Jan 21 (Reuters) - A U.S. appeals court on Tuesday

rejected Macy's claims that the National Labor Relations

Board lacked the power to order the retailer to reimburse

workers who were locked out after a strike, creating a circuit

split.

The San Francisco-based 9th U.S. Circuit Court of Appeals in

a 2-1 ruling said that because monetary remedies in NLRB cases

serve the broader public purpose of promoting industrial peace,

the agency's recent expansion of those remedies was within its

powers.

The board first said it would begin ordering employers to

reimburse workers for "direct and foreseeable" monetary harms

stemming from their illegal conduct, such as credit card fees or

out-of-pocket medical expenses, in the 2022 case Thryv Inc.

Macy's is one of more than a dozen businesses that has

challenged the expanded remedies, claiming that they are no

different than the compensatory damages typically sought in

private lawsuits, which the NLRB is barred from awarding.

But the 9th Circuit majority on Tuesday said the NLRB has

discretion to award remedies that vindicate the public interest

by restoring the status quo that existed before an employer

broke the law.

"The fact that these proceedings may operate to confer an

incidental benefit on private persons does not detract from this

public purpose," wrote Federal Circuit Judge Evan Wallach, who

sat on the panel by designation.

Wallach was joined by Circuit Judge Jacqueline Nguyen. Both

judges are appointees of Democratic former President Barack

Obama.

Macy's and lawyers for the union did not immediately respond

to requests for comment. An NLRB spokesman declined to comment.

The ruling creates a split with the Philadelphia-based 3rd

Circuit, which ruled last month in a case involving Starbucks ( SBUX )

that the expanded remedies exceeded the NLRB's powers. The New

Orleans-based 5th Circuit last May threw out the Thryv ruling,

but it did so on the merits of the board's decision in that case

and did not address the broader issue of remedies.

And the 10th Circuit in Denver on Tuesday heard oral

arguments in a movie producer's challenge to the Thryv standard.

It was not clear how the panel was leaning, but one judge

suggested that the court lacked jurisdiction over the issue

because the producer had not raised its arguments before the

board.

President Donald Trump's appointees to the NLRB are widely

expected to overturn the Thryv ruling and a series of other

Biden-era board decisions that favored workers and unions. The

board currently has a 2-1 Democratic majority and two vacancies,

meaning Trump could move quickly to cement Republican control.

Macy's was appealing an NLRB decision that said it

unlawfully locked out a group of building engineers in 2020

after they ended a strike over stalled union contract

negotiations, and required the company to post notices informing

workers of their rights.

The board also ordered Macy's to reimburse workers for any

monetary harms caused by the lockout, but said it would

determine at a later time whether any further remedies were

appropriate.

In dissent on Tuesday, Circuit Judge Patrick Bumatay

criticized the board for what he called a "power grab," and said

the expanded remedies violated Macy's constitutional right to a

jury trial.

"Now everything is on the table under the Board's newly

claimed authority - the only limit is the Board's imagination,"

wrote Bumatay, who was appointed by Trump during his first term.

The case is Macy's Inc v. NLRB, 9th U.S. Circuit Court of

Appeals, No. 23-150.

For the NLRB: Usha Dheenan and Barbara Sheehy

For the union: David Rosenfeld of Weinberg, Roger &

Rosenfeld

For Macy's: Laura Pierson-Scheinberg of Jackson Lewis

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