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NLRB Overturns Pre-Discipline Bargaining Obligation For Employers Negotiating A First Union Contract

Last week, the National Labor Relations Board (the “Board”) ruled that an employer is not obligated to bargain with a union before issuing discipline to individual union-represented employees not yet covered by a collective bargaining agreement. 800 River Road Operating Company, LLC d/b/a Care One at New Milford, 369 NLRB No. 109 (June 23, 2020) (Care One).

Thus, Care One overturns Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (2016 (Total Security) and reinstates 80-year precedent as it existed prior to 2016.

Background

The Board long has held that an employer violates the National Labor Relations Act (“NLRA”) when it makes material changes to bargaining unit employees’ terms and conditions of employment without first giving the union representing the affected employees notice and an opportunity to bargain over the changes. NLRB v. Katz, 369 U.S. 736 (1962). This so-called “unilateral change” doctrine applies during the period between certification of a union as collective bargaining representative and ratification of the parties’ initial collective bargaining agreement, such that unilateral material changes to the bargaining unit employees’ “status quo” terms and conditions of employment violate an employers bargaining obligation under Section 8(a)(5).

In 2016, however, a Board majority extended this doctrine when it issued Total Security, holding that an employer’s pre-contract bargaining obligation required an employer to provide a union with notice and an opportunity to bargain about discretionary elements of an existing discipline policy before imposing “serious discipline” – such as a suspension or discharge – to any individual union-represented employees who were not yet covered by a collective bargaining agreement. Under Total Security, an employer’s failure to bargain in these circumstances violated Section of the 8(a)(5) NLRA, even when the employer merely exercised discretion consistent with its preexisting discipline policy or practice, without modifying the policy or practice. The Total Security majority reasoned that this pre-discipline bargaining obligation was consistent with an employer’s bargaining obligations under the unilateral change doctrine in the pre-contract period. Generally, the remedy for such violations include reinstatement and backpay for a disciplined employee.

The Total Security holding was a challenging development for employers in new collective bargaining relationships where the parties had not yet agreed to a collective bargaining agreement. Effectively, the decision prevented employers from exercising managerial discretion to discipline employees for engaging in the most severe types of misconduct for the duration of the parties’ attempts to reach an initial contract – which can take years.

The Care One Case

In Care One at New Milford, the current Board majority overruled an administrative law judge (“ALJ”) decision that an employer rehabilitation and nursing care facility violated Section 8(a)(5) of the Act by applying its preexisting discipline policy to suspend three employees and discharge one employee, without first providing the employees’ union with notice and an opportunity to bargain over the discipline. In overturning Total Security, the Care One majority wrote that Total Security’s imposition of a pre-discipline bargaining obligation “misconstrue[d] the general unilateral change doctrine” and “impose[d] a complicated and burdensome bargaining scheme that is irreconcilable with the general body of law governing statutory bargaining practices.”

Notably, the Board decided to apply Care One retroactively, such that employers may recently have engaged in pre-disciplinary bargaining that would be unnecessary under the new standard. Moving forward, employers may once again lawfully exercise managerial discretion with respect to deciding matters of serious employee discipline consistent with employer policies, without first bargaining with the union.

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If you have any questions about employer bargaining obligations under the NLRA, or any labor relations issues, please feel free to contact one of our experienced labor attorneys, who regularly assist employers with all types of labor law matters.