The NLRB Has You Covered…By The Contract

By Patrick Scully

In another stunning and sweeping decision, The National Labor Relations Board (“NLRB” or “Board”) has overturned the “clear and unmistakable” waiver test and concluded that employers may make unilateral changes to terms and conditions of employment “covered” by an existing collective bargaining agreement. 

For decades, employers had negotiated lengthy “management rights clauses” into collective bargaining agreements only to have the NLRB strike down a change made by the employer by finding that the union did not “clearly and unmistakably” waive its right to bargain about the change.  For example, if an agreement indicated that an employer could issue and amend policies and rules, the NLRB would usually find a violation of National Labor Relations Act (“NLRA” or “Act”), unless the Board found that waiver “sufficiently specific” to encompass the change.  In other words, employers would negotiate what they believed was an effective waiver, only to have their bargain disrupted by the union filing an unfair labor practice charge.

Under the new test, employers will be able to rely on a defense that the objected-to change was covered by the language of the collective bargaining agreement.   In such cases, the Board will now “give effect to the plain meaning of the relevant contractual language” and find a change covered if it “falls within the compass or scope of contract language that grants the employer the right to act unilaterally.”

The significance of the NLRB’s decision is best encapsulated by dissenting Member McFerran’s characterization of it:  “The implication of the majority’s new standard is clear: If a management-rights provision in a collective bargaining agreement is sufficiently general, it will permit an employer to act unilaterally with respect to any specific term or condition of employment that plausibly fits within the general subject matters of the provision.” 

MV Transportation, Inc., 368 NLRB No. 66 (September 10, 2019).