Many union employers insist on strong management clauses in their labor agreements. Such clauses contain language reserving for the employer the right to adopt new rules and regulations. A reasonable employer may assume that this language gives the company the right to adopt rules and regulations without first bargaining with its union. A recent decision from the National Labor Relations Board reflects just how differently the Board views this issue than the “reasonable employer,” and provides several lessons learned for employers moving forward.
In that case, the Board reviewed a management right clause that, among other things, gave the employer the right to: “adopt and enforce rules and regulations and policies and procedures.” Relying on that clause, the employer unilaterally adopted new work rules and a new attendance policy. The employer also denied the union’s request to receive information and bargain about the changes. According to the company, because the management rights clause allowed the employer to adopt rules and policies, bargaining was not required.
The Board disagreed, however, concluding that the employer was required to bargain and provide information related to the changes before implementing the new rules and policies. According to the Board, while the management rights clause reserved the right to adopt “rules,” it did not specifically say “work rules,” and while it reserved the right to adopt “policies,” it did not specifically say “attendance” policies.
In reaching its decision, the Board wrote, “[i]n order to find a waiver {of a duty to bargain} based on contractual language, that language must be ‘sufficiently specific.’” The Board also determined that, in order for there to be an effective waiver of the obligation to bargain, it would look for evidence that the intent to waive was “fully discussed and consciously explored during negotiations.”
This Board decision was not simply a loss in principle for the employer. It had real economic consequences, including the Board ordering the employer to pay back-pay to all employees who were “improperly” discharged under the new work rules and attendance policy.
What does all of this mean for an employer who relies on management rights clauses? Several things: