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NLRB: Employer Obligated To Bargain Over “Discretionary Discipline” Arising Before CBA Is Negotiated

September 7, 2016

In the period after a labor union is newly-certified or first recognized by the employer and before a disciplinary procedure has been negotiated and set forth in a collective bargaining agreement, the employer now will be required to give notice to the union and afford it an opportunity to bargain before imposing any “discretionary” discipline that results in suspension, demotion, or discharge of an employee in the bargaining unit represented by the union.  Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (3-1 decision).  The National Labor Relations Board applies the new duty to bargain set forth in Total Security only prospectively to charges of unfair labor practices arising after August 26, 2016, when the decision was issued.

This decision revives the rule originally set out by the Board in its 2012 Alan Ritchey, Inc. case that was one of many invalidated by the United States Supreme Court’s 2014 landmark ruling in NLRB vs. Noel Canning, which held that the President’s appointments of a majority of the Board’s members at the time had violated the Recess Appointments Clause of the United States Constitution.

The Majority Decision

After the employer determines that an incident requires “serious discipline,” meaning any action impacting tenure, status, or earnings, such as a suspension, demotion, or discharge, then the duty arises for the employer to notify the union representing the affected employee and allow the union an opportunity to bargain over any “discretionary” aspects of the employer’s decision – which includes the union’s right to request and be provided relevant information – before the employer implements its intended disciplinary action.  Discretionary aspects of discipline include questions of whether a work rule or policy was in fact violated and the degree of discipline, if any, that should be imposed.

Discipline resulting from the application of a pre-existing and uniformly applied policy or practice regarding the particular misconduct committed by the employee is not deemed to be “discretionary” and is not subject to this duty to bargain.  An example of such a practice might be a previously published and consistently enforced “no-fault” attendance policy that subjects employees to a stated progression of warning, invariable periods of suspension, and ultimately discharge, without exception, due to a fixed number of absences from work regardless of the cause or excuse for each absence.  If, however, the duration of the suspension, or any other aspect to the disciplinary action is variable and subject to case-by-case discretion, the employer’s action is then negotiable.

The Board’s decision fails to clearly explicate how a policy that is non-discretionary and not negotiable is distinguished from a discretionary practice that is subject to the duty to bargain.

The Board majority explained that the discipline-related duty to bargain initially requires no more than providing notice to the union and an opportunity for meaningful discussion – and providing relevant information that is timely requested by the union – before the employer imposes its intended discipline.  The employer may then act without first being required to reach agreement or impasse.  After implementation, however, the employer’s duty to bargain – including negotiating over the possibility of rescinding or mitigating the disciplinary action – continues until the parties reach agreement or impasse.

The Board majority further provided that the employer may suspend or discharge an employee unilaterally, i.e., without any discussion with the union, when the employer has a reasonable and good faith belief that the employee’s continued presence presents a serious and imminent danger to the company’s business or personnel.  That unilateral disciplinary action, however, remains subject to the employer’s post-implementation duty to provide notice of the action, to provide timely requested, relevant information to the union, and to afford an opportunity to the union to bargain to agreement or impasse (again including the possibility of rescinding or mitigating the disciplinary action).

An employer’s failure to bargain in good faith over serious discipline is now considered an unfair labor practice that, if proven at trial before an Administrative Law Judge and confirmed on appeal by the Board, subjects the employer to a remedial “make whole” order requiring reinstatement of the discharged or suspended employee or employees, payment to each such employee of backpay with interest, entry of a cease and desist order against the employer, and physical posting and electronic distribution of a notice to employees in the unit informing them of the employer’s violation of the NLRA and the terms of the remedial order, which includes an explanation of the employer’s obligation to bargain about such matters in the future.

The Dissent

The lone remaining Republican Member of the Board is Philip A. Miscimarra, who dissented from the three-Member Democratic majority’s decision in the Total Security case.  Member Miscimarra’s dissent emphasizes, among other things, that: the majority decision establishes a collective bargaining obligation that was never found necessary in the first 80 years of the existence of the National Labor Relations Act; the decision is an unwarranted intrusion into first contract bargaining; and, the decision is contrary to Section 10(c) of the NLRA, which prohibits reinstatement by the Board for any employee who is suspended or discharged for cause.

The majority responded to the Section 10(c) issue by allowing that the employer may assert in the unfair labor practice trial an “affirmative defense” that it acted for cause in implementing a disciplinary suspension or discharge.  In such a case, if the Board finds that the disciplinary action violated the employer’s newly-articulated duty to bargain, the “for cause” defense would be tried and decided in the Board’s standard, bifurcated “compliance” proceeding, in which the amount of backpay and interest, if any, is determined after the unfair labor practice trial concludes.

Meaning for Management

This decision, like many issued by the “Obama Board” in the last few years, deviates radically from past legal doctrine and is a trap for the unwary when a union is newly on the scene.  The Board’s new, specialized duty to bargain requires that both human resources staff and operating management be trained to put an extra step in any disciplinary process – notifying the relevant union and engaging in “meaningful discussion” when the union requests bargaining – before imposing serious disciplinary action arising from either poor performance or misconduct in the workplace.  Absent such engagement with the union, imposing what would otherwise be routine employee discipline may lead to protracted unfair labor practice litigation, which could result in reinstatement and payment of back pay with interest to the miscreant employee.

Due to the unusual posture of the Alan Ritchey decision, which was invalidated on Constitutional grounds having nothing to do with the underlying duty to bargain issues, no United States Court of Appeals has reviewed the correctness vel non of that unfair labor practice decision.  There is no firm basis now to predict the reception that the Board’s Total Security decision will meet in the courts.

Further delaying court review is the unusual fact that the Board – contrary to its usual practice – decided to apply the new duty to bargain only prospectively, and dismissed the unfair labor practice complaint against Total Security, such that there will be no immediate appeal of the Total Security decision.

Nonetheless, the Board now considers all employers to be on notice that disciplinary incidents arising after August 26, 2016 will be subject to the special obligation to bargain set forth in the Total Security majority decision.

Please contact us if you have any questions regarding this decision or any other matter.