United States: So Much For Management Rights Clauses — The Board Strikes Again

Seyfarth Synopsis: In Graymont PA, Inc. the Board majority ruled that a unionized employer cannot unilaterally change rules or policies that affect bargaining unit employees even if its collective bargaining agreement contains a broad management rights clause.

In Graymont PA, Inc., 364 NLRB No. 37 (2016), the union had represented a unit of the employer's employees since the 1960's.  The most recent bargaining agreement contained a management rights clause that stated that the employer retained:

the sole and exclusive rights to manage; to direct its employees; . . .  to evaluate performance, . . . to discipline and discharge for just cause, to adopt and enforce rules and regulations and policies and procedures; [and] to set and establish standards of performance for employees . . .

While the agreement was in effect, the employer announced that it was going to implement changes to its work rules, absenteeism policy, and progressive discipline policy.  These rules and policies were not a part of the agreement.  After the employer made the announcement, the union informed it that it wanted to discuss the announced changes. The employer explained to the union that although it had no obligation to bargain over the changes, it was willing to listen to the union.  The employer discussed with the union and made a few revisions to the work rules and absenteeism policy based on the union's comments.  Nevertheless, the Board found that the employer's changes to the work rules, absenteeism policy and progressive discipline policy constituted unlawful changes because the employer did not have the right under the agreement to make these unilateral changes.

The Board noted that for purposes of determining whether a collective bargaining agreement allows an employer to make unilateral changes, it applies the "clear and unmistakable waiver" standard.  Under Graymont PA, Inc., to constitute a clear and unmistakable waiver of a union's right to bargain over changes in policies, procedures and/or work rules, the management rights clause must specifically refer to the types of rules/policies at issue. In other words, a broad management rights clause that provides management with the sole and exclusive right to "manage" and "direct its employees," "evaluate performance," "adopt and enforce rules and regulations and policies and procedures," and "set and establish standards of performance" does not waive the right of the union, for example, to bargain over changes to an attendance rule or a progressive discipline policy. For such a waiver to be enforceable, according to the Board majority, the management rights clause must specifically refer to rules and regulations related to "discipline"  and  "attendance."

This Graymont PA decision creates new restrictions on an employer's ability to rely on a management rights clause to make changes to rules and/or policies without first bargaining with the union. At the same time, it opens the door for unions to file unfair labor practice charges over such changes. In order to evaluate an employer's right to make unilateral changes in rules, regulations, handbooks or policies, every collective bargaining agreement's management rights clause will need to be reviewed to determine how specifically it refers to the changes in question.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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