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A Collective Bargaining Agreement’s Management Rights Clause Is No Longer Meaningless

A Collective Bargaining Agreement’s Management Rights Clause Is No Longer Meaningless Background Decorative Image

One of the biggest complaints that you will hear from employers with unionized workforces is that it is so difficult to implement minor policy changes during the term of a collectively bargained contract. For example, the employer may want to implement a new safety policy to address a recent increase in workplace injuries that could have been prevented had the employees been wearing the required PPE (Personal Protective Equipment). The employer adds a new provision to the PPE rule that requires employees caught without their PPE to undergo a mandatory retraining program on the first instance and be subject to discipline, up to including termination, for any subsequent violations.

For those readers who work in non-union workplaces, you may be surprised to learn that employers have generally been prohibited from unilaterally implementing such common-sense changes unless they can get the union to agree. And while you might think that a union would happily agree to a rule that is intended to protect its members, most unions will resist such rules unless they can get something in return. You might also be surprised that language in collective bargaining agreement’s management rights clause that says the employer can implement reasonable rules would allow an employer to do that.  However, for the past 12 years, you would have been wrong.

Until yesterday, even employers who have broad management rights clauses that allow the employer to “retain the sole and exclusive rights to manage, to direct its employees; to evaluate performance, to discipline and discharge employees, to adopt and enforce rules and regulations and policies….” might have had difficulty enacting the above-described safety rule without union consent unless they could meet what was known the “clear and unmistakable waiver” standard under which the parties must “unequivocally and specifically express their mutual intention to permit unilateral action with respect to a particular employment term, notwithstanding the statutory duty to bargain that would otherwise apply.”

Yesterday, the NLRB abandoned that standard and adopted a “contract coverage” standard instead, which will allow employers the right to take certain actions unilaterally without further bargaining with the union during the term of the CBA, if those rights appear to be granted by the CBA’s management rights clause or elsewhere in the CBA.

It bears noting the management rights clause in this particular case contained a fairly lengthy list of the subjects that fell within the scope of the management rights clause and the Board found that 9 out of the 10 changes that were at issue fell within that scope. The one dissenting member, however, suggested that a management rights clause that is “sufficiently general” might permit an employer to act unilaterally with respect to any “specific term” or condition of employment. That is likely to be an issue for a future case, which will make negotiations and drafting of the management rights clause very important.

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This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.