NLRB Returns to “Clear and Unmistakable Waiver” Test for Evaluating Unilateral Employer Changes | Morgan Lewis

In Endurance environmental solutionsThe National Labor Relations Board returned to the “clear and unambiguous waiver” standard for determining whether an employer may make changes to the terms and conditions of employment while a collective bargaining agreement is in effect. Reinstating this more union-friendly standard will make it more difficult for union employers to implement unilateral changes during the term of an employment contract.

The National Labor Relations Board (the NLRB or Board) has repealed the “contract coverage” test established in 2011 MV Transportation Inc.(1) which considers the contractual language of the employment contract before conducting a waiver analysis. The board inside Endurance environmental solutions found that a waste hauling company acted unlawfully by unilaterally installing video cameras on its fleet of 400 trucks without first negotiating the changes with the union. In defending the unfair labor practice allegations, the company pointed to its management rights clause, which gave it the right to “make changes to the equipment.”

The Board found that the management rights clause lacked the specificity necessary to constitute a waiver of the union’s right to negotiate the installation of cameras. Accordingly, the Board concluded that the Company violated Sections 8(a)(1) and (5) of the National Labor Relations Act and ordered the Company to consider the decision to install the cameras and any implications thereof to negotiate with employees.

CLEAR AND UNIQUE WAIVER STANDARD

Pursuant to the clear and unambiguous waiver standard, the Board will reconsider “the exact language of the relevant contractual provisions” and reject waiver defenses that are based on “generally worded” contractual language that does not address “a particular subject area.” (2) The Board also determined that broad management rights clauses that do not specifically address a particular proposed change will not be considered a waiver. The board said it would continue to look at bargaining history in determining the waiver, including whether a particular issue had been “fully discussed and consciously explored” and the union had clearly and unequivocally given up its right to negotiate in the future.

Returning to the clear and unambiguous waiver test, the majority of the Board concluded that the contract coverage standard undermines contract stability and is “undefensible and unenforceable.” (3) According to the Board, unless a contractual provision expressly and unambiguously provides for a clear and unambiguous waiver of the union’s right to negotiate on a particular issue, management must provide notice midway through the contract and an opportunity to negotiate on all mandatory issues. The union then has the right to negotiate to reach at least an impasse or no agreement on the matter before the employer can proceed with the change.

REACTIVITY

The board left open the question of whether the decision would apply retroactively to all pending cases. However, in the present case it applied the decision retroactively.

CIRCUIT COURT’S CRITICISM OF THE CLEAR AND Distinctive WAIVER STANDARD

The NLRB’s reinstatement of the clear and unambiguous waiver test puts it at odds with several district courts, most notably the D.C. Circuit, which has openly opposed the Board’s continued use of the standard. (4) The D.C. Circuit, which has full jurisdiction over all NLRB enforcement actions, has previously sanctioned the NLRB for its continued application of the waiver standard. Although the NLRB majority in Endurance environmental solutions Although they have attempted to address the concerns raised by the district courts, their position is largely one of respectful disagreement. The rejection of the standard by DC and others will likely undermine the Board’s ability to fully implement this standard unless the Supreme Court finally intervenes. (5)

DISSENT IS AGAINST THE ABANDONMENT OF THE CONTRACT COVERAGE STANDARD

Dissenting member Marvin Kaplan argued that the contract coverage standard better respects the legal framework of the obligation to bargain, is consistent with Congress’ policy of free collective bargaining, and reduces unnecessary disputes over waiver of bargaining rights. (6) The dissent relates to the Supreme Court decision from 2015 M&G polymers(7), which stipulated that the provisions of a collective agreement must be interpreted in accordance with the usual principles of contractual interpretation. This is the same language used in the contract coverage standard, where “the Board shall give effect to the clear meaning of the relevant contract language, applying normal principles of contract interpretation.” (8)

PRACTICAL NOTICES

Unionized employers should take this decision into account when drafting new collective bargaining language and making unilateral changes during the term of collective bargaining agreements. However, the impact of the decision may be diminished by the various district courts refusing to enforce the Chamber’s approach. Additionally, the newly formed Republican NLRB majority will likely make overturning this decision one of their priorities.

Still, in light of the Board’s return to a “clear and ambiguous” waiver standard, union employers should consider the following in the near future:

• Use caution when drafting new or amended language in collective bargaining agreements and consider the potential risk that the more stringent waiver standard will not be met.
• Review existing collective bargaining agreement language, particularly management rights clauses, under the new, more stringent standard when deciding how to handle changes during the contract term and engage with the union.
• Be prepared for further unfair labor practice charges that challenge employment or operational decisions that the union opposes. Such allegations may require a lawsuit in district court to obtain a positive outcome.
• Consider the alternative forum of grievance arbitration to resolve one-sided amendment disputes, including deferring unfair labor practice charges that implicate clear and unambiguous waiver issues, as the NLRB may be a less hospitable forum as long as the waiver test remains in effect.

---

(1) MV Transportation Inc.368 NLRB No. 66 (2019).

(2) Endurance environment Solutions, 373 NLRB No. 141 (2024), 18.

(3) Id. (quoted EI du Pont de Nemours & Co.368 NLRB No. 48, Slip op. at 8 (2019)).

(4) Local Union No. 47 v. NLRB927 F.2d 635, 641 (DC Cir.1991)); NLRB v. Postal Service8 F.3d 832, 836 (DC Cir. 1993) (“If the matter is covered by the collective bargaining agreement, the union has exercised its right to bargain and the issue of waiver is irrelevant.”). See also Bath Marine Draftsmen’s Assn. against NLRB475 F.3d 14, 25 (1st Cir. 2007); Electrical worker IBEW, Local 43 v. NLRB, 9 F.4th 63, 77 (2d Cir. 2021); Chicago Tribune Co. v. NLRB974 F.2d 933, 937 (7th Cir. 1992).

(5) Heartland Plymouth Court MI, LLC v. NLRB838 F.3d 16, 18 (DC Cir. 2016).

(6) Endurance environmental solutions at 36.

(7) 574 U.S. 427, 435 (2015); Slip op. with 37.

(8) MV transport at 11.

(View source.)