Implementing Work Rules During the Term of a Collective Bargaining Agreement

Employers with unionized work forces often want to implement new work rules during the term of their collective bargaining agreements. Typically, that can be done unless the contract includes a provision that would be contradicted by the new rule.

However, before new work rules or other new terms and conditions of employment can be implemented, the employer must give the union an opportunity to demand bargaining about the matter. If the union asks to bargain, the employer may not implement the new rule without the union's consent or without having first bargained to "impasse." Two new National Labor Relations Board decisions illustrate and reinforce these principles.

In Provena Hospitals, 350 NLRB No. 64 (August 16, 2007), the Board addressed whether the employer's unilateral implementation of a "staff incentive policy," which paid nurses a bonus for agreeing to work extra hours over the holidays, and an "attendance and tardiness policy," which included provisions for disciplinary action, was lawful. The contract had a provision for "extraordinary pay" for extra hours worked, but did not address incentive pay or the disciplinary consequences of poor attendance. The employer admitted that it had not bargained about these two changes, but argued that it was privileged to make the changes unilaterally because of the "extraordinary pay" provision and the contract's "management-rights" clause. The latter stated that the employer retained the rights "to change or eliminate existing …reporting practices and procedures and/or introduce new or improved ones;….to suspend, discipline and discharge employees; to make and enforce rules of conduct, standards and regulations governing conduct of employees; [and]…to determine staffing patterns…." The employer also argued that the union had historically acquiesced in its implementation of staffing incentives, and the union had, in fact, failed to object to the employer's unilateral implementation of two other staff incentive policies in the prior year.

The principal issue in Provena was whether the Board should depart from its historical analysis of when an employer is free to make unilateral changes during the term of the contract. For decades, the Board has held that an employer may not make unilateral changes in any term or condition of employment unless the union has "clearly and unmistakably" waived its right to bargain about the change. However, in the early 1990's, two United States Courts of Appeals—the Seventh Circuit in Chicago and the D.C. Circuit—had rejected the waiver analysis and held that such changes were privileged if the subject matter of the change was "covered by" the current contract, such that it can be said that the parties have bargained about the subject and reached some accord. According to those two courts, in such instances, the union may object to the change and seek a remedy through the grievance and arbitration procedure. The Provena Board explicitly addressed whether it would adopt this "contract coverage" test and discard its "clear and unmistakable" waiver analysis.

Unfortunately for employers, the Board rejected the contract coverage test by a 2-to-1 vote. In short, the Board majority concluded that its historical waiver analysis better promotes efficient collective bargaining, one of the NLRA's principal objectives. According to the two-member majority, the contract coverage rule would force negotiating unions to tie down every conceivable loose end related to any topic of collective bargaining for fear that the employer would later argue that the union had waived its right to object to changes "covered" by the clause governing that topic. The Board concluded that its historical approach "encourages parties to bargain only over subjects of importance at the time [of the negotiations] and to leave other subjects to future [mid-term] bargaining."

It remains to be seen whether the Seventh and D.C. Circuits will go along with the a clear-and unmistakable-waiver test, now that their alternative analysis has been explicitly rejected by the Board. Ultimately, the issue will probably have to be resolved by the United States Supreme Court.

The Board then applied the historical clear-and-unmistakable waiver analysis to the facts before them and concluded that the union had not waived its right to bargain about the employer's unilateral grant of hundreds of dollars of incentive pay for working extra shifts during the holidays. As to the employer's argument that it had previously implemented incentive pay programs without objection from the union, all three Board members adopted the administrative law judge's conclusion that "a union's past acquiescence in an employer's unilateral action on a particular subject generally does not, without more, constitute a waiver by that union of any right it may have to bargain about future action by the employer in that matter."

As to the contract's authorization of "extraordinary pay," the Board majority refused to equate "extraordinary" with the "ongoing, periodic, and predictable requirements" associated with holiday staffing requirements.

The Board did, however, permit the employer's unilateral implementation of the attendance and tardiness rules. The Board concluded that the union had clearly and unmistakably waived its right to bargain about these subjects by agreeing to language in the management rights clause. The Board relied on the management rights provisions reserving to the employer the rights "to change …reporting practices and procedures and/or introduce new or improved ones," "to make and enforce rules of conduct," and "...to suspend, discipline and discharge employees." The Board did not explain how these managements rights "unequivocally and specifically expressed the union's intent to permit unilateral action," to use the Board's own description of just how clear a "clear and unmistakable" waiver must be.

The second unilateral-change case decided by the Board in recent weeks is California Newspapers, 350 NLRB No. 89 (September 10, 2007). There the Board applied the clear-and-unmistakable waiver analysis to conclude that the employer's unilateral implementation of a new email policy that prohibited "broadcast" emails (i.e., emails to more than one person) was unlawful. The employer's contract with the union did not address email policies or practices, but it did have a "management rights" clause that said that "the sole and exclusive rights of management, which are not abridged by this Agreement…include …the [right to] establish …policies…for the conduct of the business…." And, the contract also included a "waiver" clause (a/k/a "zipper" clause) stating that the parties "acknowledge that during the negotiations which resulted in the Agreement, each had the unlimited right and opportunity to make demands and proposals … [and, therefore], …each voluntarily and unqualifiedly waives the right, and each agrees that the other shall not be obligated, to bargain collectively with respect to any subject matter not specifically referred to or covered in this Agreement, even though such subject matter may not have been within the knowledge or contemplation of either …of the parties at the time they negotiated…this Agreement." The Board adopted the ALJ's conclusion that the union had not clearly and unmistakably waived its right to bargain about the email policy "in light of the general language" in the management rights clause. Then, without any mention of the conclusion in Provena (discussed above) that the management rights clause in that case had permitted that employer to unilaterally implement an attendance policy even though the clause made no reference to the subject of attendance, the Board cited with approval a 1992 decision from the Fifth Circuit Court of Appeals that concluded a clause allowing the employer to make "reasonable rules for efficiency, cleanliness, safety, …and working conditions" was not a clear and unmistakable waiver of the right to bargain over a no-tobacco rule because there was no specific mention of tobacco in the clause.

As to the "zipper clause," the Board stated that "with limited exceptions, the Board has generally found zipper-clause language not to constitute a clear and unmistakable waiver. More specifically, while the Board has permitted a zipper clause to be invoked as a ‘shield' against demands for bargaining, it has said that such clauses may not be used…as a ‘sword' to accomplish a change in the status quo."

These two cases highlight the need for management to be cautious about implementing mid-term work rules (or other changes in terms and conditions of employment) without affording the union an opportunity to demand bargaining. Normally, absent a contradictory or limiting provision in the contract, this can be accomplished by affording the union a reasonable period to consider a new rule. Notice should always be in writing, and the union should be given a copy of the proposed new rule and notice of its proposed effective date. If the union fails to demand bargaining about the rule prior to its scheduled implementation date, the union will be deemed to have waived its right to bargain.