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Unionized Employers May Have Less Than They Bargained For

A recent decision from the National Labor Relations Board (“NLRB”) may significantly weaken the “management rights” clauses found in many collective bargaining agreements.  A management rights clause reserves certain rights to management, often anything not covered by the collective bargaining agreement.  When a right is reserved to management, it can be changed unilaterally by the employer without bargaining with the union.

The recent NLRB decision, Graymont PA, Inc., 364 NLRB No. 37 (June 29, 2016), could have a major impact on the effectiveness of broad management rights clauses utilized by unionized employers in the private sector; unionized public employers are not directly subject to the impact of the decision because they are not governed by the National Labor Relations Act, but the decision could still serve as persuasive authority in public-sector decisions.  In Connecticut, the State Board of Labor Relations has long required such specificity, so this is not a change for public-sector employers in the state.  This decision serves as a reminder of the importance of careful drafting in this area.

In the Graymont PA case, the collective bargaining agreement between the employer and the union contained a fairly typical management rights clause.  It provided that the employer “retains the sole and exclusive rights to manage; to direct its employees; to evaluate performance, . . . to discipline and discharge for just cause, to adopt and enforce rules and regulations and policies and procedures; [and] to set and establish standards of performance for employees. . . .” The employer decided to change work rules, the absenteeism policy, and the progressive disciplinary policy with notice to the union.  The employer denied the union’s information request and efforts to bargain with the employer over the changes.  The NLRB held that the employer failed to meet its burden of proving that the union had “clearly and unmistakably” waived its right to bargain over these changes, notwithstanding the language of the management rights clause.  Had the management rights language specifically referenced work rules, absenteeism, and progressive discipline or had the employer been able to show that the parties “fully discussed and consciously explored” these topics during negotiations, the outcome may have been different.

What this means for unionized employers is that management rights clauses must be quite specific in order to rely on them as waivers of the union’s right to bargain over changes to the terms and conditions of employment.  As a practical matter, at the next round of negotiations, employers may find that they need to make bargaining concessions just to achieve the management rights outcomes they thought they already had.  When considering changes to the terms and conditions of employment, unless the topic at hand is specifically enumerated as a management right, employers should meet with the union before making changes and respond to information requests from the union.

Our team of labor and employment attorneys can assist you in all aspects of labor-management relations in the public and private sectors.