On June 23, 2020, the National Labor Relations Board (NLRB) issued its decision in 800 River Road Operating Company, LLC, 369 NLRB No. 109. The decision restores the pre-2016 rule that employers need not bargain with a new union representative over discretionary discipline prior to the finalization of the initial labor contract, so long as the discipline is materially consistent with the employer's established policy or practice.
History of the Rule
For approximately 80 years, the NLRB had held that, while employers of union-represented employees may not make material changes to such employees' terms or conditions of employment without first providing notice and an opportunity to bargain to the union, in general there was no predisciplinary bargaining obligation prior to the finalization of a first contract. However, in 2016, the Board, consisting of a Democratic majority, held that there was such a duty to bargain. In that case, Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (Aug. 26, 2016), the NLRB found that an employer violated the National Labor Relations Act when it discharged three employees in accordance with its established discipline policies and procedures, but without giving notice to and bargaining with the union. Importantly, the employer and the union were still in the process of negotiating the first contract, with the union having only represented the employees for approximately six months at that point.
The Board in Total Security overturned decades of precedent and found that the employer was required to bargain with the union over the "serious" discipline. It reasoned that unilaterally deciding discretionary discipline violated the National Labor Relations Act because it altered the terms or conditions of employment. This was in contrast to nondiscretionary discipline, which would not trigger the obligation to bargain.
A Return to Decades of Precedent
The NLRB in 800 River Road overruled Total Security and reinstated the law as it existed prior to the 2016 decision. In that case, the employer discharged one employee and suspended three employees prior to finalizing a first contract. It did not notify the union, nor did the union demand to bargain over the decisions. The administrative law judge (ALJ), adhering to the decision in Total Security, found that the employer had violated the Act by not affording the union the opportunity to bargain.
The NLRB, in overturning the ALJ's decision, wrote a strongly worded opinion, sharply criticizing the prior Board's decision in Total Security. It stated that the 2016 majority "devise[d] a contorted bargaining scheme at odds with traditional bargaining practices." It stated further, "the rationale for that decision and the scheme for its enforcement are insupportable as a matter of law and logic."
In reestablishing the prior rule, the NLRB summarized that "upon commencement of a collective-bargaining relationship, employers do not have an obligation under Section 8(d) and 8(a)(5) of the Act to bargain prior to disciplining unit employees in accordance with an established disciplinary policy or practice." This rule encompasses both discretionary and nondiscretionary discipline. As an added boon to employers, the Board applied this rule retroactively to all pending cases in whatever stage. Therefore, employers may utilize this defense in a case that has not yet concluded.
What This Means for Employers
This is an important decision for employers, particularly those with a newly unionized workforce. After the 2016 rule change, employers had to grapple with an obligation to notify and bargain with a union when implementing discipline, even if such discipline was fully in-line with established policies, practices and procedures. As explained in 800 River Road, the 2016 rule meant that employers had to hesitate before disciplining an employee, even where immediate discipline was necessary to maintain a safe workplace. The NLRB explained, "Employers confronted with a potentially dangerous employee would have to act at risk of violating the Act and incurring remedial liability."
The Board's ruling recognized the importance of an employer's ability to uphold its rules and policies during the period when it is negotiating with a new union, and is vital so that employers can maintain safety and order in the workplace. With the return to longstanding precedent, the law will be more consistent and employers will have the ability to make unilateral decisions as to discretionary discipline during the period prior to the adoption of a first contract.
Employers should note, however, that this is not carte blanche to discipline employees whichever way the employer chooses without notice and bargaining with the union. Rather, employers must follow the policies, practices and procedures that were in place prior to certification or recognition of the union. Changing a policy, practice or procedure or disciplining an employee in a way that is not consistent with prior disciplinary practices without first notifying and bargaining with the union will still be a violation of the National Labor Relations Act, unless another exception applies. We recommend consulting counsel before unilaterally implementing discretionary discipline prior to the finalization of an initial labor contract, because there may be additional factors and rules to consider.
For More Information
If you have any questions about this Alert, please contact Eve I. Klein, Bruce J. Kasten, James R. Redeker, Elizabeth Mincer, or any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
