Labor Board Makes it Harder for Employers to Make Unilateral Workplace Changes: 5 Steps for Employers

In a significant move, the National Labor Relations Board (NLRB) just overruled a Trump-era ruling and made it more challenging for unionized employers to make workplace changes without bargaining over the change with the union. Tuesday’s decision in Endurance Environmental Solutions, LLC is the latest shift in the labor law pendulum, overturning an employer-friendly standard that smoothed the way for unilateral changes and instead restoring a stricter requirement for determining whether a union waived its bargaining rights. Moving forward, the Board will require evidence of a “clear and unmistakable” waiver before clearing employers to make workplace changes without negotiations. While we expect the incoming administration to flip the Board and install members who will return the playing field to an even level, you will need to comply with this new standard until this case is once again overturned. This Insight will review this decision and provide you five steps to adapt to this new landscape.

Workplace Security Cameras Sparked Key Ruling

The dispute arose between Endurance Environmental Solutions, a waste management company, and a Teamsters affiliate representing its Kentucky-based workers. Endurance allegedly installed security cameras in its trucks without first bargaining with the union, asserting that it had the authority under the CBA to make such a change unilaterally. The union argued that this move violated its collective bargaining rights, prompting an unfair labor practice charge.

The critical question that would determine the case outcome: whether the union had waived its right to bargain over such changes in the agreement.

• For over a decade starting in 2007, the NLRB maintained a “clear and unmistakable waiver” standard for answering this question. It allows employers to make unilateral changes only when a union clearly and specifically waived its right to bargain over that issue.
• In 2019, the NLRB adopted the “contract coverage” standard. Under that test, the plain language of a collective bargaining agreement determined whether an employer could make unilateral changes to particular workplace terms. It gave employers the broad ability to run their operations – including workplace matters – without being hemmed in to negotiate about specific items.

NLRB Goes Back in Time to Install Union-Friendly Standard

Tuesday’s ruling reverted to the old “clear and unmistakable waiver” standard, making it more challenging for employers to make workplace changes without bargaining over the change. In this specific case, the NLRB found that the employer’s reliance on the contract’s management rights clause was insufficient to justify bypassing union negotiations.

The Board’s Democratic majority cited several reasons for reinstating the stricter standard:

• Alignment with Statutory Goals: The clear and unmistakable waiver standard better supports the National Labor Relations Act’s (NLRA) core purpose of fostering industrial peace through collective bargaining, it said.
• Consistency with Precedent: This standard purportedly aligns with more than 70 years of Board practice and is endorsed by the U.S. Supreme Court, according to the Board majority, providing employers with a more stable and predictable framework.
• Harmony with Federal Courts: The majority of federal Courts of Appeals have applied the clear and unmistakable waiver test, ensuring consistency across jurisdictions.

In contrast, the contract coverage test – adopted in the 2019 case of MV Transportation during the first Trump administration – had allowed employers to interpret broad management rights clauses as permission to make unilateral changes, diminishing unions’ bargaining leverage.

Chairman Lauren McFerran emphasized that this return to the historical standard underscores the importance of explicit union consent in a statement that accompanied the decision. “Today’s decision makes clear that an employer has the obligation to bargain over changes to wages and working conditions, unless the union expressly yields its right to bargain over an employer’s decision. Returning to the clear and unmistakable waiver standard better serves the pro-bargaining policy of the Act.” 

Implications for Employers

This ruling significantly affects how employers must handle workplace changes in unionized settings. Key takeaways include:

• Narrow Interpretation of CBAs: Broadly worded management rights clauses may no longer provide sufficient authority for certain unilateral actions.
• Increased Risk of Violations: Employers are more likely to face unfair labor practice charges if they act without ensuring explicit union waivers.
• Pro-Bargaining Emphasis: The decision strengthens unions’ ability to contest changes and demand negotiations.

5 Steps for Employers

To adjust to this new landscape, employers should consider taking the following five steps:

1. Thoroughly Review Your CBAs

• • Conduct a detailed review of all collective bargaining agreements to identify any ambiguous language in management rights clauses.
  • Clarify provisions during negotiations to specify when unilateral changes are permissible.

2. Consult Legal Counsel

• • Seek advice from your FP labor counsel before implementing any workplace changes that could impact unionized employees.
  • Ensure compliance with the clear and unmistakable waiver standard to minimize legal risks.

3. Train Management Teams

• • Educate managers and HR professionals about the restored standard and its implications for decision-making.
  • Develop clear protocols for engaging with unions before introducing policy or operational changes.

4. Strengthen Union Communication

• • Maintain open and constructive dialogue with union representatives to collaboratively address workplace concerns.
  • Proactively involve unions in decision-making processes to demonstrate good-faith efforts at bargaining.

5. Plan for Disputes

• • Prepare for potential challenges by documenting all communications with unions and providing clear rationales for proposed changes.
  • Establish contingency plans to address operational needs if negotiations stall.

Conclusion

We expect a flurry of additional standard-shifting decisions over the next week as the term of the Democratic Board Chair winds down. Make sure you are subscribed to Fisher Phillips’ Insight System to receive the most up-to-date information about the latest decisions. If you have questions on how these developments may impact your organization and workforce, please contact your Fisher Phillips attorney, the authors of this Insight, or any member of our Labor Relations Practice Group.