NLRB Reinstates Longstanding Precedent: Employers Do Not Have a Pre-Discipline Bargaining Duty Prior to First Union Contract

July 6, 2020Alerts

In a clear victory for management that overturns yet another Obama-era decision, the National Labor Relations Board has ruled that recently unionized businesses that have not yet signed a first labor contract are not obligated to bargain with a union prior to disciplining its employees.

The Board’s June 23, 2020 decision in 800 River Road Operating Company, LLC, 369 NLRB No. 109 (2020),effectively restores eight decades of NLRB precedent by overturning its 2016 decision in Total Security Management, 364 NLRB No. 106 (2016).

Relevant Background

In Total Security, a Board majority instituted a new bargaining obligation on recently unionized businesses. It required employers, with limited exceptions, to provide a union with notice and opportunity to bargain over discretion used when imposing “serious discipline” on unionized employees not yet covered under a contract. This was so even if employers merely continued to follow long established procedure or practice in implementing such discipline. Total Security defined serious discipline as those actions that have an “inevitable and immediate impact on an employee’s tenure, status, or earnings,” or otherwise classified as suspensions, demotions, or discharges. Employers who did not provide their union counterpart with notice and opportunity to bargain over such disciplinary actions were subject to Section 8(a)(5) violations that carried possible reinstatement and backpay remedies (unless the discipline was imposed “for cause” under Section 10(c) of the Act).

800 River Overrules Total Security

The Board in 800 River unanimously reversed Total Security. An employer no longer has a duty – prior to a first contract – to provide a union with notice and opportunity to bargain before implementing any discipline, provided an employer follows its preexisting disciplinary policies. In support of its ruling, the Board pointed to three faulty aspects of the Total Security decision.

First, the Board noted that the majority in Total Security had “[d]ismissively overruled [] controlling precedent as ‘demonstrably incorrect.’” Board and Supreme Court cases actually support the opposite conclusion: there is no pre-discipline bargaining obligation owed to a newly certified union when adhering to preexisting disciplinary procedures.

The Board then found that “the greatest failing of Total Security” was that the majority fundamentally misconstrued the commonly applied unilateral change doctrine from Katz. The Total Security Board mistakenly considered only whether an employer’s preexisting disciplinary policy involved any discretion and held that the exercise of that discretion always constituted a unilateral change requiring advance notice and bargaining. Rejecting that reasoning, the Board in 800 River found that the “correct analysis under Katz” focused on whether disciplinary action was consistent with an employer’s established policy or practice. If so, such conduct is not a material change in working conditions, i.e., an unlawful unilateral change, and is allowed.

Finally, the Board concluded that the Total Security pre-discipline bargaining obligation was unnecessarily complicated and contrary to established aspects of collective-bargaining practices under the Act. Significantly, Total Security did not require parties to bargain to agreement or impasse prior to imposing discipline, thus making it unclear when employers could lawfully implement discipline after beginning to bargain. In this respect, newly unionized employers had more difficulty running their operations properly due to this new bargaining obligation.

The 800 River decision – which applies retroactively to all pending cases at whatever stage –properly restores longstanding precedent that govern an employer’s duty to bargain and when this duty applies.

Moving Forward and Employer Takeaways

The overturning of Total Security is a significant victory for employers, as it alleviates management’s concern for bargaining with a new union over (practically) each of its disciplinary actions. Effective immediately, employers entering a new bargaining relationship do not need to worry about being constrained in continuing to follow its established policies or practices when implementing discipline.

In sum, traditional collective bargaining principles are now back in place, and employers will no longer be subject to costly and protracted NLRB litigation simply because they followed long established disciplinary procedures. The 800 River decision means employers have regained the ability to run their business operations more freely and it is the latest development from this Republican-controlled Board. Stay tuned for what comes next.

For more information about this workplace alert or any related topic, please contact Carlos Torrejon at 973.548.3312 or[email protected], or any member of Fox Rothschild’s national Labor & Employment Practice.