United States: NLRB Reaffirms Alan Ritchey Doctrine With New Make-Whole Twist

Seyfarth Synopsis: The Board reaffirmed, prospectively, the Alan Ritchey doctrine requiring employers to bargain over discretionary discipline issued to newly organized employees pre-first contract and mandated prospective make-whole relief including reinstatement and back pay for future violations.

The Board in Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (Aug. 26, 2016) reaffirmed its prior decision in Alan Ritchey Inc., 359 NLRB No. 40 (Dec. 14, 2012), requiring employers to bargain over discretionary discipline issued to newly organized employees prior to the execution of a first contract or a separate side letter addressing discipline. Alan Ritchey was previously invalidated by the Supreme Court's decision in NLRB v. Noel Canning.

Considering the issue de novo, the three-member majority led by Chairman Pearce, who also served as Chairman when Alan Ritchey was issued, reiterated that employers must provide notice and an opportunity to bargain to the union before imposing discipline (with limited exceptions for minor discipline and exigent circumstances). We previously covered the obligations under Alan Ritchey here.

The majority emphasized the importance of protecting employees' rights during the pre-first contract phase of the bargaining relationship. Allowing the employer to exercise discretion in imposing discipline during this time would, according to the majority, "demonstrate to employees that the Act and the Board's processes implementing it are ineffectual, and would render the union...impotent." Total Security, 364 NLRB No. 106, slip op. at 10.

The Board found that the discharges in Total Security met the standard established in Alan Ritchey for pre-imposition bargaining and that no such bargaining took place. The Board declined, however, to order retroactive enforcement of its decision, holding that such enforcement would constitute manifest injustice. Id. at 12.

The majority in Total Security also set forth, for the first time, the remedies available for future Alan Ritchey violations. In addition to standard remedial relief, i.e. cease-and-desist orders, a requirement to bargain, and notice-posting, the Board opined that make-whole remedial relief, including reinstatement and back pay, would also be appropriate. Id. Where post-violation the parties did bargain and later reached agreement on discipline, the majority indicated the back pay remedy generally would run from the date of unilateral discipline until the date of the agreement to the extent the agreement did not provide for such back pay. An agreement providing less than full lost back pay and purporting to settle the pre-discipline bargaining violation would be subject to review under the Board's standards for non-Board settlement agreements if challenged. In the event the parties, post-violation, bargained in good faith to impasse over the discipline, back pay would run until the date of impasse. Id. at 13.

Such make-whole relief would, however, be subject to an employer's affirmative defense that the discipline was "for cause" under the Act. The majority's new "for cause" defense places the burden on the employer, during the compliance phase of the case, to show "(1) the employee engaged in misconduct, and (2) the misconduct was the reason for the suspension or discharge." Id. at 15.

The burden of proof then shifts to the General Counsel and the charging party to challenge the employer's showing by demonstrating, for example, disparate discipline for the same behavior or other reasons for leniency. The employer may rebut such evidence by proving that the employee would have received the same discipline regardless. The ultimate burden of persuasion remains, at all times, with the employer.

In a 25 page dissent longer than the decision itself, Member Miscimarra asserted the majority took a "wrecking ball to eight decades of NLRA case law." He not only addressed how the majority erred in reaffirming Alan Ritchey, but he also criticized the majority's creation of the affirmative defense. Member Miscimarra argued that Section 10(c) of the Act requires the General Counsel to demonstrate the absence of cause in order to find a violation rather than placing the burden on the employer to show cause in order to avoid liability. Moreover, Member Miscimarra asserted that that cause issue must be addressed as part of the liability phase of the proceedings as opposed to the remedial phase.

The reaffirmation of Alan Ritchey is no surprise, although the provision of a back pay remedy and the new employer burden during the compliance phase to prove a "for cause" defense is. Given the complaint against the employer here was dismissed as the ruling was prospective in nature, it likely will be some time before this new rule is actually appealed to the courts.

Moving forward, employers negotiating first contracts risk an unfair labor practice finding if they do not comply fully with Alan Ritchey's bargaining requirements for any discipline that could even arguably be seen as discretionary.

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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