Spoiler Alert – unless you regularly deal with collective bargaining agreements you may find this a tad wonky.
As we have seen over the time of the current administration, the National Labor Relations Board (“Board”) has applied a more business-friendly approach when deciding cases arising under the National Labor Relations Act (“NLRA”). While many of those cases have re-examined prior Board precedents set during the Obama administration, the current Board’s willingness to reverse course is not without limit, as we recently saw in Nexstar Broadcasting, Inc. d/b/a KOIN-TV, 369 NLRB No. 61. In Nexstar, the employer asked the Board to extend the reach of the “contract coverage” rule adopted by the Board in late 2019 in M.V. Transportation, Inc., 368 NLRB No. 66. That rule set forth a new standard for determining when an employer’s action taken in reliance on contractual provisions under a collective bargaining agreement (“CBA”) constitutes a “unilateral change” in violation of the NLRA. Under the new standard, which we discussed in a prior client alert, the Board held that if an employer makes a change to working conditions without bargaining with the union, the Board will first look to whether the plain language of the CBA grants the employer the right to make the change. If the CBA permits the action, there is no violation of the NLRA. If the CBA does not, further analysis is needed. [Full Alert Available Here].
But what if the employer’s action, although covered by the CBA, occurs after the CBA expires? This was a question left open in M.V. Transportation, and which the employer in Nexstar argued was subject to the new rule. The Board did not agree. It held that the new “contract coverage” test does not apply after the expiration of the CBA, “unless the agreement contained language explicitly providing that the relevant provision would survive contract expiration.” Nexstar Broadcasting, Inc. d/b/a KOIN-TV, 369 NLRB No. 61. The Board reasoned that during the term of the CBA, the employer’s right to take actions affecting the terms and conditions of employment of its employees is determined by what the parties agreed to under the CBA; however, upon the expiration of the CBA, the employer’s right to take actions otherwise permitted under the CBA comes to an end, and the NLRA thereafter imposes a statutory obligation on the employer not to change working conditions until a new CBA is reached, or bargaining with the union has reached an impasse. As the “contract coverage” test flows from ordinary principles of contract interpretation, it does not apply following the expiration of the CBA, without the explicit agreement of the parties.
In order to take advantage of the “contract coverage” test and maintain workplace flexibility following the expiration of a CBA, employers should consider amending any “management rights clauses,” “subcontracting clauses,” or similar clauses that protect an employer’s business discretion to explicitly state that such clauses survive the expiration of the CBA.