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NLRB Abandons Longstanding Measure for a More Employer-Friendly Standard to Evaluate Unilateral Changes

September 24, 2019

The National Labor Relations Board has made it easier for employers to make unilateral changes to employment terms without union consent with a ruling issued Sept. 10.

The 3-1 decision in MV Transportation removes the longstanding “clear and unmistakable waiver” standard that previously required unions to waive their right to bargain. The NLRB instead adopted a new “contract coverage” standard that will examine the plain language of the parties’ collective bargaining agreement to see if any of the disputed changes fall within management’s authority to act unilaterally.

In applying this standard, the Board will give effect to the contract language’s plain meaning, apply ordinary principles of contract interpretation and “will find that the agreement covers the challenged unilateral act if the act falls within the compass or scope of contract language” granting the employer a right to act unilaterally. If the disputed changes are not covered by the contract language, the Board will then look to whether the employer can show either that the union waived the right to bargain over the disputed changes or that the employer had some other legal basis on which to act unilaterally.

In its decision, the NLRB majority said that past cases and the dissenting member’s opinion confirmed that the “clear and unmistakable waiver” standard “could not be separated from a deep-seated and indeed principled hostility” toward management rights language. Under the “clear and unmistakable waiver” standard, the Board rarely found that a union had waived the right to bargain. The majority reasoned that if collectively bargained for and agreed-upon language is to have any meaning, the “clear and unmistakable waiver” standard must be abandoned. According to the majority, the new “contract coverage” standard “rightly gives effect to the limits—or absence of limits—upon which the parties themselves have agreed.”

The Board’s decision certainly will not put an end to disputes over whether employers’ unilateral actions are permitted. That said, the decision may make it easier for employers to establish that such action did not violate the NLRA, which should ultimately afford employers more flexibility in decision-making and operations.