By Robert G. Brody and Fintan S. Lalor
On December 10, 2024, the National Labor Relation Board (“NLRB” or “the Board”) reinstated the “clear and unmistakable waiver” standard for deciding whether a union has contractually waived its right to bargain over terms and conditions of employment. The Board’s decision, which overturns its previous 2019 decision implementing the “contract coverage” standard, will make it much more difficult for unionized employers to make unilateral changes to workplace conditions. The decision is one of many union-friendly rulings issued in the final weeks of the Board’s Democratic majority under the Biden Administration. However, given the immense changes in the weeks since Trump has returned to office, the shelf life of this decision may not be long.
Background
Unionized employers are typically not allowed to make changes to a mandatory subject of bargaining (such as wages, hours, and other terms and conditions of employment) on their own, without first notifying the union and offering them an opportunity to negotiate. Under the NLRB’s previous “contract coverage” standard, which was implemented pursuant to a NLRB decision during the first Trump administration, the Board would determine whether the collective bargaining agreement covered the employer’s change by “applying ordinary principles of contract interpretation.” In other words, the Board did not require the contract to specifically address the decision at issue. Rather, the Board would determine whether the employer’s decision fell under “the compass or scope” of the contract’s language granting the employer the authority to act unilaterally. If it did, then the employer could unilaterally make the change without bargaining with the union.
The “Clear and Unmistakable Waiver” Standard
The Board’s December decision overturned the “contract coverage” rule and returned to the “clear and unmistakable waiver” standard. Under the “clear and unmistakable waiver” standard, instead of analyzing whether the collective bargaining agreement broadly covers the employer’s change, the Board will look for specific language in the contract directly authorizing such a change. To underline just how tough a standard this is, the Board noted that broad management rights clauses within collective bargaining agreements will not be deemed a waiver. Under this Biden standard, employers will have the burden of showing through contract language and bargaining history that the parties unequivocally expressed their mutual intention to allow unilateral employment action on a particular issue.
Now What / Employer takeaways
Shortly after Trump was inaugurated for his second term, he effectively paralyzed the NLRB by firing their General Counsel along with a Democratic member of the Board. As of now, the Board is down to just 2 members and is without a quorum to make rulings. Moreover, there is no telling how long it will take to fill the vacancies. As a result, it could be quite some time before the Board is able to restore the “contract coverage” standard they put into place during the first Trump Administration.
Consequently, for the foreseeable future, unionized employers must now negotiate with unions to include a “clear and unmistakable” waiver in each term of the collective bargaining agreement they may need to unilaterally change during the life of the contract. Otherwise, employers will need to provide the union with notice and the opportunity to bargain.
Brody and Associates regularly advises its clients on all labor management issues, including collective bargaining strategies, and provides union-free training and counsel. If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.
