Seyfarth Synopsis: On September 10, in a 3-1 decision, the NLRB in MV Transportation, Inc., 368 NLRB No. 66 (Sept. 10, 2019), adopted the "contract coverage" standard in replacement for its previous "clear and unmistakable waiver" standard for determining when a collective bargaining agreement allows an employer to take unilateral action. This decision makes it easier for employers to show that their collective bargaining agreements allows them to make unilateral changes and is consistent with the position the D.C. Circuit has taken for years.
In MV Transportation, Inc., the Board considered whether MV Transportation violated the NLRA by making unilateral changes to various employment policies impacting workers at its Las Vegas, Nevada facility.
Previously, in determining whether an employer's unilateral changes violated the NLRA, the Board applied a "clear and unmistakable waiver" standard. Under this standard, a unilateral change to working conditions was a violation of the NLRA unless the contract specifically allowed the employer to take the action in question. Broad management rights clauses, for example, were not sufficient to allow employers to take unilateral action, as these were found to not specifically address the unilateral action.
Yesterday, in MV Transportation, Inc., the Board rejected the "clear and unmistakable waiver" standard and adopted the "contract coverage" standard established by the D.C. Circuit in NLRB v. Postal Service, 8 F.3d 832, 838 (D.C. Cir. 1993). Under this standard, the Board will examine the plain language of the contract to determine if the employer's actions fall within the employer's authority under the contract. If the actions are "within the compass or scope" of the contract, the change will be found to not violate the NLRA. If the employer's actions, however, are not covered by the contract, the employer will have violated the NLRA, unless it can prove that the union "clearly and unmistakably waived its right to bargain over the change" or that its unilateral action was privileged for some other reason. Notably, the Board gave the example of a contract that broadly grants an employer the right to "implement new rules and policies and to revise existing ones." Under the newly adopted "contract coverage" standard, an employer with this broad language will not violate the NLRA by making changes to its various rules including attendance rules, safety rules, or disciplinary rules—even though these rules are not specifically listed in the contract.
Ultimately, the Board's decision in MV Transportation, Inc. is an overdue acquiescence to the standard that has long been applied by the D.C. Circuit and to a standard that will lead to results that are more aligned with what the parties agreed to be bound to at the bargaining table. Previously, unions were able to take advantage of the Board's "clear and unmistakable waiver" standard by filing unfair labor practice charges based on an employer's unilateral action because even though the contract might have broadly granted the employer the rights to take the unilateral action, under the old standard, unions knew that this broad language would likely be insufficient for the employer to prevail through the Board's processes. To have a shot at prevailing with broad contractual language, the employer under the old standard needed to litigate the case through the Board's processes, before appealing the case to the D.C. Circuit Court or other Circuit Court. Now, Regional offices will likely review the contract based on its plain language and determine whether the unilateral action falls within the rights granted to the employer. The result is that employers will be able to more easily take the unilateral actions that they bargained for at the bargaining table, without as much fear that the NLRB will find their actions to violate the Act.
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