NLRB Approves Unilateral Benefits Changes Consistent with Past Practice
In a 3-1 decision, the National Labor Relations Board (“NLRB” or “Board”) ruled that E.I. DuPont De Nemours and Company (“DuPont”) did not violate the National Labor Relations Act ( “Act”) by implementing unilateral changes to employee benefits without advance notice because the changes were consistent with annual past practice. (Decision can be found here.)
For many years and across successive collective bargaining agreements, DuPont announced benefit plan changes in the fall and implemented them on January 1 without union objection. However, in 2004 and 2005, DuPont made unilateral changes following contract expiration and in response, the United Steelworkers local union filed unfair labor practice charges, alleging that DuPont unlawfully refused to bargain with the Union regarding the changes to the union members’ terms and conditions of employment. In 2010, the NLRB determined that DuPont’s unilateral changes violated Section 8(a)(5) of the Act because the reservation of rights provision waiving the union’s right to demand bargaining did not survive contract expiration. DuPont appealed the Board’s decision to the D.C. Circuit Court of Appeals.
On appeal, the D.C. Circuit ruled that the NLRB departed without reasonable justification from its own precedent regarding past practice, and remanded the case to the NLRB for further proceedings.
On remand in 2016, the NLRB affirmed its prior findings, which DuPont again appealed. While the case was pending before the D.C. Circuit for a second time, the NLRB issued the Raytheon decision, which held that employers do not have to bargain over changes to employment terms so long as the changes are consistent with past practice. Critically, the Raytheon decision expressly overruled the majority’s holding in DuPont 2016 and the precedent upon which it relied.
The Board then returned to the instant matter. Applying Raytheon, the majority, consisting of Chairman John Ring and Members Bill Emanuel and Marvin Kaplan, held that DuPont’s changes to the unit employees’ benefits “were consistent with a long-standing past practice of annual changes established over several years of the parties’ collective bargaining relationship.” Because the changes did not materially vary in kind or degree from prior changes, the employer was merely maintaining the status quo expressed in its past practice when the collective bargaining agreement was in effect. Accordingly, the employer did not violate the Act by implementing changes without providing the union with advance notice and the opportunity for bargaining. Member Lauren McFerran dissented only on procedural grounds, arguing that the NLRB lacked jurisdiction, as the case was still pending before the D.C. Circuit, and that the NLRB wrongfully deprived the parties of administrative due process by failing to provide notice.
The Board’s decision affirms an employer’s right to make unilateral changes so long as those changes are similar in kind and degree to an established past practice consisting of comparable unilateral actions. Employers considering making such unilateral changes would do well to consult with competent counsel beforehand to avoid an unfair labor practice charge.