In a welcome relief to employers, National Labor Relations Board General Counsel Peter Robb has issued guidance on the duty to bargain in emergency situations. As addressed in our COVID-19 Guidance And FAQs For Unionized Employers, the Board has held the duty to bargain over changes in contractual terms may be suspended where “compelling economic exigencies” compel prompt action. Under such circumstances, an employer may unilaterally implement changes without providing the union notice and the opportunity to bargain, which would otherwise violate Section 8(a)(5) of the National Labor Relations Act (NLRA). Unionized employers, struggling to balance their statutory obligation against their operational response to the ongoing COVID-19 pandemic, have therefore been questioning when such “compelling economic exigencies” exist.

To shed some light on the issue, the March 27 memo titled “Memorandum GC 20-04: Case Summaries Pertaining to the Duty to Bargain in Emergency Situations” summarizes nine cases from previous “emergencies,” ranging from natural disasters and bankruptcy to the attacks on September 11, 2001. General Counsel Robb divides them into two categories: the duty to bargain during public emergencies and the duty to bargain during employer-specific emergencies.

Key Themes In The Summarized Cases

In the cases summarized in the memo, the duty to bargain attached in three circumstances: layoff, plant closure, and policy implementation.

Layoffs

The Board found the following circumstances constituted “compelling economic exigencies” such that the employer had no obligation to bargain with the union prior to layoffs:  

• An impending hurricane and mandatory citywide evacuation. However, the employer had an obligation to bargain the effects of the layoff after the hurricane. Port Printing & Specialties, 351 NLRB 1269 (2007), enforced, 589 F.3d 812 (5th Cir. 2009).
• Anticipated business volume plunging 60% following 9/11, resulting in the employer filing for bankruptcy. K-Mart Corp., 341 NLRB 702, 720 (2004).

However, the Board ruled no such “compelling economic exigencies” existed when a lumber mill was required to close following a log shortage, as the shortage had been a chronic problem with no “precipitate worsening” requiring immediate action. Hankins Lumber Co., 316 NLRB 837 (1995).

Plant Closure

The Board found the following circumstances created no obligation to bargain with the union prior to plant closure: 

• After learning its lender had terminated its line of credit, when the employer was in bankruptcy. However, the Board ruled the Employer still had an obligation to bargain over the effects of the plant closure. Cyclone Fence, Inc., 330 NLRB 1354 (2000).
• Activities of conservation groups and the anticipated needs of other lumber companies warranted shuttering a sawmill two months early, despite a projected decline in the amount of harvestable trees. Brooks-Scanlon, Inc., 247 NLRB 476 (1979).
• After discovering its credit line was discontinued. However, the employer had an obligation to bargain with the union over the effects of the decision to close the meatpacking plant and the reopening of the plant. Raskin Packing Company, 246 NLRB 78 (1979).

Policy Implementation

The Board found the employer must bargain prior to unilaterally implementing policies under the following circumstances:

• During a two-day power outage caused by a hurricane, where the policy concerned employee compensation during the hurricane. Dynatron/Bondo Corp., 324 NLRB 572, 578-79 (1997), enforcement denied in relevant part, 176 F.3d 1310 (11th Cir. 1999).
• During a severe ice storm, where represented employees under an expired collective bargaining agreement were required to either take personal days or go uncompensated. Gannet Rochester Newspapers, 319 NLRB 215 (1995).
• At an acute care hospital, where the policy required all nurses who had not received a flu immunization shot to either take antiviral medication or wear a protective mask. Virginia Mason Hospital, 357 NLRB 564 (2011).

What Does This Mean For Employers?

Following publication of this memo, employers should feel more confident in evaluating whether “compelling economic exigencies” exist because of COVID-19. On its face, the COVID-19 obviously seems to meet this threshold. However, the actual effects of the pandemic will be different for every employer and will therefore require a fact-specific analysis. 

Unions will undoubtedly file unfair labor practice charges (ULPs) against employers for failing to bargain, in violation of Section 8(a)(5), during this period of upheaval. This memo offers insight as to how the NLRB may adjudicate such ULPs. The General Counsel has flagged these specific cases as ones which “may prove useful to those considering these issue during these challenging times.” The Regions are likely therefore rely on them when evaluating the merits of any COVID-19-related ULPs alleging a failure to bargain. 

As General Counsel Robb notes, we are “in an unprecedented situation” and circumstances are constantly changing.