On August 26, the National Labor Relations Board (NLRB) overruled the Trump-era Raytheon Centric Network Centric Systems (2017), which had allowed employers to make unilateral changes under expired management’s rights clauses if the changes were purportedly justified by past practice.
In two decisions, Wendt Corporation and Tecnocap, LLC, the NLRB reimposed employers’ duty to bargain before changing terms and conditions of work, whether during first contract negotiations or after expiration of an existing collective bargaining agreement. The Wendt decision brought back the rule that an employer cannot rely on an asserted past practice of making unilateral changes before employees were represented by a union to justify unilateral changes after the workers select a bargaining representative. And in Tecnocap, the Board decided to overrule the management rights past practice rule from Raytheon because it had permitted employers to make sweeping discretionary changes even after a CBA expires and bargaining for a new agreement is ongoing.
The Board correctly explained that allowing unilateral changes undermines the collective bargaining process and forces unions to bargain to regain terms of employment lost to post-expiration unilateral changes. These and other recent changes are representative of a Board willing to fulfill its statutory duties of encouraging collective bargaining and protecting the rights of workers to organize.
Now, an employer’s use of the past practice defense is limited to situations where the employer’s unilateral change is “fixed by an established formula based on nondiscretionary standards and guidelines.” Discretionary unilateral changes during negotiations, even if they’re consistent with an employer’s past practice, violate the law and should be documented by unions as evidence for pursuit of a successful unfair labor practice charge. Employers will once again be required to bargain in good faith with unions before forcing their economic power unilaterally upon their unionized workforce.
As always, please contact the firm with any questions about these or other developments in labor law.