After Labor Board Ruling, Unions Must Shut Door on Management Rights

Since 2017, Republican appointees have firmly controlled the National Labor Relations Board. Not surprisingly, the agency has released a slew of decisions markedly reducing or eliminating union rights.

One of the most egregious is MV Transportation, issued in September 2019. This decision upended 70 years of NLRB law requiring employers to give advance notice and bargain with unions before making substantial mid-contract changes to rules, policies, and practices not fixed by the contract. Attendance requirements, safety policies, and subcontracting unit work are typical examples.

The Board first banned unilateral changes in 1949 (Tidewater Oil Co.). Hundreds of Board, circuit court, and even Supreme Court cases have since upheld the ban. These rulings were issued despite management-rights clauses in most of the union contracts in question, some of which were detailed and extensive.

The Board’s policy was that a management-rights clause does not displace the duty to bargain unless the clause clearly and unmistakably permits the employer to take unilateral action with respect to the “particular employment term” the employer wants to change.

This history helps to explain why it has been common for unions to (begrudgingly) accede to employer demands for management-rights clauses.

ON ITS HEAD

MV Transportation turns “unilateral change” law on its head. Under the Board’s new “poison pill” approach, called the “contract coverage standard,” if a management-rights or other contract clause says that a broad subject area—such as assignments, schedules, or rules and regulations—is under exclusive management control, then management is permitted to make unilateral changes within the “compass or scope” of that clause. References to specific employment terms, for example, “safety policies” or “disciplinary rules,” are no longer required.

Nor does it matter that when the language was negotiated, the union had no reason to believe it was giving up its midterm bargaining rights.

No wonder many unions are looking at their contracts in shock. Language they justifiably believed was innocuous or rhetorical has now been weaponized against them. Employers may take drastic actions without giving the union prior notice, much less an opportunity to bargain.

The lone dissenting Board member in MV Transportation, Lauren McFerran, grimly described its consequences:

“Today’s decision presents a grave threat to the practice of collective bargaining....[It] creates a powerful incentive for employers to insist on sweeping management-rights provisions...

“With such contractual language in place, employers will be free to change employees’ terms and conditions of employment at will ... the duty to bargain created by the National Labor Relations Act will effectively be set aside, and American workplaces risk returning to the era before 1935 when employers could, and did, exercise their power unchecked.”

BATTLE PLAN

Unions must quickly develop plans to maintain their midterm bargaining rights. This will often require new contract language. The proposals below are designed to limit the scope of management-rights clauses. The union should explain that as the NLRB has changed the way it looks at management-rights clauses, the parties must change the contract to restore its original meaning.

* Add language to the management-rights clause. When negotiating the next contract, demand that the following statement be included in the management-rights clause: Notwithstanding this clause, the Employer agrees that it will give the Union at least two weeks’ notice before adopting or changing any rule, policy, or practice having a significant impact upon one or more members of the bargaining unit. If the union requests, the employer will engage in good faith negotiations, to agreement or impasse, before carrying out the change.

Alternative: Nothing in this agreement shall be deemed to negate or reduce the employer’s duty to bargain under Section 8(a)(5) of the National Labor Relations Act before changing a term or condition of employment.

* Remove the management-rights clause. If the employer refuses to amend or revise the management-rights clause, demand that it be removed from the contract.

* No-strike clause. Rewrite the no-strike clause to allow the union to strike if the employer fails to notify the union in advance or agree to bargain before changing a rule, policy, practice, or other condition of employment.

While pursuing new contract language, the union should react to unilateral changes with concerted actions such as rallies, informational picket lines, and non-cooperation campaigns. When applicable, file ULP charges asserting that the union contract is different from the one at issue in MV Transportation (see Question 2 below).

QUESTIONS AND ANSWERS

1. No management-rights clause

Q. We do not have a management rights clause in our contract. Does MV Transportation allow the employer to make unilateral changes?

A. No, unless other language in the contract permits unilateral action in particular areas.

2. Bare-bones language

Q. The management-rights clause in our contract reads: “The employer reserves and retains, solely and exclusively, all of its rights to manage the company, its activities, and its operations.” Does MV Transportation authorize the employer to unilaterally announce harsher disciplinary penalties?

A. No. The contract in MV Transportation listed several broad subject areas in which the employer retained exclusive control, including “schedules,” “work hours,” “transfers,” and “the adoption of reasonable work rules.” A contract clause that does not list any mandatory bargaining subjects as a management right should not be interpreted as authorizing unilateral changes.

3. Effects bargaining

Q. Our management-rights clause says scheduling is under the company’s exclusive control. Can we demand that the company engage in effects bargaining before carrying out significant scheduling changes?

A. The answer is not clear. The only issue decided by MV Transportation was decision bargaining. Three weeks later, however, in Columbia College Chicago, the Board signaled that in future cases it may rule that a contract that releases an employer from decision bargaining on a matter will also be construed as releasing the employer from having to engage in effects bargaining—unless the contract expressly states otherwise. Stay tuned.

4. Contract expiration

Q. Our contract, which has a wide-ranging management-rights clause permitting unilateral changes, has expired. We refused to extend and are working without a contract while bargaining for a new agreement. Does the employer’s right to make unilateral changes continue?

A. No. Unless the management-rights clause explicitly provides that it survives expiration, it is no longer operative. Your employer must bargain to agreement or impasse before making a change that directly affects employees.

5. Contracts may not be modified

Q. Does MV Transportation allow an employer with a broad management rights clause to change wages or benefits?

A. No. Wages and benefits are usually fixed by the contract. A management-rights clause cannot be used to defend a change that violates a contractual obligation.

6. Public sector coverage

Q. Does MV Transportation apply to public sector employers such as school departments?

A. No. NLRB decisions are only binding in the private sector. Public sector unions should be alert, however. State labor boards sometimes reflexively follow federal precedent..

7. Bargaining during the pandemic

Q. Our contract has a bare-bones management rights clause that only refers to the company’s right to “manage operations.” Ordinarily, the company gives us prior notice and bargains before making major changes in matters not regulated by the contract. Last week, however, it unilaterally announced sweeping changes in schedules, hours, and work procedures. When we objected, it said a special NLRB rule allows it to make changes during emergencies such as the COVID crisis. True?

A. Perhaps. In 1991 the Board ruled that an exception to the duty to bargain arises if an extraordinary unforeseen event compels an employer to take immediate action. The rule has been applied during hurricanes and in the aftermath of 9/11. The 2020 pandemic may meet this standard in regard to certain changes. The exception, however, does not permit an employer to violate contract provisions. Moreover, the employer must bargain over how the change affects employees.

8. November election

Q. If a Democrat wins the presidency in November, could the rules announced in MV Transportation be reversed?

A. Yes. A new president can appoint NLRB members who will support a return to the “clear and unmistakable” waiver standard.

Robert M. Schwartz is a retired union labor lawyer. He is the author of several books including The Legal Rights of Union Stewards and No Contract, No Peace! A Legal Guide to Contract Campaigns, Strikes, and Lockouts. His books can be purchased from the Labor Notes online store.