NLRB Hands Unions Another Victory

If we have learned anything during the Obama Administration it is that often the most profound and impactful policy decisions are made in agencies and boards far from the public’s eye, by bureaucrats elected by no one and accountable to no one. One such decision occurred last week at the National Labor Relations Board (NLRB).

Last week, the NLRB showcased why the entrepreneurial energy, so necessary for a business to grow and survive in today’s global marketplace, is missing in many of the nation’s unionized companies.

The Board found a “management rights clause,” a collective bargaining agreement provision commonly bargained for by employers whereby the employer retains the right to manage and direct its employees except to the extent otherwise provided for in the agreement, to be without force and effect.

In Graymont PA, Inc., 364 NLRB No. 37, in successive collective bargaining agreements over 20 years time, the employer bargained with the union to “retain[] the sole and exclusive rights” to adopt rules and regulations to manage and direct its employees such as evaluating and setting standards for performance and disciplining and discharging them provided it be for just cause.

When Graymont did what the clause plainly contemplates, however:  here, modifying its attendance and progressive discipline rules without bargaining with the union, the Board found Graymont violated the law.   It ordered the employer to rescind the changes and any discipline it imposed under the newly modified rules and make the disciplined employees whole including reinstatement and back-pay.

Ignoring reality, “[o]ne cannot spell out every detail of life in an industrial establishment” [Archibald Cox, former Solicitor of Labor], the Board held the union did not waive its right to bargain over the changes because the clause was not sufficiently specific and there was no evidence that the parties “fully discussed and consciously explored” the subject matter of the rules the employer modified.

Under the law contracts are binding on the parties who made it except, that is, for a union before the National Labor Relations Board.

DeMaura is President of American Potential and can be found @sdemaura