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NLRB Deferral Rules to Arbitration

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Many employers are unsure about the NLRB’s deferral to arbitration rules. For nearly 60 years the National Labor Relations Board (NLRB) had applied the “Spielberg/Olin” standard in cases involving whether to defer to a decision reached through a grievance/arbitration procedure in a union contract. Under this standard, the NLRB would defer IF the following factors were present:

  1. all parties had agreed to be bound by the decision;
  2. the proceeding appear to be fair and regular;
  3. the arbitrator or grievance committee had been presented generally with the relevant facts to consider the unfair labor practice issue; and
  4. the award is not clearly repugnant to the NLRA.

However, in Babcock & Wilcox Construction Co., Inc., 361  NLRB # 132 (December 15, 2014) the NLRB announced a new standard for deferral . This new standard, which makes deferral to an arbitration decision less likely (and which is applied only prospectively), requires that the following factors  be met:

  1. the arbitrator must have been EXPLICITLY  authorized to decide the unfair labor practice issue;
  2. the arbitrator was presented with AND considered the statutory issue, or was prevented from doing so by the party opposing deferral; and
  3. NLRB law reasonably permits the award.

Employers should keep in mind these regulations when negotiating arbitration provisions for union contracts.