NLRB Upends Obama-Era Board Rule on Employer's Obligations to Bargain
- The National Labor Relations Board (NLRB) has held that employers are once again permitted to implement changes to terms of employment that are consistent with past practice without needing to give notice to and bargain with a union.
- The NLRB's Dec. 15, 2017, ruling in Raytheon Network Centric Systems reversed the Obama-era Board's 2016 decision in E.I. du Pont de Nemours.
- Under the now-rejected DuPont rule, even when the employer's change in employment terms is wholly consistent with past practice, the employer still must give the union notice and the opportunity to bargain.
It is well-established law that unionized employers may not make unilateral changes in employment terms without first giving notice to the union and giving the union the opportunity to bargain over the change. But what constitutes a "change" in employment terms has been in a state of flux. On Dec. 15, 2017, the National Labor Relations Board (NLRB) reversed the Obama-era Board and held that an employer has no obligation to bargain with a union over changes in working conditions that are a mere continuation of past practices. See Raytheon Network Centric Systems (365 NLRB No. 161).
The facts in Raytheon Network are straightforward. The employer had a well-established practice of unilaterally making changes to the health insurance plan affecting bargaining unit employees on an annual basis. The changes at issue were consistent with past changes. The union alleged that these changes violated the standard established by the Obama-era Board in E.I. du Pont de Nemours, 364 NLRB No. 113 (2016).
The NLRB Decision
In Raytheon Network, the NLRB rejected its prior decision in DuPont. As characterized by the current Board, DuPont dramatically altered what constitutes a "change" in employment terms requiring notice to the union and the opportunity to bargain. Under the now-rejected DuPont rule, even when the employer's change in employment terms is wholly consistent with past practice, the employer still must give the union notice and the opportunity to bargain.
Under the standard announced in Raytheon Network, regardless of the circumstances under which a past practice was developed, including when the practice was developed through the management rights clause of a collective bargaining agreement authorizing unilateral action by management, "an employer's past practice constitutes a term and condition of employment that permits the employer to take actions unilaterally that do not materially vary in kind or degree from what has been customary in the past." 365 NLRB No. 161. Accordingly, employers should be free to continue with their past practices of making changes to the terms of employment, provided those changes are consistent with past changes.
The Board in Raytheon Network offered several reasons for its rejection of DuPont. Notably, one of those reasons was that the DuPont standard was inconsistent with fostering stable bargaining relationships. This reason has been a common theme in a number of recent Board decisions reversing new standards articulated by the Obama Board and may portend future reversals of Obama Board decisions that introduced material changes in the law. See, e.g., Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017), overruling Lutheran Heritage's standard on facially neutral workplace rules and policies; Hy-Brand Industrial Contractors Ltd., 365 NLRB No. 156 (Dec. 14, 2017), overruling Browning-Ferris Industries' new joint-employer doctrine; and PCC Structurals, Inc., 365 NLRB No. 160 (Dec. 15, 2017), overruling Specialty Healthcare's allowance of micro units.
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