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The National Labor Relations Board, in a 2-1 panel decision, upheld the traditional waiver standard in determining whether an employer’s unilateral action is unlawful. Provena St. Joseph Medical Center, 350 NLRB No. 64 (Aug. 16, 2007). It rejected the use of a “contract coverage” analysis that has been enunciated by two circuit courts of appeals. Unilateral changes by an employer during the course of a collective bargaining relationship concerning matters that are mandatory subjects of bargaining are normally regarded as per se refusals to bargain. A labor union, however, may contractually waive its right to bargain over a mandatory subject. When such a waiver is claimed by virtue of the collective bargaining agreement, the test is whether the putative waiver is in “clear and unmistakable” language. Under this test, the employer’s conduct is unlawful unless the contract clause “clearly and unmistakably” waives the union’s right to bargain. When a “management rights” clause is the source of an asserted waiver, it is normally scrutinized to ascertain whether it affords specific justification for the unilateral action. See Higgins, The Developing Labor Law, V. 1 (5th ed. 2006) at 832-833, 1006-1007. In Amoco Chem. Co., 328 NLRB 1220, 1221-22 enf’t denied, sub nom. BP Amoco v. NLRB, 217 F.3d 869 (D.C. Cir. 2000), the board repeated its long-standing position, quoting from the U.S. Supreme Court’s 1983 decision in NLRB v. Metropolitan Edison, 460 U.S. 693, 708 (1983): “Either the contract language relied on must be specific or the employer must show that the issue was fully discussed and consciously explored and that the union consciously yielded or clearly and unmistakably waived its interest in the matter.” See also, NLRB v. C. & C. Plywood, 385 U.S. 421, 430 (1967). The board has adhered to its waiver analysis, notwithstanding judicial criticism and the application by at least two circuit courts of appeal of the alternative, less rigid “contract coverage” analysis. E.g., Chicago Tribune Co. v. NLRB, 974 F.2d 933 (7th Cir. 1992); Dept. of the Navy v. FLRA, 962 F.2d 48 (D.C. Cir. 1992); and NLRB v. U.S. Postal Service, 8 F.3d 832 (D.C. Cir. 1993). Under this contract-coverage approach, once a matter is reasonably deemed “covered by” the collective bargaining agreement, the union has exercised its bargaining right and the question of waiver is irrelevant. Case arose from a staff incentive policy In Provena, the employer and union had been parties to successive collective bargaining agreements since 1993. The agreement at issue was effective from March 24, 1999, through March 23, 2002, and contained the following management rights terms: Except as specifically limited by express provisions of the agreement, the employer retained exclusively to itself the traditional rights (as existed prior to union organization) to operate and manage its business and to direct its employees; the employer was permitted “to change or eliminate existing methods, equipment, facilities and reporting practices and/or to introduce new or improved ones”; the employer was authorized “to suspend, discipline, and discharge employees”; and the employer was allowed to “make and enforce the rules of conduct, standards, and regulations governing the conduct of employees.” Also the right to determine or change the methods and means by which its operations are to be carried on and “to take any and all action it determines appropriate . . . to maintain efficiency and appropriate patient care” was reserved to the employer. On Dec. 8, 2000, because of short-term staffing concerns over the holidays resulting in job vacancies, the employer implemented a staff incentive policy, providing that nurses who signed up between Dec. 8, 2000, and Jan. 1, 2001, would qualify for premium payments. This was the employer’s third incentive policy in 13 months. The contract provided “extraordinary pay for extra hours worked when the employer determined that additional work hours for nurses were needed,” but it did not contain any provisions relating to incentive pay. Admitting that it did not offer the union an opportunity for bargaining, the employer maintained that it had that authority to act unilaterally under the management rights clause, in the absence of a specific limitation to the contrary, and because the union had historically acquiesced in its implementation of staffing incentives. Thereafter, the employer informed the union that it would be implementing a revised attendance and tardiness policy, replacing one that had been in effect for about four years. The union filed a grievance and demanded bargaining. The employer argued that the union’s failure to request bargaining promptly upon receiving two weeks’ advance notice of the employer’s plan constituted a waiver and privileged its action. The employer also relied on the provision of the management rights clause and its unilateral formulation of attendance and tardiness policies in 1997 and 1998 to support its position that it had unilateral authority in this area. Applying the board’s waiver standard, the administrative law judge found that the union did not clearly and unmistakably waive its rights to bargain over the implementation of the incentive policy or the change in the attendance and tardiness policy. The board, in a 2-1 panel decision, found that the employer’s unilateral implementation of its incentive policy was unlawful, but that the union waived its bargaining rights with respect to the employer’s newly implemented disciplinary policy on attendance and tardiness. The board panel applied the clear and unmistakable waiver standard, and rejected the contract-coverage standard, reasoning that “the clear and unmistakable waiver standard is firmly grounded in the policy of the NLRA favoring collective bargaining”; the standard has been consistently applied by the board for more than 50 years; and the waiver standard has been approved by the Supreme Court. The panel majority found that the waiver standard best reflected the board’s interpretation of the statutory duty to bargain during the terms of an existing agreement, and the board’s interpretation should be entitled to judicial deference as long as its interpretation is “rational and consistent with the act.” It concluded that the two circuits that had rejected the waiver standard are in a distinct minority, and there were neither persuasive reasons for abandoning the well-established waiver standard, nor evidence that a different approach would further the board’s statutory mandate. In applying the waiver test, the panel found that the employer acted unlawfully by unilaterally implementing the incentive policy. It reasoned there was no express substantive provision in the collective bargaining agreement regarding incentive pay, and there was neither evidence that incentive pay was consciously yielded in bargaining nor evidence that the union intentionally relinquished its right to bargain over the topic. As to the newly implemented disciplinary policy on attendance and tardiness, the panel found that several provisions of the management rights clause, taken together, explicitly authorized the employer’s unilateral action. Specifically, the portions of the clause providing that the employer has the right to “change reporting practices and procedures and/or to introduce new or improved ones,” “to make and enforce rules of conduct,” and “to suspend, discipline, and discharge employees” were sufficient to find that the union relinquished its right to demand bargaining over the implementation of the policy prescribing attendance requirements and the consequences for failing to adhere to these requirements. Chairman’s dissent favored contract-coverage approach Chairman Robert J. Battista dissented, stating that the contract-coverage approach was “the better approach” and this case offered the board an opportunity to eliminate the conflict between it and the two circuits on this important issue and to harmonize its views with the grievance-arbitration process. According to Battista, when the parties have bargained about the subject and having reached some accord, the issue should not be whether the union has waived its right to bargain but whether the parties have bargained about the relevant subject matter. Battista would find no refusal to bargain when the parties have bargained about the subject matter. Battista also pointed out that the contract-coverage analysis would serve to minimize the conflict between the board and the grievance-arbitration process because the board, viewing a case through the “waiver prism,” would find a violation, while an arbitrator, viewing the same case through normal principles of contract interpretation, would likely find that the clause privileges that conduct, albeit not “clearly and unmistakably so.” Thus, there is a distinct possibility of different results depending on the choice of forum. Applying the contract-coverage test, Battista would find no unlawful conduct by the employer’s implementation of the staff incentive policy because the contract contained provisions relevant to the dispute about overtime work and the compensation to be paid for it, permitting “extraordinary pay” for extra hours worked. He thus concluded that the issue should be left for the arbitral process. Under the waiver test reaffirmed in Provena, an employer’s unilateral change is ordinarily unlawful unless the contract clause “clearly and unmistakably” waives the union’s right to bargain. Thus, unless the clause explicitly covers this action and clearly takes away the union’s right to bargain, a violation will be found. While this traditional board test certainly encourages collective bargaining, the contract-coverage test would better reconcile conflicts both between the board and the courts and between the board and the arbitral process. Board adoption of the contract-coverage test would also prevent employers from forum-shopping for courts that would apply that test. Kenneth R. Dolin is a partner in the labor and employment practice group of Chicago’s Seyfarth Shaw. He is a fellow in The College of Labor & Employment Lawyers and an associate editor of The Developing Labor Law (BNA, 5th ed. 2006).

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