The US Supreme Court has refused to hear Macy's challenge to a labour board ruling that requires the retailer to compensate dozens of workers it unlawfully dismissed.

The refusal leaves intact a lower court decision upholding the National Labor Relations Board (NLRB) order.

Macy's had sought a Supreme Court ruling to settle a disagreement among federal appeals courts over how far the NLRB's remedial powers extend.

According to a report from Reuters, the NLRB ruled in 2023 that Macy's acted unlawfully when it locked out and dismissed around 60 unionised building engineers in Nevada and California after they ended a strike over stalled contract negotiations.

The board ordered the company to reimburse the workers for any monetary harm resulting from the dismissals and said it would assess whether further remedies were warranted at a later stage.

Macy's was also directed to post notices informing staff of their rights.

The case is part of a wider dispute over an NLRB policy change introduced through a 2022 ruling involving Thryv, a small business marketing software company.

A Democratic Party board majority determined that employers found guilty of illegal conduct must compensate workers for “direct and foreseeable” financial losses — such as credit card fees or out-of-pocket medical expenses — going beyond the previous standard of lost pay and benefits alone.

Macy's is one of many businesses contesting the broadened remedies, arguing they are effectively the same as compensatory damages typically sought through private lawsuits and infringe on the constitutional right to a jury trial.

The Ninth US Circuit Court of Appeals in San Francisco ruled against Macy's, finding that the NLRB has the discretion to award remedies that restore the position that existed before an employer broke the law.

Three other federal appeals courts have taken a different view, finding that Congress intentionally limited the board's authority.

The US Chamber of Commerce and other business lobbying groups submitted briefs in support of Macy's and called on the Supreme Court to take up the matter.

The NLRB currently has a 2-1 Republican majority with two vacant seats.

Reversing existing board precedent requires three votes under longstanding policy.

President Donald Trump has nominated labour lawyer James Macy to fill one vacancy, which could provide the third vote needed to potentially overturn the Thryv ruling and other decisions made by Democratic-era appointees.