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NLRB Rules CBA Expiration Bars Employers’ Discretionary, Unilateral Changes, No Matter What Past Practice Is

October 3, 2016 by

When a union contract expires, so too does the management rights clause contained in that contract. Unilateral changes an employer may make in working conditions and terms of employment during the contract pursuant to the management rights clause, once the contract expires, now require bargaining before implementation. This is well-established “black letter” law.

But what if the employer has a practice of using the management rights clause to make changes every year in, say, the company benefits referenced in the union contract? Can a “past practice” of making discretionary changes and making those changes without bargaining survive expiration of the union contract? The NLRB over the past few decades has issued rulings going both ways on this question.

In one of a series of important decisions issued at the end of August, just before the NLRB was reduced from four to three sitting members, the Board overruled its prior decisions allowing a “past practice” argument to justify discretionary unilateral changes after the union contract has expired.

In E.I. DuPont, 364 NLRB No. 113, the Board ruled “that unilateral, postexpiration discretionary changes are unlawful, notwithstanding an expired management-rights clause or an ostensible past practice of discretionary change developed under that clause.” If there is discretion involved, the employer must bargain.

The Board also reiterated the circumstances in which an employer may unilaterally implement changes postexpiration: “the Board and the court have repeatedly held that an employer may act unilaterally pursuant to an established practice only if the changes do not involve the exercise of significant managerial discretion.” For example, if the employer has a uniform past practice of annually granting employees a performance bonus based on objective criteria, that’s a non-discretionary past practice that may be continued without bargaining; indeed, as an established, non-discretionary past practice, it must be continued and can only be altered or discontinued after bargaining to impasse.

The Board’s decision here provides much needed clarity in an area of the law that has too often prompted time-sucking litigation. (The case here took over 12 years to resolve.)

To read the Board’s decision, click here:


The material on this website is provided by Beeson, Tayer & Bodine for informational purposes only and does not constitute legal advice. Readers should consult with their own legal counsel before acting on any of the information presented. Some of the articles are updated periodically, and are marked with the date of the last update. Again, readers should consult with their own legal counsel for the most current information and to obtain professional advice before acting on any of the information presented.