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How NLRB Status Quo Rule Change Affects Employers

By James R. Redeker
October 07, 2022

How NLRB Status Quo Rule Change Affects Employers

By James R. Redeker
October 07, 2022

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In 1991, in Litton Financial Printing Division v. National Labor Relations Board, the U.S. Supreme Court created a corollary to this rule: With few exceptions,[3] an employer must maintain the status quo following the expiration of a collective bargaining agreement by refraining from making unilateral changes, unless the parties have reached an impasse in bargaining for a successor contract.[4]

How these rules apply in specific situations has been the subject of numerous NLRB decisions, the most recent on Sept. 21 in PG Publishing Co. Inc. dba Pittsburgh Post-Gazette.

In this case, the NLRB made a radical change to the application of the corollary, which could have a significant negative effect on employers.

By way of background, in 2015, a Democrat-controlled NLRB held in The Finley Hospital that a wage increase for employees in a one-year contract must be continued after the union contract expired because the annual wage increase was part of a "dynamic" status quo.[5]

The fact that the wage provision in the contract said that the increase was for the life of the contract was not clear and unmistakable enough to constitute a waiver of the statutory obligation to maintain the status quo.

Not surprisingly, on appeal the U.S. Court of Appeals for the Eighth Circuit denied enforcement of the NLRB's decision, finding that the wage increase did not, as a matter of statutory law, survive the contract termination because it had not been a practice over such a period of years that the employees had come to expect it each year.

In 2019, a Republican-controlled board decided two cases that effectively rejected Finley without expressly reversing it.

In Pittsburgh Post-Gazette,[6] a unanimous, three-member panel reversed an administrative law judge and held that the employer did not violate the law when it did not increase its contribution to the union's health and welfare fund in the year following the expiration of the union contract.

The panel noted that the employer's increase in contributions in the three years prior to the term of the agreement did not establish a sufficient pattern to create a dynamic status quo.

Also in 2019, the NLRB, voting 3-1 — with then-member, now-Chairman Lauren McFerran[7] dissenting — applied a "contract coverage" standard in MV Transportation Inc. to decide whether a provision of a contract continued after the expiration of the contract. That is, if the contract between the parties covered the issue, the contract alone would apply.

Only if the contract did not cover the issue would the NLRB be compelled to determine whether there was a clear and unmistakable waiver of the status quo requirement.

Turning now to the Pittsburgh Post-Gazette case just decided[8] in September of this year, the NLRB was presented with the following facts:

  • The collective bargaining agreement of the Pittsburg Post-Gazette and the Graphic Communications Union provided "all employees ... shall be guaranteed five (5) shift[s] ... each payroll week for the balance of the Agreement, ending March 31, 2017."
  • Following the expiration of the agreement, the parties entered into negotiations for a successor contract.
  • Fifteen months later and before a new contract had been negotiated or an impasse in bargaining had occurred, the company told the union that it had made a decision to transition to an all-digital format and, beginning in August 2018, it would reduce the number of print days from seven to five.
  • The parties commenced bargaining about the effects of the decision on the employees. Before an agreement was reached on either the effects of the decision or a successor contract, the company laid off two pressmen.

An unfair labor practice charge was filed, alleging that the company's unilateral action violated its status quo obligation and that the contractual guarantee of five shifts per week should have been continued until either a new agreement was negotiated or an impasse was reached.

On stipulated facts, an administrative law judge dismissed the complaint, holding that the parties had clearly agreed that the five-shift guarantee would cease upon the expiration of the contract. The judge's decision was appealed to the full board.

Four years later, the NLRB issued its decision and reversed the administrative law judge, holding that, while the language in the contract may have been sufficient to terminate the five-shift guarantee as a contractual matter, it was not sufficiently clear and unmistakable that the union waived its statutory right to bargain over any change to the guarantee.

Therefore, as a matter of statutory law, the status quo included the five-shift guarantee, even though the parties had agreed that the guarantee would end when the contract expired.

The NLRB, having concluded that the five-shift guarantee was part of the status quo, found that the unilateral change violated the law and ordered the reinstatement of the two pressmen who had been laid off, even though there was no work for them to do. The back pay dated back four years, to Oct. 6, 2018.

In making this ruling, the majority of the current board not only rejected the decisions of the Republican board in PG Publishing and MV Transportation, but also refused to heed the refusal of the Eighth Circuit to enforce the Democratic board's decision in Finley Hospital.

In doing so, the current board rejected the dissent's argument that Finley Hospital should be reversed and, instead, doubled down on Finley Hospital.

What Employers Need to Know

This decision is another example of the seesawing changes in NLRB law that began with the Obama and Trump administration boards and is being continued by the Biden administration board. The effect of these changes make it difficult for employers to make operational decisions.

Because of the current pace of these changes, employers must be alert to both the changes that have already occurred and those that can be reasonably anticipated. Of particular importance is knowing whether a contemplated operational decision implicates the National Labor Relations Act.

If an employer does not want a term in its labor contract to be continued after the expiration of the contract, it must ensure that it is clear and unmistakable that the union waived both its contract and statutory rights to bargain over changes post-expiration of the contract.

Proposing such a waiver, however, may be tricky, since it may trigger suspicion at a time when the parties are seeking to settle a new contract.

Further, making such a proposal and then giving it up in the negotiations will create an adverse bargaining history, making it more difficult to argue later that the intent of the parties to waive bargaining on an issue post contract is clear and unmistakable.

If the employer is not prepared to hold to such a demand, even in the face of a strike, it must take care to make it absolutely clear that the withdrawal of the proposal is not to be construed as a substantive concession.

If an employer wishes to propose a waiver of the statutory right to bargain over changes post-expiration of a contract, it may wish to consider having the proposal modify the zipper clause of the contract. The zipper clause is already a waiver of bargaining rights over issues that were or could have been raised in negotiations during the life of the contract.

An example of new language that extends this waiver to include the period after the agreement expires would be: "Upon the expiration of this Agreement, neither party shall be obligated to bargain over any change to a provision limited to the life of this Agreement."

A midground may be not to raise the issue of a post-term waiver of bargaining rights but to put in all relevant places language such as "for only the life of this Agreement."

However, this is similar to the language in Finley Hospital that the Obama administration board found was not sufficiently clear and unmistakable to waive the union's right to bargain over a change post-expiration.

Whether the use of "only" will change the result with the current board is highly questionable, but the change is sufficiently different to permit a reasoned argument.

A word of caution: The current board's use of the clear and unmistakable analysis, as opposed to a contract coverage analysis, will continue at least for the life of the current board. Any attempt to obfuscate is likely to be an expensive failure.

Reprinted with permission of Law360.