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NLRB revises standard on employers’ duty to bargain

At the end of August, the NLRB issued two full-Board decisions, Wendt Corporation and Tecnocap, LLC, that address the statutory duty of employers to bargain with unions before making changes in terms and conditions of work.

The employer in Wendt had laid off 10 employees temporarily during negotiations for a first collective bargaining agreement. The employer cited its “past practice” of conducting layoffs during economic downturns.

But the NLRB found that these layoffs were “different in kind and degree” than previous layoffs, and therefore didn’t qualify as “past practice.” As a result, the Board found that the employer’s layoffs were unlawful under its 2017 decision in Raytheon Network Centric Systems (2017).

However, the Board went on to overrule Raytheon, which had given employers greater latitude to make unilateral changes affecting a unionized workforce during a contractual hiatus or during negotiations for a first contract.

The Board said that allowing employers to justify discretionary unilateral changes during such time periods as a “past practice” was both inconsistent with the U.S. Supreme Court’s decision in NLRB v. Katz, 369 U.S. 736 (1962) and undermined the pro-bargaining policies of the National Labor Relations Act.

The Board in Wendt also reaffirmed the longstanding principle that an employer may never rely on an asserted past practice of making unilateral changes before employees were represented by a union (when the employer had no duty to bargain) to justify unilateral changes after the workers select a bargaining representative.

Unilateral implementation of shifts

The Tecnocap case involved an employer that unilaterally implemented 11-hour and 12-hour work shifts, when typical shifts were eight hours, while bargaining for a new collective bargaining agreement.

The union opposed the change, but the employer refused to bargain over it.  The employer contended that it had a past practice of similar shift adjustments.

The contract, which had recently lapsed, contained a management rights clause that gave the employer discretion to run its business, but it did not say it survived contract expiration.

The employer argued that the schedule change was required to accommodate the workload and said that the management rights clause allowed its actions after the contract expired.

In Tecnocap, the NLRB overruled a different aspect of Raytheon that was not addressed in Wendt. The Board held that an employer’s past practice of unilateral changes that was developed under a management-rights clause in a collective-bargaining agreement could not authorize unilateral changes made after the agreement expires and while bargaining for a new agreement is under way.

The Board explained that the Raytheon holding harmed the collective-bargaining process in two ways: 1) it forced unions to bargain to regain terms of employment lost to post-expiration unilateral changes, and 2) it discouraged unions from agreeing to management-rights clauses in the first place.

“Our decision today returns to a more faithful application of Supreme Court precedent. By protecting employees who have chosen a union representative from being subject to discretionary unilateral changes in their terms and conditions of employment without bargaining, the policy we announce today better promotes the collective-bargaining process that lies at the core of the National Labor Relations Act,” said Chairman Lauren McFerran.

Takeaway for employers

The latest rulings from the NLRB continue the recent pattern of union support from the Board.

As a result, employers must be prepared to give unions the chance to bargain over business decisions, except in cases where they have detailed documentation of consistent changes of the same degree and kind.