September 25, 2020

Volume X, Number 269

September 25, 2020

Subscribe to Latest Legal News and Analysis

September 24, 2020

Subscribe to Latest Legal News and Analysis

September 23, 2020

Subscribe to Latest Legal News and Analysis

September 22, 2020

Subscribe to Latest Legal News and Analysis

NLRB Clarifies Successor Employer’s Duty to Bargain Over New Employment Terms

On July 27, 2020 the NLRB issued a supplemental decision involving a labor law successor employer, which unilaterally implemented terms and conditions of employment prior to commencing operations. The question presented was whether and to what extent the successor could take further unilateral action, free of the duty to bargain with the union. As discussed below, the Board determined that the applicable standard in such cases is whether the successor’s unilateral action was “reasonably encompassed” by the unilaterally imposed terms.

In a dispute between Tramont Manufacturing, LLC (the “Employer”) and United Electrical, Radio and Machine Workers of America, Local 1103 (the “Union”), the Employer took over diesel engine and parts manufacturing operations from a predecessor employer. As a successor employer, the Employer was not bound by the provisions of the collective bargaining agreement between the Union and the predecessor employer per NLRB v. Burns International. Because the Employer was a Burns successor, it was free to unilaterally implement new terms and conditions of employment, which it did in the form of an employee handbook that included a provision establishing the Employer’s power to and procedure for unilaterally implementing layoffs.

After establishing these new terms and conditions of employment (including the layoff provision), the Employer hired the predecessor employer’s represented employees. Subsequently, the Employer initiated layoffs without first bargaining with the Union. The Board determined that, per the new terms and conditions of employment, the Employer had no obligation to bargain with the Union over the decision to initiate the layoffs. However, the new terms and conditions of employment did not relieve the Employer of its duty to bargain with the Union over the effects of the layoff decision.

To begin its analysis, the Board dispensed with the contract-coverage and clear and unmistakable waiver standards, finding them inapplicable when determining which subjects of mandatory bargaining have been displaced by a Burns successor. The Board determined that the contract-coverage standard—used to determine whether an employer’s unilateral actions are consistent with the terms of a bargained for collective bargaining agreement—is not applicable in the context of a Burns successor, because a union does not agree to the successor employer’s unilaterally implemented terms and conditions of employment. Accordingly, there can be no “contract coverage” because there is no bargained-for contract governing the union-employer relationship.

Likewise, the clear and unmistakable waiver standard—used to determine whether an employer’s unilateral actions are consistent with contractual language, bargaining history, and past practices—is not applicable in the context of a Burns successor, because the union and the successor employer, by definition, have no bargaining history or past practices. Accordingly, the Board determined that a successor employer’s unilaterally implemented employment terms cannot operate as a waiver of a union’s right to bargain over mandatory subjects of bargaining.

Instead, the Board clarified that, in the context of unilaterally imposed terms and conditions of employment, a successor employer is free to take actions that are reasonably encompassed by the unilaterally implemented terms and conditions without first bargaining with the union. However, in the absence of an applicable exception, an employer generally must bargain with the union over the effects of a decision or action, even if the decision or action itself does not require bargaining.

The standard established by the NLRB in this case is similar to the “contract coverage” standard applicable in cases where the terms and conditions have been established in a collective bargaining agreement.  Here, however, the successor has the ability to set initial terms and conditions unilaterally. This gives the successor employer the advantage of using language of its own choosing—language that can “reasonably encompass” anticipated needs to make unilateral business decisions free from the duty to bargain over those decisions.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.National Law Review, Volume X, Number 219

TRENDING LEGAL ANALYSIS


About this Author

Lukas Moffett Employment Lawyer Hunton AK
Associate

As an associate in the firm’s labor and employment group, Lukas assists clients in employment litigation and general compliance matters.

Lukas focuses on litigation matters involving employment discrimination and the employer/employee covenant relationship. Lukas also helps employers comply with anti-discrimination laws by advising on employee termination and consultation procedures. In addition, he is involved in the firm’s pro bono efforts.

Relevant Experience

Advises employers regarding...

214 979 2908
Ronald Meisburg Special Counsel Washington DC labor management relations law and policy
Special Counsel

Ronald’s practice focuses on labor management relations law and policy.

Ronald is a former National Labor Relations Board member and general counsel.

Prior to joining the firm, Ronald co-chaired the labor-management relations practice at an international law firm. Over the course of his 40-year career, which began with the Office of the Solicitor of the US Department of Labor, Ronald has handled matters arising under federal labor and employment law in complex business transactions before federal agencies and courts.

Ronald joined the NLRB in 2004, following a recess appointment by President George W. Bush. Two years later, President Bush appointed Ronald to a four-year term as NLRB General Counsel, a position independent from the Board. Serving under the Bush and Obama Administrations, Ronald was the chief prosecutor under the National Labor Relations Act and chief administrator of the agency’s  regional offices and regional and headquarters staff, including execution of the agency’s congressionally appropriated budget.

202-955-1539