The National Labor Relations Board (NLRB) issued two 3-1 decisions this week, continuing a string of rulings favoring employers over unions or workers.

Details on the decisions follow. 

September 10: The NLRB abandons its long-standing “clear and unmistakable waiver” standard and adopt the contract coverage standard

Under the new “contract coverage” standard announced in MV Transportation, Inc., the NLRB will examine the plain language of the collective bargaining agreement to determine whether action taken by an employer was within the scope of contractual language granting the employer the right to act unilaterally. For example, if an agreement contains a provision that broadly grants the employer the right to implement new rules and policies, the employer would not violate the National Labor Relations Act by unilaterally implementing new attendance or safety rules, even if “attendance” or “safety” are not specifically mentioned in the contract provision. The “contract coverage” standard will make it easier for employers to change terms and conditions of employment based on broad contract language—such as language in a management rights clause—without first bargaining with the union.

This is a significant departure from the NLRB’s prior “clear and unmistakable waiver” standard, last reaffirmed in Provena St. Joseph Medical Center, which prohibited employers from making changes to the contract without first bargaining with the union unless the contract specifically provided that the employer was entitled to make the change. 

The MV Transportation majority held that the “clear and unmistakable waiver” standard encouraged “perpetual bargaining at the expense of contractual stability.” Among a laundry list of reasons why the standard is unworkable, the NLRB noted that the D.C. Circuit has long rejected the “clear and unmistakable waiver” standard in favor of the “contract coverage” standard, making the Board’s “dogged adherence” to the former standard “an exercise in futility.” 

Member Lauren McFerran—the Board’s lone Democrat—dissented, excoriating the majority for breaking with 70 years of precedent and giving employers “wide berth to make unilateral changes” that she said would frustrate bargaining, inject uncertainty into labor-management relations, and increase the prospect for labor unrest. Member McFerran criticized the majority for simply acquiescing in the D.C. Circuit’s viewpoint when other circuit courts have approved the “clear and unmistakable waiver” standard. She reiterated the NLRB’s longstanding policy of “nonacquiescence” to circuit court decisions.

The NLRB announced that it will apply the “contract coverage” standard retroactively to all pending unilateral change cases involving the question of whether the contract privileged an employer to make the disputed change. This decision is a welcome relief to employers who have faced sanctions by the Board for conduct that the D.C. Circuit has long declared permissible, forcing employers to choose between acquiescence to Board policy or lengthy and expensive litigation.

September 9: The NLRB makes organizing “micro units” more difficult

In The Boeing Co., the NLRB held that a petitioned-for unit of fewer than 180 Boeing production employees in a plant of approximately 2,700 was not an appropriate unit.

This decision is an expansion of the NLRB’s 2017 decision in PCC Structurals, which contemplates a three-part test for analyzing whether a unit is appropriate:

  1. The petitioned-for unit must share an internal community of interest;
  2. Excluded employees must have meaningfully distinct interests in the context of collective bargaining that outweigh similarities with unit employees; and
  3. The community-of-interest analysis considers industry-specific guidelines with regard to appropriate unit configurations.

Traditional community of interest factors require examining whether the petitioned-for employees are organized into a separate department, have distinct skills and training, have distinct job functions and perform distinct work, are functionally integrated, have frequent contact with other employees, interchange with other employees, have distinct terms and conditions of employment, and are separately supervised.

Specialty Healthcare—which the Board overruled in PCC Structurals—had made it easier for unions to organize smaller units of employees because unions were only required to show that a petitioned-for unit shared a community of interest. The burden was then on the employer to show that excluded employees shared an “overwhelming” community of interest with the petitioned-for group. 

Applying the PCC Structurals principles, the Boeing majority concluded that the petitioned-for flight line readiness technicians and flight line readiness technician inspectors did not share a sufficient community of interest with each other. The majority focused on the lack of interchange between the two groups, separate operational departments, different job functions, and separate supervision to reach its conclusion. The majority also found the unit inappropriate because the petitioned-for workers had too much in common with those excluded from the unit. 

Member McFerran once again penned a lengthy dissent in which she said that the majority was “upending…well-established unit determination principles” and placing a heightened burden on unions to establish that petitioned-for employees are more different from, than they are similar to, excluded employees. She continued: “[t]he majority erroneously downplays fundamental subjects of collective bargaining that matter most to workers, impermissibly prioritizes employer preference over employees’ organizational desires, and ultimately robs employees of their fullest freedom to organize in an appropriate unit of their choosing.” Member McFerran concluded that the Boeing test creates a presumption in favor of the largest, most comprehensive unit. 

The move away from so-called “micro units” will be a relief to many employers confronted by the prospect of managing a myriad of small units at a single facility.

Ballard Spahr's Labor and Employment Group monitors changes in law and policy at the NLRB and routinely assists clients in navigating and preparing for compliance with labor decisions and policy. 

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