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The Labor Board Gives Unionized Employers More Flexibility Managing Their Workforce

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It is well established that, in general, employers, whose employees are represented by a union, commit unfair labor practices by making any material, substantial and significant change regarding most terms and conditions of employment affecting the unionized employees, without first providing the union notice and a meaningful opportunity to bargain about the change to agreement or impasse. [1]

On September 10, 2019, overruling established legal precedent, the National Labor Relations Board (NLRB or Board) adopted a new standard to determine whether an employer is privileged, under the language of a collective bargaining agreement (union contract), to adopt and implement changes in the terms and conditions of employment affecting its union-represented employees, without bargaining with the union.

Under the new standard adopted by the Board, referred to as the contract coverage test, effect will be given to the plain meaning of contractual language “applying ordinary principles of contract interpretation.” Under this analysis, the Board will examine the union contract, typically the contractual management rights clauses, to determine if the employer’s unilateral change in question falls within the “compass or scope of contract language that grants the employer the right to act unilaterally.” Accordingly and most significantly, the Board will no longer require that the union contract “specifically mention, refer to or address the employer decision  at issue.”

It is only if the Board determines that the union contract does not cover the disputed unilateral change, that the Board will require the employer to show that the union had waived its right to bargain over the change, in order to dismiss allegations that by making the change the employer had committed unfair labor practices. [2]

[1] NLRB v. Katz, 369 U.S. 736 (1962).

[2] MV Transportation, Inc. 368 NLRB No. 66 (Sept. 10, 2019).