The COVID-19 pandemic has caused unprecedented disruption for U.S. businesses of every size and in every industry. As state and local governments have ordered companies to cease nonessential operations and directed consumers to quarantine, isolate or otherwise “shelter in place,” the very survival of many of today’s businesses depends on their abilities to develop new operational and business strategies for addressing changing consumer needs, altered distribution channels and a depressed economic market.
Unionized employers face unique challenges in making necessary business changes while navigating restrictive collective bargaining agreement provisions and meeting legal obligations under the National Labor Relations Act (NLRA) to bargain in good faith with incumbent unions. Below we provide guidance addressing various common issues unionized employers face as they prepare and implement COVID-19 prevention and response efforts.
Implementing New Policies, Procedures and Practices in Response to COVID-19
Federal labor law imposes a duty on employers to bargain in good faith with their employees’ collective bargaining representative as to all mandatory subjects of bargaining, including wages, hours, terms and other conditions of employment. Generally, unionized employers are required to follow the terms of negotiated collective bargaining agreements, and even in times of business hardship, are prohibited from making unilateral changes regarding such mandatory terms without first negotiating to impasse with an incumbent union.
In response to the COVID-19 pandemic, employers nevertheless are faced with the need to make substantial decisions and take immediate action to ensure the continued viability of their business operations. Other employers have found themselves scrambling to implement new or modified operating procedures necessary to protect the health and safety of employees and consumers, such as:
- taking the temperature of employees before they come to work
- requesting that employees self-report health-related symptoms
- enhancing cleaning protocols
- sending employees home who are sick or asking employees who have symptoms to stay home
- amending pay, time off, sick pay and personal leave policies
- implementing social distancing measures
- implementing telework procedures
- changing start times, work shifts and hours
- revising work assignments to accommodate employee absence or decreased product demand
- furloughing employees
- temporarily or permanently discontinuing service line or plant closures
- initiating new service line and product development strategies targeting COVID-19 initiatives
All of the above are examples of employer decisions involving mandatory subjects of bargaining, which typically are either governed by collective bargaining agreements or trigger an employer’s duty to bargain with an incumbent union.
In assessing options for implementing operational changes in times of crisis, unionized employers must first examine the terms of any applicable collective bargaining agreements. Some agreements contain force majeure clauses that establish specific employer rights to act in situations of emergent or unforeseen circumstances. Absent such special clauses, unionized employers must look to other relevant contract provisions addressing management rights, employee health and safety, human resources policy development and enforcement, work rules, work assignment, leaves of absence, layoff and recall, and guaranteed paid time off. While some employers may seek to defend unilateral action based on contract provisions expressly granting them authority to implement necessary changes, other employers risk breaching collective bargaining agreements or committing unfair labor practice charges when implementing operational changes in response to the COVID-19 pandemic.
Employers should note, however, that in the recent decision of MV Transportation, 368 NLRB No. 66 (2019), the National Labor Relations Board (NLRB) granted employers some risk relief by abandoning a “clear and unmistakable waiver” standard in favor of a more lenient “contract coverage” standard for determining whether a union has waived its right to bargain an employer’s unilateral action. Specifically, the NLRB’s “contract coverage” standard recognizes an employer’s right under a collective bargaining agreement to act unilaterally as to matters which are broadly referenced within the “compass or scope” of the employer’s authority under the plain wording of the particular contract. Even in situations where the plain contract language is seemingly unclear regarding a particular management right, the NLRB will look to the bargaining history, past practices and other express contract terms in determining whether a collective bargaining agreement evidences a union waiver of its right to bargain an employer’s unilateral action. Moreover, the NLRB recognized in MV Transportation that even in absence of express or implied contract language, an employer’s unilateral action may be privileged in limited situations where a “compelling economic exigency” supports the employer’s unilateral action.
Thus, even if a collective bargaining agreement does not provide the employer with a right to act unilaterally, and management determines that it has a duty to bargain with the union, there may be exigent circumstances that would allow the employer to proceed with changes before bargaining to agreement or impasse. The NLRB has recognized that an employer confronted with an economic exigency compelling prompt action satisfies its statutory obligation by providing the union with notice and an opportunity to bargain. An employer may act unilaterally when it can show that the proposed changes were compelled, caused by external events, were beyond the employer’s control or were not reasonably foreseeable. The exigency exemption to an employer’s duty to bargain may very well apply to COVID-19 measures.
In a March 27 guidance memorandum, NLRB General Counsel Peter Robb provided case summaries pertaining to an employer’s duty to bargain in emergency situations. The takeaway from the guidance is that, while existing NLRB law may provide a limited privilege for employers taking unilateral action necessary to address “compelling economic exigencies” or other emergent situations (such as those involving a natural catastrophe, pandemic or governmental order limiting business operation), an employer still must bargain with incumbent unions as to the effects such decisions may have on employees’ terms and conditions of employment, once the compelling exigency has passed.
The lesson for employers is that even in situations where management determines it has no duty to bargain with an incumbent union regarding an operational or workplace decision, the employer may still want to share any COVID-19 response measures with the union before implementing them. In this instance, management should inform the union of any changes proposed, the reasons for the changes and the exigency to implement changes immediately.
When considering its implementation of COVID-19 response measures, the employer also should assess whether the collective bargaining agreement addresses the effects of the change or decision at issue (including the manner of implementing that decision). For example, in the case of significant workplace changes like facility closures, layoffs, or furloughs, the collective bargaining agreement may include terms that govern the employer’s selection of employees for layoff/furlough, employees’ recall rights, and employees’ right to receive certain accrued benefits. In any event, unless waived by contract language or otherwise, the employer must notify the union of its decision to implement any COVID-19 response measures and bargain about the effects of those decisions on bargaining unit employees.
Duty to Respond to Information Requests
Many employers find themselves inundated with information requests from unions regarding the employer’s response to the COVID-19 outbreak. For instance, unions may request to know what the employer is doing to keep employees safe and healthy or how employees will be paid if the business is temporarily closed by government ordinance. Information requests related to bargaining unit employees are presumptively relevant. However, an employer should consult the collective bargaining agreement to determine its rights and obligations. In responding to information requests, employers are only required to provide information that exists, and if a policy is still under consideration, the employer can inform the union that the information will be provided when it is available. Employers need to be mindful that employees’ medical information is confidential and should not be provided to the union without a release.
Dealing With Employees’ Concerns
Employers also must address employee concerns related to their health and safety at work. Both union and non-union employers should be aware that the NLRA provides all non-supervisory employees the right to engage in “protected concerted activities,” which under the current circumstances could include raising concerns about employee safety due to the COVID-19 outbreak or an employer’s lack of protective equipment when interacting with potentially infected consumers. Federal law here protects employees for raising issues of mutual interest and concern, and employers may not discriminate or retaliate against employees for raising such group concerns.
Unionized employers again should review applicable collective bargaining agreements for provisions regarding safety and health, no-strike clauses and management rights. While implementing measures such as social distancing, telework and sanitizing procedures may alleviate employees’ concerns, the employer may first need to negotiate with its employees’ collective bargaining representative before acting to address employee concerns. Employers should take into consideration their duty to bargain with the union as discussed above when implementing any procedures addressing employees’ safety concerns.
Dealing With Government Executive Orders
For companies with offices located in areas affected by government executive orders mandating the closure of non-essential businesses, the first priority should be to determine if their business is exempt from government orders temporarily mandating the closing of operations. If the business is exempt, another consideration is whether some employees can work remotely. For employees needing to report to work, employers may have to consider policies that adequately protect their employees from the transmission of COVID-19 at work — and inform the union of the steps it is taking to address these issues. Employers will again need to review their collective bargaining agreements for provisions regarding safety and health, no strike clauses, and management rights and follow the duty to bargain guidelines described above. If the employer’s business is not exempt by local or state orders to temporarily close, management will need to examine any contractual lay-off and recall provisions and leave of absence provisions in the collective bargaining agreement and enforce those provisions accordingly.