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NLRB Adopts New Standard For Unilateral Change Allegations

Volume: 18 | Issue: 21
November 19, 2019

The National Labor Relations Board (NLRB or Board) recently adopted the "contract coverage" standard for determining whether a unionized employer's unilateral change in a term or condition of employment violates the National Labor Relations Act (NLRA or Act). The Board abandoned the more onerous "clear and unmistakable waiver" standard, which has been rejected by several federal courts of appeals.

A unilateral change allegation accuses an employer of taking an action without bargaining with the union. An employer violates the Act if it makes a material, substantial, and significant change regarding a mandatory subject of bargaining without first providing the union notice and a meaningful opportunity to bargain about the change to agreement or impasse, absent a valid defense.

For many years the Board applied a "clear and unmistakable waiver" standard to evaluate unilateral change allegations. Under this standard, an employer will be found to have violated the Act unless a provision of the collective-bargaining agreement "specifically refers to the type of employer decision" at issue "or mentions the kind of factual situation" the case presents. In MV Transportation, Inc., the Board decided to abandon the "clear and unmistakable waiver" standard and to adopt the "contract coverage" standard as "more consistent with the purposes of the Act."

Under the contract coverage standard, the Board "will examine the plain language of the collective-bargaining agreement to determine whether action taken by an employer was within the compass or scope of contractual language granting the employer the right to act unilaterally." The Board will honor the parties' agreement by applying ordinary principles of contract interpretation. As such, in each case, the Board "will be governed by the plain terms of the agreement."

This decision is great news for employers. In adopting the contract coverage standard, the Board has finally recognized that parties cannot anticipate or address each and every one of the myriad of potential fact situations that might arise under their labor contract. The new standard gives effect to the intended and expected consequences of contract provisions and eliminates the unrealistic level of specificity required under the "clear and unmistakable waiver" standard. However, like all Board precedent, it is subject to partisan attacks and possible reversal, especially when there is a change in the Administration. Thus, prudent employers will continue to seek broad management rights language in their labor contracts that contains detailed examples of such rights.

KZA Employer Report articles are for general information only; they are not intended and should not be construed to be legal advice. Reading or replying to such articles does not establish an attorney-client relationship. In addition, because the subject matters and applicable laws discussed in Employer Report articles are often in a state of change and not always applicable to every type of business entity or organization, readers should consult with counsel before making decisions based on the same.