A single skipped step left the firm paying far more than it expected
A San Francisco cleaning company must pay fired workers for job-hunting costs after a federal appeals court upheld a labor board order against it.
On August 21, 2026, the US Court of Appeals for the DC Circuit denied Preferred Building Services' (Preferred) petition for review and enforced the National Labor Relations Board's (Board) order in full.
The dispute dates to 2014. Preferred cleaned several San Francisco office buildings through a subcontractor, Ortiz Janitorial Services (Ortiz). Frustrated over what they described as low pay, poor conditions, and sexual harassment, workers turned to a union, Service Employees International Union Local 87. They then held informational pickets outside the buildings. Their signs named Preferred and made clear they were not calling a strike or a boycott.
The employers fired several of the picketers. The Board found that Preferred and Ortiz, operating as joint employers, discharged the workers in retaliation for protected activity, in violation of the National Labor Relations Act. Because the two firms counted as joint employers, the lead contractor shared responsibility for the subcontractor's conduct. According to the decision, the subcontractor's founder demanded that two workers produce papers proving they were authorized to work in the United States, and warned others they would lose work over the picketing.
Preferred challenged the findings. It argued the pickets were unlawful "secondary" activity - pressure aimed at neutral building tenants - and that a judge had wrongly kept out its evidence. The court disagreed on both counts. The Board had taken Preferred's proffered evidence as true, including a later protest where demonstrators allegedly pushed into a lobby, and still found no unlawful purpose. The court also backed the Board's finding that the pickets were not a bid to force union recognition.
The expensive part is the remedy. The Board ordered the firms to compensate the workers for "any other direct or foreseeable pecuniary harms," including "reasonable search-for-work and interim employment expenses," on top of reinstatement and back pay. That broadened make-whole standard traces to the Board's 2022 Thryv ruling.
Preferred tried to fight the remedy but lost on procedure: it never properly raised the objection before the Board. Under the Act, courts will not hear objections a party did not press to the agency first.
For HR and labor teams, the case shows that informal worker protests can be protected, that retaliation carries growing financial exposure, and that an objection not raised before the agency cannot be revived on appeal.
