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NLRB General Counsel Issues Memorandum Summarizing Bargaining Obligations During Emergency Situations (US)

For those employers whose employees are represented by labor unions, the extraordinary circumstances brought about by the COVID-19 pandemic have presented unique complications not shared by their employer counterparts whose operations are union-free.  Under the National Labor Relations Act (NLRA), an employer is obligated to bargain with its employees’ exclusive bargaining representatives concerning mandatory subjects of collective bargaining.  These include, among other things, wages, hours of work, furloughs, and layoffs.  With this obligation to bargain also comes a prohibition on taking unilateral action – that is, making changes to mandatory subjects of bargaining – without first reaching agreement with the employees’ representative, or reaching an impasse in negotiations.  To facilitate those negotiations, unions are entitled under the NLRA to request that employers provide information relevant to any proposed changes in employees’ terms or conditions of employment, which can slow down the bargaining process.

But we are in strange times, unlike any that have existed since the NLRA became law in 1935.  Given the existential threat posed to employers by the COVID-19 pandemic, particularly those impacted by government stay-at-home orders and other orders prohibiting certain industries from serving the public (restaurants, movie theatres, etc.), it is not exaggeration to say that employers must make immediate, often momentous decisions impacting not only their business, but their employees.

How then, if an employer must take immediate action, in some cases, to survive, can it satisfy its obligation under the NLRA to bargain with its employees’ union, particularly if doing so would impede its very objective of ensuring the survival of the business?  Is there any exception to the duty to bargain or refrain from making unilateral changes during the sort of emergency in which we now find ourselves?

On March 27, 2020, the General Counsel of the National Labor Relations Board (NLRB) issued a memorandum (GC 20-04) to the NLRB’s network of field offices, but intended to advise the public, discussing prior NLRB decisions involving the duty to bargain during emergency situations.   The memorandum summarizes cases falling in two categories: those involving public emergency situations, and those involving emergencies particular to the employer.

The public emergency cases involve situations where unionized employers took unilateral action following natural disasters such as hurricanes and following the events of September 11, 2001.  In some of these cases, the employer’s action was found not to have violated the NLRA because of “economic exigencies” resulting from “extraordinary events which are an unforeseen occurrence, having a major economic effect requiring the company to take immediate action.”  But in some cases, notwithstanding the emergency, the employer was found to have violated the NLRA by failing to notify the union of the changes and to offer to bargain over them, even on an expedited basis.  Similar outcomes occurred in the cases summarized in the memorandum involving employer-specific emergencies, which also suggest that even when confronted with an  emergent situation, employers will need to notify and offer to bargain with unions in order to avoid unfair labor practice findings.

Those employers with unionized workforces whose business is impacted by the current COVID-19 crisis, and those who have already taken unilateral action in response thereto, should carefully evaluate the cases summarized in the General Counsel’s memorandum.

© Copyright 2020 Squire Patton Boggs (US) LLP

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About this Author

Daniel B. Pasternak, Squire Patton Boggs, Phoenix, Labor Litigation Layer
Partner

Dan Pasternak focuses his practice on litigating labor and employment claims, representing management in traditional labor relations matters, and working with employers to develop and enforce business-sensible policies and practices to effectively manage their human resources.

Dan represents employers before federal and state courts and administrative agencies, and in arbitration and mediation proceedings, in employment matters arising under the array of federal and state employment laws, including discrimination, harassment, retaliation,...

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