussion of the generic “costs,” see id., was meant 

to cover bargaining costs as well as litigation costs. We 

therefore conclude that “the Board received adequate notice of 
10

the basis for the [Companies’] objection,” see Alwin, 192 F.3d 

at 143, and we may consider the merits of the challenge.

The same is not true of the Companies’ alternative 

argument that even if the Board has the authority to award 

bargaining costs generally, it may not award “all” of the 

Union’s costs. The thrust of the claim is that the Board may 

award bargaining costs only to the extent the Companies’ 

bad-faith conduct caused the Union to incur such costs 

unnecessarily. Because “the Union undoubtedly would have 

incurred some bargaining costs” even if the Companies had 

properly discharged their duty to negotiate in good faith, the 

Companies argue that, in awarding the Union “all” of its 

bargaining costs, the Board “crossed the line separating 

permissible remedial action from impermissible punitive 

action.” Pet’rs’ Br. 28–29. The Companies never presented 

this argument to the Board but they argue that we should 

nonetheless consider it because the award is “patently in excess 

of [the Board’s] authority,” see Alwin, 192 F.3d at 143 n.13 

(alteration in original) (quoting Detroit Edison Co. v. NLRB, 

440 U.S. 301, 311 n.10 (1979)), and therefore their failure to 

raise the issue should be “excused because of extraordinary 

circumstances,” 29 U.S.C. § 160(e).

Although “a remedy that is patently ultra vires” generally 

warrants review even if not challenged at the Board level, see 

HTH Corp., 2016 WL 2941936, at *3 (citing Alwin, 192 F.3d 

at 143 n.13), the bargaining-costs remedy at issue does not 

patently run afoul of the limits on the Board’s power. If the 

Board has the authority to award bargaining costs generally, it 

is not inconceivable that requiring the reimbursement of all of 

a party’s bargaining expenses might be necessary; for instance, 

if an employer repeatedly schedules bargaining sessions with a 

union but is a perpetual no-show, reimbursing all of the 

expenses the union incurred in connection with those planned 
11

sessions when no bargaining in fact took place would be 

required to return the union to its financial position ex ante, 

which is the Board’s justification for awarding bargaining 

costs in the first place. See Fallbrook Hosp. Corp. v. NLRB, 

785 F.3d 729, 732 (D.C. Cir. 2015) (bargaining-costs remedy 

“warranted . . . to restore the economic strength that is 

necessary to ensure a return to the status quo ante at the 

bargaining table” (internal quotation marks omitted)). Thus, 

such an award is not “obviously ultra vires” in all 

circumstances. See Alwin, 192 F.3d at 143 n.13.

Nor is it obvious that an award of all of the Union’s 

expenses was not necessary to remedy the wrong here; indeed, 

the Board may well have concluded as much. This fact 

underscores why we lack jurisdiction to consider this claim on 

the merits—the Board has the first crack at answering whether 

and why awarding “all” of a union’s bargaining expenses is 

necessary in the particular circumstances of the case before it. 

See Local 900, Int’l Union of Elec., Radio & Mach. Workers v. 

NLRB, 727 F.2d 1184, 1192 (D.C. Cir. 1984) (“Simple fairness 

to those who are engaged in the tasks of administration, and to 

litigants, requires as a general rule that courts should not topple 

over administrative decisions unless the administrative body 

not only has erred but has erred against objection made at the 

time appropriate under its practice.” (quoting United States v. 

L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37 (1952))). The 

Board had no reason to do so when the Companies never raised 

this question in an exception or in a motion for reconsideration; 

we lack jurisdiction, then, to address the claim for the first time 

on appeal.3

 3 This does not mean, however, that the Companies are 

prohibited from raising this argument before the Board at the 

compliance stage. At oral argument, in comparing the Board order 

in HTH that noted the union bore the burden of establishing a causal 
12

2.

Because the Companies forfeited their extent-of-thebargaining-costs claim, only one question remains for 

consideration on the merits—whether the Board ever has the 

authority to require a party to reimburse another’s bargaining 

costs. The Companies contend that the Board has no such 

power. On their theory, the Board’s job is to enforce 

substantive legal rights; it may not, however, require one party 

to reimburse another for the costs incurred in vindicating those 

rights. They view bargaining costs as “indistinguishable from 

litigation costs” in that both “represent the price of attempting 

to vindicate substantive legal rights.” Pet’rs’ Br. 24. 

Therefore, just as awarding litigation costs is aliunde the 

Board’s remedial authority, so is requiring one party to 

reimburse another’s bargaining costs. The Board, in contrast, 

contends that requiring a party that has engaged in particularly 

egregious bad-faith bargaining to reimburse another party’s 

bargaining costs is well within its remedial power under 

section 10(c) of the Act.

We agree with the Board. When the Board determines 

that a party has committed an unfair labor practice, section 

10(c) of the Act gives it “discretion to fashion appropriate 

remedies.” Fallbrook, 785 F.3d at 734. Specifically, the 

Board “shall issue . . . an order requiring [a violator] to cease 

 

relationship between the costs awarded and the unfair labor practice, 

see HTH Corp., 361 N.L.R.B. No. 65, at 5 (Oct. 24, 2014), to the 

Board award of “all” bargaining costs here, the Board counsel 

explained, “[I]t was a different sort of remedy [in HTH] than you’ve 

seen, so [the Board] w[as] reminding the Union we’ve not imposed 

something like this before, so FYI, here’s what you need to do in 

compliance, but I don’t think it’s any different than in other typical 

compliance proceeding[s].” Oral Arg. Tr. 50:1–5.
13

and desist from such unfair labor practice, and to take such 

affirmative action . . . as will effectuate the policies of [the 

Act].” 29 U.S.C. § 160(c). “[T]he thrust of affirmative 

action redressing the wrong incurred by an unfair labor 

practice,” according to the United States Supreme Court, “is to 

. . . restor[e] the economic status quo that would have obtained 

but for the company’s wrongful [act]. The task of the [Board] 

in applying § 10(c) is to take measures designed to recreate the 

conditions and relationships that would have been had there 

been no unfair labor practice.” Franks v. Bowman Transp. 

Co., 424 U.S. 747, 769 (1976) (some alterations in original) 

(citations and internal quotation marks omitted).

Although we have never directly held that reimbursement 

of bargaining expenses is the type of “affirmative action” that 

“effectuate[s] the policies” of the Act, 29 U.S.C. § 160(c), the 

Board has repeatedly asserted as much, see, e.g., Unbelievable, 

Inc., 318 N.L.R.B. 857, 859 (1995), enf’d in relevant part, 118 

F.3d 795; Fallbrook Hosp. Corp., 360 N.L.R.B. No. 73, 2014 

WL 1458265, at *2 (Apr. 14, 2014), enf’d, 785 F.3d 729, and 

we have discussed the Board’s reasoning favorably. As we 

explained in Fallbrook Hospital Corporation, “a 

reimbursement remedy is appropriate ‘where it may fairly be 

said that [an employer’s] substantial unfair labor practices have 

infected the core of a bargaining process to such an extent that 

their effects cannot be eliminated by the application of 

traditional remedies.’ ” 785 F.3d at 732 (alteration in 

original) (quoting Fallbrook Hosp. Corp., 360 N.L.R.B. No. 

73, 2014 WL 1458265, at *2). “Such a remedy is warranted 

both to make the charging party whole for the resources that 

were wasted because of the unlawful conduct, and to restore 

the economic strength that is necessary to ensure a return to the 

status quo ante at the bargaining table.” Id. (internal quotation 

marks omitted). Accordingly, we noted that “ ‘[i]n cases of 

unusually aggravated misconduct,’ the Board may order an
14

offending party ‘to reimburse the charging party for 

negotiation expenses.’ ” Id. at 734 (quoting Unbelievable, 

Inc., 318 N.L.R.B. at 859).4

Confronted directly with the question for the first time, we 

too find the Board’s reasoning persuasive. An award of 

bargaining expenses remedies an unfair labor practice by 

ensuring that, upon resolution of the unfair labor practice 

charge, the injured party can return to negotiations on the same 

footing it occupied before the violation of the Act occurred. 

See Fallbrook, 785 F.3d at 732. A more traditional remedy, 

such as a bargaining order, is of little value if one party can 

drain another of its resources by bargaining in bad faith and 

then extracting concessions as the money wanes. See 

Unbelievable, Inc., 318 N.L.R.B. at 858 (“[A] bargaining order 

alone will not ensure meaningful bargaining, because it cannot 

restore the Union[] to [its] position[] prior to the futile 

negotiations. In fact, limiting the remedy to the conventional 

bargaining order would effectively permit the [employer] to 

benefit from its violations of the Act by ensuring bargaining 

 4 In Fallbrook and Unbelievable, we were not confronted with 

the question of the Board’s general authority to order reimbursement 

of bargaining costs; rather, we considered only whether the Board 

had misapplied its own precedent in deciding that the 

bargaining-costs remedy was warranted on the factual records those 

cases presented. See Fallbrook, 785 F.3d at 736–37 (employer 

argued Board improperly determined it had engaged in “unusually 

aggravated conduct”); Unbelievable, Inc., 118 F.3d at 799 (“The 

[employer] does not question the Board’s authority to order a 

respondent to reimburse the charging party for negotiation expenses 

if the respondent’s misconduct has been unusually aggravated . . . . 

The Company does argue, however, that there is not substantial 

evidence in the record considered as a whole to support the Board’s 

findings of fact.”). Here, in contrast, the Companies challenge the 

Board’s authority to award bargaining costs generally.
15

with [a] Union[] that [has] been economically weakened by the 

[employer’s] misconduct.”). By instead allowing the harmed 

party to be returned to its financial position ex ante, the Board 

“effectuate[s] the policies of the Act.” See id.; see also

Bowman Transp. Co., 424 U.S. at 769.

The Companies do not dispute this rationale per se; in fact, 

they acknowledge that “[a]n award of bargaining costs . . . can 

be deemed ‘remedial’ in a broad sense.” Pet’rs’ Br. 27. 

Rather, they hold fast to their contention that bargaining costs 

and litigation costs are the same, and, if litigation costs cannot 

be shifted under the American Rule, neither can bargaining 

costs. The “harm” a bargaining-costs reimbursement order 

“remedies,” they claim, is “not the sort of harm that is 

generally cognizable in our legal system—the time and 

expense necessary for a party to vindicate its substantive legal 

rights.” Id.

We reject this approach for several reasons. First, 

although the Companies make broad appeals to “tradition,” 

“our legal culture” and “our legal system,” see id. at 24, 27, 

noticeably absent from their brief is any case suggesting the 

American Rule extends beyond the context of litigation or 

other quasi-judicial adversarial proceedings. That is to say, 

although it is well-established that litigation costs are subject to 

the longstanding, pay-your-own-way tradition the Companies 

describe, see, e.g., Alyeska Pipeline Serv. Co. v. Wilderness 

Soc’y, 421 U.S. 240, 247–63 (1975), the Companies have 

offered no authority for the proposition that the same tradition 

applies to costs incurred during private contractual 

negotiations outside the litigation context. See Pet’rs’ Br. 24–

27.

Second, even granting the Companies their premise, their 

view of bargaining as a means of “vindicat[ing] substantive 
16

legal rights,” id. at 24, misses the mark. The Act grants the 

employer and the union alike the right to good-faith 

bargaining, 29 U.S.C. § 158(d), and a violation of the

right—like any unfair labor practice—supports a remedy

making the wronged party whole, cf. Bill Johnson’s Rests., Inc. 

v. NLRB, 461 U.S. 731, 747 (1983) (“[T]he Board may order

the employer to reimburse the employees whom he had 

wrongfully sued for their attorneys’ fees and other expenses.”). 

Thus, even assuming arguendo that “our legal culture” 

prohibits a party from recovering the costs of “vindicat[ing]” 

substantive rights as a general matter, see Pet’rs’ Br. at 24, 

such a rule would not prohibit the Board from awarding 

bargaining costs for bad-faith conduct during collective 

bargaining.

Third, and finally, the justifications for awarding 

bargaining costs and for awarding litigation costs pursuant to 

the bad-faith exception to the American Rule are not, contrary 

to the Companies’ claim, “essentially the same,” see id. at 26; 

indeed, there are critical differences. The U.S. Supreme Court 

has explained that a litigation-cost award is, in the context of 

the bad-faith exception, a punitive measure—it “vindicate[s] [a 

court’s] authority over a recalcitrant litigant.” Chambers v. 

NASCO, 501 U.S. 32, 53 (1991) (some alterations in original) 

(internal quotation marks omitted). Moreover, “[t]hat the 

award ha[s] a compensatory effect does not” deprive it of its 

punitive purpose. See id. (some alterations in original) 

(internal quotation marks omitted). In contrast, the Board’s 

rationale for awarding bargaining costs is consistent with the 

“thrust of affirmative action” effectuating the Act’s 

purposes—“restor[ing] the economic status quo that would 

have obtained but for the [Companies’] wrongful [acts].” 

Bowman Transp. Co., 424 U.S. at 769 (internal quotation 

marks omitted). And just as the incidental “compensatory 

effect” of a litigation-costs award does not render that award 
17

“remedial,” see Chambers, 501 U.S. at 53 (internal quotation 

marks omitted), neither does the incidental deterrent effect of a 

bargaining-costs award render it “punitive.” Indeed, awards 

that our “legal culture,” see Pet’rs’ Br. 24, plainly treats as 

remedial—such as compensatory damages in a tort suit—often 

have (and are intended to have) a deterrent effect. See, e.g., 1 

Dan B. Dobbs, Paul T. Hayden & Ellen M. Bublick, The Law 

of Torts § 14 (2d ed. updated 2015) (West) (“Courts and 

writers almost always recognize that another aim of tort law is 

to deter certain kinds of conduct by imposing liability when 

that conduct causes harm.”). The same is true of bargaining 

expenses in the labor law context. Although an award of such 

costs might make the Companies think twice before again 

wasting the Union’s time, the primary justification for the 

award is to make the Union whole and “to recreate the 

conditions . . . that would have been had there been no unfair 

labor practice.” Bowman Transp. Co., 424 U.S. at 769 

(internal quotation marks omitted).

Accordingly, we have little trouble concluding that 

awarding bargaining costs in the appropriate case is within the 

Board’s statutory remedial authority under section 10(c) of the 

Act. Because the Companies do not challenge the Board’s 

conclusion that they engaged in “unusually aggravated 

misconduct” that “infected the core of a bargaining process,” 

see Fallbrook, 785 F.3d at 732, 734 (internal quotation marks 

omitted), we enforce the Board’s order requiring the 

Companies to reimburse the Union for its bargaining costs.

For the foregoing reasons, we grant the Companies’ 

petition for review with respect to the litigation-costs remedy 

and enforce the remainder of the Board’s order.

So ordered.