Legal Updates

NLRB Returns To Previous Standard On Waivers Of Union Bargaining Rights

In a decision last December, the National Labor Relations Board (the “Board” or “NLRB”) announced its return to a legal standard previously applied by the Board for more than 70 years in deciding whether an employer has unlawfully changed terms and conditions of employment for unionized workers without giving their union an opportunity to bargain over the change. A 2019 Board decision had adopted a more lenient standard that made it easier for employers to make unilateral changes without having to bargain with a union.

In announcing the Board’s return to the previous “clear and unmistakable waiver” standard, then-Chairman Lauren McFerran stated that the decision was consistent with other Board and court precedents and best served the overall pro-collective bargaining goals of the National Labor Relations Act (“NLRA”).

Background

From 1949 until 2019, the NLRB consistently held that an employer making a unilateral change to workplace terms and conditions during the term of a CBA was required to prove that the union had given a “clear and unmistakable waiver” of its right to bargain over the particular issue involved.

In 2019, the Trump-era Board changed course significantly. In MV Transportation, Inc., the NLRB adopted a new, employer-friendly “contract coverage” standard. Under this standard, “ordinary principles of contract interpretation” determine whether an employer’s unilateral change is “within the compass or scope” of any CBA provision authorizing unilateral action (most typically, a management rights clause). If the action is found to be “covered” by such a provision in the CBA, then the employer has not violated Section 8(a)(5) of the NLRA. Notably, this standard allows for unilateral actions to be “covered” by a union contract even if the language of the contract does not specifically mention the employer action at issue.

A Return To The Old Standard: Endurance Environmental Solutions

In Endurance, the union and the employer, a trash hauling company, were parties to a CBA that included a management-rights clause allowing the employer to “implement changes in equipment,” among other actions. When the employer decided to install cameras in its fleet of 400 trucks, the union protested, citing the employer’s failure to provide notice and an opportunity to bargain over the decision.
The employer maintained that it was not obligated to bargain over the decision, and the union filed an unfair labor practice charge. While the Regional Director initially dismissed the portions of the charge relating to the unilateral change, the NLRB’s Acting General Counsel sustained the union’s appeal of that dismissal and ordered the Regional Director to issue a complaint regarding the dismissed portion of the charge.

After a hearing on the amended complaint, the administrative law judge (“ALJ”) found that while the employer’s decision to install cameras was a mandatory subject of bargaining, under the contract coverage test promulgated by MV Transportation, the decision was “covered” by the language in the management-rights clause allowing the employer to “implement changes in equipment” without bargaining. The ALJ determined that trucks are “equipment” and, therefore, that adding cameras to trucks equates to “implementing changes in equipment.” The ALJ found that by agreeing to the management-rights clause, the union had relinquished the right to bargain over the decision or its effects. The union appealed the ALJ’s decision to the Board.

After a lengthy analysis of the duty to bargain and the development of the clear and unmistakable waiver standard, the Board announced its decision to overrule MV Transportation, which it believed to be based “on a series of erroneous assumptions.” The Board then restored the “clear and unmistakable waiver” standard, stating that it was “appropriate to hold an employer seeking to establish, as an affirmative defense to an allegation of unlawful unilateral action or refusal to bargain, that a union waived its statutory right to bargain, to the same standard as we hold a party seeking to establish any other affirmative defense to an alleged unfair labor practice.”

In support of its decision, the NLRB stated that no court had ever adequately explained why management-rights clauses should be subjected to a lower level of scrutiny than contractual waivers of other rights. The Board also pointed out that the standard it was readopting reinforces the NLRA’s pro-bargaining goals by encouraging parties to clearly state what they are and are not waiving in the CBA itself.

Having decided to revive the “clear and unmistakable waiver” standard, the Board turned to the question of whether to apply the standard retroactively to the employer in Endurance. Noting that this same standard had been in effect when the parties negotiated their CBA, the Board concluded that applying the Endurance decision retroactively would not work a “manifest injustice.”

The Board then found that the employer had unlawfully failed to provide the union with notice and an opportunity to bargain regarding the decision to install cameras. Because the CBA made no mention of video or audio surveillance of employees, the Board held that it lacked the specificity required to meet the “clear and unmistakable waiver” standard.

Takeaways For Employers

The Board’s revival of the union-friendly “clear and unmistakable waiver” standard will make it more difficult for unionized employers to make changes to terms and conditions of employment without first providing the union with notice and an opportunity to bargain. To maximize their flexibility, employers should consider prioritizing the adoption of a detailed and specific management-rights clause as part of collective bargaining negotiations.

Additionally, employers should keep a clear record of collective bargaining negotiations. In the Endurance decision, the Board noted that a “clear and unmistakable” waiver of bargaining rights can be evidenced by bargaining history, but only if the evidence shows that the specific issue was “fully discussed and consciously explored” during negotiations.

Finally, as the Endurance decision brings back a narrower aperture for unionized employers seeking to make unilateral changes, employers should seek guidance from experienced labor counsel before taking such action.

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If you have questions about this decision, please don’t hesitate to reach out to Schwartz Hannum PC's experienced labor counsel.