NLRB Members Intend to Revisit Applicability of ‘Contract Coverage’ Standard in Unilateral Change Cases
How the NLRB analyzes defenses to unilateral change unfair labor practice charges may be in for a substantial revision.
National Labor Relations Board (NLRB) Chairman John Ring and Member Marvin Kaplan have signaled their interest in reviewing the law in this area. E.I. du Pont de Nemours & Co., 368 NLRB No. 48 (Sept. 4, 2019). In footnote 13 of the decision, they expressed their intention to revisit the applicability of the “contract coverage” defense in a future appropriate unilateral change case.
Under the National Labor Relations Act (NLRA), employers have a duty to bargain in good faith with the union that represents its employees about mandatory subjects of bargaining (e.g., wages, hours, and other terms and conditions of employment). An employer’s unilateral change to a mandatory subject of bargaining without first offering to bargain with the union is a violation of the NLRA, unless the employer has a valid defense, such as the union’s waiver of the right to bargain.
An employer has a difficult burden to establish a waiver defense; it must prove the union clearly and unmistakably waived its right to bargain over the topic. This can be shown through contract language, bargaining history, and/or past practice. An employer must show the parties “unequivocally and specifically express[ed] their mutual intention to permit unilateral employer action with respect to a particular employment term, notwithstanding the statutory duty to bargain that would otherwise apply.” Provena St. Joseph Med. Ctr., 350 NLRB 808, 811 (2011). Under this standard, the Board narrowly construes waivers and has been hesitant to imply waivers not expressly mentioned in the collective bargaining agreement (CBA).
The Board in Provena applied the “clear and unmistakable waiver” standard in analyzing the employer’s defense. Then-Chairman Robert Battista dissented, writing that he would have applied a less restrictive “contract coverage” standard to the case. He explained:
Under this [contract coverage] test where there is a contract clause that is relevant to the dispute, it can reasonably be said that the parties have bargained about the subject and have reached some accord. Thus, there has been no refusal to bargain. In sum, the issue is not whether the union has waived its right to bargain. The issue is whether the union and the employer have bargained concerning the relevant subject matter. If so, the Board and the courts should honor the fruit of that bargaining.
Where the contract coverage defense is asserted in response to a unilateral change allegation, the employer would claim the change was allowed by a clause or clauses in the CBA. If the union disagreed, it would be expected to file a grievance alleging the clause or clauses did not permit the unilateral change and that the employer’s actions violated the CBA. Through the grievance process, an arbitrator would apply normal principles of contract interpretation to decide whether the contract clause or clauses were relevant to the dispute. If they are found relevant, the arbitrator would determine if the employer’s change violated the CBA.
The contract coverage defense has been adopted by some U.S. Courts of Appeal, including the D.C., First, and Seventh Circuits. If the defense is adopted by the NLRB, employers will have an easier burden to defend against unilateral change allegations.