The National Labor Relations Board (NLRB) overturned a 2019 precedent that gave employers more discretion to change job requirements and working conditions without bargaining with a union.
With this change, broad management rights clauses in collective bargaining agreements are likely insufficient for employers to make unilateral workplace changes. The return to the "clear and unmistakable waiver" standard means that employers can only make changes if a union has plainly waived its right to bargain over the issue.
Before the NLRB's September 2019 decision in MV Transportation, the board used a different standard to decide if a collective bargaining agreement allowed certain employer changes to working conditions. The employer had to establish that the contract "unequivocally and specifically express [the employer and union's] mutual intention to permit unilateral action with respect to a particular employment term."
In deciding MV Transportation in 2019, the NLRB replaced this standard with the "contract coverage" test. This aligned the board with the D.C. Circuit Court of Appeals and the First and Seventh Circuits. Under that test, the board took a plain language approach, giving effect to the plain meaning of relevant contractual language. In applying this test, the board did not require the contract to explicitly mention or address the specific employer decision at issue. It permitted employers to rely on clauses providing management with rights to make general changes.
However, in the case of Endurance Environmental Solutions, the NLRB reinstated the "clear and unmistakable waiver" standard. The case involved a dispute regarding Endurance Environmental Solutions' unilateral decision to install cameras in trucks operated by union employees. The union then filed an unfair labor practice charge alleging a violation of the National Labor Relations Act (NLRA).
The board reversed the administrative law judge's application of the "contract coverage" test, opting instead for the "clear and unmistakable waiver" standard. The board concluded that the union contract, which only allowed management to "implement changes to equipment," did not explicitly waive the union's right to bargain over the specific issue of camera installation. The board found that Endurance was required to provide the union notice and an opportunity to bargain over the issue. The board ruled the company's unilateral decision to install the cameras violated the NLRA.
In readopting the "clear and unmistakable waiver" standard, the NLRB stated that this approach "better serves the purposes of the Act" by requiring contracting parties to acknowledge and accommodate the NLRA's "pro-bargaining orientation." This decision places the board at odds once more with several circuit courts.
NLRB Chairman Lauren McFerran issued the decision, joined by members Prouty and Wilcox. The sole GOP member, Kaplan, dissented, describing the decision as "non-binding, nonprecedential dicta."
The Senate failed to reconfirm McFerran for another five-year term just before her term ended on Dec. 16, 2024. Though it is not clear when another sea change may occur, McFerran's failed reconfirmation potentially paves the way for a Republican majority when the incoming presidential administration takes office, which could impact future board decisions.
However, with a return to the "clear and unmistakable" waiver standard, employers will likely face difficulty in relying on previously negotiated, broad management rights clauses when making unilateral changes. Going forward, employers must carefully assess union contracts and closely evaluate whether workplace changes may be subject to mandatory bargaining. Employers should also plan for additional training for relevant managers and decision-makers.
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