NLRB Finds Aggressive Bargaining Proposals Not Unlawful

Jackson Lewis P.C.
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An Administrative Law Judge’s (ALJ) findings that an employer engaged in bad faith bargaining and unlawfully withdrew recognition from the union has been overruled 2-1 by a panel of the National Labor Relations Board (NLRB). District Hospital Partners, L.P. d/b/a The George Washington University Hosp., 370 NLRB No. 118 (Apr. 30, 2021). While the Board’s interpretation will be welcomed by employers, there is a question as to how long it may last.

The union and the employer had a decades-long collective bargaining relationship. After meeting 30 times over two years without reaching a new agreement, the employer received a petition signed by a majority of unit employees stating their desire to end representation by the union. The employer ceased bargaining and withdrew recognition from the union.

The union filed unfair labor practice charges asserting that many of the employer’s aggressive contract proposals were designed to avoid reaching agreement, and thus evidenced bad faith bargaining. If the employer engaged in bad faith bargaining, the employee petition would be deemed “tainted,” and the employer could not lawfully withdraw recognition. The complained-of proposals included:

  • A management rights clause giving the employer unilateral discretion to modify many contractual terms;
  • Elimination of the union security and dues checkoff clauses;
  • Exclusion of arbitration for any discipline short of discharge; and
  • Removal of the just cause requirement for discipline and discharge.

The employer also proposed a new, exclusively merit-based wage structure.

The ALJ determined the employer had bargained in bad faith and its subsequent withdrawal of recognition was unlawful. An NLRB panel, comprised of a 2-1 Republican majority, reversed the ALJ, finding the employer’s hard bargaining proposals alone could not be  evidence of bad faith because the employer had shown its willingness to consider the union’s proposals and made concessions on other issues. The majority also found the union responded to many proposals with nothing more than a “no,” along with many examples of profanity in complaints about the employer’s proposals. The union’s failure to make counterproposals, said the Board majority, meant it did not actually test the employer’s willingness to compromise on the proposals at issue. Further, the union itself contributed to delays in bargaining. The majority held that the NLRB will not find an employer’s proposals in themselves to constitute bad faith bargaining without a showing of some intent, under the circumstances taken as a whole, to frustrate reaching an agreement. Moreover, there was no surface bargaining, and the employer lawfully withdrew recognition from the union after receipt of the employee petition.

Perhaps signaling where the NLRB may be headed later this year once President Joe Biden’s future nominees are confirmed and the Board has a Democratic majority, current NLRB Chair Lauren McFerran filed a strong dissent. McFerran deemed the employer’s proposals to be clear evidence of bad faith surface bargaining. She viewed the employer’s proposals as leaving employees with fewer rights than they would have without a contract. Ms. McFerran said employer proposals giving the management near unfettered discretion over wage increases, eliminating longstanding union security and dues-checkoff clauses, and regressive proposals concerning the arbitration process all demonstrated the  employer’s intent to frustrate bargaining and oust the union. She also argued the union negotiator’s poor behavior, while boorish, did not excuse the employer’s unlawful bargaining tactics.

During contract negotiations, the employer provided employees summaries of bargaining from its point of view. These often blamed the union for a lack of progress and were critical of many of the union’s positions. The ALJ found these communications with employees were lawful. McFerran contended that, although lawful, the employer’s communications demonstrated its motivation to frustrate agreement, and thus should be evidence the harsh proposals constituted bad faith bargaining. Significantly, the NLRB majority flatly rejected this argument, stating that lawful communications are protected under Section 8(c) of the NLRA and “cannot be used as evidence of an unfair labor practice.”

It remains to be seen whether the majority’s view of bargaining and employer communication rights will survive a revamped NLRB under the once President Biden Administration. 

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