In Endurance Environmental Solutions, the National Labor Relations Board returned to the “clear and unmistakable waiver” standard for determining whether an employer may make changes to terms and conditions of employment while a collective bargaining agreement is in effect. Reinstatement of this more union-friendly standard will make it harder for unionized employers to implement unilateral changes during the term of a labor agreement.
The National Labor Relations Board (the NLRB or Board) overturned the “contract coverage” test adopted in MV Transportation Inc., [1] which considers the contract language of the labor agreement before reaching a waiver analysis. The Board in Endurance Environmental Solutions held that a trash hauling company acted unlawfully by unilaterally implementing video cameras in its fleet of 400 trucks without first bargaining with the union about the changes. In defending the unfair labor practice allegations, the company pointed to its management rights clause which provided it the right to “implement changes in equipment.”
The Board found the management rights clause lacked the specificity needed to constitute a waiver of the union’s right to bargain over the installation of cameras. Accordingly, the Board found the company violated Sections 8(a)(1) and (5) of the National Labor Relations Act and ordered the company to bargain over the decision to install the cameras and any effects on employees.
Under the clear and unmistakable waiver standard, the Board will once again consider “the precise wording of relevant contract provisions” and will reject waiver defenses based on contract language “couched in general terms” that do not refer to “any particular subject area.” [2] The Board also held that broad management rights clauses that are not specific about a particular proposed change will not be considered a waiver. The Board said it would still look to bargaining history in determining waiver, including whether a specific issue was “fully discussed and consciously explored” and the union clearly and unmistakable yielded its right to future bargaining.
In returning to the clear and unmistakable waiver test, the Board majority concluded that the contract coverage standard undermines contractual stability and is “indefensible and unenforceable.” [3] According to the Board, if a contract provision does not explicitly and unequivocally present a clear and unmistakable waiver of the union’s right to bargain over a specific issue, management must give mid-contract notice and opportunity to bargain over any mandatory subjects. The union then has the right to bargain to at least impasse if not agreement over that issue before the employer can proceed with the change.
The Board left open the question of whether the decision would apply retroactively to all pending cases. However, it applied the decision retroactively in this case.
The NLRB’s re-adoption of the clear and unmistakable waiver test puts it at odds with several circuit courts, particularly the DC Circuit, which has shown open hostility to the Board’s continued use of the standard. [4] The DC Circuit, which has plenary jurisdiction over all NLRB enforcement actions, previously has sanctioned the NLRB for its ongoing application of the waiver standard. Although the NLRB majority in Endurance Environmental Solutions attempted to address concerns raised by the circuit courts, their position is largely one of respectful disagreement. The DC and other circuits’ disfavor of the standard likely will undermine the Board’s ability to fully implement this standard, absent ultimate intervention by the Supreme Court. [5]
Dissenting member Marvin Kaplan reasoned that the contract coverage standard better respects the statutory duty to bargain framework, conforms to the congressional policy of free collective bargaining, and reduces unnecessary disputes about waivers of bargaining rights. [6] The dissent points to the Supreme Court’s 2015 decision in M & G Polymers, [7] which instructed that provisions in a collective bargaining agreement must be interpreted according to ordinary principles of contract interpretation. This is the same language utilized under the contract coverage standard where “the Board [gives] effect to the plain meaning of the relevant contractual language, applying ordinary principles of contract interpretation.” [8]
Unionized employers should take note of this decision in drafting new collective bargaining language and when making unilateral changes during the term of labor agreements. However, the impact of the decision may be reduced by the various circuit courts’ refusal to enforce the Board’s approach. Additionally, the newly constituted Republican NLRB majority will likely make overturning this decision one of its priorities.
Nevertheless, in light of the Board’s return to a “clear and mistakable” waiver standard, unionized employers should consider the following in the near term:
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[1] MV Transportation Inc., 368 NLRB No. 66 (2019).
[2] Endurance Environmental Solutions, 373 NLRB No. 141 (2024) at 18.
[3] Id. (citing E. I. du Pont de Nemours & Co., 368 NLRB No. 48, slip op. at 8 (2019)).
[4] Local Union No. 47 v. NLRB, 927 F.2d 635, 641 (D.C. Cir.1991)); NLRB v. Postal Service, 8 F.3d 832, 836 (D.C. Cir. 1993) (“[W]here the matter is covered by the collective bargaining agreement, the union has exercised its bargaining right and the question of waiver is irrelevant.”). See also Bath Marine Draftsmen’s Assn. v. NLRB, 475 F.3d 14, 25 (1st Cir. 2007); Electrical Workers IBEW, Local 43 v. NLRB, 9 F.4th 63, 77 (2d Cir. 2021); Chicago Tribune Co. v. NLRB, 974 F.2d 933, 937 (7th Cir. 1992).
[5] Heartland Plymouth Court MI, LLC v. NLRB, 838 F.3d 16, 18 (D.C. Cir. 2016).
[6] Endurance Environmental Solutions at 36.
[7] 574 U.S. 427, 435 (2015); slip op. at 37.
[8] MV Transportation at 11.