On Tuesday, December 10, 2024, the National Labor Relations Board (“NLRB”) reversed a previous precedent that gave employers more power to change working conditions without bargaining with the union. In Endurance Environmental Solutions, LLC and Teamsters Local No. 100, N.L.R.B., Case 09–CA–273873, the NLRB overturned the standard set by the Trump-era Board just five years earlier in MV Transportation, reinstating a higher standard that requires employers to show unions had a “clear and unmistakable waiver” of their rights to bargain over an issue as part of the collective bargaining agreement (“CBA”).
“Contract Coverage” replaced by “Clear and Unmistakable Waiver” standard
The previously nicknamed “contract coverage” standard adopted by the NLRB in 2019 in MV Transportation, Inc. and Amalgamated Transit Union Local #1637, N.L.R.B., Case 28– CA–173726, made it easier for employers to broadly interpret management rights clauses to make unilateral changes if the subject of the change is generally covered in the agreement and if the agreement does not restrict the employer from taking the unilateral action. This standard changed bargaining by allowing employers to avoid bargaining on a wide range of issues as they had the power to change working conditions in the middle of a CBA. In MV Transportation, the NLRB stated that the contract test would remedy the deficiencies from the previous “clear and unmistakable waiver” test as the test would only require “examining the plain language of the collective-bargaining agreement to determine whether action taken by an employer was within the compass or scope of contractual language granting the employer the right to act unilaterally.”
The NLRB’s decision reversed the contract coverage standard and reinstated the previous “clear and unmistakable waiver” standard, requiring an analysis of the plain language of the contract to determine if the employer’s actions are within the scope of its authority under the contract. If the employer’s actions are not covered by the contract, the employer must prove that the union “clearly and unmistakably” waived its right to bargain over this change in order to avoid a violation.
On Wednesday, November 11, the U.S. Senate narrowly voted down an attempt to give NLRB Chairman Lauren McFarren another term, giving President Trump an opportunity to elect a republican majority. Consequently, time will tell if these recent decisions will be overturned once more under a second Trump board’s more employer-oriented approach.
Takeaway for Employers
Employers must now demonstrate that a union has explicitly waived its right to bargain over specific changes to working conditions. Without clear and unmistakable evidence of this waiver, unilateral changes by employers may violate labor laws.
To ensure compliance, employers should carefully review CBAs before making any unilateral changes that are not approved by the union.
Contact a GRSM Employment Law attorney with any questions regarding how this new standard may impact your business practice or current cases, or if you would like more information on the subject.