Labor Board Reduces Standard for Unionized Employers to Update Work Terms


Lisa Nagele-Piazza, J.D., SHRM-SCP By Lisa Nagele-Piazza, J.D., SHRM-SCP September 12, 2019
Labor Board Reduces Standard for Unionized Employers to Update Work Terms

The National Labor Relations Board (NLRB) eased the standard for determining whether employers in a unionized workplace can make certain changes to workers' terms and conditions of employment without requiring additional bargaining with the union.

The decision fashions a new, business-friendly standard for determining when an employer's actions taken in reliance on the provisions of a collective bargaining agreement (CBA) constitute a "unilateral change" in violation of the National Labor Relations Act (NLRA), explained Jonathan Turner, who is a partner at Mitchell Silberberg & Knupp in Los Angeles.

The NLRB adopted the "contract coverage" standard and abandoned the stricter "clear and unmistakable waiver" standard that has also been rejected by several federal appeals courts—including the U.S. Court of Appeals for the District of Columbia Circuit, which has the authority to review NLRB rulings.

The issue "has repeatedly sown division among the members of the National Labor Relations Board and between the board and reviewing courts of appeals," according to the decision.

Under the old standard, unless the CBA specifically referred to the type of employer decision at issue or mentioned the kind of factual situation at hand, the employer could not make a change without bargaining with the union, said Jon Klinghoffer, an attorney with Goldberg Kohn in Chicago.

Now, the board will examine the CBA's plain language and determine whether the employer's action is within the scope of the contractual language granting the employer the right to act on its own. If so, the employer will not have violated the act even if the employer's unilateral change was not specifically mentioned in the CBA, Klinghoffer noted. "In practice, this change will allow employers to rely on broadly written management-rights clauses in support of their unilateral changes to certain terms and conditions of employment."

Contract Language Is Key

Under the new standard, the board will first determine if the contract provision the employer relied on covers the employer's action challenged by the union. "Where contract language covers the act in question, the agreement will have authorized the employer to make the disputed change unilaterally, and the employer will not have violated [the NLRA]," the board said. 

[SHRM members-only HR Q&A:  What is the function of the National Labor Relations Act (NLRA)?]

However, if there are no provisions in the labor contract that cover a disputed unilateral change, the board will consider whether the union nevertheless waived its right to bargain over the change. In making this determination, the board will continue to apply the clear and unmistakable waiver analysis "to determine whether some combination of contractual language, bargaining history and past practice establishes that the union waived its right to bargain regarding a challenged unilateral change," the decision said.

"The practical effect of the board's decision here is that it removes from the equation the various factual arguments often made by unions and accepted by the board that, if an action taken by the employer was not specifically enumerated in the CBA, the employer could not undertake that action without first bargaining with the union," Turner said. As the board explained, the clear and unmistakable waiver standard imposed a nearly impossible standard on employers—one that effectively required employers to engage in "perpetual bargaining" over contractual issues thought to have been resolved already under the parties' labor contract, Turner noted.

The prior standard "undermined the very policy objectives the act is intended to further—to encourage the process of collective bargaining, and through that process, attain a labor contract that locks in and fixes the parties' respective rights and obligations during the term of the contract," he added.

Practical Implications

The NLRB's decision should help employers understand what standard to apply when analyzing their agreements, said Paloma Ahmadi, an attorney with Haynes and Boone in San Antonio, Texas. "However, this is not carte blanche to change terms and conditions of employment for unionized workers, and companies need to read their CBAs carefully to see whether any proposed action is within the grant of rights.

"Also be aware of whether your interpretation of that grant of rights differs from the union's interpretation," she added. "To the extent that your existing CBA doesn't give you the management rights you want or need to respond to commercial pressures or industry realities, such as tightening labor markets, work through bargaining to get language that better reflects industry realities and commercial needs."

An employer with a unionized workforce may still want to include the union in discussions about implementing changes to employees' terms and conditions of employment to avoid operational disruptions, Klinghoffer said. "When the rubber meets the road, however, if the respective collective bargaining agreement has a broadly written management-rights clause or otherwise can be interpreted to allow for the employer's unilateral change, the employer will have a much easier time defeating [a legal challenge under the NLRA] than under the previous clear and unmistakable waiver standard."

More Business-Friendly Decisions

The ruling fits squarely within the continuing trend of employer-friendly NLRB decisions, Klinghoffer noted, including two other decisions issued this week that eased employers' ability to keep union organizers off their property and reversed an Obama-era position on the appropriateness of micro-bargaining units.

"As with other board decisions that have been issued over the term of this current administration, the board's decision in this case is in keeping with the administration's business-friendly environment," Turner said. "We can expect to see other cases before the board, which likely will reverse prior board law established during the past administration."

The case is M.V. Transportation Inc. (28-CA-173726; 368 NLRB No. 66).


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