Reversing Course, NLRB Holds Employers Have No Pre-disciplinary Bargaining Obligation

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On June 23, 2020, the National Labor Relations Board issued its decision in 800 River Road Operating Company, LLC d/b/a Care One at New Milford, 369 NLRB No. 109 (2020), holding that employers have no duty to bargain over serious employee discipline imposed before the negotiation of a collective bargaining agreement.  The Board’s opinion overturns its 2016 decision in Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (2016), which the current Board majority attacked as having “shredded longstanding principles governing the duty to bargain.”  In so doing, the Board returned to its pre-Total Security standard, which had governed labor relations for decades.

Background

For the eighty-year history of the National Labor Relations Act, no obligation existed for employers to give notice of, or bargain over, discipline before reaching agreement with a newly elected union on a first contract.  The Supreme Court tacitly approved this standard in NLRB v. Weingarten, 420 U.S. 251 (1975), which, quoting the Board in Mobil Oil Corp., 196 NLRB 1052 (1972), explained that the union does not have “any particular rights with respect to pre-disciplinary discussion which it otherwise was not able to secure during collective-bargaining negotiations.”  The Board upended that long-standing precedent in Total Security, holding for the first time that an employer could not issue “serious discipline,” such as suspension or discharge, without first bargaining with a newly elected union over the disciplinary decision, because the discipline itself represented a material change in working conditions.  Consequently, the Board held, its precedent prohibiting pre-contract unilateral changes to the terms and conditions of employment imposed a pre-disciplinary bargaining obligation on employers that had not yet reached a collective bargaining agreement with a union representing its employees.

The Board rejected this rationale and reversed course in Care One.  In 2012, the Board certified 1199SEIU United Healthcare Workers East as the exclusive collective bargaining representative for a unit of nonprofessional employees at the rehabilitation and nursing care facility.  The employer had maintained its disciplinary policy before and during negotiations with the union for an initial collective bargaining agreement.  The employer ultimately reached an agreement with the union, but in the months preceding that agreement, the employer suspended three employees and discharged a fourth, consistent with its existing disciplinary policy. 

The union argued—and an Administrative Law Judge agreed—that, under the standard established by Total Security the pre-agreement discipline constituted a material change in the employees’ terms and conditions of employment, and as a result, the Act required the employer to bargain over the discipline.  The Board reversed and overturned Total Security, holding that the 2016 decision: (1) conflicted with prior Board precedent and the Supreme Court’s Weingarten decision; (2) misconstrued the Board’s general unilateral-change doctrine with respect to what constitutes a material change in working conditions; and (3) imposed “a complicated and burdensome bargaining scheme that is irreconcilable with the general body of law governing statutory bargaining practices.”  Recognizing that disciplinary decisions generally involve some degree of managerial discretion, the Board instead focused on the fact that the employer applied its preexisting disciplinary policy and, thus, no material changes in working conditions occurred.

The reversal comes as part of a continued shift in Board precedent, overturning Obama-era decisions the current Board views as wrongly decided.  In June 2019, the Board’s General Counsel, Peter Robb, signaled that Care One was among several then-pending cases via which the Board saw an opportunity to change course.  In fact, the union sought to withdraw the case, having determined that the employer had just cause for the discipline in question, and perhaps fearing that it presented an opportunity for the Board to overturn Total Security.  The Board denied the motion for withdrawal in August 2019, and ultimately seized the opportunity to restore its longstanding prior precedent.

Practical Implications

The Board decided to apply its Care One decision retroactively.  As a result, the Board notes that employers may find they have engaged in pre-disciplinary bargaining now rendered superfluous, though not unlawful.  Moving forward, employers may again exercise their discretion in issuing discipline—even “serious discipline”—without first bargaining with the union, provided such discipline is in accordance with an established disciplinary policy or practice.

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