# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 9, 2016 Decided June 10, 2016

No. 12

- 1071

C AMELOT T ERRACE
, I NC

. AND G ALESBURG T ERRACE
, I NC
., P ETITIONERS

v.

N ATIONAL L ABOR R ELATIONS B OARD
, R ESPONDENT

S ERVICE E MPLOYEES I NTERNATIONAL U NION
, H EALTHCARE I LLINOIS I NDIANA ( PREVIOUSLY SEIU L OCAL 4),
I NTERVENOR

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 General2

Counsel, and Usha Dheehan , Supervisory Attorney

, were with
her on brief

.

Margaret Angelucci was on brief for the intervenor

, Service Employees International Union, Healthcare Ill inois Indiana (previously SEIU Local 4) in support of the respondent.

Before: H ENDERSON and R OGERS
, Circuit Judges , and
W ILLIAMS
, Senior Circuit Judge

.

Opinion for the Court filed by Circuit Judge H ENDERSON

.

K AREN L E C RAFT H ENDERSON
, Circuit Judge : Came lot 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 Bo ard 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 Camel ot 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’ condu ct and is improperly punitive.3

We agree that the Board lacks authority to require the reimbursement of litigation costs incurred during Board proceedings, s ee 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 co nclude 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 Boar d’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 Compan ies

— 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 requir ements 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 a nd 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 c onduct 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 imp osition 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 de clared 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 litigati on 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 Bo ard 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 circumstanc e. 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. Ci r. 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
auth ority” 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 i nvolved 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 inappropria te 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” a nd “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 u nfair labor practice.” Pet’rs’ Br. 12. For the reasons discussed in HTH Corp. v. NLRB , we agree. T here, as here, the Board “claimed that, like a federal court, it has inherent authority to control and maintain the integrity of its own proceedings throug h 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. S ee id. at *11. Recognizing that “[a]s a creature of7

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 expl icitly 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 wr ong 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

t he 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. 1 998)).

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. Barga ining 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 Un ion would have incurred at least some of those costs had the Comp anies 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.
NLR B , 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 objec ting” (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 excep tions 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 Expres s , 813 F.3d at 372, but nonetheless charged that the bargaining

- costs remedy violated “established Board law and policy,” Resp’t s’ Exceptions to the A.L.J. ’s Decision 2 (Mar. 10, 2010) . Similarly, although their supporting brief was “no paragon of precisi on or detail,” it included several statements “adequate to ap prise 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. , 66 3 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’t s’ Br. in Supp. of Exceptions to t he 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.

a t 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 wi th 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 of10

the basis for the [Companies’] objection,” see Alwin , 192 F.3d at 143, and we may consider the merits of the challenge.

Th e 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 fait h, 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 th e 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 C orp. , 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 inconceiv able 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 incur red in connection with those planned11

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)). T hus, 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 a s 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 not ed the u nion bore the burden of establishing a causal12

2.

Because the Companies forfeited their ex tent

- of

- the

bargaining

- 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 co sts. 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 requiri ng [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 typica l 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 unfa ir labor practice,” according to the U nited 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 rec reate 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 applica tion 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 b ecause 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 aggra vated misconduct,’ the Board may order an14

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 th e 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 th e 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 m oney 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 co nventional 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 mis applied 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 condu ct”); 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 Comp any 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 awa rd bargaining costs generally.15

with [a] Union[] that [has] been economically weakened by the [employer’s] misconduct.”). By instead allowing the harmed

p arty 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

- cost s 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 lega l 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
Amer ican 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, s ee, 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 litigat ion context. See Pet’rs’ Br. 24

– 27.

Second , even granting the Companies their premise, their view of bargaining as a means of “vindicat[ing] substantive16

legal rights,” id. at 24, misses the mark. T he Act g rants 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, c f. 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 a s 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 lit igation 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 aw ard 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). Moreo ver, “ [ t ] hat the award ha[s] a compensatory effect does not” deprive it of its punitive purpose. See id. ( some alteration s in original) (internal quotation marks omitted). In contrast, the Board’s rationale for awarding bargaining costs is consistent wit h 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 award17

“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 o f 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 th e 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
mis conduct” that “infected the core of a bargaining process,”
see Fallbrook , 78 5 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 litigati on

- costs remedy
and enforce the remainder of the Board’s order.

So ordered.