Revised NLRB Deferral Standards May Undermine Arbitration, Threaten Industrial Peace

In cases involving unfair labor practice charges, when does the National Labor Relations Board (NLRB) need to intervene, and when should it defer to arbitration procedures? The NLRB revised the standards to determine who has the final say in such matters in a 2014 decision that, according to critics, reduces the power of arbitrators and expands the cases in which the NLRB will make the final ruling. The decision rejected a 30-year precedent and continues to draw criticism from a number of parties, including Faegre Baker Daniels partner Stuart Buttrick, who leads the firm's labor management relations team.

At an American Bar Association conference, Buttrick said the NLRB decision was based on a groundless assumption that “wild-eyed” arbitrators were ignoring employees’ statutory rights in arbitration proceedings. In “put[ting] a thumb on the scale in favor of statutory rights,” Buttrick said, the NLRB has undermined an arbitration system that has proven to be effective in resolving disciplinary actions.

Buttrick’s comments at the ABA conference were featured in a Bloomberg BNA article on the topic.