The National Labor Relations Board (“NLRB”) recently overturned a 2019 ruling that made it easier for employers to modify terms and conditions of the workplace without bargaining with the union. Going forward, employers need to show there is a “clear and unmistakable waiver” of the union’s right to bargain over a particular topic to justify unilateral changes. The Dec. 10, 2024, decision in Endurance Environmental Solutions, LLC is emblematic of the constantly shifting nature of NLRB case law, which will likely persist as the incoming administration attempts to implement its own policy goals.
Previous “Contract Coverage” Standard
In a 2019 decision, the NLRB adopted the “contract coverage” test in MV Transportation, Inc. to determine whether a collective bargaining agreement (“CBA”) permitted an employer to change working conditions without first giving the union notice and an opportunity to bargain. Under this more lenient standard, unilateral changes by management were permitted if the topic at issue was “within the compass or scope of a contract provision that grants the employer the right to act unilaterally.” The “contract coverage” test relied on the “plain language” of the CBA, giving “full effect to the plain meaning of such provision.”
In practice, this standard allowed employers to rely on broad management rights clauses when running their businesses, without having to spell out each subject over which it retained control or constantly consult the union about workplace changes.
A Return to Stricter Precedent – The “Clear and Unmistakable Waiver” Standard
With its recent 3-1 decision in Endurance Environmental, the NLRB rejected the “contract coverage” test, finding that it “undermined” the National Labor Relations Act’s “central policy of promoting industrial stability by encouraging the practice and procedure of collective bargaining.”
In its place, the NLRB has reverted to the more exacting “clear and unmistakable waiver” standard. This test requires parties to a CBA to “unequivocally and specifically express” their desire to allow “unilateral employer action with respect to a particular employment term” that would otherwise be subject to the statutory duty to bargain.
In a press release, the NLRB framed its decision as a return to longstanding Board precedent, reinstating the “historical standard” that had been “previously followed by the Board for more than 70 years and endorsed by the Supreme Court.” It further emphasized that the “clear and unmistakable” standard “better serves the pro-bargaining policy of the” NLRA by limiting employers’ ability to change workplace rules without collective bargaining.
Takeaways for Employers
With this latest shift in the NLRB’s approach, employers will need to adjust their approach and strategy when considering potential unilateral changes in terms and conditions of employment. Employers facing this scenario should be cautious and may wish to consult legal counsel to ensure their CBA is sufficiently detailed to insulate them from an unfair labor practice charge.
Those employers engaged in collective bargaining negotiations should carefully consider the employment terms over which they wish to retain sole discretion and bargain for management rights clauses that specifically permit unilateral changes regarding those topics. Broad and/or ambiguous management rights clauses may no longer be sufficient to avoid collective bargaining with the union.
While this precedent may shift yet again once the incoming administration can put its stamp on the NLRB, for the time being, employers should proceed with care when negotiating management rights clauses or when implementing unilateral changes in the workplace.
