When a union and employer negotiate the terms of a collective bargaining agreement (CBA), it is virtually impossible for the parties to predict and account for every issue that may affect the working relationship between them before the next contract negotiation. CBAs routinely contain a "management rights" clause that grants the company the ability to make routine business decisions that do not significantly alter key terms and conditions of employment without first receiving consent from the union through bargaining.
This week, the National Labor Relations Board issued a decision that significantly changes these rules, diminishing employers’ ability to use the management rights clause as the basis for avoiding mandatory bargaining with the union. In Endurance Environment Solutions Inc., the NLRB majority concluded that employers must bargain with the union for any decision that involves changes to wages or working conditions, unless the union has given a clear and unmistakable waiver of such bargaining rights under the CBA.
This decision reverses MV Transportation, a case decided during the first Trump administration holding that employers may unilaterally make changes that generally fall within the scope of the management rights clause. The board majority said that federal labor law favors collective bargaining, and that unless the union and employer agree to waive such rights, interim business changes that affect employees are the subject of mandatory bargaining. The dissent noted that several federal appellate circuits have rejected the clear and unmistakable waiver standard, including the DC Circuit which hears many appeals of NLRB decisions.
As with many NLRB opinions issued during the Biden administration, this decision is likely to be revisited and reversed after Republican appointees regain a majority of board seats. In the meantime, employers relying on the management rights clause to avoid mandatory bargaining with unions may face unfair labor practice charges if they attempt to unilaterally impose such changes.
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